[Congressional Record (Bound Edition), Volume 152 (2006), Part 2]
[House]
[Pages 2524-2531]
[From the U.S. Government Publishing Office, www.gpo.gov]




                      THE PRESIDENT'S 2007 BUDGET

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 4, 2005, the gentleman from Virginia (Mr. Moran) is recognized 
for 60 minutes as the designee of the minority leader.
  Mr. MORAN of Virginia. Mr. Speaker, I plan to yield to several of my 
colleagues. Mr. Scott from Virginia is also going to speak, and as soon 
as Mr. Spratt, the ranking member on the House Budget Committee, comes 
out of an important hearing on the Dubai ports issue, he will be able 
to join us as well.
  Mr. Speaker, the 2007 budget takes America down a wrong and unsus-
tainable path. The decisions the President made in this budget favor 
the wealthy over the working class. These decisions reward those who 
live off what the IRS considers to be unearned income, while making 
those who have to work long hours every day, to support themselves and 
their families, pay far more in taxes. In fact, I think you would have 
found bipartisan agreement if we could have worked out tax cuts that 
were more in the interest of the working class and those hardworking 
families.
  But, in fact, when you combine the focus of the tax cuts on those who 
live primarily off unearned income and the spending cuts that 
purportedly are necessary to offset the cost of these tax cuts, the 
majority of young people in this country will find it harder to go to 
college. It will be harder for low-income elderly to get the nutrition 
and health care they need, and it will be much harder for our 
grandchildren to pay for the future needs that their generation will 
face.

[[Page 2525]]

  The decisions made in the President's 2007 budget, like his budgets 
since 2002, define a Nation, a community, if you will, that is not the 
America that we know. In fact, his priorities are just the opposite of 
what makes America great.
  We heard from our colleagues on the other side of the aisle; they 
call it a so-called Republican truth squad. It boggles your mind.
  But the fact is that the Bush administration has raised spending 
while they have cut taxes. You can't fight two wars on four tax cuts, 
ladies and gentlemen.
  The gentlewoman from North Carolina suggested that the government 
never invests, it only spends. Well, what does she think is the purpose 
of the interstate highway system that enabled our economy to fulfill 
its potential during the Eisenhower administration and subsequent 
administrations, or the money that we have put into the public schools 
systems to empower our working class?
  And that is what we are talking about, investment that will give us 
sustainable benefits versus tax cuts that are immediately lost, most of 
which seem to be invested overseas, and cuts in the real safety net 
that can make America achieve its greatness.
  The conscious choices made in this budget reflect the flawed policies 
of an administration that has taken this country down a terribly wrong 
path, one that consists of waging an unnecessary and extraordinarily 
costly war, delivering huge tax cuts to the very wealthiest of this 
Nation, and taking the Federal debt to depths never before experienced, 
while reducing services to working Americans.
  First, the 2007 budget is heavily impacted by the consequences of a 
reckless foreign venture, namely, the war in Iraq. The President's 2007 
budget sets aside another $120 billion supplemental to cover the cost 
of waging this war in fiscal 2007. Of course, this is on top of a 
regular defense budget of over $450 billion. And, in fact, we have now 
allotted over $400 billion, when you look through fiscal 2007, 
primarily for this war in Iraq, and very little for the war in 
Afghanistan that was referred to by our colleague from Maryland.
  The money that is requested in these Iraq war supplementals is $40 
billion more than we request for transportation, $33 billion more than 
we request for education and training, more than $40 billion more than 
we request for the care of our military veterans, more than $90 billion 
more than we will set aside to protect our environment and natural 
resources, and more than $80 billion for what is considered diplomacy, 
but is spent on dealing with the AIDS crisis, on dealing with the 
ethnic cleansing, the genocide in Sudan and throughout the world, 
places where we could have such a constructive, positive effect.
  The amount of money that is being requested in fiscal 2007 for this 
war in Iraq will bring the total amount requested by the Bush 
administration to $490 billion, an enormous sum. The American people 
have to ask, has this been worth it, given the results to date? But we 
know the results are more than 2,300 Americans who have lost their 
lives in Iraq; more than 16,700 who have been wounded; tens, if not 
hundreds, of thousands of Iraqi casualties; and yet Osama bin Laden is 
still on the run. Iraq now appears to be descending into an all-out 
civil war and al Qaeda recruitment levels are reportedly stronger than 
ever.
  But while our men and women are risking their lives overseas, at the 
instruction of this administration, and of course, we have great regard 
for their courage and sacrifice, we are not being asked to sacrifice at 
home; and, in fact, the people who have been the most rewarded by this 
great economy--that was built on the investments that have been made in 
prior generations--they are being asked to sacrifice the least. In 
fact, they are actually being rewarded. The same time that these men 
and women are going to war, we are continuing trillions of dollars of 
tax cuts that primarily benefit the very wealthiest in our society. And 
yet these tax proposals are going to cost the American people about $3 
trillion, $3 trillion over the next decade. The benefits from these tax 
cuts are heavily skewed toward the wealthy.
  If they were to fix the alternative minimum tax for the middle class, 
that would be one thing. If they were to help working-class families 
deal with the vulnerabilities they face in providing for their 
families, that would be one thing. But that is not where most of it 
goes. More than half of these benefits go to the 4 percent of Americans 
who make over $200,000 annually.
  Four years from now, in 2010, taxpayers with incomes of more than $1 
million a year will receive average tax cuts worth $155,000, 100 times 
the tax cut that the average taxpayer will receive. Is that fair? Is 
that smart? I don't think it is appropriate, and I don't think it 
reflects America's priorities. And they come at a huge cost to the 
fiscal security of this Nation; causing massive amounts of annual 
Federal deficits.
  Over the last 4 years, we have seen the largest deficits in the 
history of our Nation. Mr. Scott is going to show you what has happened 
over the last 5 years on a chart. I hope you will pay close attention. 
It is unbelievable.
  The current fiscal year, 2006, is expected to produce the largest 
deficit ever in the history of our country at $423 billion. And this 
doesn't even take into account the supplemental spending requests that 
the President will send up to the Hill any day now which will increase 
the 2006 deficit to well over half a trillion dollars. And fiscal 2007 
will be another year of historic deficits predicted to be $354 billion.

