[Congressional Record (Bound Edition), Volume 150 (2004), Part 15]
[House]
[Pages 20628-20634]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           THE NATIONAL DEBT

  The SPEAKER pro tempore (Mr. Murphy). Under the Speaker's announced 
policy of January 7, 2003, the gentleman from Tennessee (Mr. Tanner) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. TANNER. Mr. Speaker, I come here to the floor tonight to talk 
about something that is not very pleasant to think about, much less 
talk about, but as President Jimmy Carter once said, the highest office 
in this land of ours is that of citizen, because the citizen makes the 
determination as to the course that our country's leaders take. All of 
us are citizens, and therefore, all of us ought to be aware of what I 
consider to be a grave and growing danger, maybe second only to 
terrorism in our country tonight. The issue that I am referring to is 
our Nation's overwhelming Federal debt. I do not believe most of our 
citizens, the highest officeholders in this land, realize just how bad 
this debt and deficit is and how much it is rapidly deteriorating in 
terms of our Nation's financial balance sheet.
  We have embarked for the last 4 years on an unprecedented and 
unsustainable borrowing binge that is going to place our citizens in 
hock not only from the standpoint of paying ever-increasing taxes just 
to service the debt, much like we do our credit card debt, but what we 
are doing to ourselves, to our country and to our children and 
grandchildren.
  Let me talk to you a little bit about mind-numbing figures, numbers. 
I will try to limit that, but let me just try to explain. We hear two 
different debt numbers. We hear of our Federal debt being $7.3 
trillion, and it is. That is the total obligation of our country vis-a-
vis our deficits, our budgets and so on. About $3 trillion of that $7.3 
trillion is money basically that we owe to each other; we owe to the 
Social Security trust fund that we have borrowed from; we owe to the 
veterans' organizational trust funds that we have; the airport trust 
fund; the highway trust fund; on and on. That $3 trillion is money that 
we the people, the citizens, owe to the various trustees, and we have 
to make good on that in the future. That is not the part of the $7.3 
trillion I want to talk about tonight. I want to talk tonight about the 
$4.3 trillion that I call hard money, hard dollars that we have 
actually borrowed from individuals and corporations in this country and 
from around the world that we will talk about in a few minutes. I hope 
before you turn off listening to us, you will listen to what we have to 
say about that, because it is truly frightening.
  I do not know, reading history, of any country that has managed to 
remain strong and free and bankrupt. My friends, my citizens, that is 
where this country is headed. The deterioration of the Federal balance 
sheet in the last 4 years is truly breathtaking. These numbers right 
here, we have borrowed in the last 45 months or so $1 trillion if we 
add all of this up, $1 trillion. I do not have to tell all of us, 
myself included, who have debt on our house, our car or our credit 
cards, what $1 trillion means. It means, at 5 percent interest, we have 
actually increased taxes on the American people in the last 45 months 
by $50 billion a year each and every year. That is called a debt tax 
that we will talk about later. It must come off the top. It must be 
paid. It cannot be repealed, and that is where we have put ourselves 
collectively in the last just 4 years.
  This second chart shows how much the debt limit levels have increased 
just since 2001. In 2001, the debt ceiling was $5.9 trillion. In 2004, 
it will be $8.07 trillion, and by 2014, according to the Congressional 
Budget Office projection, that is assuming that everything stays the 
same, it will be $13 trillion. I suggest to you that, if you are in an 
airplane, you are in a death spiral financially on this chart right 
here. If you

[[Page 20629]]

do not do something different, if we do not do something different, if 
you do not demand that the leaders of this country in this one-party 
government we have now do something different, we are going to hit the 
ground. There is no way this country can sustain and service this kind 
of debt.
  I talked about servicing the debt. Last year, on this $4 trillion 
plus, we paid $159 billion in interest. We wrote checks for $159 
billion. This will go on as we see under present law. By the end of 
2008, we will be spending $1 trillion a year just to service our debt. 
It is clearly unsustainable. There is no way that you can take that 
much money out of our economy just to service debt for which we get no 
military prowess, no education, no health care, no highways, no 
bridges, no anything but just the privilege of paying taxes so we can 
pay debt.
  At this point, I want to again emphasize, if you are just talking 
about debt, we are in an unprecedented and unsustainable headlong dive 
into bankruptcy. I want to ask my friend from Texas now to talk a 
little bit about what we do. But after he does, please stay tuned 
because we are going to talk about who owns it, and that is truly 
frightening. My friend from Texas (Mr. Stenholm) is one of the leaders 
here in the Congress for financial responsibility, for commonsense 
approaches to government in terms of what we can afford. He has been so 
for over 20 years. He is the father around here of the balanced budget 
amendment. He introduced it, I guess, as soon as he got here, and he is 
one who has unquestioned credibility and credentials on our Nation's 
debt, deficit, financial balance sheet, you name it. I am glad the 
gentleman has joined us tonight.
  Mr. STENHOLM. I thank my friend from Tennessee for yielding and thank 
him for taking this hour tonight. I not only want to thank him, but I 
want to thank USA Today for what they did today on the front page of 
their newspaper. We have been in this Chamber several times this year 
talking about this, but nobody pays any attention. You would think that 
you are making this up, what you have just shown, how the deficit has 
turned around. We have listened to the explanations from our friends on 
the other side who are in control of the fiscal matters of this country 
right now. Here is the paper, front page: $84,454 is the average 
householder's personal debt, as you mentioned. We have got home 
mortgages. If you are in small business, you borrow money. Your 
personal family, you borrow money. You have got credit card debt. You 
have got a car loan, et cetera. So the average per household is 
$84,454. The average debt that you are talking about tonight plus the 
unfunded liabilities of Social Security and Medicare, and I found it 
rather fascinating that the previous 1 hour did not ever mention the 
debt that is associated with the Medicare program right now, that did 
not mention that we were kind of misled, and I was one of the 
bipartisan supporters of the pharmaceutical drug Medicare reform bill, 
and I supported it because of the rural hospital components, but nobody 
mentioned the fact that we were misled about what the cost of that bill 
was going to be, those of us who supported it. We were not told 100 
percent of the truth, and that is another story for another day.
  But you are going to get into something in a minute that I think is 
going to get even more the attention of the American people. I 
remember, 1981, when we in this body in a bipartisan way increased the 
debt ceiling to, I believe, $980 billion. We are talking tonight about 
$7.3 trillion. It was $980 billion in 1981. We did not worry too much 
about that at that time because we owed most of that money to 
ourselves. When you owe money to yourselves, I remember the debate very 
clearly, it is not a problem because we are just taking it out of this 
pocket and putting it in another one. But, today, it has changed a 
little.
  I think that leads into the point the gentleman was wanting to make. 
I want to talk more about this unfunded liability again, things we are 
not doing in this 108th Congress.

