[Congressional Record (Bound Edition), Volume 152 (2006), Part 5]
[House]
[Pages 6726-6733]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           BLUE DOG COALITION

  The SPEAKER pro tempore (Mr. Schwarz). Under the Speaker's announced 
policy of January 4, 2005, the gentleman from Florida (Mr. Boyd) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. BOYD. Mr. Speaker, I come tonight before the country to discuss 
the state of our Nation and to talk about a few of the things that I 
think that we can do to improve the state of the Nation. This hour that 
we will have tonight, there will be some other members of the Blue Dog 
Coalition that will join me, I am sure.
  Mr. Speaker, as you know, the Blue Dog Coalition is a group of 37 men 
and women from all over the country, Democratic Members that believe 
that there are certain things that we should do as a government, 
certain functions that we should perform to make the economic model 
work well, and we should try to perform those functions well, and we 
should be willing to pay for it.
  I was very interested in the previous speaker and actually agree with 
what some of the previous speaker said, and I think he wound up by 
saying that we ought to balance the budget.
  The Blue Dogs, Mr. Speaker, could not agree more that that is a very 
important step, and I think most Members, most folks out in the country 
would understand the concept or the notion of balancing the budget, 
whether it is our individual home budgets or whether it is our business 
budget, whether it is our local governments. Eventually, you have to 
have revenues meet expenditures, or you do not stay in business too 
long. Most of us understand that. Except in the Federal Government, we 
have a difficult time understanding it sometimes, and I think we have 
not done very well on that front in the last 6 years certainly.
  I was also interested in some of the comments made by the previous 
speaker. You would have thought that the Democrats were in control of 
the Congress of the United States. I would remind the Speaker that the 
White House, the House and the Senate are all controlled by the 
Republican party. When it comes to doing budgets and programs and 
balancing those budget and programs, that is certainly within the 
control of the majority party to do that.
  There also was a good bit of talk about the welfare program. Mr. 
Speaker, the welfare program was something that this Nation worked 
together on back in the 1990s under a Democratic President and 
Republican-led Congress, worked very hard, sat down in a bipartisan way 
and came up with a good solution to find ways to move people off of 
welfare and get them into the workplace.
  The previous speaker is absolutely right in that we need people in 
the workplace, getting paychecks, being productive, paying taxes into a 
society, and that way our economy works best and our lives are better.

[[Page 6727]]

  Mr. Speaker, I want to talk about three specific issues, three broad 
areas, basically, where I believe this administration and this 
Republican-led Congress have failed us in being responsible.
  Number one is they have failed to balance the budget. For 5 
consecutive years now, we have had a budget that is out of balance.
  Number two, they have failed to manage our Federal Government and its 
functions effectively and efficiently. Let me say that again. They have 
failed to manage the Federal Government and its functions effectively 
and efficiently, and I want to talk specifically about that a little 
more.
  Thirdly, I believe that this administration and this Congress has 
failed to uphold the standards of honesty and accountability when it 
comes to perform their functions.
  Now, I want to start with the second of those particular bullet 
points and talk about the management of the Federal Government and 
point out some of the things that have been going on the last 5 to 6 
years.
  When President Bush took office, he told us and we all knew that he 
came from a business world and with an MBA and with the charge that the 
government would be run like a business. Instead, Mr. Speaker, we have 
seen many of our Federal agencies managed by people with little or no 
experience. As a result, you find today 19 of the 23 Federal agencies 
are not in compliance with proper accounting standards. In other words, 
they cannot give a clean audit of their own actions in how and where 
they spent the money, the taxpayers' money that was given to them to 
perform their governmental function. What this means is that we cannot 
account for all of the government's assets and liability.
  The previous speaker talked about the Department of Defense being the 
biggest offender; and, in actuality, the Department of Defense is the 
largest offender of this. Of course, the Department of Defense is one 
of the largest agencies in the Federal Government, the largest agency 
in the Federal Government, and we all know the high-profile story of 
the over $3 billion that was allocated, appropriated for Iraq 
reconstruction that nobody can account for. The Department of Defense 
cannot account for the over $3 billion that was appropriated for Iraq 
