[Congressional Record (Bound Edition), Volume 152 (2006), Part 5]
[House]
[Pages 6720-6726]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  2000
                           THE FEDERAL BUDGET

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 4, 2005, the gentleman from Texas (Mr. Hensarling) is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. HENSARLING. Mr. Speaker, we have just received some news 
yesterday which I hope will sufficiently alarm every big spender that 
we have in the United States House of Representatives. Yesterday we 
received the annual report on the financial well-being of Medicare and 
Social Security from the trustees of those funds. They report that the 
fiscal situation has again deteriorated and, in fact, Social Security 
will become broke in 2040, 1 year sooner than expected, and Medicare 
will go broke in 2018, 2 years sooner than expected.
  This is not good news, Mr. Speaker; but a number of us have been 
speaking out for weeks, for months, for years that we must do something 
in this body to change the fiscal path that we are on.
  Now, today, if you are a senior receiving Medicare, receiving Social 
Security, you are going to be fine. But there is this great big baby 
boom generation that has been paying billions and billions of dollars 
into the funds, and soon they will be taking from the funds; and the 
fiscal situation will deteriorate rapidly.
  The challenge that we have, though, Mr. Speaker, is that too many 
people in the Federal city, too many people in this body, are focused 
on the next election and not the next generation.
  Now, the report we received is certainly not a crisis. It is not 
something we have to take care of today. We do not have to take care of 
it tomorrow, do not have to take care of it next week. But let there be 
no doubt about it, if we want to preserve Medicare and Social Security 
as we know these programs for the next generation, steps must be taken 
today. Otherwise, we will put our Nation on a course, on a fiscal path, 
that will determine, that will actually ensure that our children, our 
grandchildren have a lower standard of living than we do.
  So, Mr. Speaker, this is the week where we are due to vote on the 
budget, and the budget is always a time of great debate in this 
institution. And I hope that the American people focus on the fact that 
the budget is more than just numbers; it is more than just getting out 
a pencil with a stubby eraser; it is more than just red ink and black 
ink, and, unfortunately, it has been a lot more red ink than black ink. 
It is really about priorities. It is about the society that we want to 
have. It is about the legacy that we will leave the next generation.
  I personally got into the parenthood business 4 years ago. I have a 
4-year-old daughter and a 2\1/2\-year-old son. And I think a lot about 
the kind of America that I want my children to grow up in and all the 
children that I see in the Fifth Congressional District of Texas that I 
have the honor to represent in this body. I want to leave my children a 
legacy of greater hope, greater freedom, and greater opportunity. I do 
not wish to leave them a legacy of greater debt, greater taxes, and 
more big government bureaucratic solutions. That is not the America I 
want to leave them. I think that if we will just ford the frontiers of 
freedom, if we can have smart government, limited government, 
accountable government, then our children and grandchildren can have an 
even brighter future than what we enjoy today.
  But as we debate this budget, it is a little bit like that film with 
the comedian called ``Groundhog Day,'' where it seemed like he, Bill 
Murray, relives the same day over and over. And for those of us who 
have been veterans of these budget debates, it seems like the debate 
points never change. Maybe the numbers do and the situation gets more 
serious, but the debating points do not seem to change.
  So first, Mr. Speaker, there will be a number of different budgets 
that we debate; but my guess is, if history is our guide, it will come 
down to one Republican budget and one Democrat budget.
  Now, the Democrats will tell us that all these programs are being cut 
and if you will only send more money to Washington, we can solve all 
these problems for the American family. If you will just trust 
Washington, if you will just trust the liberal elite in the Nation's 
capital who know better about your family than you do, then everything 
will be fine.
  Let me tell you, Mr. Speaker, what has been happening. First, 
Washington, DC, our Federal Government, is now spending, last year, 
starting with last year, over $22,000 per household. This is only the 
fourth time in the entire history of America that the Federal 
Government has spent this much money. It is the first time since World 
War II that the Federal Government has taken so much money away from 
hardworking American families to bring up to Washington, DC. And as you 
can tell from this chart, frankly, the trend line is very, very 
worrisome. And in just the past decade, look at what has happened: the 
average family income, as measured by median family income, 10 years 
ago was roughly $45,000 per family of four. As you can tell from this 
bottom line, it has now increased over 10 years to about $62,000 for a 
family of four.
  But look at what has happened to the Federal budget. Ten years ago it 
was about $1.6 trillion, and now it is approaching $2.6 trillion for 
the next year. The Federal budget has outpaced the family budget by 
almost a full third in just the last decade. And the future trends are 
even more alarming.
  So, Mr. Speaker, tonight I want us to focus on what the future is 
going to look like if we do not change big spending ways in Washington 
and what the future can look like if we will just have smart 
government, limited government, accountable government, and trust the 
American people and trust freedom and trust hope and trust opportunity.
  At this point, though, I am very happy, Mr. Speaker, that we have 
been joined by an outstanding Member of the freshmen class who has been 
a real leader in the United States Congress in trying to protect the 
family budget from the Federal budget, to try to restrain out-of-
control Federal spending.
  Mr. Speaker, I yield to the gentlewoman from North Carolina (Ms. 
Foxx).
  Ms. FOXX. Mr. Speaker, I thank Representative Hensarling for 
yielding. We all owe him a great debt for the work that he does in 
getting us this kind of information about what is happening with the 
budget. He has been a tremendous leader not just in the Republican 
Study Committee, where we talk about these things a great deal, but 
here on the floor, bringing the attention of the American people as 
well as the Members of Congress to these issues.
  I say over and over again, when I get a chance to do so in small 
groups and in large groups, that what we have to refocus on in this 
Congress is the role of the Congress and the role of the Federal 
Government. What has happened in this country is we have allowed the 
Federal Government to get its tentacles into all kinds of issues that 
it has no business being in.
  The Founders of this country were very, very concerned about the role 
of the Federal Government and wanted to keep a weak Federal Government 
and strong State governments. It made sense to do that. One of the ways 
that they did that was to spell out clearly what the responsibilities 
of the Federal Government would be and then say everything not 
mentioned here remains with the States. That is the 10th amendment of 
the Constitution. And we do not pay enough attention to that amendment, 
I think, on a day-to-day basis in this body; and we need to be doing 
that because we have gotten involved in things we should not be 
involved in.