                              {time}  2215

  It has been now labeled, and I think correctly, the biggest do-
nothing Congress since 1948; i.e., we have been in session less this 
year than any Congress since 1948. And that means that we have got an 
energy bill we have not passed. That means we have got a budget we have 
not passed. That means that, sometime this week, we are going to reach 
the debt ceiling of $7.384 trillion, which means we have got to up our 
credit card limit, or we default on these notes that we have got. And 
so all of this time, nothing is being talked about until today on the 
front page, some newspaper, some media, paid a little bit of attention 
to it.
  But when we talk about debt, we do not owe it to ourselves anymore, 
and one of the most frightening aspects of this debt today is the one 
that the gentleman is just about to talk about.
  Mr. TANNER. Mr. Speaker, reclaiming my time, I thank the gentleman 
for his comments.
  I hope that we have communicated the breathtaking magnitude of this 
federal debt, $7.3 trillion in a $10 trillion economy. We cannot 
sustain that. It is like, if one makes $50,000 a year and they owe 70 
percent of that in debt, they are in deep trouble, and I will talk 
about that in a minute. But the gentleman from Washington has joined 
us.
  Mr. Speaker, would he like to say something before I get into whom we 
owe?
  Mr. McDERMOTT. Mr. Speaker, will the gentleman yield?
  Mr. TANNER. I yield to the gentleman from Washington.
  Mr. McDERMOTT. Mr. Speaker, I think it is rather unusual that the 
gentleman from Texas (Mr. Stenholm), the gentleman from Tennessee (Mr. 
Tanner), and I are all up here today talking about the same issue 
because I really think it is time to get some real value out of the 
administration's color-coded warning system. It is time to declare a 
code red on the Nation's debt crisis.
  The front page story today, which has been alluded to, from USA Today 
analyzed the financial obligations facing Americans because of 
government debt. USA Today called it the hidden debt, and it totals a 
staggering $53 trillion. That translates into $473,456 per household. 
This money we need right now to meet the future obligations for 
programs like Medicare, Social Security, and government pensions. It 
grows by $1 trillion a year as long as this administration's budget 
binge continues.
  The bills come due in earnest beginning in 2008. That is not very far 
away. It is a blink of an eye in real terms. So far, the answer out of 
this administration seems to be a strategy of letting the financial 
crisis reach epic proportions and then renege on the promise that the 
country has made to the greatest generation. And that, in my view, is 
not right.
  When Americans need their government most, at retirement, the 
administration has not put forth a credible plan to honor our 
commitment to senior citizens. When Americans are most vulnerable, 
entering retirement after a lifetime of hard work and sacrifice, this 
administration is budget binging and simply cannot go on.
  What will they say to seniors? Well, we would not do the math. Or we 
did the math and left it to the next administration to be responsible. 
The road the administration has put this Nation on is a fast track to 
catastrophe. This is far from a dire warning.
  Economists and other experts on both sides of the aisle know the 
consequences of what USA Today is reporting today. The nonpartison, 
independent CBO looked at the President's budget. The CBO concluded, 
``These long-term budget projections show clearly that the budget is on 
an unsustainable path.'' That is not rhetoric. That is a dose of 
reality about where this administration has taken the country.
  It gets even worse if a major disruption in oil supplies or another 
terrorist attack shakes the world's confidence in America. There is a 
major crisis at America's doorstep, but this administration serves up 
anecdotes instead of answers.
  America's national security cannot be separated from America's 
economic

