[Congressional Record (Bound Edition), Volume 150 (2004), Part 6]
[House]
[Pages 7956-7961]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           BALANCE THE BUDGET

  The SPEAKER pro tempore. 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 would like to address 
certainly different issues that I think are possibly more serious than 
a lot of challenges this Congress has faced, this Nation has faced in 
fact.

[[Page 7957]]

  This is the 195th birthday of Abraham Lincoln, and in my district 
Republicans are celebrating Abraham Lincoln's birthday with their 
annual dinners. And I think of what Abraham Lincoln said in his 
Gettysburg Address when he indicated that, Can a country of the people, 
by the people and for the people long endure?
  And now I am concerned about the system that we have in the United 
States where we have so many lobbying groups pushing for more money and 
a political system where Members of the House and the Senate often are 
better off and increase their probabilities of getting reelected if 
they start promising more programs, if they take home pork barrel 
projects that might allow them to be on the front page of the newspaper 
or on television and it ends up that they have more publicity if they 
spend more money down here.
  And that has led us into a dilemma of overspending and overpromising. 
And I have put this pie chart up simply to review how the Federal 
Government now spends approximately $2.4 trillion in the year that we 
are budgeting for right now.
  We see the largest portion of our total spending pie that represents 
21 percent of the total spending of the Federal Government is Social 
Security. But Medicare, which is now 12 percent, is going to overtake 
Social Security in terms of the percentage of total spending, total 
Federal Government spending that it consumes, and that is going to 
happen within the next 25 years.
  Part of it is because we have dramatically expanded the Medicare 
program to now cover more benefits, including prescription drugs. And 
there is a problem with prescription drugs because if you are on 
Medicare and you do not have the proper drugs and you go into the 
hospital, then Medicare pays for all those prescription drugs while you 
are in the hospital. So to the extent that some of the new prescription 
drugs can keep you out of the hospital, it is reasonable to have some 
help from Medicare to furnish those drugs to keep you out of the 
hospitals.
  But what we have done now is we have expanded the entitlement program 
in Medicare for prescription drugs without making strong changes to the 
programs that are going to keep the program solvent. So the actuaries 
in Medicare are estimating that the unfunded liabilities for Medicare 
now is approaching almost over $60 trillion. In other words, over $60 
trillion would have to be put in a savings account today with returning 
the amount of interest that would represent inflation plus the time 
value of money to come up with enough money to continue to pay benefits 
and to have enough money over and above the FICA tax, the payroll tax 
that is contributing to the Medicare fund.
  As we go around this pie chart, we see that defense is 20 percent, 2 
years ago it was about 18.5 percent. Going into Afghanistan and going 
into Iraq has increased about 1.5 percent of the budget now dedicated 
to defense. But still Social Security compared to defense, you see 
Social Security is much larger. Domestic discretionary is 16 percent. 
Other entitlements are 10 percent. Medicaid is now 6 percent. We were 
growing very quickly, and part of that is long-term health care.
  So even if you are fairly diligent in saving during your working life 
and your early retirement years, if you have to go into a nursing home 
that is now costing between 40 and $70,000 a year, it very quickly uses 
up those savings, and you have gone from a self-payer to a system of 
Medicaid.