[[Page 6721]]

  The number one role of the Federal Government is to provide for the 
defense of this country. However, what has happened is that over time 
Members of the Congress and the executive branch have decided that we 
should be like Santa Claus to the country and we should get involved in 
many, many other kinds of programs. We are very much involved in 
education. We are very much involved in health care through Medicare 
and Medicaid. We have the Social Security program, which is, I think, a 
cruel hoax on the American people. We have told the American people 
that we will provide for their retirement through the Social Security 
program; and as my colleague, Mr. Hensarling, has pointed out, we keep 
getting sobering information about the requirements we have established 
for ourselves and what mechanisms we have for taking care of those 
requirements.
  We have created, in the lexicon of our government, some terms that we 
need to get out of our lexicon. The word ``entitlement'' is something 
that is used a great deal. There is no such thing as an entitlement 
from the Federal Government, but we have created that over the years by 
our interest in creating power for ourselves here in the Congress. And 
it is a very insidious thing that has happened, which we need to do 
something about.
  We also talk all the time about mandatory spending. Mandatory 
spending is talked about in terms of Social Security, Medicare, 
Medicaid. These are programs that are put on automatic pilot, and 
nobody ever deals with them. Oh, every year somebody comes up with a 
study such as Congressman Hensarling mentioned, and then people get 
nervous and then they stop talking about it.
  Our colleagues on the other side talk all the time about the deficit. 
But day after day after day, they talk about both the deficit and then 
how we are not spending enough money on various programs. We cannot 
have it both ways, but yet we continue to try to have it both ways, and 
we have tried to convince the American people that we can have it both 
ways. But we cannot do that.
  There is a big difference. The difference is that the folks on the 
other side think they know how to spend your money better than you know 
how to spend your money. Republicans have the opposite opinion. They 
think that you know how to spend your money better than the government 
knows how to spend your money. And to do that, we have made tax cuts in 
the last few years. I was not here when the major tax cut was made in 
2001, but it is really responsible for why our economy is growing as 
well as it is growing. We have these terrible situations looming out 
there on the horizon, but the economy right now is doing well, and it 
is a direct result of the tax cuts, letting the people keep more money 
in their pockets. Frankly, we have got to do more of that. We have got 
to cut back on Federal spending. We have got to get the Federal 
Government out of many of the programs that it is involved in and set 
some priorities.
  Our number one priority has to be the defense of this Nation because 
State governments cannot do that and local governments cannot do that. 
We have to do that at the Federal level. That is our number one 
priority.

                              {time}  2015

  Then if we have funds to do other things, we must set our priorities 
based on what are the proper roles of the Federal government. Frankly, 
those roles are very narrow. We have to get back to a situation where 
we examine every program that we fund in the Federal government against 
those priorities and against what is outlined in the Constitution for 
us to do.
  I am really proud again to be a small part of this presentation 
tonight where my colleagues are going to present the facts about where 
we stand with the budget and what we need to do to get our fiscal house 
in order in this country. We have seen socialism fail in Europe and in 
other countries. We know it doesn't work, and yet there are people in 
this country who think we can keep spending without regard to ever 
having to come to account for that spending.
  I am happy to tell you tonight you are going to understand some of 
the things that we are doing that are creating our problems and what we 
might do in this country to solve this problem of overspending and get 
ourselves back on track that will lead to economic healthiness, instead 
of economic sickness in this country.
  Mr. HENSARLING. Mr. Speaker, reclaiming my time, again, I thank the 
gentlelady from North Carolina for her great leadership in this body on 
trying to bring fiscal sanity to the Federal city and do something that 
can really make a difference in the lives of her constituents and for 
all Americans.
  Mr. Speaker, again we are talking tonight on the precipice of the 
great budget vote which occurs here in Congress each and every year. I 
think it is important that we get a number of facts out before this 
debate takes place. People are always entitled to their own opinions, 
but they are not entitled to their own facts.
  One of the opinions you will hear from Democrats on the other side of 
the aisle is that somehow the Republican budget is going to cut taxes. 
Well, I have looked very carefully at this budget. It doesn't cut 
taxes. What it does is it preserves the tax relief that has already 
been given to the American people in previous years. In other words, 
Mr. Speaker, it prevents a Democrat tax increase.
  The American people, very few of them know this, but in Washington 
spending is forever and tax relief is temporary. You have got to keep 
on voting to just keep the tax relief that you have already received. 
Yet spending goes on forever.
  I think it was President Reagan who once said that the closest thing 
to eternal life on Earth is a Federal program, and indeed he was 
correct.
  So, let's talk a little bit about what would happen if the Democrats 
succeed in making sure that they have a huge, automatic tax increase. 
They say that any fiscal woe that we have in the Nation is somehow the 
result of tax relief that was given out in earlier years.
  If they have their way, if they roll back all the tax relief that has 
occurred, tax rates will rise substantially in each and every bracket 
on American families, right now when many of them are struggling to 
fill up the family pickup truck or the family car.
  Low-income taxpayers, if the Democrats have their way and raise taxes 
on the American people, the 10 percent bracket will disappear and the 
15 percent bracket will come back. That means our lowest wage earners 
who pay taxes, our lowest wage earners who pay taxes under the Democrat 
plan will see a 50 percent increase in their taxes. They call that 
compassion.
  Married taxpayers will see the marriage penalty return, costing 
American families thousands of dollars. Taxpayers with children will 
lose 50 percent of their child tax credits if the Democrats have their 
way, if their budget is passed. The American people, Mr. Speaker, need 
to read the fine print.
  Now, the Democrats will rail against the deficit, but they won't 
admit that under their budget, all these taxes increase on American 
families. Taxes on dividends and capital gains will jump by as much as 
100 percent. Half of American families are invested in the stock market 
in their 401(k) plans. It is their retirement, particularly since the 
Democrats refuse to do anything to save Social Security for the next 
generation.
  The depreciation period for leasehold improvements will increase from 
15 to 39 years on small business, the job engine of America. If the 
Democrats have their way in their budget, taxes will increase on small 
businesses. And the list goes on and on and on.
  Mr. Speaker, at this time, I am very happy to see that we have been 
joined by truly one of the great leaders in Congress to combat waste 
and fraud and abuse and duplication and I guess really dumb government. 
I am very happy to be joined by a dear friend of mine and colleague, 
the gentleman from Indiana, Mr. Chocola, who happens to be also the 
coauthor, along