[[Page 20630]]

security. And knowing that this Nation faces a looming debt load 
surpassing $53 trillion, the administration simply denies the crisis 
and keeps rewarding the rich with increasing tax cuts. Every day that 
the administration pretends everything is rosy is another day closer to 
a crisis when decisions will be forced, not made. That is because 
America is being run on borrowed money as much as borrowed time.
  America is increasingly dependent on foreign governments to finance 
the U.S. Government spending. Is that the administration's idea of how 
to keep America secure? The way the administration is going, our 
insatiable appetite for foreign capital to keep the United States going 
will match our insatiable appetite for oil. Dealing with one is bad 
enough. Dealing with both is downright scary.
  What happens when foreign countries decide to push the limit and 
demand more and more of us, not in dollars but in policies? If anyone 
doubts that carrot-and-stick approach, I would say look back on our own 
recent history. How many times has the United States tied economic 
assistance to another nation for concessions on something we want in 
return? The answer is, too many times to count.
  National security depends upon economic security and is not built on 
top of an international debt or a mountain of international IOUs. We 
owe the greatest generation something more than a than an IOU. We owe 
the next generation something more than an anvil of debt hanging around 
their necks. We owe it to ourselves to face the reality that is facing 
us this day.
  Here is the scale.
  America is the greatest economic engine on the face of the earth. 
Last year, America's entire economic output was $11 trillion, as has 
been mentioned before. That was the total gross domestic product. As 
impressive as that is, the GDP pales in comparison to the $53 trillion 
coming due. Last year's entire economic output of the greatest country 
on earth is a mere one-fifth of the debt load America faces. Common 
sense ought to tell us where math like that gets us.
  The war on America's debt is going to challenge us in ways we have 
never seen before. The danger is the economic policies set in motion by 
the current administration will pit one generation against another; the 
seniors against the folks in our age group against our kids. Every day 
the administration denies the problem is another day the war on debt 
becomes harder to win. We can act while we are still responsible to 
make choices. Or America can wait until we make or are forced to make 
draconian cuts.
  The Greatest Generation made the greatest sacrifice on behalf of 
every generation. America owes them a debt of gratitude, not a mountain 
of debt that imperils everything they fought for. It is time to put the 
common good ahead of uncommon gain in this country. We have done it 
before, and we can do it again.
  I think the gentleman from Tennessee (Mr. Tanner) ought to be 
commended for coming out here and raising this issue. At 10:30 at 
night, the people of the west coast are still watching, and I am sure 
people in Tennessee are watching, and people in Texas are watching, and 
they have got to think about this. This is not being discussed in this 
campaign. But George Bush has run us off the road. So my hat is off to 
the gentleman for coming out and talking about this.
  Mr. TANNER. Mr. Speaker, reclaiming my time, I thank the gentleman 
for joining us. I got interested in this, it has been 2 years ago now, 
and I have learned more about the Nation's debt structure and so forth 
than I ever thought I would. And the more I think about it, the more 
concerned I become. And we are talking about this gross federal debt.
  Let me try to boil it down. Of the last year, we paid gross interest 
on the $7.3 trillion of $318 billion. If we do the math, that is, 17.8 
percent of every dollar that comes into this town is going out in 
interest. That is a 17.8 percent mortgage on our country. If we just 
talk about the $4 trillion, the hard dollars, and take away the money 
we owe each other, we have got almost a 9 percent mortgage on the 
country now, and it is going up every single day.
  Mr. McDERMOTT. Mr. Speaker, who is financing it?
  Mr. TANNER. Mr. Speaker, I am going to answer that question, and I 
guess now is as good a time as any. The foreign-held debt in January of 
2001 was $1.01 trillion. The foreign-held debt in July of this year was 
$1.81 trillion. That is a difference of $800 billion since 2001, a 79 
percent increase in what foreigners hold.
  If we look at this chart, in 1980, of our debt foreigners held 17 
percent of it. Last year, they held 37 percent of it. That is over a 
23-year period.
  But look at this one. In just 1 year, through July of 2004, it has 
gone from 37 to 42. That is what I am talking about when, on page 2 of 
the story, we will hear this, oh, well, this deficit is not any greater 
than it has been in times gone by as a percentage of the gross domestic 
product. That may be true, but what they do not tell us is that, in 
those times before, it was Americans buying war bonds. It was Americans 
buying T-bills and Americans buying notes. That is not true any longer. 
We are now dependent on the infusion of foreign capital to buy our 
notes, our T-bills and our bonds to finance this government. This is a 
recipe for financial disaster. It has to be.
  One of the heart-breaking things about this is that people just do 
not focus on it and do not understand the magnitude of the problem. We 
think about the foreign aid bill. Do my colleagues realize that this 
year we will ship overseas four times the amount of the foreign aid 
bill in interest alone? Eighty-four billion dollars we are shipping out 
of this country to foreign-held debt. This is something that I think 
people ought to be aware of.
  And this chart will show who owns our debt. In July of 2004, we owed 
the Japanese $695.8 billion. We owe mainland China $166.9 billion; 
United Kingdom, $130.4 billion; Caribbean banking centers, $90.9 
billion; Korea, $61.5 billion; Taiwan, $57.6 billion; Hong Kong, $50.4 
billion; Germany, $49 billion; Switzerland, $48 billion. We owe OPEC 
$43.9 billion. We owe Mexico $34.1 billion; Canada, $33.3 billion; 
Singapore, $26.1 billion. We owe Luxembourg $26 billion; Ireland, $18.2 
billion; Brazil, $16.2 billion; Italy, $15.7 billion; Turkey, $15 
billion; India, $14.9 billion; the Netherlands, $14.6 billion; Belgium, 
$14.6 billion; Thailand, $14.3 billion; Israel, $13.8 billion; France, 
$13.6 billion; Spain, $11.9 billion; Sweden, $10.4 billion; Australia, 
$9.7 billion; others, $7.5 billion. We owe $1.813.1 trillion out of the 
$4 trillion to people who are not Americans and who may not see the 
world as we see it in the future. And therein lies, I think, an 
unacceptable risk that we are putting our country in. We are creating a 
financial risk to our country that is, in my view, unacceptable.
  The percentage of debt that was in foreign-held hands when President 
Bush took office has gone up, as I said, $800 billion. And the 
percentage of the 2003 deficit last year that we had, do my colleagues 
know what happened? Seventy percent of our deficit last year was 
financed by foreigners.