                              {time}  1530

  In fact, since President Bush took office, we have had the largest 
annual deficits in the history of this country, and those numbers are 
net numbers after you take the Social Security surplus and offset it 
against general fund deficits. So you can add another $200 billion 
annually to each of those numbers.
  So we are creating debt of over $500 billion a year, Mr. Speaker. 
These deficits and the $8 trillion in debt we now have as a result of 
prior deficits will place on our children and grandchildren an 
unprecedented level of debt burden.
  Because of these policies, every child born today automatically 
inherits $28,000 as their share of the Federal debt. And under the 
President's budget proposals, a child born just 5 years from now will 
inherit a much larger share. In fact, they will be paying taxes for 
nearly the first 5 months of every year just to pay the interest on the 
debt that their parents' generation incurred.
  The President's massive budget deficits also require us to borrow 
from foreign governments. Foreign investors now hold half of the 
country's publicly held debt. China alone holds $250 billion of the 
public debt, which is more than 300 percent the amount that China held 
only 5 years ago. They have a fiscal guillotine over our necks if they 
chose to use it. We are so dependent upon China's being willing to 
borrow all this debt that we generate year after year.
  Let me just show you a chart, in fact, of this foreign debt; Mr. 
Kahn, our very able staff director on the House Budget Committee, has 
put this together. This is the aggregate U.S. national debt held by 
foreign countries.
  Now, the debt was climbing during the Reagan years in the 1980s, 
continued to climb during the Bush years. During the beginning of the 
Clinton years, it started to top off, and then with President Clinton 
having adopted the pay-as-you-go policy of the first President Bush, 
having to pay for tax cuts as well as additional spending, we got the 
budget under control. We had an estimated $5.6 trillion surplus 
predicted for the succeeding decade. So foreign debt would have gone 
down just like this. And as our foreign debt went down, our national 
security would have gone up.
  But this administration decided they did not want to adopt the 
policies of the father. They did not want any pay-as-you-go. They just 
wanted to cut taxes. The heck with paying it. We will send a credit 
card to the next generation. They can pay off our debt. That is their 
problem, not ours. We are going

[[Page 2526]]