                              {time}  2015

  Medicaid is the health care system for the low income, and Medicare 
is the health care system once you reach 65 for seniors, and I want to 
make a point over here at about four o'clock.
  You see about 14 percent of that pie in that purple section; that is 
interest on the debt. Today's debt that is subject to the debt limit in 
the United States, the 14 percent, is now over $7 trillion. In a few 
months, we are going to have to again vote in this Chamber and in the 
Senate, and the President is going to have to sign it, a bill that 
increases the debt limit of this country.
  What does that mean? It means that somehow, we are pretending that 
our problems today are so great that it justifies us borrowing money 
from the earnings that our kids and our grandkids have not even 
received yet. We are borrowing money and passing this increased debt on 
to them to let them worry about servicing the debt; and right now, 
interest rates are at record lows.
  When interest rates go up, and Alan Greenspan chairman of the Fed has 
suggested that is going to happen, we know it is going to happen. The 
14 percent of the total Federal spending that is now used to pay the 
servicing of that debt, paying interest, could dramatically increase 
from two fronts. One is the increased rate that government is going to 
have to pay to entice people to loan money and buy Treasury bills; and 
of course, the second is that we are dramatically increasing the debt.
  This country from 1776 till now, what, that adds up to about 228 
years, it took the first 200 years of this country to amass a debt of 
$500 billion, and now we are increasing our debt every year by an 
additional $500 billion. So we are mounting the debt load that we are 
passing on to the next generation for the next several generations, and 
it is going to be intolerable if we do not control how much we are 
overspending, and even more significant is unfunded liabilities.
  Unfunded liabilities, Madam Speaker, is what politicians promise that 
they are going to do in the future, for example, Social Security. We 
are promising to pay Social Security benefits, and I would like 
everyone to know that there is no entitlement to Social Security. There 
is no account with your name on it. So you can work all of your 40, 50 
years, you can pay into Social Security, but you are not automatically 
deserving of Social Security benefits based on the fact that you paid 
into it. It has gone to the Supreme Court twice, and twice the Supreme 
Court has ruled that Social Security taxes are simply another tax that 
is charged by legislation passed by the House and the Senate and signed 
by the President; and Social Security benefits are a benefit program 
that is not directly related to the fact that you have made payments in 
all of your life.
  So that is one reason we should consider private savings accounts 
that are owned by the worker, that government cannot mess around with, 
for lack of a better description, and this is the messing around. 
Government has been taking all of the surplus from the Social Security 
trust fund and spending it for other purposes; and so we have continued 
over the years to expand the benefits of Social Security to the extent 
that today we have a $12 trillion unfunded liability; and, again, that 
means that we are going to have to put $12 trillion in a bank account 
today that is going to, over the next 75 years, earn about $120 
trillion, and this is what we are going to need for the next 75 years 
in future years' dollars, $120 trillion in addition to the payroll tax 
that is coming in from existing workers to accommodate and to meet 
promised benefits that we have promised in the current Social Security 
legislation.
  Medicare part A. Medicare part A is mostly hospitals, and the 
unfunded liability for Medicare part A is $21.8 trillion. Medicare part 
B, mostly doctors, is $23.2 trillion, and Medicare part D, the drug 
program that we passed last November, is $16.6 trillion. This is the 
unfunded liability, what is going to be needed in addition to the money 
coming in for those programs; and on the Medicare drug program, it is 
interesting that Tom Savings, an actuary in Medicare, estimated last 
November that the unfunded liability for Medicare would be about $7.5 
trillion. The new estimate that came out last month is $16.6 trillion, 
a huge liability to leave to our kids and our grandkids.
  The unfunded liabilities, the generosity of this body, saying we are 
going to make all these kinds of promises and let our kids and our 
grandkids pay for it and we are going to continue to increase 
overspending in addition to these promises on Medicare and Medicaid and 
Social Security, in addition to that we are going to overspend. Last 
year, it was $530 billion overexpenditure. This year it could very well 
get

[[Page 7958]]