                              {time}  2230

  Not us. We are not paying for it. We are not paying for anything. 
Foreigners are financing our deficit spending. And if you do not think 
that is dangerous, then you have not studied history.
  I yield further to the gentleman from Texas (Mr. Stenholm).
  Mr. STENHOLM. Mr. Speaker, I hope our colleagues are paying a little 
attention to this tonight, because when we have been on this floor 
offering to be part of a solution, if people are watching this right 
now, folks are beginning to think, I would hope, okay, what should we 
do about it? What do you propose we do about it? How do you stop this, 
or is it no problem?
  Well, I do not think anybody can come to the conclusion that this is 
no problem. If they do, they are living on a different world than the 
gentleman is or I am. It is a problem. It is a major problem.
  Not only is this foreign debt, but then when you look at the unfunded 
liabilities of our Social Security system,

[[Page 20631]]

for our children and grandchildren, and I want to emphasize right here, 
no one watching this has to worry about your Social Security check 
today. That is not the problem. It is our children and grandchildren 
that have got to worry about it. The Medicare situation right now is a 
$30 trillion unfunded liability. That is the more immediate problem.
  But our point tonight is in emphasizing this body, the 108th 
Congress, has done nothing to address the problem the gentleman is 
showing, has done nothing to address the Social Security unfunded 
liability, has done nothing to deal with Medicare, other than dig the 
hole deeper; and that is the concern that we bring tonight.
  It is time that we start doing something about it. Sometime this 
week, it is estimated that on Friday the United States of America will 
reach our credit card limit, $7.384 trillion; and when you reach that 
limit, you cannot borrow any more.
  Now, the Blue Dogs, we have written a letter to the gentleman from 
Illinois (Speaker Hastert), saying Mr. Speaker, we will vote to 
increase the debt ceiling, we will provide some bipartisan support for 
doing that, and we ask you to bring it to the floor and do it out in 
the open, with one proviso: reinstate one small rule that worked in 
1990, 1992 and 1997, pay-as-you-go.
  It says if you are going to spend more money for any purpose, you 
have got to pay for it. If you are going to cut taxes, you have got to 
cut the spending first; not just say you are going to do it, but 
actually do it before you cut the taxes so you do not dig the deficit 
hole deeper.
  We think that is a reasonable compromise. The gentleman and I and 36 
of our colleagues have said on this side of the aisle, we will do that.
  Instead, what we hear from the leadership of this House is we are not 
going to vote on it until the lame duck session. We are going to put 
the Treasurer of the United States, who has asked us to increase the 
debt ceiling, we are going to put the good faith and credit of the 
United States into requiring the Treasurer of the United States to use 
every gimmick at his disposal, borrowing the Civil Service trust fund 
dollars, again, they have already been borrowed and spent, but we are 
going to do it again, because, as you know, these trust funds are a 
figment of imagination of anybody.
  The military, the irony tonight, is that for the next 6 weeks we are 
going to force the Treasurer of the United States to borrow the 
military trust funds. The men and women who are putting their lives on 
the line tonight for us in Afghanistan and Iraq, work in paying into 
their trust fund for their retirement, we are going to manipulate that 
for the next 6 weeks just to keep us from voting to increase the debt 
ceiling. That borders on immorality. We hear a lot about that around 
this body, and it is wrong.
  It is time for us to start dealing. You will find, Mr. Speaker, there 
are some considerable number of Democrats that will work with you would 
you allow us the opportunity to do so.
  Finally, on the point the gentleman is making here, the gentleman 
mentioned debt tax awhile ago. All we hear about around here is tax 
cuts, tax cuts out the gazoo.
  What the gentleman has shown tonight is the largest tax increase that 
this country has ever seen, because once you owe $7 trillion, let us 
round it off now because it will be $8 trillion within the next year, 
$8 trillion, a 1 percent increase in the interest rates of this 
country, a 1 percent increase is a $80 billion tax increase, and where 
are we going to send 42 percent of that tax increase? To our good 