[[Page 6722]]

with myself and Mr. Ryan of Wisconsin, of the Family Budget Protection 
Act, which is the most comprehensive piece of budget reform legislation 
that could be passed by this Congress. I am very happy to be joined by 
him. I would at this time yield to him to get his perspective.
  Mr. CHOCOLA. Mr. Speaker, I want to thank the gentleman from Texas 
for yielding and thank him for his leadership on budget process reform, 
spending and many other very important issues. I appreciate you 
bringing us to the floor tonight to talk about what I think is the most 
important challenge we face as a Nation, because if we don't solve our 
fiscal challenges, really nothing else matters.
  Since I was elected a few years ago, one of the probably most 
knowledgeable, honest, straightforward people I have talked to about 
fiscal issues in Congress is a guy named David Walker. He is the head 
of the GAO, the Comptroller General of the United States. What I would 
like to do is just share with you part of an op-ed that he put in an 
Atlanta newspaper recently. I will share here.
  ``News flash: The largest, most complex and arguably the most 
important entity on the face of the Earth recently failed an external 
audit for the ninth straight year.'' Let me repeat that, Mr. Speaker. 
Entity failed an audit for 9 straight years in a row. ``It also 
received an adverse opinion on its system of internal control over 
financial management and reporting.
  ``If that is not bad enough, this entity overspent by $319 billion on 
a cash basis,'' that is billion dollars, on a cash basis, and on an 
accrual basis, it was $760 billion in fiscal 2005. ``Worse yet, the 
accumulated liabilities and unfunded commitments for this entity have 
risen from about 20 trillion,'' that is with a T, ``at the end of 
fiscal year 2000 to more than 46 trillion,'' with a T, ``at the end of 
fiscal year 2005.
  ``If this news flash were related to any multinational corporation, 
it would have been on the front page of every newspaper in the world 
and at the top of every news broadcast in the world. However, this news 
flash doesn't relate to a company, it relates to a country, the United 
States of America.
  ``As Washington embarks on its budget cycle, the facts are clear and 
compelling that the Federal government is on an imprudent and 
unsustainable fiscal path that, if not effectively addressed, could 
serve to swamp our ship of state. Our current course doesn't just 
threaten our future economy and quality of life, but also our long-term 
national security.''
  Mr. Speaker, I think we could talk about a lot of things tonight. We 
could talk about immigration. We could talk about just about anything, 
and it really doesn't matter as much as what I just read from David 
Walker. Because, by 2040, we will spend on entitlement spending, 
including Social Security and Medicare and interest, more than we have 
in revenue coming in. So that means by 2040, not that long from now, we 
will not have any money for education, we will not have any money for 
defense, we will not have any money for agriculture, we will not have 
any money for anything.
  I think it is important. To solve a problem, we have to define a 
problem. Unfortunately, the American people and many Members of 
Congress don't appreciate the situation we are in fully.
  So I have introduced a piece of legislation. I think it has been 
cosponsored by the gentleman from Texas. It is called the Truth in 
Accounting Act. All that that does is require the Federal government to 
share with the American people and all Members of Congress fully the 
extent of our unfunded liabilities.
  Today, our unfunded liabilities stand at $46 trillion. Just a few 
years ago, in 2000, they were at $20 trillion. So just over 5 years 
they have more than doubled.
  When I go around my district and talk about fiscal issues and people 
say how big is the national debt, I say $8.3 trillion. People are 
appalled. But to put this in perspective, we could fully pay off our 
national debt today and we wouldn't even come close to meeting our 