to live high off the hog. We are going to reward our contributors. And 
the fact is that that is exactly what has happened, and we have driven 
this Nation into debt.
  But even more seriously, look at what has happened to foreign debt. 
Foreign debt has gone up like this to here. We are now at $1.5 
trillion. Here we are at $1.175 trillion and here we are over $2 
trillion in 2005, a substantial share being purchased by China, as I 
just said, a 300 percent increase in China's share of the foreign debt. 
But imagine what has happened to foreign debt since 2001 when this 
President took office. Talk about endangering national security.
  Now, who pays for all of this? Well, what happens is that the 
American people obviously pay. Our children will pay most of it. But 
even today the sick and the elderly who need care that cannot be 
provided by their families will pay. We will have our college students 
pay in reductions in student loans, and basically the dignity and the 
upward mobility of the American working class is going to suffer for 
these policies. Mr. Speaker, this is a situation that is not 
sustainable, that has to be reversed.
  Now, everyone is entitled to their own ideological opinions. I do not 
think they ought to be entitled to their own set of facts. This is 
factual information. You can check in any of these budget documents put 
out by the government. You can find that the amount of debt has 
skyrocketed. The amount of debt held by foreign nations has skyrocketed 
to an even greater degree. We are dependent on countries like China to 
keep us afloat.
  And, in fact, the working class has suffered. Our children are going 
to pay the bill, and we are involved in a war that we are only paying 
for by borrowing from the future. We have not paid one dime of the cost 
of the Iraq war nor have we paid for the tax cuts that we have so 
blithely passed.
  Mr. Speaker, with this, I would like to yield to Mr. Scott, who has 
been on the Budget Committee for several years, and he is going to show 
you some shocking charts as well.
  Mr. SCOTT of Virginia. Mr. Speaker, I thank my colleague from 
Virginia for yielding to me.
  My colleague from Virginia, you have done an excellent job in 
outlining what the problem is.
  I like to use charts as I describe what the problem is. Our previous 
speaker indicated, the Truth Squad, as to what the truth is. I would 
like to point out exactly what he is talking about because this chart 
shows the deficit back through the Ford, Carter, Reagan, Bush, Clinton 
administrations, up to a surplus and what has happened in the last 5 
years.
  When they talk about bragging about fiscal responsibility from the 
Republican side, this is the line they are talking about, the one they 
are bragging about right here.
  When they ask what the Democratic plan is to get us out of this mess, 
I would say, Mr. Speaker, the Democratic plan is this blue line right 
here. That is what we had under President Clinton. My colleague from 
Virginia will remember in 1993 the first budget passed under the 
Clinton administration. It passed without a single Republican vote, 
House or Senate, and we took that budget and took it up to a surplus.
  In 1995, when the Republicans came in and took control of Congress, 
they passed a different kind of budget, and President Clinton vetoed 
that budget. In fact, they threatened to close down the government if 
he did not sign those tax cuts, and he vetoed it again and the 
government was shut down. President Clinton would not sign an 
irresponsible budget. And as a result, we have almost a straight line 
up into a surplus.
  When President Bush came in, everything collapsed. They stopped 
paying for tax cuts or paying for spending cuts. Pay-as-you-go 
dissolved, and here is what you have. And this is the line they are 
bragging about.
  Now, unfortunately, it is going to get worse before it gets better. 
The President says that he wants to cut the deficit in half in 5 years. 
That is a fairly, what I would say, modest goal, taking into 
consideration the fact that you had a huge surplus to begin with to say 
that you are only going to clean up half of the mess, but the fact is 
he cannot even do it if we make the tax cuts permanent and do other 
things that he has suggested. And they are passing.
  This is the line we are going to follow for the next 10 years. Deep 
into deficits. This green line is the promise, which is not much, but 
the red line is what we are going to probably do.
  This little blue line up here is an interesting line because that is 
the budget from this administration in 2003 before they continued 
cutting taxes. They showed that by now we would be up into surplus. 
2003 is significant because that is after 2001. After the war we still 
had projected, before we continued to mess up the budget, we were 
supposed to be in surplus now, but here we are deep in the ditch. In 
fact, as my colleague from Virginia has indicated, we had, when this 
administration started, a projected $5.6 trillion surplus for the 
following decade. We have dropped almost $9 trillion to, the same year, 
a $3.3 trillion deficit, a turnaround of $8.9 trillion.
  Now, let us put that number in perspective because it is a big 
number. If you add up everybody's individual income tax, what everybody 
pays on April 15, every individual, what your individual tax is, it 
averages year by year to be about $800 billion. An average 
deterioration in the budget, almost $900 billion, deterioration in the 
budget. And when you talk about the war, the gentleman mentioned less 
than $500 billion, 0.5.
  Talk about Katrina, $200 billion, we might want to pay for the 
Katrina aftermath, 0.2. An $8.9 trillion deterioration; you cannot 
blame it on 0.5 and 0.2. And since that happened, it looks like you 
would have changed course somehow to accommodate it. No, you kept going 
straight. But you cannot blame 0.5 and 0.2 on a $9 trillion 
deterioration.
  Now, the Truth Squad indicated a blank slate of the Democrats who 
voted for the spending cuts in 1991. That is true. But they did not 
tell you what the spending cuts were. Food stamps and health care for 
the working poor, and I say ``working poor'' because when you cut, you 
cut from the top. The ones that are struggling, the ones that are just 
barely making it, you whack them. The very poor are untouched; it is 
just the working, struggling poor that get whacked with food stamps and 
health care.
  They also cut child care, child support enforcement, foster care. We 
had a group come into my office the other day talking about the effects 
on foster care. Many at-risk children who are in foster care now will 
not have resources to help them. These are the ones at most risk of 
getting into trouble, getting into other problems that we are going to 
have to deal with. Those are the ones that got whacked by that budget, 
as well as, as the gentleman indicated, student loans. That is what we 
did not vote for.
  But he also did not say what that was a total package of. They had 
spending cuts and they had tax cuts. The spending cuts were less than 
$40 billion. The tax cuts were $70 billion. Had we passed the plan, we 
were going to be $30 billion worse off, further in the ditch than we 
started off. These are some of the problems with the budget.
  And let me get these other charts which point out that when you run 
up that kind of deficit, that is kind of esoteric, but at some point 
not only do you have to pay it back, but in the meanwhile, interest on 
the national debt. By 2010, compared to where we were on the line on 
interest in the national debt, we are going to be spending over $200 
billion more in interest on the national debt, $227 billion more in 
interest on the national debt than we had projected.
  At $22,000 a year for a job, how many people can you hire with $227 
billion? Answer: 10 million. There are only 8 or 9 million people 
looking for work, drawing unemployment today. You could hire each and 
every one of them with a $22,000 job and have money left over with the 
additional interest in the national debt that we are going to have to 
pay.
  Now, as you have indicated, we are running up debt. This chart shows 
the

[[Page 2527]]

Social Security cash flow. What we are spending now, the little blue 
line, shows that we are bringing in more than we are paying out. In 
2017, we are going to start paying out more than we are bringing in. 
Right at the time we are deepest in the debt, paying the most in 
interest on the debt, we are going to need to come up with cash to pay 
for Social Security.
  Now, there is an old adage that goes, ``If you don't change 
directions, you might end up where you're headed.'' Let us look at what 
where we are headed with this budget. This black line shows the taxes 
if we continue making these tax cuts permanent, as the Republicans have 
continued to pass. Where are we headed? By 2040, this line goes across 
and shows that we could be able to pay for the blue, interest on the 
national debt; the yellow, Social Security, and we would have to borrow 
a lot of money to pay for that because you are not even covering Social 
Security; but we would also have to borrow for the red, which is 
Medicare and Medicaid; and green, which is government spending like 
defense, education, FBI, and everything else we do, all with borrowed 
money.