foreign neighbors that are financing our spending binge in this 
country.
  This is the biggest not only tax increase, but, as the gentleman 
pointed out tonight, the biggest foreign aid bill that this country has 
ever passed. And yet you would not believe it based on the rhetoric we 
hear in this body night after night.
  Mr. TANNER. Mr. Speaker, I see our friend from Mississippi (Mr. 
Taylor) has joined us. I thank the gentleman for coming down. Some of 
us sometimes feel like a canary in a coal mine. They send a canary in a 
coal mine to see if it can live because of the gases and so forth. We 
have been talking about this, the Blue Dogs and others, for at least a 
year.
  I think maybe with the gentleman from Texas (Mr. Stenholm), what he 
said about USA Today, maybe we are getting through now and people are 
beginning to see. As I said earlier, the citizens of this country need 
to know this. I do not think they really fully know, because nobody has 
talked that much about it, but we are on a road to financial 
Armageddon. What we are doing around here is just plain wrong.
  I thank the gentleman from Mississippi for joining us tonight.
  Mr. TAYLOR of Mississippi. Mr. Speaker, I thank the gentleman for 
yielding.
  Later on this week there will be a debate between the two candidates 
for President. I distinctly remember the incumbent telling me a little 
over 3\1/2\ years ago that he could increase spending, decrease taxes 
and pay down the national debt.
  Having watched this body for decades have huge annual operating 
deficits, I did not think it could work. It just did not make sense. It 
took fiscal restraints, it took some tax increases that I voted 
against, but it took both of those things to balance the budget. And 
here he was coming in saying, I am going to spend more, I am collecting 
less, and I am going to balance the budget.
  So on the night of my son's 13 birthday, they passed the President's 
budget. At that time our Nation was $5,643,283,000,000 in debt and owed 
over $1 trillion to the Social Security trust fund, and yet he said 
what we needed to do was spend more and collect less.
  In slightly over 3 years the national debt has increased by 
$1,735,784,685,911. To put that into context, if you went all the way 
from the American Revolution, the cost of the American Revolution, the 
cost of the War of 1812, the cost of the Mexican American War, the 
Civil War, Spanish-American War, World War I, World War II, Korea and 
Vietnam, all the things that happened in those years, all the way up to 
1979, our Nation borrowed $1 trillion. In a little over 3 years, our 
Nation has borrowed $1.7 trillion. Where did it come from?
  The gentleman from Tennessee (Mr. Tanner) has done a great job of 
talking about we borrowed it from the Communist Chinese. By the way, if 
you are concerned about Taiwan's independence, imagine a scenario where 
the Chinese are getting ready to invade Taiwan and say, By the way, if 
you defend Taiwan, we are calling in the note for $160 billion you owe 
us, plus the note for the other $50 billion you owe to Hong Kong, since 
we now own them also. So we are calling in the note for over $200 
billion if you defend Taiwan. I have got to tell you, I do think that 
is part of their strategy. I have said that here on the House floor. If 
you think big deficits are a good idea, then you like borrowing money 
from the Communist Chinese.
  But worse than that, every single American who has a job, from a kid 
who is working at a snowball stand to Bill Gates, everybody pays at 
least on their first $68,000 of income on their Social Security. There 
was a solemn promise made back during the Reagan Presidency when those 
taxes were increased that that money would be set aside for no other 
purpose than paying Social Security benefits.
  Right now, our Nation owes the Social Security trust fund $1.6 
trillion with no plan to pay it back. The past 3 years, they have 
stolen an additional $521 billion from the Social Security trust fund.
  So if you watch the debates Thursday night, and I hope some 
television commentator somewhere is watching this, how about a great 
question: How do you plan to pay back the $1.6 trillion that has been 
stolen from the Social Security trust fund, including the $521 billion 
that has been stolen in just over the past 3 years? Because if you do 
not have a plan to pay it back, then you stole it.
  So in order to get about $600 billion in tax breaks, $521 billion 
stolen from the Social Security trust fund, the rest is borrowed from 
the Communist Chinese. A heck of a deal.

[[Page 20632]]