financial obligations. The $46 trillion is money we know we owe. If the 
United States Government was a public company, it would have to 
disclose those unfunded liabilities.
  I am the only Member of Congress that I am aware of that ever served 
as CEO of a publicly traded company. Because of that, I understand that 
if any public company in America accounted for its business the way the 
Federal government accounts for its business, the management team would 
be in jail.
  Public companies are required to account a certain way to result in 
transparency and accountability. I think we should expect no less from 
the Federal government. So, again, the Truth in Accounting Act simply 
requires the Federal government in the annual financial reports to 
disclose the unfunded liabilities that this Nation faces.
  Why I think it is so important is because the better understanding 
there is of our financial challenges, the better policy we can enact. 
Because until we can define the problem, we won't have serious efforts 
to solve the problem, and I think it is so critical that we don't pass 
along a debt to our children that they simply can't afford.
  The analogy I use is Congress is kind of like the Levee Commission. 
If recent history has taught us anything, when a storm is coming, you 
must strengthen the levee. We know that the storm is coming. In fact, 
it is a Category 5 hurricane. By publishing our unfunded liabilities 
clearly and accurately, I think that we will see that the sirens will 
go off, that the American people will demand that we address this 
responsibly, and they will not reelect Members to this body that don't 
stand up and do the right thing and not pass it along to future 
generations or future Congresses.
  I appreciate the gentleman bringing us down here tonight. I 
appreciate his leadership on these issues. Certainly as responsible 
Members of this body, we must address this sooner, rather than later.
  Mr. HENSARLING. Mr. Speaker, reclaiming my time, I thank the 
gentleman for his leadership. Anything called ``truth in accounting'' 
is going to be a very foreign topic in this body.
  Mr. Speaker, this is precisely what we need. The analogy or the 
metaphor that the gentleman from Indiana used is truly an apt one. As 
great as the tragedy that Hurricane Katrina was, think how much greater 
a tragedy that would have been had we not seen the hurricane coming, 
had it been like that tsunami that hit in Asia, where people didn't see 
it coming, and tens of thousands perished.
  We see this coming. But our challenge, Mr. Speaker, it is not coming 
tomorrow, it is not coming next week, but it is coming, and we have an 
opportunity to do something about it.
  Let me tell you, Mr. Speaker, going on the thing that the gentleman 
from Indiana spoke about, what does the future look like if we choose 
to do business as usual, if we choose to follow the Democrat's lead and 
just keep on spending and spending and taxing and taxing and taxing and 
spending?
  Let me tell you. Former chairman Alan Greenspan said, ``We are very 
short on time and we will have a very great difficulty in fully funding 
the existing system.'' He was referring to Social Security.
  The liberal Brookings Institute, no bastion of conservative thought, 
has recently written, ``Expected growth in these programs,'' referring 
to Social Security, Medicare and Medicaid, ``along with projected 
increases in interest on the debt and defense, will absorb all of the 
government's currently projected revenue within 8 years, leaving 
nothing for any other program.''
  Like the gentleman from Indiana said, if we don't do anything, in a 
matter of time the Federal government will consist of Medicare, 
Medicaid, Social Security and nothing else. There will be no Border 
Patrol. There will be no student loans. There will be no veterans 
health care system. There will be no agricultural research. There will 
be no Federal Trade Commission. And the list goes on and on.
  The same report said, ``The authors of this book believe that the 
Nation's fiscal situation is out of control and