                              {time}  1545

  Obviously, this is not a sustainable direction. We have to change 
directions, and we need to start now. It is not getting any better.
  I thank you for leading this Special Order. We have a lot of work to 
do. Again, if people want to know what the Democratic plan is, the 
democratic plan is the blue. We dug ourselves deeply out of debt and 
ran up a surplus sufficient to have an over-$5 trillion surplus.
  Mentioning Social Security, to pay for Social Security for the next 
75 years, we would need today $4 trillion more in the trust fund, $4 
trillion more. We had over a $5 trillion surplus squandered away, 
turned into a deficit. We had the Social Security problem licked 
because we had gone into surplus. We could have paid Social Security 
for the next 75 years. But, no, we went in a different direction.
  We need to get back to the Democratic plan and certainly reject more 
of what we have been doing for the last 5 years.
  Mr. MORAN of Virginia. I thank my good friend from Virginia. Let me 
just clarify a couple of points. In the Democratic plan, it was 
basically based upon the pay-as-you-go concept of 1990 with the first 
President Bush, a bipartisan plan to pay for any subsequent tax cuts, 
to have sufficient revenue to pay for whatever spending occurred, but 
to balance the budget each year. By those efforts to balance the 
budget, it actually created a surplus.
  Now, I know that the gentleman voted after 9/11 to go to war in 
Afghanistan, to go after the people that attacked us, Osama bin Laden, 
as I did; but that is a small fraction of the money that we are 
spending on the Iraq war.
  The gentleman knows a lot of people, men and women, who have been 
financially successful. Does he feel that if they had been asked to 
sacrifice to pay for the war to go after those people who attacked us 
on 9/11, that they would have readily foregone tax cuts so that we 
could keep the budget balanced and avoid deficits being passed on to 
future generations?
  Mr. SCOTT of Virginia. If the gentleman would yield further, not only 
that, and the way the question is framed, it is significant, because 
the overwhelming portion of the tax cuts are going to people that make 
more than $200,000.
  There is one tax cut that goes into effect this year, colloquially 
known as PEP and Pease, dealing with standard deductions and other 
kinds of deductions that can be made. To make a long story short, it 
only affects the wealthy. If you are making more than $1 million, you 
get out of this tax cut, when it is fully phased in, about $19,000. If 
you are down between $75,000 and $100,000, on average you will get $1. 
If you are under $75,000, you get zero. This shows how we are going to 
spend $20 billion a year when this thing is fully phased in.
  It would seem to me this is how we get into deficit, with those kinds 
of cuts. $20 billion a year, let's put that into perspective. All the 
BRAC base closings that you suffered in Northern Virginia and I 
suffered in Hampton Roads, Virginia, all of the BRAC closings, we will 
be lucky to save $20 billion over 20 years. $20 billion a year, when 
people under $75,000 don't get a dime; people over $100,000 might get 
$1; $100,000 to $200,000 might get $25, over $1 million, $19,000. That 
is how we are spending $20 billion a year in that tax cut.
  It seems to me before we pass tax cuts like that, we ought to get the 
budget straight. Let's not be down here in the dumps talking about more 
tax cuts, particularly when they are weighted overwhelmingly toward the 
wealthy.
  Mr. MORAN of Virginia. I thank the gentleman for illuminating those 
misplaced priorities, and I thank him very much for his extraordinarily 
illuminating set of charts and numbers.
  Mr. Scott, do you have one further thing you wanted to share with the 
American people? I yield to the gentleman.
  Mr. SCOTT of Virginia. I would say that if we had actually improved 
the economy with all those tax cuts, it might have been worth it. But 
this chart shows that the economic improvement, the number of jobs 
created since Herbert Hoover, it shows that after we have run the 
budget into the ditch, we still have ended up with the worst job 
performance since Herbert Hoover.
  Mr. MORAN of Virginia. Unbelievable charts. So for all of those 
Presidents since Herbert Hoover who had a net loss of job creation 
because of the Great Depression, Presidents Roosevelt, Truman, 
Eisenhower, Kennedy, Johnson, Nixon, Ford, Carter, Reagan and the first 
President Bush, and then President Clinton, of course, they all created 
far more jobs than this Presidency, the worst job creation record in 
our lifetimes, in the last, what, 65 years. So, it is an unbelievable 
record. We thank you for sharing it with us, Mr. Scott.
  We will now hear from the gentleman from Long Island, New York, Tim 
Bishop, a member of the Budget Committee, and very much concerned about 
the fiscal policy of this administration.
  Mr. BISHOP of New York. Mr. Speaker, I thank the gentleman from 
Virginia for yielding, and I thank both gentlemen from Virginia and Mr. 
Spratt and all of our colleagues on the Budget Committee for their 
leadership and diligence in making the case against the Republicans' 
failed economic strategy and misguided budget priorities.
  These shortcomings are conspicuous in the President's fiscal 2007 
budget. If the last few years have taught us anything, the emerging 
Republican budget resolution to be considered by this House in the 
coming weeks will mirror the problems and missteps called for in the 
President's proposal.
  On one hand, we are hopeful, even optimistic, that the promise of his 
competitiveness agenda represents a down payment on the long-term 
priority investments we need to make in order to maintain our 
competitive edge in the global economy. Yet, on the other hand, this 
budget is perhaps the single most disappointing, counterintuitive, and 
hypocritical proposal of his six requests thus far. Calling for deep 
cuts in education and health care, for example, while advocating a 
competitive workforce, represents a fundamentally incompatible 
strategy. Americans shouldn't be surprised, though, given this 
administration's history of cutting taxes for the wealthiest 
individuals and corporations at the expense of middle-class priorities.
  After a dozen town hall meetings in my district in recent weeks, my 
constituents have spoken loud and clear about how these budget cuts are 
making it tougher for their families to stay ahead in today's economy.
  Let me focus on two aspects of the President's budget proposal, each 
of which reflects deeply flawed policies.
  First, education. Under the so-called Deficit Reduction Act and the 
President's 2007 budget request, student loan programs are cut by $12 
billion, Pell grants are frozen for the fourth year in