  As a matter of fact, if you take a look at it, for every dollar the 
American people got back in tax breaks, our Nation has borrowed three. 
That is a heck of a sound business decision.
  So if you have watched the House floor in the past couple of weeks, 
you know that we have had votes on things like gay marriage, which I 
opposed. We have had votes on things like burning the flag, which I 
oppose. We have had a lot of talk of morals; we have had a lot of talk 
of patriotism.
  So let me pose to my Republican friends who vote for most of these 
things, a moral question: Is it moral for you to spend money that you 
are going to stick your kids with the bill? What moral father, what 
moral mother would go out and buy a house or a fancy car and say, I 
don't care what it costs, because my kids are going to pay for it.
  What moral grandparent would go out and buy something and say, I 
don't care what it costs. My grandkids are going to pay for it.
  Mr. TANNER. Or just pay the interest on it and let them pay it off.
  Mr. TAYLOR of Mississippi. Right. Talk about patriotism. What patriot 
would bankrupt the country he loves? That is exactly what has been 
going on for the last 3 years.
  We hear talk about sound economic principles. Really? What is so 
sound about borrowing $3 for every $1 the citizens got back in tax 
breaks? New York loan sharks do not charge that kind of interest. Yet 
it is what we continue to pay.
  So I think the questions that I would hope the press will be asking 
Thursday night are how did we get into this jam and what is your plan, 
both of you candidates, for getting us out it?
  What is my plan? Number one, I think we need a constitutional 
amendment to protect the trust funds. We have a solemn promise. If we 
take money out of a person's paycheck and say it is going towards 
Social Security, then it should go towards nothing but Social Security. 
If we take money out of a person's paycheck to pay for Medicare, then 
it should go towards nothing but Medicare. It is pretty simple. If we 
tell a Federal employee we are going to take money out of their 
paycheck and set it aside for their retirement, then we ought to do 
just that.
  But what you do not know and probably do not want to hear is that as 
of this moment this Nation owes you, every Social Security recipient, a 
total of $1.6 trillion has been taken out of your trust fund. For those 
of you who paid into Medicare, and every working American has, we owe 
you $270 billion. If you are a Federal employee, we owe you $622 
billion in your retirement fund.
  By the way, if a private sector employer had done that, if a private 
sector employer had dug into his employees' retirement fund for any 
reason, no matter how good, whether it was to help a crippled child, 
whether it was to help someone go to college, whether it was to pay a 
disaster loan, if they borrowed into it for any reason, they would go 
to jail. Yet the people who run our country continue to do that with 
absolutely no remorse for what they have done, and, sadder still, with 
absolutely no plan for paying it back.
  So I say to the gentleman from Tennessee (Mr. Tanner), I do 
appreciate the opportunity to be here tonight.
  For you House employees, I hate keeping you here tonight. There is 
one week left in this session. I promise not to do this to you on a 
regular basis. I think these are things the American public needs to 
know about. I think this is the time to talk about it.
  Mr. TANNER. I yield to the gentleman from Texas (Mr. Stenholm).
  Mr. STENHOLM. Mr. Speaker, I was just going to add a couple of points 
here.
  It is not just the three of us talking about this. The Comptroller 
General David Walker, the government's chief accountant, is traveling 
the Nation warning of the impending crisis. ``I am desperately trying 
to get people to understand the significance of this for our country, 
our children and our grandchildren,'' Walker says. ``How this is 
resolved could affect not only our economic security but our national 
security,'' which the gentleman has pointed out and the gentleman from 
Mississippi (Mr. Taylor). ``We are heading to a future where we will 
have to double taxes or cut Federal spending by 50 percent.''
  Alan Greenspan has been begging this Congress and this administration 
to deal with the deficit, but nobody seems to be listening.

                              {time}  2245

  This is a major problem which requires a solution, and we just seem 
to be ignoring it and sweeping it under the table like it is not there, 
but it is there.
  Mr. TANNER. Mr. Speaker, if this has not depressed us enough, this 
year, so far, in 2004, the increase in the privately held debt is $380 
billion. The increase in foreign-held debt is $370 billion. Ninety-
seven percent of the increase in privately held debt is in the hands of 
foreigners.
  There is a fellow, Alan Sloan, who wrote not long ago in The 
Washington Post about us financing our government with borrowed money 
from anywhere on Earth where people will let us have some in exchange 
for our IOU, and he said this: ``Whose bread I eat, his song I sing.'' 
What of course he was talking about is, as the gentleman from 
Mississippi (Mr. Taylor) pointed out, when you are in hock all over the 
world, but particularly to Beijing, and look at what they have done; I 
cannot believe that this is just happenstance.
  Just since 2000, they have increased their holdings of our debt 119 
percent. Now, there is a reason for that, and it is not because they 
see the world the same way the United States does every day. I am not 
bashing China, other than to say, we are creating a financial 
liability, a financial vulnerability that is tantamount to a national 
security issue. There is no other way we can say it. To point that out, 
there is a former official of the People's Bank of China, the country's 
central bank, who was recently quoted and said the U.S. dollar is now 
at the mercy of Asian governments.
  I want to tell my colleagues, we not only have a horrendous balance 
of trade situation with Asia but, if this is true, then we are no 
longer the architects of our own destiny financially. There is no way 
this country can be strong and free and put in the position we are in, 
in hock all over the world, getting worse by the day. Mr. Speaker, 97 
percent of the privately held debt this year increased by foreigners.
  Mr. STENHOLM. Mr. Speaker, I want to make an observation right here, 
because I know if any of our colleagues, and we have two on the floor 
from our friends on the other side of the aisle right now, their 
thinking right now, if it has been as it has been when we have had open 
expressions of opposition to some of our solutions, is that you are 
forgetting to say we are at war, and wars are expensive. No, we are not 
forgetting for one second that we are at war, and 20 percent of this 
problem is directly related to the war, 20 percent. I use as my 
reference for that, Alan Greenspan.
  The gentleman from Tennessee brought up another interesting point 
that really is directly tied to the point the gentleman is making 
tonight. How many times have we been on this floor worried about the 
trade deficit? I rhetorically ask the question of my constituency back 
home many times: How long can America keep sending over $500 billion, 
exporting our jobs to other countries at the rate we are without the 
law of economics taking over? I do not know the answer to that 
question, and I do not know anybody who does know the answer to that 
question, but there is an answer, and the market is ultimately going to 
answer that.
  But now, tonight, the gentleman has shown, as Paul Harvey says, the 
rest of the story. What happens to those dollars when we ship them 
across to other countries? They come back. They have to come back. They 
are buying our debt with those dollars. If they did not, we would have 
a much more serious economic situation almost overnight.
  Mr. TANNER. And if they stop, we have a crisis.
  Mr. STENHOLM. That is the crisis.
  Now, we hear folks saying, well, Charlie, this deficit is not the 
largest in the history of our country as a percent of GDP, and I 
concede that point