up to $620 billion overexpenditure. Next year, another 520 to $530 
billion overexpenditure.
  Overexpenditure means deficit spending; and the deficit spending 
every year you add that up, and it comes to the total debt, and 
somebody's going to deal with if not paying back the debt, at least 
paying the interest on that increased debt, a huge challenge that is 
going to make life much tougher for our kids and our grandkids.
  I am going to talk about Social Security and the Social Security bill 
that I have introduced. I was chairman of the bipartisan Social 
Security Task Force; and when Democrats and Republicans met and had 
witnesses, we brought in witnesses every week for close to a year, it 
was unanimous: Republicans and Democrats, everybody agreed, we have got 
to do something with Social Security; and the longer we wait to solve 
this program, the more drastic the solution is going to have to be.
  And yet we do not do anything. We do not mention it, we do not 
mention the huge entitlement programs in our budget. We simply pass a 
budget every year, and now what is called the Gephardt amendment in our 
rules says that when we pass a budget, this is sort of a footnote, when 
we pass a budget, instead of bringing it up for a separate bill and 
debate, we will automatically consider a separate bill that increases 
the debt limit. It will be assumed to be passed when we pass a budget, 
so sort of hidden in that budget bill. So we really do not talk about 
the significance of increasing the debt on our kids and our grandkids 
and the tremendous challenge it is going to be to pay the interest on 
that debt, as well as trying to sometime, somehow, somewhere trying to 
pay some of that debt down.
  This is sort of a quick tutorial on how Social Security works, and 
then I will go into what I have done in my Social Security bill to keep 
it solvent forever as scored by the Social Security Administration.
  Benefits are highly progressive and based on earnings. That means the 
lower income you are through your working lifetime, as you pay in your 
Social Security tax a higher percentage, you will get back a lot more 
relative to what you earn than if you are higher income; and this is 
how this is going to work down here. At retirement, all of a worker's 
wages up to the tax ceiling are indexed to present value using wage 
inflation.
  What we do is for your 35 best years, so if you are working 40 years 
you take your best 35 years of earnings, if you work 30 years, that 
means 5 years are scored as zero, as you add those 35 best years 
together and divide by 35, but in terms of indexing to present value, 
on wage inflation, wages double about every 11 years, and so that means 
if 11 years ago you were making $20,000 and you score it 11 or 12 years 
later, you are scored as making $20,000. So it is the kind of job that 
you had in earlier years and what the wages would be for that job today 
is what is credited, adding up your 35 best years on Social Security. 
Here is the progressivity.
  The annual benefit for those retiring in 2004 equals 90 percent of 
earnings up to $7,344. So if you are making $7,344 or less a year, you 
would get 90 percent of that back in Social Security payments if that 
was your average for the 35 years. For that amount over the $7,000 up 
to the $44,000, it is 32 percent of the earnings between the $7,300 and 
the $44,200, and then 15 percent of the earnings above $44,268.
  It might be good to just mention here that one of the ways that I 
keep Social Security solvent is slowing down the increased benefits for 
high-income retirees, and what I do, these are called ben points. What 
I do is add an additional ben point of 5 percent and say that higher-
income earners over $38,000 would get a return of 5 percent of those 
higher wages. So a low income would get 90 percent, and then it would 
go to 32 percent, 15 percent. Then I add another ben point of 5 
percent.
  I put this blip in because I think that a lot of people do not 
understand or have not figured out, should they retire at 62 and start 
earning benefits or should they wait till age 65. Based on average life 
expectancy, early retirees would get less. So at the average age of 
death, which is now 86 years old for a male and 88 years old for a 
female, the average earnings for those years, whether you retire at 62 
or 65, would still amount to the same amount of payments back to you. 
In fact, if you wait 2 years to retire after 65, you can have an 
additional 4 percent added to your benefits for each one of those 
years. In terms of waiting until you are 66 or 67, you can have 
additional benefits if you wait an extra 2 years.
  When I give speeches around Michigan and around the country, a lot of 
people say, well, I know people that are getting SSI, supplemental 
security income, payments on welfare, and they really do not deserve 
it; and I should not have to have that come out of my Social Security. 
Actually, the Social Security Administration runs the program, but it 
comes out of the general fund. It does not come out of the FICA tax. It 
does not come out of the Social Security trust fund.
  This picture sort of represents the demographic problems. The birth 
rate is going down, and the age of death is going up, and since Social 
Security is a pay-as-you-go program, with existing workers paying in 
their tax, and within days that withholding from your paycheck is sent 
out to current retirees; and the problem is there are fewer workers 
working per retiree.
  In 1940 we had about 36 workers working, paying in their Social 
Security tax to accommodate the needs of every one retiree. By 2000, 
the taxes had to go up, of course, because there were only three 
workers working to pay in their taxes to accommodate every retiree; and 
by 2025, there will be just two workers in the United States working to 
pay the benefits of every retiree.

