[Congressional Record (Bound Edition), Volume 150 (2004), Part 7]
[House]
[Pages 9293-9299]
[From the U.S. Government Publishing Office, www.gpo.gov]




MOTION TO INSTRUCT CONFEREES ON S. CON. RES. 95, CONCURRENT RESOLUTION 
                   ON THE BUDGET FOR FISCAL YEAR 2005

  Mr. POMEROY. Mr. Speaker, I offer a motion to instruct.
  The SPEAKER pro tempore (Mr. Sweeney). The Clerk will report the 
motion.
  The Clerk read as follows:

       Mr. Pomeroy moves that the managers on the part of the 
     House at the conference on the disagreeing votes of the two 
     Houses on the House amendment to the concurrent resolution S. 
     Con. Res. 95 be instructed to agree to the pay-as-you-go 
     enforcement provisions within the scope of the conference 
     regarding direct spending increases and tax cuts in the House 
     and Senate. In complying with this instruction, such managers 
     shall be instructed to recede to the Senate on the provisions 
     contained in section 408 of the Senate concurrent resolution 
     (relating to the pay-as-you-go point of order regarding all 
     legislation increasing the deficit as a result of direct 
     spending increases and tax cuts).

  The SPEAKER pro tempore. Pursuant to rule XXII, the gentleman from 
North Dakota (Mr. Pomeroy) and the gentleman from Iowa (Mr. Nussle) 
each will control 30 minutes.
  The Chair recognizes the gentleman from North Dakota (Mr. Pomeroy).
  Mr. POMEROY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, we know that we have a very large problem facing this 
Congress: we cannot pass a budget. We have got a budget that has passed 
the House, a budget that has passed the Senate, but an absolute train 
wreck in conference committee with neither side indicating any 
indication to reach compromise and finish the budget process.
  The motion that we have before us, we believe, unlocks this problem. 
It would have the House pass the motion to instruct conferees relative 
to the PAYGO requirement, a requirement I will explain more fully in a 
moment. This passed the Senate and is now, I believe, the key to 
getting this resolved, will we have the PAYGO budget enforcement 
provision as part of the budget. Quite frankly, it appears very 
possible that without embracing some kind of bipartisan step toward 
budget discipline along the pay-as-you-go requirement, this House, this 
Congress, will not be able to pass a budget. Obviously, with the 
President, the Senate and the House in one-party control, one would not 
expect that that would be the result, but that is the result without 
some movement toward budget discipline.
  Why has budget discipline become so central to the budget debate? I 
have got some charts that illustrate in very painful fashion what has 
happened to the Federal budget during the last 3\1/2\ years. This chart 
captures the skyrocketing deficit from years 2002 to projected end of 
year 2004. What we see is a budget spinning entirely out of control, an 
absolute hemorrhage of red ink with Congress now spending more than $1 
billion a day more than it takes in. This all accumulates in the 
national debt, a soaring burden for our country and the next 
generation.
  If that chart captured the whole story, it would be very dangerous 
and frightening. I hate to tell you this, but the story is actually 
worse than that. Because of budget rules, the full exploding nature of 
the tax cuts which throw our budget even more radically out of budget 
occurs after the measurement period of this budget debate. This chart 
captures that. The budget before us covers the first 5 years. What 
happens in the next 5 reveals the dirty little secret of their budget 
plan, skyrocketing red ink, a budget more out of balance than ever 
before, just at the period of time baby boomers leave the workforce, 
move into retirement, each one carrying a guarantee from the Federal 
Government that Social Security will be paid, that Medicare will be 
paid.
  Knowing how many baby boomers there are relative to the rest of the 
population, the obvious thing for this country to do is pre-position 
and improve the fiscal condition of this country so that we are ready 
to take the tremendous hit entitlement spending will bring when baby 
boomers retire.
  My colleagues can see what we are doing: exactly the opposite. It is 
fiscal lunacy as we borrow in ever-radical fashion just before baby 
boomers retire. The long-term trend here, assuming the administration 
budget policies, AMT reform and the ongoing war costs take us to a 
national debt situation of $14.8 trillion by the year 2014. The debt 
service cost on that alone is $400 billion, just in interest costs. So 
this is a very, very serious problem. It is a fiscal catastrophe that 
has been foisted upon this country. The only thing to do is to begin to 
deal with it.
  This is not the first time the country has had budget problems. It is 
not the first time we have had people of good will trying to reach 
across a partisan aisle and come up with some answers. The pay-as-you-
go requirement, in fact, that is before the House with this motion was 
initiated in a budget conference convened by President George Bush, not 
this President George Bush, his father, George H.W. Bush. They came 
upon a fairly basic budget enforcement mechanism. In light of not 
wanting to make the budget situation any worse, they agreed that a pay-
as-you-go requirement would apply.
  What does that mean? That means if you spend more, you are going to 
have to find the money to pay for it. You are going to have to either 
cut spending, or you are going to have to raise revenue. Also on the 
revenue side, if you cut taxes and reduce the inflow of revenue, you 
are going to have to deal with it. You are going to have to show at 
that time where the spending cuts are going to come that offset the 
revenue loss or what other revenue increases you would have to offset 
that revenue loss. This was ultimately adopted in a bipartisan vote in 
1990. Many believed it was an extraordinarily important contribution to 
national budget discipline. Chairman Alan Greenspan spoke about the 
need to get such tools back in the budget process in his testimony to 
Congress just within recent weeks.
  After the 1990 agreement, this thing started to show that it really 
could work. The budget picture continued to improve. In the budget vote 
of 1993, the budget votes thereafter, the bipartisan balanced budget 
agreement of 1997, the pay-as-you-go requirement was affirmed no fewer 
than two additional times by bipartisan votes of Congress. There is 
some confusion, I believe, raised by some of the arguments that I have 
heard coming from majority leadership that those early pay-as-you-go 
requirements were not applicable to the revenue side. That was 
misinformation. I have the language of the earlier pay-as-you-go 
requirements with me, and I am prepared to debate on the floor of this 
House the applicability of those earlier pay-as-you-go requirements to 
the motion before us. The motion is the same. And so to my friends in 
the majority who are inclined to look at this very carefully, thinking 
about their earlier votes back in 1995 and 1997 in favor of the pay-as-
you-go requirement, I am telling you that you have done this before, 
and now we need to do it again. We need to do it again worse than ever 
in light of the budget situation.