reconstruction.
  The complete lack of management and accountability in our Federal 
agencies is unacceptable. If you had a manager that operated like that 
in your local government or in a business, you would replace that 
manager. So I think that we really should demand more of our executive 
agencies in terms of management and accountability as it relates to how 
they spend the money that is appropriated to that particular agency.
  In the 1990s, Mr. Speaker, Congress and the President, again a 
Democratic President, a Republican-led Congress working together in a 
bipartisan way enacted a series of reforms for the Federal civilian 
workforce known as the Readmission of Government. These reforms reduced 
the size of the Federal Government, Mr. Speaker, by over 300,000 
employees.
  Let me say that again. In the 1990s, the size of the Federal 
Government was reduced by over 300,000 employees.
  Despite this reduction, many Federal agencies improved their 
performance substantially; and I want to talk about one of those 
Federal agencies specifically, I think, which is a good example. 
Because, Mr. Speaker, I come from Florida, and in Florida we are 
accustomed to natural disasters, primarily hurricanes that start about 
this time of year and run all the way through the summer and into the 
fall. Last year, I think we had so many hurricanes that we ran out of 
alphabetic names and had to start back through the alphabet a second 
time to name all the storms. I think there has been a lot of press and 
a lot of publicity about the storms that we have had.
  Florida has created an excellent emergency management system to deal 
with those storms, but we always work hand in glove with the Federal 
Emergency Management Agency, which is known as FEMA, and I found in my 
18 years of public service in Florida that FEMA was one of the premier 
Federal agencies, really a professional agency that knew what its role 
was and knew how to get the job done probably more than any Federal 
agency I knew in the 1990s. It was the poster child, if you will, of a 
well-managed Federal agency. FEMA's structure was transformed, and 
three national response teams were created to quickly react to any 
national emergency. I guess in the 1990s, FEMA's performance was more 
notable for the newspaper stories that weren't written about it. 
Anytime you find an agency that is doing a good job, doing what it is 
supposed to be doing, then you do not hear much about it. Disaster 
victims and State officials alike, including myself, gave FEMA grade A 
marks, unanimous applause, if you will.
  Now we fast-forward 5 years, 6 years, we find FEMA in response to 
Hurricane Katrina an utter failure. Just last week or 2 weeks ago, you 
had a Senate committee with jurisdiction over FEMA stating that FEMA is 
so broken that that bipartisan committee, leadership of that committee, 
believes that it should be completely dismantled.
  How did we go in the late 1990s or in the 1990s from an agency that 
was acclaimed to be the most efficient and effective Federal agency to 
an agency that is almost dysfunctional today? Why do we have so many 
problems with FEMA?
  Well, maybe it is because the administration dismantled the three 
national response teams prior to Katrina, so there was no group of 
folks within FEMA ready to go at a moment's notice. Perhaps it was that 
FEMA was folded into a brand-new Department of Homeland Security and, 
by all accounts, became the dumping ground for the Department.
  Whatever these reasons are, I think every one of them point back to a 
management style or scheme or capability. One factor that certainly 
played a role in the change was that in the 1990s FEMA was run by 
professionals with strong emergency management experience at the State 
and local level.
  Let me say that again. In 1990, early 1990s, the previous 
administration brought in emergency management professionals with 
strong management experience at the State and local level, and they 
took FEMA and they transformed it into a world-class organization. 
However, under the current administration, until weeks ago, FEMA was 
run by political hacks with little or no emergency management 
experience.
  It is clear that on the fiscal and management fronts that this 
administration is failing the American people; and, as a result, you 
have agencies which cannot produce clean audits. They cannot tell you 
where the money was spent, the taxpayers' dollars that we are 
appropriating, and what was done with it. And that is one of the points 
that I want to make.
  The other point and the one I mentioned earlier was the balancing of 
the Federal budget. Now, the previous speaker spoke of that; and, 
actually, as I said earlier, we are in complete agreement, that the 
Federal budget should be balanced.
  I see that we have been joined by one of our fellow Blue Dogs, 
Representative Jim Cooper from Tennessee. Mr. Cooper serves in a role 
in the Blue Dogs where he chairs the policy committee and, as a result, 
has the task of leading us in developing of our policy positions. Mr. 
Cooper has done a lot of work on these issues, fiscal responsibility.