                              {time}  2030

  The United States is heading towards a ratio of workers to senior 
citizens that is going to continue to result in a pay-as-you-go 
program, like our Social Security System, to have it continue to be 
insolvent. So now we can play around the edges a little bit and say, 
well, let us increase taxes or let us reduce benefits. But even those 
kinds of decisions are going to eventually again keep the Social 
Security System from, in the long range, being solvent.
  The birthrate. Well, of course, we have 78 million baby boomers, 
those born right after World War II, from about 1946 to 1965. We have 
78 million of them that are going to start retiring in 5 years, and 
these are the people that are high-income now. So the 12.4 percent of 
their payroll brings a lot of money into the Social Security System. 
Again, as they retire, we lose those high-paying individuals, and they 
go out as recipients collecting the high payments as retirees, since 
there is a direct relationship, even though it is progressive, between 
what you pay in and what you take out.
  I think it is important to sort of reflect historically on what we 
have done. Some people suggest, well, maybe the economy can help us. If 
the economy can come back stronger, we are going to have money. But 
that is not true, of course, because of the direct relationship of 
benefits to earnings. So if the economy increases even more rapidly 
than it is now and jobs expand, then we have more people paying into 
the system now, which means that there will be more money in the short 
run; but when they retire, because they are paying in more money now, 
they are going to take more benefits out when they retire to leave a 
deeper hole then. So it is going to take some structural changes to the 
program.
  What this body in the House and what the Senate and what the 
President have done over the years when they needed a little more money 
for Social Security, they said, well, let us just increase taxes again. 
There is sort of a historical picture of taxes going from 1 percent to, 
in 1940, increasing it to 2 percent of the first 3,000, which meant a 
maximum tax of $60 a year. In 1960, when we needed money, we increased 
the rate threefold to 6 percent, upped the base to $4,800, for a total 
of $288 a year. In 1980, we increased it again to 10.16 percent of the 
first $26,000, roughly; and that amounted to

[[Page 7959]]

