[Congressional Record (Bound Edition), Volume 150 (2004), Part 5]
[House]
[Page 5562]
[From the U.S. Government Publishing Office, www.gpo.gov]




             NEGLECT OF NATION'S FINANCES THREATENS AMERICA

  The SPEAKER pro tempore. Pursuant to the order of the House of 
January 20, 2004, the gentleman from Michigan (Mr. Smith) is recognized 
during morning hour debates for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, this year we celebrate Abraham 
Lincoln's 195th birthday. In his famous address at Gettysburg, he noted 
that ``our fathers brought forth on this continent a new Nation 
conceived in liberty and dedicated to the proposition that all men are 
created equal.'' The Civil War was ``testing whether that Nation, our 
Nation or any Nation so conceived and so dedicated can long endure.''
  Now, that challenge is with us. Today, we face a threat to the 
country that may well be as serious. It lies not in the dramatic clash 
of arms, but in neglect of our Nation's finances, especially our long-
term finances.
  Voters vote for benefits, and politicians promise them without 
knowing how to pay for it. Just 4 months ago, Congress voted for a 
prescription drug benefit that adds $16 trillion to the program's 
unfunded liability. That is over two times our total national entire 
debt, and it was done mostly for short-term political gain with little 
reform of the underlying program. There is now a call from some Members 
proclaiming that the budget we are now working on for 2005 that is 
actually twice an increase in government, twice the rate of inflation 
is not enough and we should have more spending to increase taxes 
eventually. There are very few in Congress who are willing to resist 
the continual pressure to spend; and I think part of that, Mr. Speaker, 
is because of the fact that most citizens today now pay less in income 
tax than they get from government services, so it is easy to ask for 
more.
  From the founding of this country, it took until 1975 to amass a debt 
of $500 billion. Unfortunately, we are now adding more debt to our 
books every year than we did over the first 199-year history of this 
country. The deficit for fiscal year 2003 was $536 billion, $631 
billion this year, and another $534 billion expected for next year. We 
have never run a deficit this high, and we need to take decisive action 
in this budget to address our overspending.
  This kind of spending means that higher taxes are coming, maybe not 
in the next year or two, but eventually. The same Congress that could 
not bring itself to add a few real reforms to Medicare in a gigantic 
benefit expansion bill is not likely to cut benefits to the degree 
necessary to head off financial crisis until the disaster is on us.
  I take some comfort from a new willingness among many members of the 
Republican Conference to tighten our line on spending. Though some 
Members expressed concern about cuts in an election year, a strong 
majority have insisted that we reduce spending. There is general 
cooperation and agreement that we should spend less, not tax more, and 
we will see if that determination translates into effective spending 
restraint.
  Joining with colleagues who share our concern about government 
overspending, we will reimpose discretionary spending caps which were 
in effect from the early 1980s through the surplus period of the late 
1990s. It is important, Mr. Speaker, that Congress work hard to cut out 
unnecessary waste and abuse. We also need to make very hard decisions 
to prioritize spending.
  Another aspect of the solution, I think, is improving the honesty of 
government accounting. I have a bill to require the CBO and the OMB to 
include unfunded liabilities in their budget projections. This unfunded 
liability is now projected to be $71 trillion, $71 trillion that our 
kids and our grandkids are eventually going to have to finance, pay the 
interest on, and start paying it back.
  Some people have said that we should not worry so much about unfunded 
liability because it can be wiped out by reforms, but Congress has 
shown little political will to deal with the problem. Perhaps making it 
more visible will help bring about some of the reforms that will be 
necessary to come to grips with the problem.
  Congress and the President can redeem their record on spending to a 
large degree if they push hard for Social Security reform. It would be 
nice to do it before the election. Maybe we can do it after the 
election, but it remains to be seen whether we will take on that fight. 
It will be a fight because steeply progressive taxes and big government 
have combined to form a powerful electoral block. Here, again, the 
bottom 50 percent of earners now pay virtually no income tax and, 
therefore, have little will.
  Empires decline when they fail to act on fundamental problems, and I 
wonder at times if we are not too distracted by the endless scandals 
and the horse race politics of our media culture to grab what is best 
for our country.

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