                              {time}  2115

  Mr. BOYD. Madam Speaker, I would like to call on my fellow Blue Dog 
from Tennessee, Mr. Cooper.
  Mr. COOPER. Madam Speaker, I appreciate the gentleman's friendship 
and leadership of the Blue Dog Coalition because we are perhaps the 
leading voice in Congress for fiscal restraint and fiscal 
responsibility.
  The chart the gentleman has been referring to showing our national 
debt and each individual's share of the national debt is a truly scary 
document. But as the gentleman knows, I am afraid there are even 
scarier numbers in Washington than that because the

[[Page 6728]]

debt figures that the gentleman is holding shows what the debt is 
according to a cash basis; and that is, unfortunately, a very weak form 
of accounting that is illegal for most businesses in America, certainly 
businesses of any size.
  I want to put that in context for folks both in this Congress and 
back home because the numbers the gentleman referred to come from this 
document here, which is the President's budget. Every Congressman gets 
a hand-delivered copy of this. It is widely publicized in the media. It 
has a lot of good information in it, but it is the budget of the United 
States on a cash basis, counting dollars when they come in and go out.
  There is another document which is even more important. It is almost 
secret. It is not classified secret, but it is even better than that. 
It was distributed on Christmas Eve without a press release by the 
United States Department of the Treasury. They only printed a thousand 
copies for all of America, so it is not exactly like they wanted 
everybody to read it. This is called the ``Financial Report of the 
United States Government.'' It is issued by the Treasury Department and 
signed by Secretary John Snow, and it also gives a picture of our 
financial situation. But it does not use cash accounting; it uses 
modern accounting that all large corporations in America are required 
by law to use. So if you really want government to be run like a 
business, you pretty much have to use this document.
  The gentleman referred to our MBA President, the first one we have 
had in American history, and how so many Americans expected him, with 
his MBA degree, to run our country like a business. But this is still a 
largely secret and ignored document.
  Why would that be? Because the numbers in it are so grim.
  Mr. BOYD. So do I understand it to be Federal law that any business 
over $5 million has to use that accrual accounting procedure?
  Mr. COOPER. That is exactly right. Modern accounting is required of 
all businesses in America with revenues over $5 million. That basically 
says any business larger than, say, a single McDonald's would be 
required to use modern accrual accounting. And lest anyone not hear the 
word correctly, ``accrual'' has nothing to do with the word ``cruel.'' 
In fact, accrual accounting is probably the kindest form of accounting 
because it remembers our elderly and sick and disabled. Cash accounting 
tends not to do that.
  So modern accrual accounting is a very important innovation in 
accounting. All our businesses have used it for years. In fact, 
generally accepted accounting principles, GAAP accounting, really says 
that all businesses of every size should use accrual accounting because 
it is a more accurate picture of where we are.
  As the gentleman knows, because he has a business background himself, 
the saying in business is if you can't measure it, you can't manage it. 
If you can't measure it, you can't manage it. That is what accounting 
does, it helps us measure our financial situation. This shows a picture 
of our financial situation. I hope it is clear.
  Maybe I should come down to the gentleman's easel.
  This is a very important chart because it shows us in clear 
perspective the difference between the budget numbers calculated on a 
cash basis and on an accrual basis. This top number of $319 billion is 
the cash deficit for the year 2005. That is a lot of money. That is the 
third largest budget deficit in all of American history in absolute 
dollar terms. It is not quite the third largest in percent of GDP 
terms; but it is a huge, whopping number.
  If you look down the chart, you will see if you do not count the 
borrowing from the Social Security trust fund, the true cash deficit 
for the year 2005 was $494 billion, almost $500 billion. That is still 
using the old-fashioned, antique cash accounting method.
  If you use modern accrual accounting, according to the Treasury 
Department and the Bush administration, Secretary Snow says the deficit 
for 2005 was $760 billion. That is starting to be a truly large number. 
That takes into account many of the obligations that we have in future 
years because what accrual accounting means, it takes into account when 
you use that national credit card to buy something. You have obligated 
yourself to buy something. It might have been pensions for our elderly, 
health care for our elderly, health care for the disabled, things that 
we know we are going to have to spend money on but we have not actually 
paid cash yet. That is the $760 billion number; but that is not the 
scariest number on the chart.
  Everybody in this body has said that they believe Social Security and 
Medicare are vitally important programs for our Nation and that those 
benefits should be preserved for our seniors and those who are going to 
be seniors. Guess what, folks. The accrual number, as good as it is, 
does not take into account Social Security and Medicare benefits. How 
could that possibly be? Well, the reason is under modern accounting 
methods you only take into account contractual obligations, and Social 
Security and Medicare are not contractual obligations. Congress retains 
the right to vary the benefits.
  Because of that, those numbers are left out of this deficit 
calculation. So I believe if you truly care about preserving Social 
Security benefits and Medicare benefits, as I do and most Members of 
Congress do, certainly on the Democrat side, you have to look at these 
other numbers because the budget deficit for 2005 actually goes up to 
$1.7 trillion if you include the anticipated Social Security benefits 
that we are going to have to pay in the incremental increase of 1 year.
  If you add Medicare to that, the true budget deficit for 2005 was an 
astronomical $2.7 trillion.
  I am indebted for these last two numbers to the professor of law and 
accounting at Harvard Law School, a gentleman named Howell Jackson who 
did these calculations. And they are still in draft form and subject to 
some refinement. But it is the first time we have really taken the 
numbers that originally professors at the Wharton School of Business 
and a business economist in Washington, D.C. have helped put together. 
Those gentlemen are Kent Smetters and Jagadeesh Gokhale. Those 
gentlemen have shown America and the world that our true unfunded 
liabilities are astronomical. If you look out a few decades, they are 
on the order of $49 trillion to $67 trillion.
  So it is a situation where if you are just trying to measure it so 
you can manage it. Look at one year's annual deficit: you will see that 
the number we are given by the administration of $319 billion is 
probably not an accurate number. In fact, it is probably only one-tenth 
of the true size of the deficit because if you believe in Social 
Security and Medicare, as I do, you have to take into account the 
obligations that we are incurring on an annual basis to fund those 
programs.
  These numbers are huge, Madam Speaker, because even this number of 
$760 billion, that is a deficit for the year that is greater than most 
all of the discretionary spending of the Federal Government. That is 
greater than the entire defense budget and greater than all of the road 
programs, agricultural programs, parks, recreation, arts, all of the 
things that the Federal Government is involved with. So that is a large 
number. But this number down here of $2.7 trillion, that is greater 
than the total Federal budget of the United States.
  Madam Speaker, I think we should look at these accounting numbers, 
these facts, these fiscal facts so that men and women of goodwill all 
across America can evaluate our situation. As I said earlier, if you 
can't measure it, you can't manage it.
  This should not be a partisan issue. I am taking these figures 
primarily from administration documents. This is a reality that I 
especially think all of our business people should pay attention to. 
The Tennessee bankers were in today. I acquainted them today with all 
of these numbers, and we had a number of Tennessee insurance agents 
visiting today. Unfortunately, our media have not seen fit to do many 
stories on these numbers. Perhaps they