$2,631. In 2000, we increased it again to 12.4 percent, and that was of 
the first $76,200 then. But since that is indexed, we have now upped 
that. By 2004, it has gotten up to 12.4 percent of the first $87,900. 
Next year it is going to be 12.4 percent of $89,000. And that will 
continue to be indexed to increase.
  The point I am trying to make is that by delaying, by not paying 
attention to some of these very serious problems that are going to 
confront this country, I think, is in effect passing on a legacy to our 
kids and our grandkids that is going to mean that their life-style is 
going to be much less than the opportunities that we have had in this 
country. We are saying to them, look, you are going to have to pay off 
our debts that we are borrowing today. So it is important to have a 
program that does not increase taxes, the FICA taxes, on payroll.
  Madam Speaker, I would ask everybody that is listening to guess what 
the payroll taxes are right now in France. The payroll taxes in France, 
to accommodate their retired population, their senior population, is 
over 50 percent. That is one of the reasons why France is having such a 
problem competing. Because if a company has to pay a 50 percent payroll 
tax, that means they have two choices. To stay in business they either 
reduce wages to their workers, or they increase the price of their 
product to accommodate the extra taxes that they are paying. If they 
are increasing the price of their product, then of course they are less 
competitive to trade with other countries of the world. Germany just 
surpassed 40 percent.
  I just think it is so important that we act on this huge challenge of 
correcting Social Security and that we not end up having another tax 
increase that is going to make our businesses at even a greater 
disadvantage.
  Let me just put a footnote on that. We are concerned about losing 
jobs. A lot of it is because of our increased productivity to try to 
stay competitive. But our taxes on our businesses in the United States 
are about 18 percent higher than the taxes of our competitors in the G-
7, in the other industrialized countries. So when we hear from this 
Chamber, quite often from this side of the aisle over here, let us 
increase taxes to accommodate some of the great needs that we have in 
our districts back home, and there are needs, there are unlimited 
problems, the question is how many of those problems should be the 
responsibility of the Federal Government and how many of those problems 
should be accommodated by borrowing more money or increasing taxes to 
put our businesses at a greater competitive disadvantage, and, of 
course, taking the money out of the pockets of the people that have 
earned, telling all the American citizens that they have to give more 
to the government to make the government stronger, making them less 
able to do the things that they want to do with their money.
  We have had a system, and maybe I am philosophizing here a little 
bit, but our forefathers came up with a system in our Constitution in 
this country that in effect said that those that work hard and save and 
that try and invest and that go to school and use that education are 
going to be better off than those that do not.
  But now we have sort of come with a philosophy for the last 25 years 
in this country where we are sort of dividing the wealth up. So we have 
got a tax system that is very progressive, where we take from the 
people that are successful and give to the people that are not 
successful. So we are ending up with a situation where roughly 50 
percent of the adult population in the United States pays less than 1 
percent of the income tax. Fifty percent of the adult population in the 
United States, the lower-income earning 50 percent of the adult 
population in the United States, pays less than 1 percent of the 
Federal income tax.
  So with a lot of people, they say, well, let us have a few more 
government services, because when there is more government services, we 
gain, because we are not paying in tax in the first place. So it is 
maybe a whole new discussion on Special Orders, but how do we change 
our tax system so that everybody has a stake in how big this government 
gets?
  There are a lot of Members in the Chamber that react to that kind of 
pressure and say, well, I am going to take home more pork barrel 
projects, I am going to start more social programs, I am going to make 
more promises, even though we do not know where the money is going to 
come from to keep those promises.
  Let me conclude by going over the provisions of the Social Security 
bill that I have introduced, and this is a bipartisan bill. I have both 
Republicans and Democrats on the bill. These are the six principles 
that I went by in designing my bill:
  Number one. Protect current and future beneficiaries.
  Number two. Allow freedom of choice, so that if you do not want to go 
in the program and want to stay with what we have now, you have that 
option.
  Three. It preserves the safety net, and so the Social Security TRUST 
FUND, where now we have IOUs of $1.4 trillion, that is the $1.4 
trillion where the Congress, the House and the Senate, and the 
President have taken the surpluses coming in from Social Security and 
spent it for other government programs. So I do not spend all of that 
trust fund money. I save half of it and only use half, obviously, to 
make the transition to start getting some real returns on some of the 
money that is paid into Social Security.
  Four. Make Americans better off and not worse off.
  Five. Create a fully funded system.
  And Six. No tax increases.
  Madam Speaker, it is interesting that in looking in the archives, 
that in 1934, Franklin Delano Roosevelt thought it was very important 
to stop the number of hardship seniors that were, if you will, as Will 
Carlton says, going over the hill to the poor house. So instead of 
having so many people depending on going over to a poor house and 
having very meager, very difficult retirement years, he said, well, let 
us have a program, a system where we require savings of some of your 
earnings while you are working and set that aside so that you cannot 
use it until you retire so you have a little more social security when 
you retire.
  So the House passed a bill following FDR's recommendation; and it 
said government will keep all the money and then pay the benefits when 
the time comes, when the individuals turn 65 years old. The Senate 
passed a bill, however, that said, well, we are going to do the same 
thing, but instead of government keeping all the money, we are going to 
have the accounts in individuals' names, where the individuals own that 
account. But if they die before age 65, it is still money that will be 
passed on to their heirs. But there will be a rule that they cannot 
take that money out of that special account until they turn 65 years 
old.
  What is interesting is that the average age of death, up until about 
1940, the average age of death was 62 years old. But the program says 
you cannot have Social Security benefits until you are 65. When the 
House and the Senate went to conference committee, we went with the 
House version that said government is going to handle all the money. 
And it worked very well for many years. We only had to start increasing 
the tax in 1940, because the average age of death was 62. So most 
people died before they became eligible for Social Security. So the 
pay-as-you-go program worked very well.
  Here is my bill. It has been scored by the Social Security 
Administration actuaries to restore the long-term solvency of Social 
Security.
  There is no increase in the retirement age. No changes in the COLA, 
the annual cost of living index that we increase payments to COLA. And 
there is no change in the benefits for seniors or near-term seniors.
  Solvency is achieved through higher returns from worker accounts and 
slowing the increase in benefits for the highest-earning retirees.
  Right now, Social Security is not a good investment. The average 
return for retirees in Social Security is 1.7 percent. And what we do 
in our legislation is we guarantee that if you decide