[[Page 9294]]

  That is the motion we have before us. This motion has had two very 
close votes. When it was offered by the gentleman from California (Mr. 
Thompson) last spring, it was a tie vote, 209-209. Last week, a 
similarly very close vote on an identical motion brought by the 
gentleman from Kansas (Mr. Moore), that one failing 208-215, although 
we have been informed that some of those voting late in the balloting 
against this bill were led to believe that the motion before us was 
different than the pay-as-you-go requirement they had voted for in the 
90s.
  Let the record be very clear on this. The motion before us on this 
pay-as-you-go requirement would reinstate the same pay-as-you-go 
requirement that we had in the 90s that many of my colleagues have 
voted for before. We have got a situation where we are going to leave 
our children with this as the legacy, or we are going to have to come 
to some kind of awakening and recognize it is time for us in a 
bipartisan way to begin to assault this monster. The way to do it is by 
reinstating budget discipline.
  For that reason, I urge very careful consideration of the motion I 
have put before us.
  Mr. Speaker, I reserve the balance of my time.
  Mr. NUSSLE. Mr. Speaker, I yield myself such time as I may consume.
  I have been doing a little research over on this side. Again for the 
third time in a row, the minority rushes to the floor with a breathless 
motion on fiscal catastrophe, as it was announced, and how if we vote 
for tax cuts without paying for them, all sorts of red ink will be used 
on charts all over America. My goodness, you had to almost ruin a 
printer to print all that red ink on that poster. It is fascinating to 
me that someone who would be so concerned, so breathlessly concerned 
about the fiscal catastrophe that awaits the United States if, in fact, 
you vote for taxes without paying for them would, as I have discovered 
in roll call No. 144, which was just voted on here, let us see, May 5, 
where the gentleman who just spoke voted for just such a proposition. 
He voted for tax cuts without paying for them. And now he rushes down 
here to the floor saying it is an important principle of fiscal sanity 
to pay as you go.
  I know another principle and that is actions speak louder than words. 
In this instance, the actions of the gentleman voting not only on May 
5, and that is what I was doing some more research on, not only on May 
5 did he do that and joined 109 Democratic colleagues doing the exact 
same thing, wringing their hands at home, decrying tax cuts, trying to 
talk down the economy and telling how tax cuts are the bane of our 
existence and yet put out the same press release that day voting in 
favor of tax cuts and how that was so important to families and small 
businesses and I am sure the word ``farmer'' may have even been used in 
the gentleman's press release.
  Then I discovered that on April 28, in a roll call vote, No. 138, I 
see yet again the gentleman from North Dakota voted in favor of tax 
cuts without paying for them. Once again I wonder, paying as you go, if 
that is such an important principle, why would the gentleman's actions, 
not his words, his words, of course, are we should pay for these 
things. We are facing a fiscal catastrophe, the gentleman just said. 
Yet he comes to the floor and votes not once but twice, and I am just 
wondering how the gentleman will vote tomorrow on tax cuts to make sure 
that we do not have a tax increase at the end of this year for the 10 
percent bracket, the bill that I believe is going to be on the floor 
tomorrow. I wonder if the gentleman is going to vote for making sure 
that that tax is not increased on his farmers and small businesspeople. 
Many of them probably are similar to mine in my small towns and my 
small counties in Iowa. My guess is that he is not only going to vote 
the way he did the other two times in favor of cutting taxes without 
paying for them twice before, but I would bet he is going to do it 
tomorrow.

                              {time}  1830

  And I know why. Because the gentleman is going to argue that that is 
good for the economy, and he is right; and that it is good for those 
small business people, and he is right; and that it actually does 
create jobs, and he is right; and that it is unfair to tax families 
with children, to have an automatic snap-back tax increase at the end 
of the year, and he would be correct; and that it is unfair to penalize 
people who are married; and he would be correct. And so again the 
puzzlement occurs to this gentleman and so many others why it is that 
he says on one day pay as you go, but come to the floor on the next day 
and say, but I really did not mean it for those tax bills that I am in 
favor of that help my constituents. And it would suggest to me that 
maybe there is a new saying and it is, ``Do as I say, not as I do.''
  So we have a situation here yet again, the third time that the exact 
same motion comes to the floor, and I am wondering if this is not for 
political purposes that you would on one instance say you have to pay 
for them and on another instance vote for those exact same tax relief 
bills as they come to the floor.
  The economy is just now finally starting to come off the ground from 
where it has been, starting to create jobs, starting to see that 
jobless rate come down and people go back to work. And I know that 
there are many of my friends on the other side that are just 
desperately hanging on to any possible bad news about the economy 
because they know they are losing that issue politically for the fall 
election, and so they are desperately holding on to the last vestiges 
of that issue.
  But I would suggest that what is good for our economy and our 
constituents now is to not have an automatic tax increase, that it does 
in itself pay for itself with the increase of economic development that 
is happening in our country. In fact, this year alone, CBO projected a 
$35 billion increase from one year to the next, paying for those tax 
cuts with the economic growth.
  Oh, a lot of red has come to the floor. Another big red chart has 
come to the floor. Let us see how the gentleman who is about to speak 
voted. I can do that research pretty quickly. Oh, interesting, the 
gentleman from Virginia with another chart on the floor with a lot of 
red voted in favor of those same tax bills, not paying for them but 
voting for them, and I will bet I can find a press release telling his 
constituents how important those tax cuts were as we face this fall's 
election.
  I have a suspicion that this is a political vote, and I would 
encourage my colleagues to treat it as such.
  Mr. Speaker, I reserve the balance of my time.
  Mr. POMEROY. Mr. Speaker, I yield myself such time as I consume.
  To have the effort to break loose the budget stalemate in conference 
committee by having our House pass something similar to what the Senate 
in a bipartisan vote passed is a serious effort. Obviously they are 
taking it pretty seriously. They have the chairman of the Committee on 
the Budget on the floor. And rather than rebut the rather painful 
underlying reality about the Nation slipping into what would almost 
appear to be an irreversible hemorrhage of red ink, in very bellicose 
and sarcastic tones, he wants to point at individual votes and accuse 
other Members of hypocrisy. I guess that is kind of a refuge when they 
do not have arguments on the issue, let us blow a little smoke, let us 
have a little fun, let us throw a little political rhetoric around. But 
this deserves so much more than that.
  I would say to my friend from Iowa, it is not ruining printers that 
concerns me, it is ruining the Nation. And I really do believe that the 
red ink that we are generating and continuing in escalating fashion as 
the baby boomers move into retirement is a dire threat to the future of 
our country. I believe that you have already put us on a path, with you 
serving in your leadership as position as Committee on the Budget 
chairman, working with the administration, working with the Senate 
Budget Committee, to diminish the prospects of our children by so 
undermining the fiscal strength of our country.
  Mr. NUSSLE. Mr. Speaker, will the gentleman yield?