[[Page 6723]]

could do serious damage to the economy in coming decades.''
  The General Accountability Office has said there is no way you are 
going to grow your way out of this problem, even though we have had 
very robust economic growth since we passed President Bush's economic 
growth plan. If we don't change our path, there will be an adverse 
effect on economic growth, quality of life and national security.
  This is in the same report from the General Accountability Office, 
Comptroller General David Walker: ``We are heading to a future where we 
will have to double Federal taxes or cut Federal spending in half.''

                              {time}  2030

  Now Yogi Berra once said, if you find a fork in the road, take it. 
Mr. Speaker, we do not want to take this fork in the road. We want to 
back up and we want to get on the right road. Again, that is why this 
budget debate is so important in this budget vote.
  Now, again, there will be different alternative budgets debated. But 
it is going to come down to one Democratic budget and one Republican 
budget. And the Democratic budget, again their answer is more spending 
and more taxing, taking more money away from families.
  Every time you vote to increase a Federal program, you are taking 
money away from some family program. Now, let us talk a little bit 
about some more truths that need to come out. Well, number one, again, 
the Democrats will say that we have a huge deficit, and that is perhaps 
the only item we might agree with them on.
  Yes, the deficit is too large. But the deficit is too large because 
we are spending too much, not because the American people are 
undertaxed. They will say that all of the President's tax relief from 
previous years has somehow contributed to this incredible national debt 
that the gentleman from Indiana referred to.
  Well, Mr. Speaker, I hold in my hand the Treasury report of the 
latest tax revenues. And guess what it says? It says that as we have 
decreased the marginal tax rates, we actually have more tax revenue. It 
says it right here.
  Last year, corporate income taxes were up almost 45 percent. 
Individual income taxes were up almost 15 percent. Again, we have 
lowered tax rates, and we get more tax revenue. And as we can see from 
this chart, Mr. Speaker, we saw declining revenue from the Federal 
Government, as we were in a recession back in 2002 and 2003.
  And yet this body, this Republican leadership, cut tax rates for 
small businesses, for American families, and they work, and they save 
and they invest and they build. And guess what? Not only do we create 
more jobs and more hope and more opportunity; we have more tax revenue. 
More tax revenue.
  We had a 5 percent increase in tax revenue from 2003 to 2004. We had 
a 15 percent increase in revenue from 2004 to 2005. And now at the 
beginning of 2006, tax revenue is up 6 percent. Again, we cut tax 
rates, and we have more tax revenue, and the American people need to be 
aware of this.
  If you take away the tax relief, if the Democrats have their way and 
get their huge automatic tax increases on the American people, you are 
going to lose this extra tax revenue. And not only that, you are going 
to lose everything that the tax relief has brought.
  Now, with the glaring exception of terribly high gasoline prices, 
which are clearly hurting all American families, I know they are 
struggling, they are struggling. Think how much more they would 
struggle, though, if they did not have jobs.
  Under tax relief, we have 5 million new jobs that have been created 
in this economy in just the last couple of years. Five million new 
jobless. We have had 30 consecutive months of uninterrupted job growth, 
and we have actually got unemployment down. The unemployment rate today 
is lower than the average of the 1970s, of the 1980s, and of the 1990s. 
And yet Democrats want to have a huge automatic tax increase and take 
this away.
  Right now more Americans than ever own their own home. We have the 
highest rate of homeownership in the entire history of the United 
States of America. Household net wealth has now reached $51 trillion, 
which is an all-time high.
  Average hourly earnings grew, and pay rose by 3\1/2\ percent. 
Inflation continues to be low. Now, again, there is clear work that has 
to be done on the price of gasoline, and that is a grey lining in what 
otherwise would be a big silver cloud.
  Now, some people might say, well, how do you give tax relief and 
create jobs? Well, it was not that long ago, Mr. Speaker, that I 
visited a small business in Jacksonville, Texas, in my district, in the 
5th District of Texas.
  Now, Jacksonville Industries is a business that is in the aluminum 
die cast business. And they employed 20 workers when I went to visit 
them. Now, before the President brought his economic growth program to 
Congress to pass, they were on the verge of having to lay off two 
workers because of competitive pressures.
  But because of the tax relief measures, they went out and they bought 
a new piece of equipment. Now, I could not tell you what it is called. 
I do not precisely know what its mechanical function is, but I can tell 
you what the result is. The result is they bought this new piece of 
equipment, and it made them more competitive. It made them more 
efficient.
  And, Mr. Speaker, guess what? Instead of laying off two people, they 
went out and hired three new people. They hired Roger, and they hired 
Jess, and they hired Victor, three people who could have been on 
unemployment. They could have been on welfare. They could have been on 
food stamps. And they could have been on Medicaid.
  But thanks to tax relief that the Democrats want to take away with 
their huge tax increase, this one small business in Jacksonville, 
Texas, had five people now who put roofs over their head, who put food 
on the table, who are building a better future for their families. That 
is just one small business in one small town in Texas. And that is 
happening all over the economy.
  Mr. Speaker, let me at this time yield back to my colleague from 
Indiana who knows a lot about job creation himself.
  Mr. CHOCOLA. Mr. Speaker, I thank the gentleman for yielding again. 
And, you know, the story you just told I think can be told millions of 
times around the United States. Certainly small businesses are the 
backbone of our economy. Something like, you know, well over half of 
the employees in this country work for small businesses, and something 
like 90 percent of the employers are small businesses in this country.
  We were home a couple of weeks ago. I have a small business advisory 
council, and one of the members of that council was talking about the 
179 expensing that you were referring to, that allows small businesses 
to go out and buy capital goods, and they can expense it so they can 
invest in their business, grow their business, create jobs, provide 
benefits, contribute to the local economy and the national economy all 
at the same time, which is kind of a neat thing.
  The good news is that there is a bill that is offered by Mr. Herger, 
a member of Ways and Means, that would expand 179 expensing and make it 
permanent, which I think is good pro-growth tax policy.
  I also heard a quick story that I got from my small business advisory 
council. A small businessman that has a business in LaPorte, Indiana, 
used to have to go borrow money to pay for his taxes, which is kind of 
crazy.
  Because then he would restrict his flow of capital, was limited in 
being able to make the investments in his company, because he had to go 
out and borrow money to pay his taxes. But once we passed, in 2003, the 
179 small business expensing provision, he did not have to do that any 
more. And he has been able to invest that money in his business and 
grow his business.
  Just going back to the tax chart you had up a second ago, you know, 
it is kind of funny that opponents of tax relief, mainly our friends on 
the other side of the aisle, say we cannot afford to have tax relief. 
But your chart

[[Page 6724]]