[[Page 20633]]

readily, because that is a fact, if we will also use the same GDP 
figures for spending and for revenue. And having been around this body 
now for almost 26 years, I tend to go back and see, well, what was it 
in 1978 when I was elected and what is it in 2004 today. And spending 
as a percent of GDP by the Federal Government for all programs has gone 
down one-half of 1 percent. Revenue has gone down by 5 percent. 
Therefore, we are perfectly willing to borrow from foreign interests 
that which we demand the right to spend for all of the purposes that we 
are spending today. And when we hear this, there is another thing; and 
this is the point I wanted to make.
  The current accounts deficit, the gentleman mentioned that, is the 
largest that it has been in the history of our country today: 6.9 
percent of gross domestic product in the current accounts deficit. Mr. 
Speaker, 3.4 percent is where it was in 1987 when Black Monday occurred 
and the stock market crashed because of something that happened. As USA 
Today says today, an oil crisis, something happens, we have a problem. 
We are double, 100 percent worse off today in the current accounts 
deficit than we were in 1987.
  Well, one other little figure, facts and figures. The gentleman 
talked about the debt tax. Forty percent of all income taxes paid by 
the United States citizenry last year went to pay interest on the 
national debt. Forty percent of all of our taxes are going to pay 
interest on the debt; and yet the debt, the deficit, and the rising 
debt is of no problem to the leadership of this House. Mind-boggling.
  Mr. TANNER. Mr. Speaker, I yield to the gentleman from Mississippi 
(Mr. Taylor).
  Mr. TAYLOR of Mississippi. Mr. Speaker, it is funny how people 
change. There was a guy who was a Representative from Illinois and he 
believed in a balanced budget. His name is Dennis Hastert. Back when he 
was just Member Hastert, he gave great speeches on the House floor 
about the importance of a Balanced Budget Amendment to the 
Constitution. So whether the gentleman from Tennessee (Mr. Tanner) is 
here, whether the gentleman from Texas (Mr. Stenholm) is here, whether 
I am here, whether the gentleman from California (Mr. Cunningham) is 
here, no matter who is here, the rules are that Congress cannot spend 
more than they collect in taxes.
  The gentleman from Illinois (Mr. Hastert) he came to the floor back 
then and said, Mr. Chairman, I rise today in support of a Balanced 
Budget Amendment. ``It is an amazing statistic that interest payments 
on our national debt were 5 times higher in 1993,'' we are going back a 
ways, ``than outlays for all education, job training, and employment 
programs combined. Clearly, until our monstrous'' then ``$4.3 trillion 
Federal deficit is eliminated, interest payments will continue to eat 
away at the important initiatives which the government funds. I will 
not stand by and watch Congress recklessly squander the future of our 
children and grandchildren. Mr. Chairman, when I served in the Illinois 
legislature, the fact that we had a balanced budget amendment to our 
State Constitution enabled us to practice strong fiscal discipline. We 
must have the same safeguard at the Federal level. The American people 
have wanted a Balanced Budget Amendment for a long time because they 
know it is the only way to force Congress to make the tough spending 
choices.''
  That comes out of the Congressional Record March 17, 1994. The 
gentleman from Illinois (Mr. Hastert) became Speaker in January of 
1999, almost 5 years ago. In the 5 years that he has been Speaker, he 
has not allowed a single vote on a Balanced Budget Amendment to the 
Constitution. We have had a number of votes on amending the American 
Constitution on things that I voted for, things like preventing gay 
marriage, things like preventing flag desecration, but not a single 
vote on what I consider to be the most important issue in America right 
now, and that is passing a law that whether or not the gentleman from 
California (Mr. Cunningham), or the gentleman from Texas (Mr. 
Stenholm), or the gentleman from Tennessee (Mr. Tanner), or myself, the 
Speaker, or no matter who sits in our chairs, those people who serve 
the public will spend no more than they collect in taxes.
  I say to the Speaker of the House, the gentleman from Illinois (Mr. 
Hastert), we have about 1 week left in this session. I, for one, would 
like the opportunity to vote on a Balanced Budget amendment. You have 
blocked it for 5 years now. One of the reasons I will never vote for 
you for Speaker is because what you said as a Member did not translate 
into what you did as Speaker of the House.
  I believe it is important. Almost every State has laws that say, you 
cannot spend more than you collect in taxes. In my State of 
Mississippi, city councilmen and county supervisors are held personally 
liable if they spend more than they collect in taxes. And guess what? 
They do not spend more than they collect in taxes. We need that sort of 
responsibility here.
  So I say to the gentleman from Tennessee (Mr. Tanner), thank you for 
pointing out the evils of the debt. We have outlined some solutions 
tonight. We are hoping guys like the gentleman from Illinois (Mr. 
Hastert) or whoever the next Speaker is will give us a vote on that. 
And I am ready to do that, I say to the gentleman from California (Mr. 
Cunningham), and I hope he is ready to do that. But at the very least, 
let us have a vote on it. Let us show the American people who is for a 
Balanced Budget Amendment and who is not. Quit hiding behind the 
Speaker of the House who, for 5 years now, has blocked that vote, even 
though he came to this floor on any number of occasions and said how 
important it was for our Nation to have that.
  Mr. STENHOLM. Mr. Speaker, one of the reasons why he has not brought 
it up is we cannot have the kinds of budgets that have been here in 
this body for the last 3 or 4 years and get to a balanced budget. We 
have to change our overall budget philosophy and go back to pay-as-you-
go. It is pretty simple arithmetic. We cannot run this country on 
philosophy. The banks will not lend us money on philosophy all of our 
lives. At some point, the law of economics is going to take over and as 
the charts the gentleman from Tennessee (Mr. Tanner) has shown us 
tonight, if it does not begin to get the attention, which I am glad 
again today, USA Today put it on the front page, maybe now, tomorrow 
night in the debates between the two candidates for Vice President, 
this issue will come up.
  Maybe Thursday or Friday night it will become part of the debate, and 
people will start asking the question, what is your plan? The three of 
us will be here, hopefully with three friends from the other side of 
the aisle with a plan; and if we will start working together, we can 
begin to address this problem. But we cannot do it with the game plan 
that we are under today. The game plan today is giving the results of 
what the gentleman is showing us right now in the charts.
  Mr. TANNER. Mr. Speaker, I want to thank my colleagues for coming, 
and we will wrap this up. But there are three things that I hope people 
who have listened to this tonight will come away with. Number one, we 
are in an unprecedented spiral of debt. We are borrowing money now 
faster than this country has ever borrowed it. There is not a reputable 
economist in this land that thinks that growth can catch up to this 
debt curve that is plunging us into bankruptcy. Not one reputable 
economist will say that growth will catch up with this.
  As I said earlier at the top of the hour, we are in an airplane; and 
if we do not do something different, we are in a death spiral. It is 
going to hit the ground. It is that simple. No question about that.
  The second thing is I hope people will realize that as bad as this 
is, what is worse is who is financing it. Back in World War II, back in 
World War I, back any time we had a national crisis in this country and 
we had to raise money through borrowing, we did it with war bonds and 
so forth, and people in this country invested in the good of the 
Nation. That is not happening. We are now mortgaging our country, 90