[[Page 9295]]


  Mr. POMEROY. I yield to the gentleman from Iowa.
  Mr. NUSSLE. Mr. Speaker, I only have one question. Why would he vote 
to cut taxes on one day without paying for them and then come to the 
floor with a motion the very next day saying he does not have to pay 
for those taxes?
  Mr. POMEROY. Mr. Speaker, reclaiming my time, the gentleman has been 
most selective in the votes he has cited because I want to tell him, as 
he knows already, but tell my colleagues that I supported a budget that 
had the tax cuts mentioned and had them fully offset and paid for, 
bringing the budget to balance by the year 2008. That was the Democrat 
alternative, and that is what I voted for. And in addition, we have 
offered specific substitutes to each of the tax cuts he referenced, and 
those substitute motions which had the paid-for alternative have been 
voted down.
  I believe there is a merit to those particular tax cut proposals, and 
I believe that the process is best served by moving them forward, 
moving them forward hopefully to be resolved ultimately in conference 
committee in a paid-for manner. So that is what is at stake with my 
votes. But really there is a whole lot broader issue to discuss on the 
floor right now, and that is not the voting record on two isolated 
votes, although I do fully offset in other votes that I have cast on 
those particular subject matters, but much more over the fiscal 
situation facing this country.
  Mr. Speaker, I yield 4 minutes to the gentleman from Virginia (Mr. 
Moran).
  Mr. MORAN of Virginia. Mr. Speaker, I thank the gentleman from North 
Dakota (Mr. Pomeroy) for yielding me this time.
  I do feel motivated to respond to my friend from Iowa's comments. I 
am sure it was not he that suggested there is hypocrisy on our side, 
but I want to make the record clear, because 2 weeks ago, Mr. Speaker, 
the Democrats voted 187 to 10 in favor of a fully paid-for marriage 
penalty tax bill. Last week Democrats voted 196 to 5 in favor of a 
fully paid-for alternative minimum tax relief bill.
  The only way you got us to vote for those tax cuts was after you 
rejected our very aggressive efforts to pay for those. You recall we 
got that vote, we took it to a vote, and overwhelmingly the Democrats 
voted to pay for those tax cuts, and we only voted otherwise after you 
rejected our ability to pay for them.
  But I need to remind my good friend whom I have served with now for 
several years on the Committee on the Budget that in 1997, the 
gentleman from Iowa (Mr. Nussle) voted for pay-go as applied to tax 
cuts. In fact, in 1997, the gentleman voted twice along with virtually 
all of the House Republicans for pay-go to apply to tax cuts. So when 
he suggests that we are acting inconsistently, and we would not use the 
word ``hypocritically,'' but I do think ``inconsistently'' is a proper 
term when it is applied to the facts of the matter, and again in 1999, 
the gentleman will recall the Nussle-Cardin budget process bill which 
required that we have on-budget balancing for tax cuts.
  Now, today what we are trying to do is to behave responsibly, 
fiscally responsibly, because we are looking at the facts, not at any 
far-flown projections. We are looking at the facts. And the facts tell 
us that after President Clinton's balanced budget amendment, which 
passed without any Republican votes, we actually turned our backs on 
deficit spending, got all the way up to the point where we had a 
surplus, the green, of course, which the gentleman from Iowa (Mr. 
Nussle), I guess it appears, perhaps was intimidated by some of these 
colors because they are in stark contrast to some of the rhetoric we 
have been hearing. This is the fact: During the Clinton administration, 
there had been a trajectory, right up to surplus, change of 
administrations, and look what this policy has done all the way down. I 
mean one would not want a ski slope that steep.
  The point is that our policy worked, and it is because we had pay-go 
applied to spending and to tax cuts. What we have here, clearly, if you 