shows clearly, and the statistics that you talked about, tax receipts 
up 15 percent in 2005, the deficit is actually down in 2005 by about 
$100 billion, I think clearly shows that we cannot afford not to have 
tax relief to continue to have our economy grow.
  Now, we can cite economic statistics all night long, and they are 
true, and they are relevant and they matter. But they probably do not 
matter to the guy without a job. But what does help the guy without a 
job is a growing economy, because when the economy grows, everybody has 
more opportunity; and what is important to do is to focus on the pro-
growth policy that has resulted in those economic statistics.
  And the pro-growth policies that have resulted in those economic 
statistics, I would say in large part, is the tax relief that was 
passed in 2001 and 2003, just like the section 179 expensing.
  Now, when we talk about the deficit, there are only two ways to get a 
deficit. One is we tax too little. The other is we spend too much. And 
I do not know about the rest of the congressional districts around this 
country, I do not think they are a whole lot different than the Second 
District of Indiana. The people in the Second District of Indiana do 
not feel like they are taxed too little. They think we probably spend 
too much.
  And so we have to move from using our measurement of success, how 
much we spend, to how well we spend. We spend enough here in 
Washington. We do not prioritize enough.
  And just going back for a second to the Truth in Accounting Bill, we 
see that our spending is getting more challenging as we go forward. 
Just recently, yesterday I think, there was a report issued that showed 
that the Social Security trust fund will be exhausted by 2040. That is 
1 year earlier than was projected last year, and Medicare by 2018. And 
I think last year it was projected by 2020.
  So every day we wait to start using the measurement of success, how 
well we spend, rather than how much we spend, the situation gets worse. 
And, again, the best way that we can solve problems is to define 
problems and making sure that the Federal Government shares a clear 
picture of our financial challenges with the American people. I think 
that will result in the American people demanding that their elected 
representatives quit playing the politics of no, quit saying what they 
are against and start saying what they are for.
  We are not elected to be against stuff. We are elected to be for 
bipartisan practical solutions, and the Truth in Accounting Bill is a 
bipartisan bill. It is co-authored by Jim Cooper of Tennessee, a 
conservative Democrat, and Mark Kirk from Illinois, a moderate 
Republican.
  I consider myself a conservative Republican. We may not agree on all 
of the answers, but we certainly agree on the problem. And we have to 
get to a bipartisan solution, and I certainly hope the American people 
send people to this body that will not avoid this problem and be part 
of the ostrich generation.
  Mr. Speaker, I yield back to the gentleman from Texas.
  Mr. HENSARLING. Mr. Speaker, I thank the gentleman. I want to once 
again point out one of our earlier charts to show just what has 
happened to the family budget, which is this lower blue line. Median 
family income in America in the last decade has gone from roughly 
$45,000 to $62,000.
  Well, what has happened to the Federal budget in this same time 
period? This red line. About $1.6 trillion to $2.5 trillion. Again, the 
Federal budget is outpacing the family budget.
  Mr. Speaker, only families can pay for the Federal budget. There is 
no magical machine that creates wealth in Washington, DC. It comes from 
hardworking families from Indiana, from Texas, and from all across 
America.
  And the gentleman, the colleague I have from Indiana, brought up a 
very good point. It is not how much money you spend in Washington that 
counts; it is how you spend the money.
  Now, what we will again hear this week as we vote on the budget, and 
we have this annual budget vote and budget debate, we will be told that 
as a Nation we are not spending enough on education, we are not 
spending enough on housing, we are not spending enough on nutrition.
  Well, Mr. Speaker, that may be right. But the fundamental difference 
between the Republican budget and the Democrat budget is the Democrats 
want the Federal Government to do the spending. The Republicans want 
families to do the spending. And we know the difference.
  Now, the Democrats will say that the Republicans are cutting the 
budget. Well, I have yet to see any single budget submitted that 
actually cuts Federal spending. Frankly, we can probably use one.
  What we do, though, is the Republicans will moderate the growth of 
government, and the Democrats will not. I have looked up ``cut'' in 
Webster's Dictionary, and it actually means to reduce. What the 
Democrats call a cut is that some government program under the 
Republican budget will grow 3 percent next year and they want it to 
grow 6. And they call that a cut.
  Mr. Speaker, that is simply not the truth. That is not the truth. And 
they act like there has been an underinvestment in the Federal 
Government. Well, just in the last 10 years, the international affairs 
budget has increased 89 percent. The agriculture Federal budget has 
increased 118 percent.
  The Federal transportation budget has increased 83 percent. The 
Federal education budget 113 percent. Health, including Medicaid, 126 
percent. And guess what? During that same time period, median family 
income only grew by 33 percent.
  Again, in just the last 10 years, the growth of the Federal 
Government is twice that of the family budget. It is just an 
unsustainable growth rate. And it begs the question again, what kind of 
America do you want?
  Mr. Speaker, we already have 10,000 Federal programs spread across 
600 different government agencies. I do not think there is one person 
in America who can tell you what each and every one of those agencies 
does and what every single one of the bureaucrats who works there, what 
they do.

                              {time}  2045

  I mean, at some point you have to say how much government is enough, 
how much government do we want to pay for. The Democrats act like 
nothing good ever happened in America if it was not funded by the 
Federal Government. Like, if we did not have a Federal program, there 
would not be any boy scouts, there would be no soccer games, we would 
have no physician, no Red Cross, no ice cream. None of this would 
happen. Anything good that happens in America, according to the 
Democrats, can only happen through the Federal Government.
  But we have to remember, every increase in a Federal program, again, 
is a decrease in some family program. What the Republican budget is 
about is we want a Federal Government that does a few things very, very 
well and not a Federal Government that tries to do everything but does 
them quite poorly, and this is what this is about.
  Another difference between these two budgets, again as we talked 
about, is the Democrats wanting to bring forth a huge tax increase upon 
the American people. They want to take away paychecks and replace them 
with welfare checks. Mr. Speaker, that is not compassion.
  A compassionate society ought to be measured ultimately by the number 
of paychecks it produces, not the number of welfare checks that are 
produced, and with that, I yield back to the gentleman from Indiana.
  Mr. CHOCOLA. Mr. Speaker, well, the gentleman brings up a great 
point.
  The gentleman asked the question earlier, what kind of country do we 
want, what kind of America do we want? I think we also have to ask the 
question, what kind of government do we want?
  When we talk about raising taxes, talk about raising revenue, which 
we have already learned that good pro-growth tax policy at lower rates 
actually increases Federal revenue, but you ask why would we raise 
taxes and what