[[Page 2528]]

a row, and the Federal portion of the Perkins loan fund is recalled. 
This decision alone will take out of the student loan system another 
$600 million per year.
  As a consequence, the rapidly expanding gap between the amounts of 
available student aid compared to the total cost of obtaining a college 
education is growing out of control. Yet this administration's response 
is that colleges should simply charge less.
  But it is not making the same demands of other industries that are 
equally critical to our economy's infrastructure and competitiveness. 
While the budgets of college students and their families are stretched 
to increasingly thin margins and the dream of obtaining a higher 
education is placed farther out of reach, the administration isn't 
calling upon the drug companies or the oil and gas companies or those 
industries operating with banner profit margins to make the same 
sacrifices.
  The central point is this: we can propose a competitiveness agenda, 
but it is simply an empty promise if our policies are going to make it 
more difficult for students to attend college. We can educate all of 
the AP students we want, we can have the best AP teachers in the world 
we want, but if once they finish those AP courses they don't have 
access to a higher education, our competitiveness agenda is simply an 
empty promise. It is a sham.
  Investing where the government's help is needed the least, including 
$16.5 billion worth of tax breaks and generous subsidies for the most 
profitable oil and gas companies, at the expense of extending a helping 
hand to those Americans that need it the most is an economic strategy 
headed for failure.
  Similarly, the President has chosen to scale back investments in the 
other pillar of America's competitiveness and critical infrastructure, 
health care. His plan to cut $36 billion from providers through fiscal 
year 2011 could result in Medicare reimbursements to medical facilities 
in my congressional district of approximately $28 million over the next 
5 years, this on top of the $1.2 billion in cuts already enacted.
  Reasonable people simply have to ask what kinds of priorities are 
revealed by these policy initiatives. More importantly, what kinds of 
values are revealed by these policy initiatives? Cutting funding for 
medical facilities doesn't save taxpayer dollars; it passes the costs 
on to local communities and places a greater strain on the middle 
class. Our health care system is already in tatters. The Medicare part 
D drug benefit remains in shambles, and more families are joining the 
ranks of the 46 million uninsured Americans.
  These are the consequences of the Republicans' flawed policies. 
America needs a new prescription for competitiveness, one that we 
should rewrite as we take up the budget resolution in the weeks ahead.
  If we are truly committed to sharpening our competitive edge and 
meeting the goals set forth in the President's budget, I suggest that 
we back up our promises by fully funding our health care and education 
priorities.
  Mr. Speaker, this budget reflects priorities and values that simply 
cannot be supported. We can do better, and I look forward to working 
with my colleagues towards that end.
  Mr. MORAN of Virginia. Mr. Speaker, we are very appreciative of the 
gentleman's comments. Thank you very much, Mr. Bishop.
  I yield to the very distinguished gentleman from Washington State, 
Brian Baird.
  Mr. BAIRD. I thank my good friend and colleague. This is an important 
topic, because it strikes at so many issues important to our families 
back home and the people we represent.
  This administration has said repeatedly, no new taxes. What they are 
not telling you is while they say on the one hand no new taxes, they 
are in fact passing a host of hidden fees that are tantamount to taxes 
onto the backs of the American people.
  Let me give you some examples that directly impact my constituents, 
the first of which is, indeed, according to the administration, a new 
tax. If you listen to President Bush and our friends on the other side 
of the aisle, they will tell you that if we do not extend the capital 
gains and dividend tax cuts that go to the wealthiest Americans, that 
is equivalent to raising taxes. In other words, if you don't extend the 
tax cut, then you have effectively raised taxes. Yet the President's 
budget does not extend deductibility of the State sales tax that 
affects people in my State of Washington and six other States across 
the country.
  How much is this matter worth? Last year our deduction for sales 
taxes, which we fought to put in on a bipartisan basis, saved the 
taxpayers of Washington State alone $500 million. If the President 
believes that we don't need to extend that, then the President, 
according to his own logic, would raise taxes on Washington State 
taxpayers to the tune of $500 million a year, which would be $5 billion 
over the next decade.
  A second effective tax increase that is going to strike the Northwest 
comes from the President's ill-conceived proposals for dealing with 
Bonneville Power Administration revenues. The President would force 
Northwest taxpayers and the Bonneville Power Administration to take 
additional revenues from Bonneville and send them to the Federal 
Treasury to disguise the true cost of the deficit, rather than using 
them to lower the power rates, which currently are 50 percent higher 
than they were before the 2001 energy price crisis, which, not 
coincidentally, was precipitated by the actions of this very 
administration.
  Friends, if policies of this administration increase your utility 
bill 10 percent above the current levels, that is equivalent to a tax 
from an administration that swore it would have no new taxes.