want to stop spending, stop the spending. We are saying stop both. If 
you are not willing to stop the spending, and you obviously have not 
been, because once the Bush administration came in, there goes the 
spending on an upward trajectory and there goes the revenue on a 
downward trajectory. The problem is this is not sustainable.
  You say that this is going to balance out, but the fact is it has 
not. And we have to look at the reality, the real experience. These 
policies are not working. If you want to cut spending, cut spending and 
then we can work with you. But right now the reality is unless we apply 
pay-go to tax cuts as well as spending, this line of deficit is going 
to continue to decline because we will not have the revenues to pay for 
the spending that you insist on, and that spending clearly has been 
going up in an unrestrained fashion.
  Mr. NUSSLE. Mr. Speaker, I yield myself 30 seconds.
  I do not recall the gentleman from Virginia standing with me on that 
Nussle-Cardin plan. I appreciate the rendition of history, but I wish 
he would have voted for that bill as well. I do not think any of the 
Members on the floor here today voted for that. It would have been a 
beautiful thing.
  Mr. MORAN of Virginia. Mr. Speaker, will the gentleman yield?
  Mr. NUSSLE. I yield to the gentleman from Virginia.
  Mr. MORAN of Virginia. Mr. Speaker, I think I did. Does the gentleman 
have the names?
  Mr. NUSSLE. I do not, Mr. Speaker. Let us do some checking on that.
  Mr. MORAN of Virginia. Mr. Speaker, I think he needs to do a little 
research on that.
  Mr. NUSSLE. Mr. Speaker, there were so few who did, it would have 
stuck out like a sore thumb. That was not one of my finest hours, I 
would have to say.
  Mr. Speaker, I yield such time as he may consume to the gentleman 
from Ohio (Mr. Portman).
  Mr. PORTMAN. Mr. Speaker, I thank the chairman of the Committee on 
the Budget for yielding me this time.
  I am delighted today to be able to talk about the motion to instruct. 
I am on that budget conference, and I would assure my friend from North 
Dakota, who spoke earlier, that we are very close to having a budget 
agreement. The pay-go point of order he is offering tonight, he is 
saying, is to enable us to move forward with the budget. I can just 
tell him I think there are other ways to move forward that are much 
more constructive. This motion to instruct, in my view, goes too far 
and does not go far enough.
  With regard to spending, which the gentleman from Virginia has just 
stated is the major problem, and I could not agree with him more, it 
does not go far enough. Why would we want a budget point of order? Why 
would we not want a law? By having a law, we have a discipline that 
will actually work to control spending. It would have the force of law. 
And I do not know why the gentleman would not prefer what was reported 
out of the Committee on the Budget and what this House will be taking 
up after the budget is passed, which is a budget process reform that 
actually has a law. So on the spending side, it should be stronger.
  On the tax side, we have a philosophical difference, and we have 
talked about some inconsistencies here. Yes, it is true that not only 
did a couple of gentlemen on the floor vote for tax relief as recently 
as this week, without paying for that tax relief, but the majority of 
Democrats voted for it, including some who are on the floor tonight who 
have not been part of the debate yet. Others did not vote for it, and 
those are the ones who are smiling.
  But it is a philosophical difference as to whether spending and tax 
relief should be both subject to the same pay-go standards. I think 
they should not be, and I say this for a very simple reason. Tax relief 
is put in place and has been put in place in 2001, 2002, and 2003 in 
order to stimulate the economy. Some tax relief is better than other 
tax relief. We can argue about which tax relief is better. But the 
proof is in the pudding, as they say, and the pudding is fresh.