[[Page 6725]]

do we need to spend money on. I think it is important to recognize that 
we can actually have better government at a lower cost.
  Every business in America and every family in America has to find a 
way to do more with less, find a way to be more efficient. For some 
reason, we do not think government can achieve the same standards. For 
some reason, we think the government does not have waste, fraud, and 
abuse.
  Let me just share a couple of things with you. Recently, the 
Inspector General found that Social Security sent $31 million worth of 
Social Security checks to dead people. That is money that did not go to 
help anyone.
  They found in 2003 that the food stamp program spent $1.1 billion in 
overpayments. That is with a B.
  In 2001, the GAO reported and said about Medicare, there are no 
reliable estimates to the extent of improper payments throughout the 
Medicare program because they cannot audit their books, they cannot 
even tell the kind of financial controls they have.
  In 2002, the Inspector General found that Medicare had $12.3 billion 
in overpayments and in 2001 found they had $12.1 billion. That is $24.4 
billion in Medicare payments that were improper, did not go to help 
anybody, did not go to help any seniors that needed Medicare, did not 
go to help any low-income Americans, simply was money wasted. I always 
ask, what is compassionate about wasting $24 billion on mismanagement 
when the money does not go to help anyone, when there are certainly 
people in this country that need government help, and why is it 
compassionate to ignore that, not address it and get better government 
at lower cost by simply applying the same management tools and 
techniques that every business in America has to follow?
  Certainly, I hope the American people are more demanding upon us to 
give them a good return on their taxpayer dollar and not stand for 
$24.4 billion being wasted in Medicare over a 2-year period of time.
  I could go on for a long time. In 2001, HUD had overpayments of 10 
percent of their budget alone. It is kind of depressing to keep going 
down this road. It is time that we find ways to have better government 
at lower cost, better management, better oversight; and I certainly 
appreciate, again, the gentleman bringing us here to highlight these 
issues because the more people understand, the more demanding they will 
be that we fix things and only elect people that will address these 
issues, not avoid these issues.
  Mr. HENSARLING. Mr. Speaker, I thank the gentleman from Indiana for 
bringing up that point because too often in this debate that we are 
having about the budget this week, Democrats act like if we would only 
take more money away from American families and send it to Washington, 
that somehow it will magically turn into love and happiness and 
kindness and all kinds of good things.
  Yet, the Federal Government cannot account for $24 billion that was 
spent in fiscal year 2003. It has just disappeared into thin air; and 
yet the Democrats want to raise our taxes to pay for more of this?
  The Defense Department wasted $100 million on unused flight tickets 
and never bothered to collect the refunds even though the tickets were 
refundable, and yet Democrats want to raise our taxes to pay for more 
of this?
  The Federal Government spends $23 billion annually on earmarks, also 
known as pork projects, such as the grants to the Rock and Roll Hall of 
Fame, and, hey, I love rock and roll, but I am just not sure our taxes 
should pay for it, because most of the rock stars I have seen are doing 
quite well on their own, not to mention, of course, that earmark known 
as the Bridge to Nowhere, to be complemented now by the Railroad to 
Nowhere, $23 billion.
  That is another thing, Mr. Speaker, we will take up is earmark reform 
this week, which is very important that we do, because as our colleague 
in the other body from Oklahoma, Mr. Coburn, has said, earmarks are the 
gateway drug to the culture of irresponsibility. Yet, as we spend all 
this money on pork projects, Democrats want to raise our taxes to pay 
for more of this.
  Again, as was pointed out, the Department of Housing and Urban 
Development in 2001 lost 10 percent of their whole budget. How many 
families or how many businesses could still operate if they just lost 
10 percent of their budget? It goes back to that truism that we are 
never as careful with other people's money as we are with our own. This 
is just inexcusable; and yet Democrats want to raise our taxes to pay 
for more of this.
  Let us talk about duplication. We have 342 economic development 
programs at the Federal level. It begs the question, what does the 
Federal Government know about economic development? Small business 
people know. Entrepreneurs know. Families know. I am not sure what the 
Federal Government knows. We have 130 different programs serving the 
disabled, 90 early childhood development programs, 75 Federal programs 
funding international education and cultural exchange activities, and 
the list goes on and on.
  So that could be 342 executive directors and 342 vice executive 
directors and the list goes on, and yet Democrats want to raise our 
taxes to pay for more of this.
  Washington is spending $60 billion annually on corporate welfare 
versus $43 billion on homeland security. That does not make any sense, 
and yet Democrats want to raise our taxes to pay for more of this.
  So again, Mr. Speaker, if we will just be smart, if we will decide 
that we need a Federal Government that is focused on a few items and do 
them very, very well, we can receive a brighter, brighter future for 
our children because if we do not, this is the future that we are 
facing. This is what is happening to spending today; and again, as we 
have used the comparison to a hurricane that is coming in our 
direction, right now revenues are roughly about 20 percent of our 
economy, a little bit less, but what is happening is that programs are 
far outstripping our ability to pay for them.
  In just one generation, spending is due to more than double. Here is 
what is going to happen to revenues, but look at what happens to 
spending by the year 2040, and most of it is driven by Social Security, 
Medicare and Medicaid and interest on the national debt.
  So, to some extent, it is a little bit like Charles Dickens' ``A 
Christmas Carol.'' We are all familiar with that story with Scrooge, 
and we know how fearful the Ghost of Christmas yet to come, how fearful 
that spirit is.
  Well, what is going to happen here in many respects is the ghost of 
Christmas yet to come. This is the future that our children and 
grandchildren are facing if we do not start today with a very simple 
choice between a Democrat budget and a Republican budget. It starts 
today, Mr. Speaker. We can decide that the Democrats are right that we 
are not spending enough money, notwithstanding the fact that every 
Federal program has grown precipitously over the family budget, 
notwithstanding the fact that we are on this road to either have no 
Federal Government except for Medicare, Medicaid and Social Security, 
or we are going to double taxes on the American people in one 
generation.
  That is their vision of America. Our vision is one of limited 
government, better government, more effective government, one where our 
children and grandchildren still have an opportunity to use their God-
given talents to roll up their sleeves, to work hard and to create the 
kind of future that they want for themselves. It is an America that is 
growing. It is an America that has more freedom, and this is what we 
see, and that is why these budgets are so different.
  But the Democrats, again, want to keep this spending going. They want 
to have a tax increase.
  Now, they do not like to talk about it. They like to point fingers at 
the Republicans; but let me tell you, for the last 10 years, every time 
the Republicans submitted a budget, the Democrat alternative budget 
spends even more, and they are pointing the finger of fiscal 
irresponsibility?