[[Page 6729]]

 are too large for the media to understand. I think it is very 
important for America to focus on this. What they really spell is a 
crisis for our country.
  We are borrowing so much of this money; and we are not just borrowing 
it from ourselves, we are borrowing it from foreign nations.
  I am proud to stand with my friend from Florida who is a great leader 
of the Blue Dog cause. It is very important that we get the word out on 
these facts.
  There are many different ways to measure it. John Tanner from 
Tennessee points out that it took 204 years of American history to 
borrow our first trillion dollars. That is 204 years, all of the way 
from George Washington through almost Jimmy Carter to borrow $1 
trillion. Then we started on this pace where we are borrowing a 
trillion dollars now almost every 18 months, something that it took us 
204 years to do before. That is unsustainable, to put it politely. It 
is crazy if you use more normal language.
  There are other things that are going on that are worrisome. Under 
President Bush's administration, we have borrowed more money than all 
previous presidencies in America put together. President Bush is our 
43rd President, and that means he has borrowed more money than our 
first President, George Washington, all of the way through our 42nd 
President, Bill Clinton. That is an amazing thing. And it is not just 
borrowing in general; it is borrowing from foreign nations. We have 
borrowed more money from foreign nations today than all previous 
Presidents in American history.
  I am hoping that men and women of goodwill across this country will 
focus on some of these accounting facts. Maybe ask a little more of 
your newspapers and TV stations back home to get more real news because 
I think this will do more to determine the future of our kids and 
grandkids than anything else we talk about on the floor of Congress, 
because when you run deficits like this, that means you accumulate debt 
and that debt carries a high interest rate, and that interest simply 
must be paid.
  That is the one tax increase that can never be repealed, and those 
debt costs are mounting every year. Petty soon the debt that we are 
having to pay our creditors, many of whom are foreign, is getting to be 
so large it is almost larger than the entire defense budget of the 
United States.
  So it is a crisis, Madam Speaker. It is something that we must deal 
with, and I hope that our colleagues will pay more attention to these 
issues.
  We understand that next week the budget is supposed to come up for a 
floor vote. They were unable to pass a budget a few weeks ago. It is 
vitally important that not only do we have a budget, but we have a 
budget that reflects reality. The budget that will be brought to the 
House floor will not reflect these true numbers. They will still be 
focused on the cash numbers with inadequate accounting.
  However, I was able to get passed in the Budget Committee 
unanimously, House Democrats and Republicans, an amendment that said 
for next year we will start using the more accurate, accrual-based 
numbers. I think that is progress. Accrual will not replace cash 
budgeting, but at least you will be able to refer to both sets of 
numbers as we do the budget so that you can see what our true fiscal 
situation is.
  Madam Speaker, I thank my colleague and friend from Florida for 
yielding. He has been a great leader of the Blue Dogs for a long time 
now, and I appreciate his leadership, and together I think we can 
continue to make progress on these issues.

                              {time}  2130

  Mr. BOYD. Thank you, Mr. Cooper.
  A couple of things that you said struck me. One is, unsustainable; 
and the other is, we have to work together. Those of us who have been 
in this business, those of us who have any kind of accounting training 
in our background understand that those sorts of numbers, first of all, 
that reporting procedures, or those reporting procedures, are wrong; 
and the trend there of red ink, deficit spending, is unsustainable. It 
will be, and I think the public will recognize it when the markets 
begin to react to their fears that someday, if America doesn't turn 
around its habit or change its habit of deficit spending, that it will 
have difficulty sustaining itself economically.
  The other thing that struck me about what you said is what I call the 
bipartisanship thing. I want to go to this chart here, and this talks 
about the budget deficits from 1982 to 2006, a 24, 25-year period, 
starts with President Reagan back in 1982. And you see the minus 
numbers here, all the way down through the fourth year of the Clinton 
administration, or fifth year of the Clinton administration, in which, 
working together right in here, a Republican-led Congress and a 
Democratic President worked together for the Balanced Budget Act of 
1997, which then produced a positive result that got the country back 
on the right track, at least in terms of its cash basis deficit issue.
  So you see that that was a very positive thing here.
  And the biggest issue we had in 2001, when President Bush was sworn 
into office, was how do we deal with the $5.6 trillion, 10-year 
projected surplus we had. We had a $5.6 trillion, trillion, now, 
projected surplus in 2001.
  Many of us, especially of those of us in the Blue Dogs said, hey, 
there are several things we can do. Number one is we ought to address 
these priorities related to Medicare and Social Security. We know those 
programs have long-term problems. Let's spend part of the money there. 
Let's use part of it to give back in tax breaks and let's use part of 
it to pay down this huge Federal debt that we had.
  But this Congress and this administration decided not to follow that 
sort of three-pronged approach, debt reduction, deal with Medicare and 
Social Security, and tax relief. Instead, they poured all the money 
into tax relief. And then immediately you see what happened. You had 9/
11 come after that and an economic downturn, and then now we have got 
deficits.
  We have structural deficits. What does a structural deficit mean? It 
means that even if the economy works, everything works like it is 
supposed to, you are still going to have a deficit. You are still 
spending more money than you take in. That is wrong. That is 
fundamentally wrong. And we ought to, we have to correct it. We just 
can't afford to let it go on like this.
  America is the greatest country on the face of the earth 
economically, politically, militarily. We won't be that way long if we 
don't fix this very dangerous structural deficit that we have.
  We have been joined by another outstanding member of the Blue Dog 
Coalition. We come from all over the country. We have with us tonight 
Congresswoman Loretta Sanchez from California who has joined us now. 
She has been a leader. She is a member of the Armed Services Committee 
and a leader there; and I would like to yield at this time to my 
friend, Loretta Sanchez.
  Ms. LORETTA SANCHEZ of California. Thank you so much, Mr. Boyd. I 
just am very grateful that you decided to take this hour to talk a 
little bit about the financial crisis, really, that our United States 
is in, and what we can do or what we must do in the near future to 
begin to get our financial house in order of our Nation.
  As you know, I am an economist by training and a former financial 
advisor and investment banker for 12 years before I came to the House 
of Representatives; and besides sitting on the Armed Services Committee 
and the Homeland Security Committee, I also sit on the Joint Economic 
Committee for the Congress, the economic committee that looks at the 
macro picture of what is going on in the United States.
  And, quite frankly, we take a look at our position vis-a-vis the rest 
of the countries of the world. In other words, how are we going to hold 
on to our financial status, our quality of life, our way of life as we 
know it? And I believe, every night when I go to sleep, I believe that 
this is the biggest issue that is facing us here in Washington, D.C., 
and as Americans.