[[Page 9296]]

  We know right now, based on what CBO told us on May 6, that is, 
earlier this month, and what they told us in March, that even though 
this tax relief was put in place, even though we reduced taxes on the 
American people, on small businesses, on investors, guess what is 
happening? Revenues are increasing, they are not decreasing. If they 
can point to some spending that has those same characteristics, or 
spending in general that does, I might feel differently about it. But I 
do not know how we can come to this floor time and time again and put 
up the charts and say tax relief is the reason we are in deficits. It 
is not. Even if we did all the tax relief in 2001, 2002, 2003, put it 
together, we still would be in deficit because of spending and because 
of the economy.

                              {time}  1845

  The economy was the biggest problem, the economy going down and 
revenue going down because of it. And second was spending. Yes, we 
spent too much. On the other hand, we had some real needs, including 
increasing our military spending to respond to the war on terrorism, 
including spending, we were told, over $100 billion just to respond to 
9/11. The tragic loss of life also required a tremendous amount of 
Federal revenue. Now today in Iraq, yes, we have increased spending for 
those purposes. But tax relief was not the reason we are in deficits.
  The irony is, it is the reason we are making progress against the 
deficit. CBO has just told us again within the last week, they believe 
the revenues this year will be $30 billion or $40 billion or so greater 
than projected. Revenues are going up, not down. Because of tax relief, 
revenues are going up, because the economy is growing in response to 
the tax relief.
  Economists right, left, and center will tell you this tax relief 
which was passed by this Congress had the effect of helping on consumer 
spending, more money in people's pockets; on helping on investment, 
corporate profits; therefore more revenue coming into this economy, 
more capital gains revenue.
  So it is a philosophical difference, and that philosophical 
difference will be played out again tonight on this motion, as it has 
been played out over the years in this House.
  The final point I would like to make with regard to whether we should 
put pay-go rules on taxes as we should on spending is to look back at 
recent history. My friend from Virginia talked about the 1993 
agreement. Let us talk about the 1997 budget agreement that was called 
the balanced budget agreement that actually got us out of red ink.
  There was tax relief from that agreement, by the way. There was also 
a commitment by this House to restrain spending. The Republicans 
controlled the House and the Senate. Republicans decided, working with 
Democrats in a bipartisan way, we would control spending together, and 
we stood down here on the floor of this House and we pounded our chest 
and we said within 5 or 6 years we will have a balanced budget. I did 
the same.
  That would have been 2002, maybe 2003. Within a couple of years, we 
had a balanced budget, and within 3 years we had surpluses. Why? 
Because, by restraining spending, by growing the economy through smart 
tax relief, we grew, we grew out of the deficit.
  That is what we want to do again. We want to grow out of this 
deficit. We want to restrain spending, very important, and pay-go ought 
to apply to spending for that purpose, and we want to put smart tax 
relief on the floor of the House for an up-or-down vote. It is not like 
it is not subject to some procedure here or some discipline. It is 
subject to the discipline of the House and the Senate and getting 
through a conference and being signed into law by the President.
  But by restraining spending and by growing the economy, we believe we 
can make progress on the deficit. We believe we can reduce the deficit 
in half by 3 or 4 or 5 years, depending on how much spending we can 
reduce and how the economy grows. And we believe the pay-go rules ought 
to apply, and apply even more aggressively than is proposed tonight to 
spending, but not take away the opportunity for us to have meaningful 
tax relief, to be able to grow this economy, which after all was the 
solution to getting us into surpluses back in the 1990s and into 2000.
  Mr. POMEROY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would respond quickly. By omitting the revenue side of 
the equation in a pay-as-you-go requirement, you literally leave out a 
critical component of what drives the budget. This might straighten out 
the gentleman's history here.
  Revenues have plunged as a result of the earlier tax cuts, the lowest 
percentage of GDP since the year 1950. As revenues plunge, you get 
yourself into deficit.
  Can you imagine a family trying to balance their household budget 
saying, you know, we are going to have to get hold of this. We are 
going to have to cut spending, cut our family spending. Then, at the 
same time, saying, but, you know, we are working a little too hard, so 
I am going to take more vacation. I am only going to work part-time, 
because the revenue side, we are not going to deal with the revenue 
side, we are just dealing with the spending side.
  That is as much lunacy as what is proposed in terms of dealing only 
with pay-as-you-go on spending and leaving off consideration of the 
revenue.
  To put it in another way, revenues have plunged very significantly 
over the past 3 years. Revenue has declined 12 percent. So this 
business of we are going to cut taxes and get more revenue as the 
economy grows has not been demonstrated.
  There has been one area of growth, one very predictable area of 
growth; the deficit has grown to the largest level in the history of 
the country. And if there is a budget deal coming out of the conference 
committee, it is going to have an increase in borrowing authorization 
for this country, and we are told it might exceed borrowing authority 
in the amount of $10 trillion, debt we will pass on to our children.
  We will have a better way to further explain that.
  Mr. Speaker, I yield 4 minutes to the gentleman from Washington (Mr. 
McDermott).
  Mr. McDERMOTT. Mr. Speaker, my good friend from Iowa is such a good 
Member, and I really hate to review the bidding here, but last time I 
looked, Republicans had the Presidency, and they had control of the 
Senate and they had control of the House, and, if I am not mistaken, 
the Federal law says that on the 15th of April you are supposed to pass 
a budget.
  Now, if we give you all the cards, for heaven's sake, can you people 
not work it out? Do you have to keep fighting among yourselves? I mean, 
here we are, and all we are asking you is to go along with that other 
body.
  Now, I know that the gentleman is not a bad person, and I do not like 
to bring up this stuff about how we have voted for this. You know, you 
pick on guys, these other guys who voted for tax cuts. Look for me in 
that list.
  Mr. NUSSLE. Mr. Speaker, if the gentleman will yield, I am looking 
here. I do not see ``McDermott'' anywhere on the list.
  Mr. McDERMOTT. Mr. Speaker, reclaiming my time, we finally got one up 
here that the gentleman is not going to call a hypocrite, is he? I do 
not mean that consistency is the hobgoblin of small minds. I know that 
one has to be flexible when one is the chairman, because the gentleman 
voted for pay-go many times and said it was a good idea, and the 
gentleman from Virginia (Mr. Moran) got out here and gave the gentleman 
all that evidence.
  But the fact is that what we are talking about here is, you know, 
there are a lot of people sitting out there watching this, and they go 
down to the grocery store and they have a $20 bill and they say, well, 
I am going to buy some groceries here. So they buy what they can get 
with $20. That is the way a lot of people operate in this world.
  But the Republicans, ever since they have taken over this House, in 
fact you did it under Reagan, we tried this Laffer curve business and 
all that and went into this great big deficit, and it

[[Page 9297]]