[[Page 6726]]

  Mr. Speaker, I sit on the House Budget Committee, as does my 
colleague from Indiana, and we just marked up the budget. Every single 
Democrat amendment to the budget would have spent more money. They say 
the Republicans were fiscally irresponsible to provide a prescription 
drug benefit in Medicare, but guess what, Mr. Speaker? Their 
alternative plan spent even more money than the Republican plan.
  It is just inconceivable that they can point the finger of fiscal 
irresponsibility when all they want to do is lead us to a future where 
taxes are double and an America where people do not create jobs, where 
people cannot afford to send their children to college, where people 
cannot find the capital to start new businesses, oh, but there will be 
plenty of welfare checks, and they will call that compassion. 
Compassion is about paychecks.
  With that, I would like to yield back to the gentleman from Indiana.
  Mr. CHOCOLA. Mr. Speaker, I thank the gentleman for yielding.
  Recently, I was having a conversation with a friend of mine that said 
when you are talking about tax policy, he said, well, maybe it would be 
a prudent thing to raise taxes. This person was in the financial 
services industry, and I said, let me ask you a question: you do 
research on businesses and you do research on a business where every 
year the company has increasing losses and increasing debt. The company 
has not passed an audit in 9 years. The management is ineffective at 
combating waste, fraud and abuse; and the only strategy the management 
team can come up with to turn the tide is to raise prices on their 
customers. Do you think that is a business you would invest in? He 
said, you know, you have got a point; I do not think that that would be 
a good investment.
  So it is interesting when our colleagues on the other side of the 
aisle say, well, gee whiz, we have got to raise prices on our customers 
to pay for our lack of proper management. I do not think that that is 
respectful to the American people, the American taxpayer, and certainly 
not a winning strategy.
  I think the gentleman from Texas can wrap us up here; and, again, I 
thank him for bringing this very important subject to the floor 
tonight.
  Mr. HENSARLING. Mr. Speaker, again, I thank the gentleman from 
Indiana for joining us tonight. I certainly thank him for his 
courageous leadership in this body.
  In these closing minutes we have, Mr. Speaker, what is it that we do 
about all of this? Well, several things. Number one, we need to reform 
the budget process that we have today. Now, it is not particularly sexy 
kind of stuff; but, you know, the machine we have that produces 
spending in Washington was manufactured back in the 1970s, back when 
Democrats were in charge in this body, and it is a spending machine. We 
need to go back and retool that to a savings machine for American 
families.
  Number one, most American families do not realize this, but our 
budget does not even have the force of law. At best it is a mere 
suggestion. The legislation sponsored by myself and the gentleman from 
Indiana (Mr. Chocola) would ensure that our budget, when you tell the 
American people here's the budget, we will enforce it as a law.
  Second of all, we have got to cap the growth. I did not say a cut, 
but we have got to cap the growth of the Federal budget to roughly that 
of the family budget. Only then will programs have to compete against 
each other. Only then will you start to root out the waste, the fraud 
and the abuse and the duplication. Only then when you say, okay, this 
is all the money we are taking away from the American family and we 
will take away no more.

                              {time}  2100

  We need sunsetting commissions in the Federal Government. Again, as 
President Reagan once said, the closest thing to eternal life on Earth 
is a Federal program. Many have long since outlived their usefulness.
  I just tripped across this one the other day. We are still funding 
Radio Free Europe; and, to the best of my knowledge, the Berlin Wall 
fell back in 1989. We need to eliminate this thing called baseline 
budgeting which allows people to artificially inflate budgets. It is 
the kind of stuff that would make an Enron and WorldCom accountant 
blush, yet here people get away with it in Washington, DC.
  Mr. Speaker, it is time that we just balance the budget. It is time 
to balance the budget, and we need to do it without increasing taxes on 
the American people.
  Mr. Speaker, certain principles transcend time. One of those 
principles is balancing the budget. Another principle is limited 
government. You cannot have unlimited government and unlimited freedom. 
If you want unlimited government, Mr. Speaker, people ought to support 
the Democrat budget. If they want more welfare, if their greatest hope 
and aspiration is a Federal check, then people should support that 
budget. But if people want more freedom and if they want more 
opportunity and their aspiration is a paycheck with a great career 
where people can use their God-given talents and be everything that 
they can be, then they need to support this Republican budget, and we 
can have a brighter future for my children and for all the children in 
America for generations to come in this great and blessed land.

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