[[Page 7960]]

on a personal retirement account that you own, and that is going to be 
optional, but we will guarantee that you will get as much payments in 
your retirement years from having an account as you will if you did not 
have an account, but the option is still up to the individual.
  The Social Security trust fund continues. Voluntary accounts would 
start at 2.5 percent of your income and would reach 8 percent of income 
by the year 2075. A long time.
  My first bill that I introduced, and this is the fifth Social 
Security bill I have introduced that has been scored by the actuaries 
to keep Social Security solvent, but in 1993 and 1994, the legislation 
did not have to borrow any extra money from the general fund of 
government. It did not have to wait until 2075, until we upped the 
amount that you are going to be allowed in your own savings account.

                              {time}  2045

  But now it is a little more drastic. If we wait another 4 years, it 
is going to even be more drastic. If we wait more than 4 years to solve 
Social Security, then plan on a higher Social Security tax. Increased 
taxes will be on somebody someplace because there is no other way to 
accommodate it. Investments would be safe, widely diversified and 
investment providers would be subject to government oversight. It is 
sort of a copy of what Federal Government employees have now in their 
thrift savings account. They have several options, indexed bonds, 
indexed stocks, indexed cap funds. So very low risk, but it starts 
growing up in your account and the magic of compound interest means 
that you can be a modest earning worker but you can retire as a 
millionaire.
  Part of my persuasion I hope today, Mr. Speaker, is to encourage 
everybody to start saving, to let these savings grow and not live sort 
of the satisfying our needs of today and hoping that somebody else will 
take care of us in the future. You are going to need something probably 
in your retirement years in addition to Social Security if you are 
under 45 years old now.
  The next blip is the government would supplement the accounts of 
workers earning less than $35,000 to ensure they build up significant 
savings. Actually I sort of copied this from our former President, 
President Clinton, from his U.S. savings accounts. So that even low-
income workers can have a little more in their savings account to 
result in the magic of compounding to give them more money in these 
accounts. These accounts belong to the workers.
  All worker accounts would be owned by the worker and invested through 
pools supervised by the government. Regulations would be instituted to 
prevent people from taking undue risks, so you would have limited 
investment opportunity. Workers have a choice of three safe indexed 
funds with more options after their balance reaches $2,500. So it is 
very limited until you have at least a balance of $2,500, then in my 
legislation additional safe investments as determined by the Secretary 
of Treasury would be allowed for individuals once they hit the plateau 
of having $2,500 in their own retirement savings account. This, of 
course, is what you get from the savings account. Right now as I 
mentioned, Social Security has a return of 1.7 percent. So in effect 
anything you can earn from that savings account in excess of that 1.7 
percent would add over and above what you would otherwise get from 
Social Security.
  Worker accounts. Accounts are voluntary and participants would 
receive benefits directly from the government along with their account 
balance. There is a provision that I do not have on the board but at 
such time over age 55 that you buy an annuity to, in effect, guarantee 
that your retirement income is going to be at least what Social 
Security would pay you and that you are not going to ask other 
taxpayers to help you later on, then you would have the option of 
investing your personal retirement savings account in anything you want 
to invest it in, or if you want to start using it. The government 
benefit would be offset based on the money deposited in their accounts, 
not on the money earned. And workers could expect to earn more from 
their accounts than from traditional Social Security. That is why we 
can guarantee that the 1.7 percent that you get from Social Security, 
that is why we can guarantee that you will get at least as much 
earnings as you would have from Social Security.
  Here is a provision that I put in. My politically astute colleagues 
tell me that it is not politically correct to say fairness for women. I 
should say fairness for lower earning spouses that might be staying 
home with children. But these three changes for married couples, 
account contributions would be pooled and then divided equally between 
the husband and wife. So for your personal savings account, if one 
spouse is earning twice as much as the other spouse and so, therefore, 
is eligible to put more money into the personal savings account, you 