took Clinton to get us out. For all you want to say about Bill Clinton, 
he did dig us out of your mess from the Reagan years. You did not learn 
anything from that.
  So you decided let us get out our favorite two credit cards and you 
said, well, we got Social Security, we got a whole lot of money over 
there in that one, and we got a whole lot over here in the Medicare 
one. Let us just spend off these credit cards like wildfire. That is 
where you get those red blotches on the graphs.
  Now, the people out there, they do not understand why it is you do 
not want to pay as you go. Who do you think is going to pay off these 
credit cards? Do you think maybe it is the Democrats who are going to 
pay it off when we take over next time? Our job will be, how do we dig 
ourselves out of the hole you put us in?
  We are just trying to lay the groundwork for saying, hey, look, we 
know we are going to be in charge soon, or hope so, or, if God wills. 
You know, under God we do not know what will happen, but we may wind up 
in charge. And you have spent our credit cards into such a mess, we 
will have to do something.
  We cannot keep spending, because people are getting older. There are 
a lot of those baby-boomers that are coming up, and they are expecting 
that the money that was in the account that you have been borrowing 
from is going to be there for them, and they are going to find out it 
is empty. We are going to be caught with digging us out of the hole.
  Now, you may think it is funny, and you may enjoy this ride, but I 
will tell you something: When the baby-boomers get to be senior 
citizens, you are going to have a price to pay, because all this 
profligate spending is going to come home to roost.
  I think it just makes sense to adopt this resolution and go with the 
Senate. They are very smart over there; oh, very smart.
  Mr. NUSSLE. Mr. Speaker, I yield 3 minutes to the gentleman from 
Kansas (Mr. Tiahrt).
  Mr. TIAHRT. Mr. Speaker, I thank the gentleman from Iowa for yielding 
me time.
  Mr. Speaker, I want to point out and expand on a point that the 
gentleman from Washington just brought up, and that is about the 
Federal deficit. He talked about the future obligations that are part 
of our Federal deficit. If you look at all the red ink we have seen on 
the charts and you look at today's Federal deficit, we are not talking 
about the same thing as what we have in our outstanding debt.
  There is a lot of confusion between the deficit, which is how much 
money we spend versus how much money we take in, and then the national 
debt, which is when we start talking about baby-boomers, then you start 
talking about the impact of the national debts.
  Right now, our national debt is around $7 trillion. About half of 
that is publicly held debt. The other half is future obligations. So 
when we look at all that red ink and get up to $14 trillion, a lot of 
that is future obligations. It is Social Security for every individual 
in elementary school today. It is Medicare for every person that is in 
day care today. It is those people that exist today that at some point 
are going to be part of public law and they are going to qualify for 
Social Security, for Medicare, for the prescription drug plan. And that 
is some of that red ink you are seeing out there. So I think we need to 
distinguish between publicly held debt and future obligations.
  The concept of pay-go which is being pushed by the Senate is really 
fundamentally flawed economic policy. It makes an underlying assumption 
that if you reduce revenue by $1 for tax relief, you are going to have 
a $1 reduction in Federal revenue; a $1 reduction in taxes equals a $1 
reduction in Federal revenue.
  But we know from history that is not true. In fact, if you looked at 
the 1980s, in 1980 the Federal revenue was about half a trillion 
dollars per year. Reagan, under his leadership, we passed the largest 
tax decrease at that point in history, and what happened over the next 
decade is revenue doubled. The Federal revenue by 1990 was $1.1 
trillion.
  Even under the plan that was shown under the so-called Clinton 
surplus, the Clinton surplus was even preceded by tax relief. He signed 
tax cuts into law. One of them was capital gains. When we reduced 
capital gains from 28 percent to 18 percent, we actually had an 
increase in Federal revenue, not a dollar-for-dollar reduction, $1 tax 
versus $1 reduction in Federal revenue.
  So the fundamental policy of pay-go is flawed. If you have tax 
relief, three things happen: Tax relief provides a little more money in 
somebody's pocket. They either save it, spend it, or invest it. If they 
spend it, that is a demand for goods and jobs. That is good for the 
economy. If they save it, it provides money for home mortgages. That 
means more building, more jobs, a good thing. The third thing is they 
invest it. If they invest it, that means capital for companies to 
expand and hire more workers. So all three things that come out of tax 
relief are good, fundamental economic policy.
  But if you have this Keynesian economic view buried in this pay-go 
provision, then you think the Federal Government drives the economy and 
not the free market system. That is fundamentally flawed. It is the 
free market system that makes America great.
  When you increase taxes, you limit that; and when you reduce taxes, 
you increase the ability for Americans to do the right thing with their 
money, and that means more Federal money.
  Mr. POMEROY. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, that is a very interesting bit of economic history 
there, but I would put forward a different view. Which economy worked 
best, the economy of the nineties, when you had pay as you go, or the 
economy of this decade, so far a very stalling, disappointing economy?
  Mr. Speaker, I yield 4 minutes to my friend, the gentleman from 
Illinois (Mr. Emanuel).
  Mr. EMANUEL. Mr. Speaker, I thank my colleague from North Dakota for 
yielding me time.
  Mr. Speaker, since everybody wants to talk about the 1997 plan and 
what we did, just so we can all have a rendezvous with the record here, 
in fact we cut taxes on middle-class families with the introduction of 
the $500-per-child tax cut for people making $100,000 or less. We 
increased spending in higher education. We created the Children's 
Health Insurance Program, a $24 billion program for the children of 
uninsured parents who worked. We invested more dollars in environmental 
cleanup. We made long-term investments in the health of this country, 
which is in health care, education, and the environment. We expanded 
charter schools up to $2,000.
  So we in fact paid for those spendings because they were good 
investments. We reduced the deficit down to a balanced budget, and we 
cut taxes for middle-class and working class families.
  What we did not do was say every tax cut is good and every spending 
increase is bad. Some tax cuts are good. The $500 per child, which was 
the introduction in 1997, was a very good tax cut.

                              {time}  1900

  In 1993 we cut taxes on working families with the doubling of the 
earned income tax credit, which was originally created by Ronald Reagan 
in the 1983 budget.
  So, in fact, not all tax cuts are bad; but when you have a tax cut 
for corporate jets and yet you put a squeeze on middle-class families, 
those are bad choices. As President Kennedy once said, to govern is to 
choose. When you make investments, not all spending by government is 
good; there is a lot of waste. But when you invest in uninsured 
children of working parents, 10 million of them who finally get health 
care and you pay for it, you are a better country and those are good 
investments.
  When you expand the investments in opening the doors of college 
education, doubling the size of Pell grants as we did in 1997, that is 
a good thing. When we provided for middle-class families a tax 
deduction for a college education, we created the lifetime learning, 
the HOPE scholarship for continuing learning, those are good tax cuts. 
They led an investment boom, an economic

[[Page 9298]]