[[Page 6730]]

  Earlier, Mr. Cooper showed a chart that said that we are telling the 
American people, this Congress, this Republican-led Congress is telling 
the American people that, in this coming year, our shortfall or what we 
are overspending by for the year will be $319 billion. And it says it 
right there.
  But the reality is, take aside our responsibilities that we have told 
people we are going to do for Medicare and Social Security for the 
future, the reality is that we spend much more than $319 billion this 
year. Without that Medicare and Social Security responsibility, we 
really spend $760 billion more than the money we take in.
  Now we sat down a while ago with the Comptroller of the United States 
as a Blue Dog Coalition, and he said to us that 70 percent of the 
deficit that we have on an annual basis is because we are not 
collecting the taxes we should be collecting from the American public. 
In other words, with the three sets of tax cuts that were given by 
President Bush and the Republican Congress, we have failed to take in 
the money we need to pay our bills. What we are basically doing is 
borrowing to pay, and at some point that comes due.
  It is like putting it on a credit card. At some point, the credit 
card company will come and tell you, okay, you have got to pay up. And, 
as you know, it becomes much more difficult than to have paid it as you 
went along.
  We, as Blue Dogs, believe that we should do pay as you go, that we 
should make tough decisions every year and decide how we are going to 
spend and how we are going to tax and bring in the monies we need, how 
we are going to cut spending, if we need to cut spending. But we 
haven't been allowed to do that. Each and every year, as Blue Dogs, 
when we get together and we make our budget and we think about it, Mr. 
Cooper, on the Budget Committee, others of us, and the reality is that 
every year the Republicans decide that it is not the year to get our 
house in order, our financial house in order.
  Now, you know, there are some things that people haven't even begun 
to think that will impact even more our deficit spending over the 
inability for us to pay our bills on an annual basis and, therefore, 
put it on the credit card.
  The Medicare part D, the prescription drug program that the 
Republicans voted in 2 years ago, okay, it hasn't gone very well. We 
all know that. We all wonder what they are doing with it, et cetera. 
They said it would cost $400 billion over 10 years. This is extra that 
they were going to spend. We now know it is going to cost at least $1.5 
trillion if we meet the responsibility of that program. That is not 
factored into the budget deficit that we see coming in the future.
  Hurricane Katrina, that is not factored in. We have done really very 
little. We have already given about $83 billion towards Hurricane 
Katrina, but the two Louisiana senators from that State have a bill 
that says they want us to spend almost $300 billion more just for 
Louisiana to get the place fixed up. That is not counted in the 
deficits we see for the future.
  And the Iraq war, $1.5 billion a week of spending. How long is it 
going to take? We are already approaching almost $400 billion spent on 
that war by the end of this year. And I sit on that committee, the 
military committee. I don't think we are going to be out by the end of 
the year.
  You do the math. $1.5 billion a week. That is the operating cost of 
being bogged down in Iraq. Will it be 3 years, 5 years, 10 years, 20 
years? Korea, at 50 years?
  Start adding up those numbers, America, and you will understand why 
we, the Blue Dogs, are so concerned that the Republicans will not take 
this seriously and sit down with us and hash out what we need to do in 
order to begin to get this under control.
  That is why I am grateful that you have come down here today to talk 
about this, Mr. Boyd.
  Mr. BOYD. I thank the gentlewoman from California for your leadership 
on these areas and particularly on the Armed Services Committee.
  Mr. COOPER. I thank the gentleman for yielding.
  I just wanted to add a note to what the gentlewoman from California 
said talking about pay as you go. That is a policy that former Federal 
Reserve Chairman Alan Greenspan said would be the single most important 
thing we could do in Congress to help get our fiscal house in order. 
Alan Greenspan saying the single most important thing we could do to 
get it in order.
  Because Chairman Greenspan and most other economists know that PAYGO 
worked very well from 1990 when it was first put in place, until 2002, 
when the Republican majority allowed it to expire. Chairman Greenspan 
can even remember the day and the hour that PAYGO was allowed to 
expire, because he knew then that our Nation was risking serious 
trouble.
  But we have not really been allowed to vote on bringing back pay as 
you go. It is a shame, because that pay as you go policy forces 
Congressmen to make responsible decisions. You cannot increase spending 
unless you find offsetting cuts somewhere else, and you cannot reduce 
taxes unless you find some way to pay for it. It is very sensible. It 
is the sort of policy we all have to do in our own household expenses, 
and our Nation was doing so well with it for 12 years, from 1990 to 
2002. But, since 2002, we have not had PAYGO, and that is one reason 
you are seeing these terrifically high deficits.
  Mr. BOYD. If the gentleman would yield.
  I know the gentleman served in Congress prior to 1994 and is actually 
on his second trip back and was not here in 1997 when we did the 1997 
Balanced Budget Act. But Congresswoman Sanchez and myself were. And one 
of the keys to that 1997 Balanced Budget Act which led us to balancing 
the budget here in this era was PAYGO.
  Spending caps was another key element of that. You put caps on 
spending programs, and you leave them there, and you agree upon that. 
Those are not here anymore, as you know, under this administration, 
this Republican-led Congress and Republican administration. Back then, 
it was President Bill Clinton, a Democrat, Speaker Newt Gingrich, a 
Republican, and Majority Leader of the Senate, Trent Lott, a 
Republican, sat together and said how do we do this in a bipartisan 
way. You don't have any of that at work anymore.
  I think that is the thing that disappoints me more than anything, is 
I know that there are people of goodwill that would work in good faith 
all over this country that serve in this body that don't have that 
opportunity because we are not allowed to sit down. The majority party 
in many cases just won't sit down with us and work together to solve 
these problems. So these are very, very difficult solutions.
  I know the chart that showed the accrual accounting and the $2.7 
trillion deficit, those are hard numbers to understand. Here is one 
that is not hard to understand. This is what you actually owe today. We 
owe as a government today $8.352 trillion. That is trillion with a T. 
$28,000 for every man, woman and child. That is what our debt is today. 
And somebody has to pay that back. We also have to pay the interest on 
that. We have to service that debt on a regular basis. And as the 
interest rates go up, then, obviously, that is what I call a debt tax 
which cannot be repealed. It has got to be paid.
  Mr. COOPER. If the gentleman will yield.
  He is exactly right. Those numbers are much clearer than the numbers 
I gave, because every American can look at that $28,000 and say that is 
what I owe. That is what my spouse owes. That is what each of my kids 
owes.
  But if the gentleman would like the modern accounting comparison for 
those numbers, under accrual accounting, each American today owes 
$156,000 apiece, $156,000 for every man, woman and child in this 
country. And that would mean for a family of five, that is almost \3/4\ 
of $1 million. That is a luxury house anywhere in America, the cost of 
a luxury house. And yet we don't get to live in the house. We just get 
the mortgage. And that is on top of our real house and our real 
expenses and car payments and rent and all those things we have to pay.