add what each spouse can put into the personal savings account, you 
divide by two, and so each spouse owns an identical amount that goes 
into their personal savings account every pay period, every month, 
every year. It would increase surviving spouse benefits to 110 percent 
of the higher earning spouse's benefit. Right now the surviving spouse 
is entitled to 100 percent of the higher benefit. But even that amount 
often requires that these individuals move out of their home into more 
expensive nursing home care as they shift from Medicare to Medicaid. 
And so what kind of provisions can we have to encourage people to stay 
in their own homes, which is so much lower cost than if they go to a 
nursing home?
  Stay-at-home mothers with kids under 5. Maybe this is just a personal 
opinion of mine, but I put it in the legislation that stay-at-home 
moms, staying home with kids under 5, would receive a credit as if they 
were working years at the higher earning salary when their Social 
Security benefits are calculated.
  These are some other areas, simply to try to increase and stimulate 
more people to think about their retirement. Number one, increase 
contribution limits for IRAs and 401(k)s and pension plans; two, a 33 
percent tax credit for the purchase of long-term care insurance, up to 
$1,000, $2,000 for a couple per year; and low-income seniors would be 
eligible for a $1,000 tax credit for expenses related to living in 
their own homes, or if they are living with their kids or somebody 
else, whoever they are living with could receive that $1,000 tax 
credit, reimbursable tax credit on their income tax.
  Let me conclude, Mr. Speaker, by just urging my colleagues to face up 
to this challenge. More than that, this is an election year for both 
Members of the House and roughly a third of the Members of the Senate. 
So every time you have an opportunity to go and hear a candidate or 
talk to a candidate, ask them what they are going to do about the 
problem of Social Security running out of money. Ask them what they are 
going to do about the huge unfunded liabilities of Medicare and 
Medicaid. Ask them what they intend to do about increasing the debt of 
this country to the extent that we are asking foreign countries now to 
help pay for our debt.
  We have about a $500 billion trade deficit. What that means is that 
we send out $500 billion to other countries more than they send to us 
when they are buying our goods. What happens to that $500 billion? It 
is American dollars. They are not good anyplace unless they end up in 
America. What other countries are doing now with that $500 billion is 
buying our Treasury bills, they are buying our companies through stocks 
and equities, and that additionally leaves us in a very precarious 
situation to be that vulnerable to some of these countries.
  China, for example. I just returned from China. I am concerned about 
some of their what I perceive to be violations of the WTO agreements, 
their trade agreements. We have a deficit with China of about $100 
billion. China right now sometimes puts some of that money, in effect, 
under the mattress to hold it out there. Sometimes it buys Treasury 
bills. This country has accumulated enough that if they pulled their 
money out of Treasury bills or

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out of our stock market, it could dramatically affect the economy of 
the United States.
  So as we cavalierly overspend, as we increase promises to increase 
the unfunded liabilities, we are not only making our children more 
vulnerable in the kind of taxes they are going to pay but we make the 
future of America more vulnerable to what other countries might do. If, 
for example, other countries decide that there is a better place to 
invest their money than the United States because the United States is 
less dependable and starts paying a lower return and they decide to 
invest it someplace else or they decide for political purposes that 
they want to negotiate trade deals by saying, Look, we're going to pull 
our trillions of dollars out, that is going to disrupt your economy 
because we just don't want to do business with you unless you agree to 
our trade deal or to our other political deal or to our whatever deal. 
Let us not allow ourselves to continue down this road of leaving our 
kids and our grandkids a bigger debt.
  I am a farmer from southern Michigan. Traditionally what we have 
always figured on the farm, what my grandfather taught my dad, what my 
dad taught me is you try to pay off some of the mortgage on the farm to 
let your kids have a little better life than you have had. But in this 
Chamber and over in the Senate and in the White House, we are doing 
just the opposite. We are mounting up that mortgage. We are mounting up 
that debt and making the future of our kids and our grandkids more 
vulnerable.

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