boom which all incomes enjoyed, not just the top 1 percent, as is 
happening now.
  So to compare what happened in 1997, to think fondly of your memory, 
we increased our investments and government spending in the areas of 
health care, education, and the environment, we cut taxes for middle-
class families, and used the rule of putting our fiscal house in order. 
And all of those investments, all of those tax cuts started with the 
notion that we had to have a balanced budget.
  The difference today is our tax cuts are skewed not to middle-class 
families, not to working families; they are skewed towards people who 
make money from money where the burden on people who work for a living 
are carrying more of the tax burden than those who do not.
  So not all tax cuts are good and not all spending is good. We have to 
make choices based on an economic strategy.
  Today, we have had the most anemic wage growth for middle-class 
families: 1 percent. College costs this year went up 14 percent; last 
year, 10 percent; and the year before that, 11 percent. Health care 
costs have gone up by a third, and people's savings have lost their net 
value by $200 billion in the last 2 years. That is the economic 
condition of our middle-class families, and we need an economic 
strategy that puts our fiscal house in order, reflects the priorities 
that American families are facing by making sure we invest in health 
care, invest in education, invest in the environment, and give middle-
class families, rather than corporate jets, which your budget and your 
economic plan does, give middle-class families the type of tax cuts 
they deserve because they are trying to raise their children. That is 
where we should invest our limited dollars.
  This PAYGO rule begins by putting the budget of the Federal 
Government back in order, as the gentleman from Iowa (Chairman Nussle) 
voted for in 1997 and made sure every tax cut was paid for, made sure 
every investment in spending was paid for. Those were good economic 
times. They created 22 million jobs. We need to go back to that 
strategy. It was good in 1997, and it will be good in 2004.
  Mr. NUSSLE. Mr. Speaker, I yield myself such time as I may consume.
  Let me start by saying that I am sure, because I know the gentleman 
from Illinois to be a very honorable Member and friend, and I am sure 
all of those facts that he just cited were true about 1997 and the 
economy of the 1990s. Let us just assume for a moment that they are. It 
was peacetime. I mean, does the gentleman think there is a difference 
between the 1990s and the period of the 2000s since what happened when 
we inherited the Clinton recession of 2000 and the attacks on the World 
Trade Center and the Pentagon of 2001, and the war with Afghanistan and 
now Iraq? Does the gentleman think there is just a little bit of 
difference between the 1990s and this next century that we are in? 
Maybe just a little. Maybe just a smidgen, it might be different.
  And even though we found all sorts of spending priorities during the 
1990s, education and the environment that the gentleman talked about, 
it is interesting that during those 1990s, we did not seem to find the 
priority of national defense or intelligence or homeland security, or a 
prescription drug benefit for seniors.
  All of that time that President Clinton was working on all of these 
great policies of growing the size of government, taking more money out 
of the pockets of families with that huge tax increase of 1993, during 
all of that expansion of government, not once during that time could 
there be found the priorities of defense, intelligence, homeland 
security, and a drug benefit for seniors.
  So I understand that there were different priorities back then. It 
was a different decade. We were at peace. We are now at war. This is 
not a time to raise taxes on the American family. We are just now 
coming out of a recession. This is not the time to raise taxes on 
business. We are now finally getting back on our feet; and it is not 
the time to say to people, we need more of your money. This is exactly 
the time, exactly the time to say that those tax cuts should be 
predictable, they should be permanent, people should be able to bank on 
them, they should be able to plan for their futures, they should be 
able to make decisions that affect their families and their small 
businesses and their farms without having the peril of somebody coming 
to the floor and suggesting now, for some reason, that we have to start 
paying for tax cuts, and then voting just the opposite when the actual 
tax cut comes to the floor for a vote.
  It is interesting that on one hand they say we should pay for tax 
cuts and then the actual vote; and boy, I know they are kind of tricky, 
because just that vote, that specific vote on tax cuts, when that vote 
comes to the floor, they seem to be very interested in voting for that 
tax bill.
  Let me just review some things, though, because I know my friends on 
the Democratic side are very interested in talking down the economy. 
They are interested in saying, those tax cuts have not worked. I want 
to tell my colleagues that the tax cuts have worked. Let us just review 
a few things.
  Payroll employment increased by 288,000 jobs in April. We have the 
most people working in America at any time in our history, today. More 
people are working in America today than at any time in our history. 
Manufacturing employment increased by 37,000 jobs over the last 3 
months alone. It was the best 3-month period since those boom days of 
the 1990s, since 1998; the best 3-month period since 1998. Unemployment 
was down to 5.6 percent in April from its high of 6.3 percent last 
June. Unemployment insurance claims have fallen to their lowest level 
in 3\1/2\ years since we inherited that Clinton recession of 2000.
  Real growth in the economy, which is measured by our gross domestic 
product, was at 4.2 percent at an annual rate for the first quarter of 
2004, following an 8.2 percent growth in the third quarter. It is the 
highest quarterly rate in over 2 decades, and the last 6 months have 
been the fastest growth in over 20 years. Manufacturing activity soared 
at the end of 2003 and into the beginning of 2004, registering its 
highest pace in 20 years.
  So keep talking about the bad economy, keep using it as a political 
issue, keep trying to talk down the marketplace, keep trying to deliver 
all that bad news, because it is not here. People are going back to 
work. The economy is improving. People are making things. Because as my 
friend, the gentleman from Kansas, said, they have the money to spend. 
We are not taking it out here in Washington.
  It is interesting that when Democrats come to the floor and they say 
pay as you go, guess what? They are not the ones willing to pay. When 
they say pay as you go, it means there is a tax increase buried some 
place, there is a secret tax plan that is available for anyone to look 
at, and it is called tax the rich. Well, hold on to your wallets, 
folks, because they think you are rich, and they are coming after you. 
And every single time they talk about taxing people, they are talking 
about taxing you. They are talking about taxing people who are married. 
They are talking about families with children. They are talking about 
small businesses that are creating the most jobs.
  Mr. Speaker, that is what we are concerned about when we say this is 
not the time to raise taxes and this is not the time to talk about 
paying as you go, because these tax relief packages that we have passed 
are getting the economy back on its feet and revenue, as a result, is 
coming into the Federal Government. We are receiving more revenue into 
the Federal Government than we are allowing people to keep in their 
pockets through these tax cuts that we are promoting on the floor.
  Mr. Speaker, I know it is working. And the reason I know it is 
working is because 102 Democrats voted for them. They know, including 
the gentleman from North Dakota, who voted on April 28 to cut taxes 
without paying for them, because he knows, he knows what that means to 
the economy of North Dakota. He knows what it means to the economy of 
Iowa. He knows what it means to the economy of the

[[Page 9299]]