[[Page 6731]]



                              {time}  2145

  So it is a terrific and crushing financial obligation that has been 
put on us just in the last few years.
  Mr. BOYD. Madam Speaker, the fact is that some future Congress and 
some future President has a lot of hard, tough work to do, a lot of 
painful decisions to make to get us back in balance. It will be done 
somewhere down the road. We know that will happen, but it is going to 
be very painful.
  Ms. LORETTA SANCHEZ of California. Madam Speaker, if the gentleman 
would yield, the other problem is that as soon as we focus, and we must 
focus, on beginning to figure out how we pay this down, we need to do 
that. We have explained why. But the reality is that when we are doing 
that, that is less money in our pockets, if you will, to be able to 
educate our children, to educate ourselves, to invest in roads and 
water systems and sanitation systems and what makes America productive 
vis-a-vis the rest of the countries of the world.
  I can guarantee you that this debt is held to a large extent by 
countries around the world, Japan and China, the European countries. 
They are who we owe. And they are looking at ways of how do they 
increase their quality of life. And they are investing in education. 
They are investing in water systems. When we have to pay this down, we 
will not be able to make that investment.
  Mr. BOYD. Madam Speaker, the gentlewoman makes a good point. In the 
past when we had to run up debt, for instance, during World War II and 
at other times in a national emergency, that debt in large part was 
bought by Americans. That financing was provided by Americans. That is 
not the case today. Of this over almost $3 trillion that has been 
borrowed since January 2001, the great bulk of it, the majority of it, 
has been lent to us by China and Japan. So in most cases, foreign 
countries, some not necessarily that are friendly to our cause, are 
lending us this money.
  Mr. COOPER. If the gentleman would yield, many Blue Dogs have asked 
where are the war bonds for the Iraq war. Because during World War II, 
we had war bonds and it was a patriotic obligation, if you could afford 
to, to lend money to our government to conduct the war. The 
administration has not asked for war bonds for Iraq. Nor have we asked 
for Katrina bonds. That would be a great way that Americans could show 
their support. I saw in the newspaper today that a Middle Eastern 
country, Qatar, has offered to pay millions of dollars to New Orleans. 
There should be an effort for the American people to lend ourselves the 
money we need to get through this. Instead, we run up $1 trillion of 
debt with China. Already many countries have gigantic amounts. You may 
have seen the cartoon. When the President of China, Hu Jintao, came to 
visit a couple of weeks ago, there was a cartoon in the paper where 
there was a little balloon out of the White House saying, ``Oh, our 
landlord's here.'' When you start lending money on that scale from 
China to the United States and we have to pay that back to China, that 
almost means that we are beholden to them, and that is a very dangerous 
security risk for our country.
  So I appreciate the gentleman's leadership on this issue.
  Mr. BOYD. I appreciate both of you folks being here today.
  One last thing that I wanted to talk about, the third point that I 
wanted to make, was the issue of honesty and accountability by the 
administration. We have to deal with the American people in all areas, 
and particularly our financial area, with honesty, and we have to be 
accountable. On the congressional side, our forefathers designed our 
system so that the congressional side would have an oversight role, 
that we would make the laws and appropriate the money, and our job was 
to make sure that the executive branch, the President and the executive 
agencies, spent the money and applied the laws in the way that we 
intended them to be. And I do not think that is happening as well as it 
should these days. And I want to cite a couple of examples.
  An article in Monday's Boston Globe reports that the administration 
has disregarded more than 750 laws enacted since he took office, 
adopting the policy that basically the administration has the authority 
to pick and choose a provision of which laws that they wish to follow. 
This is a blatant disregard for the way our forefathers set up our 
Federal Government and has really upset the balance between the 
branches of government, and it has prevented Congress from carrying out 
our responsibility of lawmaking and oversight.
  Let me cite an example of oversight abdication: from 1994, when 
President Clinton sat in the White House and the congressional House 
and the Senate were controlled by Republicans, there were over 1,000 
subpoenas issued from 1994 to 2000, over 1,000 subpoenas issued to 
appear before House committees, under oath, to justify and explain 
actions of the administration. It is a role that Congress should be 
playing, an oversight role.
  Since January of 2001, there have been virtually no subpoenas issued 
by this House to this administration to explain their actions. And 
Congress has basically abdicated its oversight role. And as a result, 
you see misuse of power and some corruption springing up in places, and 
I think we will see more of that unless Congress steps up and exercises 
its role of oversight over the executive branch.
  Ms. LORETTA SANCHEZ of California. If the gentleman would yield for a 
moment, but part of the reason of why no subpoenas have been issued is 
that this House is controlled by the same party that controls the White 
House. And the Democrats, my party, we are not allowed to issue a 
subpoena. A subpoena can only be issued by the consent of the chairman 
of a committee, and that chairman would be a Republican. And, believe 
me, I have had a lot of questions and a lot of things I have wanted to 
ask the administration and its Departments with respect to some of 
their spending. I am not allowed to do that. Nancy Pelosi is not 
allowed to do that. It must be done by a Republican, and they have 
refused to subpoena. This is one of the reasons why there have been no 
subpoenas basically issued out of the House.
  Mr. BOYD. That is a great point, and I thank the gentlewoman for 
making it.
  Madam Speaker, we have been joined by my good friend and fellow Blue 
Dog from Tennessee, Representative Lincoln Davis, and I yield to my 
friend now.
  Mr. DAVIS of Tennessee. Congressman Boyd, thank you for yielding. I 
deeply appreciate your efforts and the gentlewoman from California and 
my good friend from Nashville, Tennessee, for the comments that you 
have been making and trying to make this Congress, this House, and 
those who may be observing us, aware of the situation that we are in.
  In the mid-1990s, I was amazed and somewhat taken aback and, quite 
frankly, somewhat was in agreement with the contract that was proposed 
by a group of individuals on September 27, 1994. And I looked at most 
of those and I thought that sounds just like a Southern Democrat in 
what they would propose. I am going to read some of those to you.
  I am a general contractor, and I do not do much work anymore. Our job 
sure does not allow us to do that; so, therefore, I am not out building 
as I was through the 1990s and the 1980s and the early part of the 21st 
century. But when I signed a contract with someone, there were certain 
ordinances in that that said you have to abide by these or else if you 
do not, we will take over that contract and we will hire somebody else 
or put someone else in your place that will fulfill those commitments 
that you have made. And I would sign a payment of performance bond that 
would do exactly that. So I felt that any contract that you made with 
this country, it was a contract that was binding. So I want to read 
some parts of the contract.
  Item No. 2, it says on the first day we will ``select a major, 
independent auditing firm to conduct a comprehensive audit of Congress 
for waste, fraud, and abuse.'' We cannot even audit several of our 
different Departments and agencies of the Federal Government today. 
This was a pledge in 1994.

[[Page 6732]]