[[Page 20634]]

percent this year. It has gone up 79 percent in the last 4 years. We 
are borrowing from people who do not have America's best interests at 
heart. I hope that is the second lesson that comes out of this tonight. 
Please, if you think that is important, if you know, as I do, that we 
are creating a financial vulnerability second only as a matter of 
national security to the war on terrorism, because we will lose control 
of our own financial destiny, control of our economy if this is not 
quickly reversed.
  And third, the way to reverse it is to immediately establish the 
rules of pay-as-you-go. Every family does it. If I want to spend some 
money over here, I have to cut somewhere over here. It is that simple. 
We all do it. They refuse, the Republican leadership here refuses to 
put what we call PAYGO rules back in. They work. If you have a good 
idea, that is fine. How are you going to pay for it? You have to cut 
somewhere else to do it. We ought to demand, the citizens, the highest 
officeholders in our land must demand financial accountability that has 
been sadly and, in my judgment, heart-breakingly absent here. I yield 
to the gentleman from Mississippi.
  Mr. TAYLOR of Mississippi. Mr. Speaker, just along the lines of the 
gentleman from Tennessee (Mr. Tanner), and I am really reminded of it 
when I see a great American hero sitting across the aisle from us, 
someone who fought for his country in Vietnam, was an ace, probably has 
some different views than what we do. But I will say this: I greatly 
respect the gentleman from California (Mr. Cunningham), and I greatly 
respect everyone who has ever served our country. I have enormous 
respect for all of those fighting in Iraq and Afghanistan tonight.

                              {time}  2300

  But I will say this. Those of us who are fortunate enough not to have 
to fight these wars, ought to at the very least be willing to pay for 
them right now and not stick those young soldiers and their children 
with the bill for this war.
  That is what is going on. We are just kicking the can. We are asking 
the kids to fight for us now, and, by the way, when you get home, here 
is the bill. And if you cannot pay for it, your children and your 
children's children will pay for it.
  Almost every tax on the books, as regrettable as taxes are, almost 
every tax on the books was put on during wartime. Never in the American 
history has there been a tax break during a war, never, because every 
other generation says, we have a challenge we are going to pay for.
  This generation needs to step forward as other generations did. And 
those of us who are fortunate enough not to fight this war ought to at 
least be willing to pay for it right now.
  Mr. TANNER. Mr. Speaker, we want to thank the staff. We apologize for 
keeping them here this late. This is a message that we hope people will 
begin to think about.

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