United States. He knows where jobs are created. I know that because I 
have served with him every year he has served in the Congress, and I 
know the gentleman understands that that is how jobs are created. That 
is why he voted for these things.
  I do not argue with the fact that he votes for them. What I am 
concerned about is that the leadership has forced the gentleman to come 
down here with a political issue. The last two gentlemen have failed in 
their attempts to try a political issue on the floor, and so now they 
roll out the gentleman from North Dakota.
  But the gentleman from North Dakota, I know, is smarter than that, 
because on May 5 he voted to cut taxes without paying for them, because 
he knows that you do not have to pay for some of these tax cuts, 
because they generate economic activity. They generate that economic 
activity in farms and small businesses, putting people back to work; 
and as a result of those people back to work, they pay into the Federal 
Government in taxes as taxpayers, and the result is more revenue coming 
into the Federal Government. The gentleman knows that. That is why he 
votes consistently to reduce taxes.
  I just wish that he would stop trying to tie our hands for the 
future; trying to tie our hands, just as the economy is getting back on 
its feet, blaming tax cuts for all the red ink when we know because of 
two wars, when we know because of the gut-punch of 9-11, when we know 
because of the bail-out of the economic crisis that occurred after the 
terrorists attacks, that we know because of huge increases for defense 
and homeland security, appropriately so, to protect the country, we 
have had to borrow money. We borrowed money deliberately, at a time 
with interest rates being very low, to do two important things: make 
sure that our country was protected and make sure that our economy 
could get back on its feet and start growing again.
  Well, our country is protected and continues to be protected; and we 
will all do whatever it takes to make sure it continues to be 
protected. But we also have to make sure that it continues to grow, 
because while we can be secure in our border, we also have to be secure 
around the kitchen tables of North Dakota and Iowa and the rest of the 
country. We want to make sure those families who are faced with 
sometimes much more perplexing issues than what we face here in 
Congress, like how am I going to pay for college; and how am I going to 
pay for the health care bills; and how am I going to deal with clothing 
my kids when I have been out of work for a little while, those are 
important issues that they face, and we want to make sure they have all 
of the resources necessary in order to make those important decisions 
around their kitchen tables with their families.
  The only way to do that is to continue the policy which has worked, 
which has gotten our economy back on its feet, and will continue to 
work if we allow it to do so, without being hamstrung by a special 
Senate rule that only stands in the way of making sure that those tax 
cuts can be predictable, that they can be permanent, and they can 
continue the job of making sure the economy grows.
  Let us vote down this special rule that will only cause tax increases 
in the future, and let us support the underlying budget which controls 
spending, which grows the economy, and which makes sure our country is 
protected. That is the budget we need to pass. We do not need to have a 
Senate rule, a rule from the other body to tie our hands for tax 
reform, tax relief, tax simplification in the future. That is what the 
gentleman, unfortunately, and probably inadvertently, would accomplish 
if, in fact, this plan passed. He wants to continue to support tax 
cuts; so do we. We want the economy to continue to grow, and the only 
way to do that is to vote down this motion to instruct.
  Mr. Speaker, I yield back the balance of my time.

                              {time}  1915

  Mr. POMEROY. Mr. Speaker, I yield myself such time as required to 
close and I will speak from the other podium.
  I thank my friend from Iowa, the chairman of the Committee on the 
Budget, for joining in this spirited debate, but to any one of our 
colleagues watching, there is something that we know for sure and that 
is that bluster does not cover facts. Energetic presentation of lots 
and lots of stuff does not mask an economic record reflected in these 
charts.
  This is what has happened to the deficit during the last 2 years, and 
this is where we are going over the next 10 years.
  Now, what we are seeking with this motion is budget enforcement 
ability to try and level out this deeply alarming trend line on 
national debt. Pay-as-you-go means that if you spend more, you have got 
to cut somewhere else; or if you cut taxes, you have got to cut 
spending and show where you do it; or if you cut taxes, you have got to 
raise taxes somewhere else. It has all got to work out in a zero-sum 
game. You cannot continue to make the budget situation worse.
  We can get lost in the economics and the numbers, but I think it is 
helpful to just think of it this way. We pay as you go now, or our kids 
pay when we go later, because these things are not balancing out. 
Representations that tax cuts are producing more revenue are not at all 
borne out. The Federal revenues from individual income taxes in the 
year 2000 was $1.4 trillion. The 2004 estimate is $765 billion, almost 
down a quarter.
  As you have revenues fall so precipitously, you have had the debt 
line grow so significantly. We have had some job numbers thrown out. 
The fact is we are down 1.6 million jobs. This administration is the 
first administration on track to have a net loss of jobs since Herbert 
Hoover was President, but those are issues for another day.
  Let us just understand that if you like the economy of the 1990s 
better than the economy we have seen this decade, realize that 
throughout the 1990s we had pay-as-you-go budget enforcement, which 
meant we were trying to get a handle on national debt. We have 
absolutely lost our way when it comes to fiscal sanity, and that is why 
we have had this explosion of debt, a deficit leading to debt, and we 
have got to get our hands around it.
  So I believe that if this House took the step of instructing 
conferees to go with what the Senate has passed, and that is a 
bipartisan vote to embrace this pay-as-you-go requirement, we can once 
again get on track. This has been the very issue that has received 
bipartisan agreement in the past, 1990, 1995, 1997, and now it is time 
in 2004 for us to do it once again.
  It is time for us to do this for our children. We put pay-as-you-go 
in the budget or it is you pay when we go to our children. As a father 
of an 8- and a 10-year old back home in Bismarck, North Dakota, I know 
we owe them a good deal better than this, a very unstable fiscal 
situation just when baby boomers retire and start drawing on Medicare 
and Social Security. We could turn this around, and passing this motion 
is the place to do it.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore (Mr. Chocola). Without objection, the 
previous question is ordered on the motion to instruct.
  There was no objection.
  The SPEAKER pro tempore. The question is on the motion to instruct 
offered by the gentleman from North Dakota (Mr. Pomeroy).
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. POMEROY. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

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