  I look at something else here. It says we ``guarantee honest 
accounting of our Federal budget by implementing zero base-line 
budgeting.'' In the Tennessee legislature, we understood what that was. 
Apparently, the folks who agreed to sign this contract did not, and the 
rest of the story, as some famous person says, is still being told.
  Then I take a look at No. 6, the National Security Restoration Act: 
no U.S. troops under U.N. command and restoration of the essential 
parts of our national security funding to strengthen our national 
defense and our credibility around the world.'' When I go to other 
countries, I am sometimes frightened, not that I am an American, 
because when God put my soul in the body of a woman who lived in 
America at conception and let me be born an American, it was one of the 
greatest blessings I could receive. But other folks I do not 
necessarily agree with. I think they misinterpret the American people 
and how they have a lack of respect for us. I do not like that and I 
want us to change that, and I think foreign policy can make a 
difference. So I think that those are failures.
  Our national defense, September 11 happened after 1994. I am not 
blaming anyone there, but I am just saying we need to start thinking in 
this country.
  Another one said ``term limits to replace career politicians with 
citizen legislators.'' We have a Senator who ran from Tennessee and 
said he would serve 12 years. I applaud Bill Frist for not running 
again. I do not necessarily always agree with him, nor do I disagree 
with him a lot. But one thing I do agree with him on: he kept his word. 
We may not have passed the bill. But, quite frankly, the bill does not 
require you to keep your word. My father always said if you are honest, 
you will be rewarded; if you are dishonest, you ultimately will be 
punished and will lose.
  Here is something else: ``a balanced budget and tax limitation 
amendment and a legislative line-item veto.'' I have been here for a 
little over 3 years. I have never seen either one of these items that 
these folks who signed the contract, as I would sign as a builder, have 
tried to pass. Again, if you were back in Tennessee and if you were 
working for a developer, the first thing that would happen is they 
would say you have broken your contract; so we will take it over and 
get somebody else to finish the job. I think the American public needs 
to understand that, that when you give your word, your word is your 
bond.
  I travel my district, all 24 counties, and, quite frankly, there is 
no conversation about $3 a gallon of gasoline, very little. There is 
very little conversation about a $1,000 per month-plus for health care; 
very little conversation about the huge deficits that we have today; 
very little conversation about the war in Iraq, where we have lost 
2,500 young men and spend $100 billion a year, approximately, in that 
country. But we played a little game one day as I played when I was a 
kid in school. We called it tag. In essence, you have to tag somebody 
else out so they can chase the other folks until ultimately they 
capture someone, and then they have to start running someone down. So I 
said let us kind of play tag. If you were President, what would you do?
  An older fellow in the back said, No, Congressman. We have elected 
you. If you were the President, what would you do?
  I said the first thing I would do for this country is I would audit 
this country. I would get the best CPAs, the most honest, the most 
knowledgeable, and I would audit every Department, every agency. I 
would look at every no-bid contract to find out how much profit was 
made. I would audit this country, and I would tell the American public 
why in 2001 we had 200-plus billion dollars in surplus and why now we 
have 300-plus billion dollars in deficits. So I would audit America. I 
would find out and tell the folks, this is where the money went. This 
is where your money went. It is your money and here is where your money 
went.
  And the next thing I would do, I would call up at Andrews Air Force 
Base and I would have them cap off Air Force One with fuel. I would get 
10 of the best pilots in the Navy. I would also get 10 of the folks who 
can speak Arabic really well, and I would load them up, and we would 
have a nonstop flight to Kuwait. And I would tell the folks in Kuwait, 
remember about 10 years ago when you were invaded by this fellow named 