                              {time}  1600

  The President also is going to shift critical fees and expenses that 
also amount to an effective tax onto our local communities through 
their proposals to cut dramatically the Secure Rural Schools 
Initiative.
  In my district, two of the highest recipients in Washington State, 
two counties are the highest recipients, Lewis and Skamania Counties, 
absolutely depend on this money to make their counties operate.
  As we have seen curtailments in timber harvests and resulting 
revenues, these counties have come to depend and desperately need this 
money for public infrastructure, education and safety, yet this 
administration would first cut the funding for this program and, 
second, require that we sell off Federal lands again in a short-term 
effort to disguise the deficit, that we sell off Federal lands in order 
to provide the meager funds that would remain.
  Our local communities depend on this creative, collaborative effort 
by environmentalists and timber companies and timber interests to get 
responsible, practiced harvests in the woods, that would be decimated. 
We cannot let this go forward.
  That the Federal Government would also renege on its fundamental 
commitment to community safety by cutting this figure is astonishing, 
up to 80 percent of Federal support for local law enforcement programs.
  Come to my district, Mr. President and my friends on the other side 
of the aisle. Talk to my local sheriffs and police officers who fight 
the daily battle against the scourge of methamphetamine, other drugs 
and other crimes. Ask them, can you do without Byrne Grants? Can you 
sustain the kind of cuts we are talking about in the COPS program? Can 
we really support further cuts in the High Intensity Drug Trafficking 
Area? We are making progress in the battle against methamphetamine, but 
increasingly international supplies are coming through our virtually 
open borders.
  Our young people, even middle-aged people are getting addicted to 
this horrific drug, and this administration says, now is the time to 
cut funding that the Federal Government provides local communities. It 
is bad policy, friends, and it amounts to a tax on our local 
communities because they will be left to pick up the tab of the reduced 
Federal dollars. And it is a tax on you if your home is burglarized, if 
your

[[Page 2529]]