Saddam Hussein, or almost 15 years ago, and you came to the world's 
stadium and platform and said, Please help us. We have got 600,000 
people, and a 25 million population country and their leader, Saddam 
Hussein, has just invaded us and they have taken over our oil fields, 
and the rest of the world came to your rescue.
  I would get the sheiks. I would get the mullahs and the emirs and 
whatever they call themselves, the royalty, the folks who inherit the 
position, and I would say $3-a-gallon gas is breaking the back of every 
woman and every man who is working in my district.

                              {time}  2200

  That is our worst enemy. We have conquered your enemy. You help with 
ours now.
  I would go to Saudi Arabia and some of those folks, and I would tell 
them the same story. Then I would go to Iraq and put the troops there 
that was needed to put production back in those oil fields up to 3.5 
million barrels a day that was there when Oil for Food was a policy 
that we criticize now so much. And certainly the dishonesty of it 
should be criticized. But I would put back on line those oil wells.
  What that does for us is to help us balance our budget. Instead of us 
spending $100 billion of American taxpayer money, Harold Ford, a 
candidate for the U.S. Senate, says that the American taxpayers are 
footing the bill for both sides in this war. As we pay $3 a gallon 
gasoline, we are helping the insurgency get money, especially from some 
of their buddies in Saudi Arabia, and other places fund their 
insurgency through the dollars that go in and go back out to the 
radical groups of Islam. And then American taxpayers are paying for the 
American troops that are sacrificing their lives there.
  I would put on line the oil fields in Iraq and get them producing 
more than 1.5 to 1.9 million barrels a day, and I would bring the 
revenue in to where the American taxpayers would have to quit paying 
for the cost of the war in Iraq.
  I know our time is about ended. I have a whole lot more I would like 
to talk about. The point I want to make is that in this country today, 
we have a battle on our hands.
  If you notice, I am not mentioning a word on the other side, their 
name. It saddens me when folks come to this floor and they want to 
criticize Democrats and Republicans. We are all adult and mature 
individuals. It is time we started acting like Americans instead of 
Democrats and Republicans.
  It is my hope we can start working together and take this bitterness 
away. Bipartisanship is the only thing that is going to solve this 
thing. In the Rules Committee, when we are not allowed to introduce 
amendments, I just got a news release that went out, and I will mention 
this because it is from the National Republican Committee.
  ``Davis Shares Blame for High Gas Prices.
  ``National Democrats are desperate to gain traction on any issue they 
can in the lead up to the 2006 elections. As gas prices across the 
Fourth District rise, so does the Democrat rhetoric. What 
Representative Lincoln Davis probably hasn't mentioned though is that 
he voted twice against helping consumers feel less of a pinch at the 
pump.''
  They mention resolution number 519 and number 145, the Gasoline for 
America's Security Act and the Energy Conservation, Research and 
Development Act.
  You realize that Republican Senator Bill Frist wouldn't even put this 
bill up on the Senate floor because it didn't do what it said it did? 
So, in essence, even the Republicans in the Senate disagreed with those 
who voted in this House on this bill. That is the kind of truth you get 
from the truth squad when they come up and start talking.
  Mr. BOYD. Madam Speaker, reclaiming my time, I appreciate the 
gentleman. He brings a lot of common sense and wisdom.

[[Page 6733]]

  I know our time has expired, Madam Speaker. I just want to conclude 
by saying that I hope that you understand that the Blue Dogs are a 
group of men and women who are ready to work together across the aisle 
in a bipartisan way to solve these problems. We have some very, very 
tough problems, and we have a group of folks who are ready and willing 
to roll up our sleeves and go to work, and let's solve some of these 
problems.
  Mr. DAVIS of Tennessee. Madam Speaker, that doesn't say Blue Dog 
Democrats. It says Blue Dog Coalition. Republicans can join it.

                          ____________________