family is assaulted, if your workplace no longer functions effectively 
because of the effects of this drug. It is a tax, my friends, and it is 
being levied by the policies of this administration.
  Finally, last month, we had a number of folks from our local school 
boards in my office. And they talked to me about the proposed cuts to 
critical education programs and the shortfalls in key educational 
opportunities. We all know that this administration and this 
Republican-led Congress has proposed to increase the cost of student 
loans even as college costs are skyrocketing.
  But we need to know too that folks who are not planning to go to 
college, the folks who need a vocational education, who want to learn a 
trade or a skill will be dramatically and adversely impacted by this 
ill-conceived budget.
  The President has proposed zeroing out the Perkins Grant program 
which local high schools and community colleges and voc programs 
absolutely depend on to sustain their voc education program.
  It happened to me last month that we had school board members and 
community college board members in my office one day talking about how 
devastating these cuts would be. The next day I heard from Josh Bolten, 
the President's OMB Director, who said everything is going to be just 
fine.
  Mr. Bolten, Mr. President, please come to my district. When we finish 
talking to law enforcement about what you are going to do to them, we 
will come talk to our educators about what your proposals will do to 
them. It is a tax on our schools. It is a tax on our students. It is a 
tax on our families if you cut these resources.
  You cannot continue to do this. You are funding a war without paying 
for it. You are funding tax cuts without paying for it. You are passing 
the debt onto our children and our grandchildren, and all the while you 
are cutting vital and essential services and you are trying to disguise 
the costs of our cuts by increasing the rates on our northwest 
electrical ratepayers, by shifting costs to local communities, and by 
trying to sell off the Federal lands.
  None of that is responsible policy. The American people should know 
about it. And we must reject this ill-conceived budget plan by this 
administration, and our friends on the Republican side. I yield back to 
you.
  Mr. MORAN of Virginia. I thank the very astute gentleman from 
Washington State. And now we have our very diligent, conscientious 
member of the Budget Committee from the Commonwealth of Pennsylvania, 
Ms. Schwartz.
  Ms. SCHWARTZ of Pennsylvania. Madam Speaker, the President's budget 
is fiscally irresponsible and cuts services vital to American families. 
I rise today in opposition to the President's proposals to cutting 
funding for homeland security.
  I represent the Port of Philadelphia, the world's largest freshwater 
port and one of the Nation's strategic military seaports. Over 3,000 
ships load and offload at the Port of Philadelphia each year, making it 
one of the busiest ports on the Atlantic coast, and the fourth largest 
port in the United States for the handling of imported goods.
  In addition to the port, the greater Philadelphia region is home to 
other critical transportation economic infrastructure, such as a large 
portion of Amtrak's northeast corridor, SEPTA and PATCO high-speed 
lines, and major highway infrastructure.
  Situated around this transportation hub are almost 5.7 million 
people. These factors led to the Insurance Services Office, which 
assesses risks for the insurance industry, to conclude that 
Philadelphia is among the 10 cities most vulnerable to a terrorist 
attack.
  Madam Speaker, the President's cuts to port security and first 
responder funding will adversely affect the ability of Philadelphia and 
cities across the Nation to protect those who live, work and visit the 
city, to protect them from traditional and emerging threats.
  Specifically, the President's budget slashes funding by 25 percent 
for first responders. These are the very dollars that allow American 
cities to equip, hire and train police officers and firefighters. The 
President's budget eliminates funding for law enforcement terrorism 
prevention, and the President's budget eliminates funding for port 
security grants which were created by Congress in 2002 as a means of 
directly funding the installation of security perimeters, surveillance 
technology, and other very important counterterrorism measures at our 
ports.
  These cuts come at a time when the administration is allowing our 
major ports, including Philadelphia, to be managed by Dubai Ports 
World, a UAE-owned company, a company located in a country whose key 
agencies, including security and monetary agencies, al Qaeda has 
claimed to have infiltrated since 2002.
  While the President justifies this decision by saying that the 
Federal Government, not Dubai Ports World, will be responsible for 
security, he has proposed to eliminate funding for port security by the 
Federal Government. Neither justification nor the President's proposals 
will make Americans safer.
  My colleagues, while it is good that the Nation is finally focused on 
the critical issue of securing our ports, our rhetoric and our passion 
about Dubai must be matched by the funding necessary to keep our ports 
and our citizens safe.
  That is why when the House Budget Committee votes on the President's 
proposed budget in the coming weeks, I will lead the fight to restore 
these and other harmful cuts to port security. The security of our 
Nation depends on our making the right investment and the right funding 
choices to protect America.
  I yield back.
  Mr. MORAN of Virginia. I thank the Congresswoman from Pennsylvania.
  I am happy to yield to the Congressman from Alabama, Congressman 
Artur Davis. Thank you for your leadership, particularly on the Budget 
Committee.
  Mr. DAVIS of Alabama. Madam Speaker, I want to thank the gentleman 
from Virginia (Mr. Moran) for what you and Mr. Spratt and Mr. Scott and 
so many others do.
  Mr. Moran, Mr. Scott, one of the helpful things about these 
colloquies and these special orders at the end of the day is that they 
have enormous nutritional content for people who really want to 
understand the budget issues. They expose some of the argument that 
happens on the floor.
  As you know, when we have our full-fledged budget debate, we match 
each other in bits of 1 minute, 2 minutes, and it is hard to get 
clarity in 1- and 2-minute exchanges. These kinds of conversations 
allow for a lot more light to be shed.
  And one of the points that you have made, that my friend from 
Virginia has made, and others have made, is exactly how fundamentally 
unserious the administration is about restraining spending. That is the 
point we ought to make over and over again, Madam Speaker, because when 
people hear these budget debates, they often think that folks on our 
side of the aisle are enamored with spending, they think the people on 
the other side of the aisle are resistant to it.
  Well, you cannot be serious about spending cuts when you pass a 
reconciliation package that cuts spending by about $45 billion, and 
then you push just as hard for revenue cuts, for tax cuts to the tune 
of $70 billion. That is a simple matter of math and arithmetic. You 
cannot be fundamentally serious about spending cuts when your 
administration has presided over the largest rise in discretionary 
spending in the last 10 years for a variety of programs.
  So the American people ought to understand, this is not an argument 
about who wants to spend more and who wants to spend less. It is an 
argument about a far different set of issues. That is what we value and 
what we prioritize.
  As so many have pointed out during all of these debates, Mr. Moran, 
the reconciliation packets that passed a few weeks ago, the budget that 
we will debate in committee next week will

[[Page 2530]]

not make much of a dent in the deficit when all is said and done. But 
it will wreak havoc with a lot of families in this country.
  Just a few weeks ago, this body thought it was so important to start 
this session of Congress out by passing a bill, a reconciliation 
package, that will mean that 13 million working poor and poor families 
will have to dig deeper in their pockets to go to the doctor.
  This House thought it was so vitally important to open this session 
of Congress by passing a package of cuts that took the heart out of the 
Federal Government's efforts to collect child support, that took the 
guts out of a program that the administration said was one of the best 
performing programs in the government.
  And you will see it again and we will see it again in committee next 
week. You will see a budget that does very little to rein in spending, 
when all is said and done, but yet will have a disproportionate impact 
when it does make cuts on the people who are struggling in our 
communities right now. And that is what the people ought to understand 
this debate to be about.
  We can do all kinds of things, cut spending that will attract support 
from both sides of the aisle. We can do all kinds of things to rein in 
the deficit that would attract support from all sides of the aisle. But 
every choice that the administration and the majority have made has 
been aimed at one set of people, the weaker people, the older people, 
the younger people, the people who are struggling to get by. And it is 
just wrong to put them in isolation. It is wrong to make them bear the 
brunt of these kind of cuts.
  So as we move through this budget debate next week and over the next 
several weeks, I hope the American people understand, it is not an 
argument about cutting spending, it is an argument about what we value. 
It is an argument about what we prioritize. And finally it is an 
argument about who we give value to.
  We know who the administration and our friends on the other side of 
the aisle often value. They often value people who are doing rather 
well in this society and they often reward that. They do not put a lot 
of value in some of the people who are living in my district, which 
happens to be the fifth poorest district in the United States. They do 
not put a lot of value in their needs.
  So if you believe in a better way of looking at the American people, 
if you believe in a more principled way of understanding that everyone 
should count and not just some people, you will vote against this 
budget, you will reject this budget. And that is the kind of debate 
that we ought to be having in the next several weeks.
  So, Mr. Moran, I thank you for your leadership. Mr. Scott, I thank 
you for your leadership, and I yield back.
  Mr. MORAN of Virginia. I thank the gentleman very much, and 
particularly for revealing the real effects upon the hard-working 
people in your congressional district. Many of them are poor because 
they have not had the opportunities to be as prosperous as others. And 
that is a situation perhaps more pronounced in your rural district, but 
it is the case through so many parts of the country.
  We need to be investing in as strong an America as we can possibly 
create. Our strength is in America's workers, and the education our 
children receive, in the roots that our families put into their 
communities.
  And I know your total commitment to the people of your district as 
well as to the country and I appreciate your input. Thank you, 
Congressman Davis.
  We now call upon the gentleman from North Dakota (Mr. Pomeroy), the 
former State insurance commissioner who watches this budget very 
carefully. And he is going to share with us some of his concern about 
the direction our fiscal policy has taken over the last 5 years.
  Mr. POMEROY. Madam Speaker, I thank the gentleman for yielding and 
thank him and all of my colleagues, Democratic colleagues, on the House 
Budget Committee.
  I have previously served on the House Budget Committee and the task 
before you points out the absolute lunacy of the Republican budget 
plan. This is extremely important. Thank you for the time you are 
spending on it today.
  Earlier this morning I was at an event where we heard from several 
Republican Congressmen and the Vice President of the United States. 
They were sharing the same talking points. Because even the phrasing 
was identical in speech after speech. And it was something like this: 
The economy is going great. Growth is strong. Unemployment is down. We 
deserve a lot of credit.
  What they did not tell you, what they did not tell the crowd this 
morning, made no mention of it at all, is that this crowd is funding 
the government on borrowed money.

                              {time}  1615

  The good times we are seeing today are very much like someone that 
might be living down the street, living high and mighty, driving nice 
cars, wearing fancy suits and doing it all on borrowed money.
  There is a wonderful television commercial that has a very self-
contented man. He says, I have got a nice family. I have got a nice 
house. I have got a nice car. And then he looks at the camera and says, 
And I am in debt up to my eyes. Because what they are doing is 
artificially creating today the appearance of prosperity while they 
mask the depth of debt they are pushing our country into. That is what 
is so important on this chart.
  We have had the most significant financial swing in the history of 
our country going from projection of surpluses as this crowd took over 
to the deepest deficit we have ever had in the history of the country. 
Record deficit in 2003. Record deficit in 2004. Record deficit in 2005. 
And this year the biggest kahuna of them all, the deepest deficit ever, 
which is why they have brought this case in the national debt. It seems 
like this crowd and their wonderful economy have borrowed so much money 
the Nation has maxed out its credit card limit. They are at the edge of 
what we have authorized them to borrow.
  Now, we have already increased this debt limit by votes of Congress 
on three different occasions under this President. I feel like the loan 
officer as a Member of Congress. They keep coming back for more and 
more and more. And now even while they proclaim how wonderful things 
are, they are presiding over the deepest deficit in the history of the 
country and an increase in the national debt limit authority down to 
$3.3 trillion of debt.
  This is going exactly the opposite of the values of the families I 
represent. Household after household in North Dakota and across the 
country, you have got moms and dads at the kitchen table working hard 
to make ends meet and sharing a conviction that, no matter what, things 
are going to be better for their children; no matter what, they are 
going to make sure that their children have more opportunity.
  Do you know what? A recent survey shows that more than half of the 
people in this country believe that it is going to be worse for our 
children than we ourselves have had it. Now, I ask you, why should 
Congress run this ``live for today economy,'' racking up debt for our 
children, doing exactly the opposite, living for today, reducing the 
prospects for tomorrow for our kids when individually the families of 
America would do anything to leave things better for their children 
than they themselves had it? In my opinion, that is the heart of this 
budget debate.
  Are we going to pay our way? Are we going to take the stand now to 
leave things better for our kids? Well, you sure would not have known 
from this morning. They are crowing about the happy economy and not 
saying one word about pushing our Nation into the deepest debt it has 
ever been in, leaving our children to clean up this mess. I believe 
they should be ashamed of themselves.
  As I prepare to yield back, I again want to express my appreciation 
for the efforts of the House Democrats on that Budget Committee 
fighting this fight and getting the word out. We should not fund 
today's good times based on tomorrow's debt that our kids are going to 
have to take care of. We ought to pay our own way, and I intend

[[Page 2531]]

to work with Republicans and Democrats to get us back to that point. I 
thank the gentleman.
  Mr. MORAN of Virginia. I thank the gentleman from North Dakota (Mr. 
Pomeroy) for his extraordinary leadership and his very deep and genuine 
concern over the fiscal policy direction of this country.
  Even beyond the immorality of this wild, profligate spending and then 
sending the bill to our children to pay, what American family would 
take a credit card, max it out, and then tell the credit card company, 
Do not worry about it. Send the bill to my kids after I die.
  And that is what is going to happen. The amount of debt and even the 
interest on that debt is going to cripple generations to come.

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