[Congressional Record (Bound Edition), Volume 153 (2007), Part 19]
[Extensions of Remarks]
[Pages 26090-26091]
[From the U.S. Government Publishing Office, www.gpo.gov]




            FISCAL RESPONSIBILITY AND THE DEMOCRATIC RECORD

                                 ______
                                 

                        HON. JOHN M. SPRATT, JR.

                           of south carolina

                    in the house of representatives

                        Monday, October 1, 2007

  Mr. SPRATT. Madam Speaker, on Friday, Majority Leader Steny Hoyer 
spoke to the National Press Club regarding fiscal responsibility and 
the Democratic record. I recommend his speech to all of my colleagues.
  The speech sets out the clear differences between the current 
Administration's harmful fiscal policies and the strong track record of 
fiscal responsibility that the current 110th Congress has established. 
Indeed, the new House majority has already passed and adhered to the 
Pay-As-You-Go rule and passed a budget resolution that returns to 
balance by 2012.
  The speech also establishes some helpful context for the 
Administration's pending veto threats on the appropriations bills. Most 
of the funding difference consists of Congressional efforts simply to 
restore harmful cuts proposed by the President, and the rest of the 
difference represents a responsible level of increase that will enable 
us to fund key priorities. Our appropriations level was accommodated 
within our fiscally responsible budget resolution, which returned the 
budget to balance by 2012.

 Majority Leader Hoyer's Address at the National Press Club: Fighting 
                          for America's Future

       Sept. 28.--I first want to thank Alan Greenspan for putting 
     the issue of fiscal responsibility back on the political map. 
     This is a very healthy development, even though it 
     embarrasses the Administration.
       In his new book, the former Federal Reserve Board Chairman 
     writes: ``Most troubling to me was the readiness of both [the 
     Republican-controlled] Congress and the Administration to 
     abandon fiscal discipline.'' And this: `` `Deficits don't 
     matter,' to my chagrin became part of the Republicans' 
     rhetoric. . . . Deficits must matter.''
       I was tempted to come here and deliver the shortest speech 
     of my professional life. Eight words in all. ``Chairman 
     Greenspan is correct. Are there any questions?''
       But the bar is higher today. So, I intend to convince you 
     of four main points: First, this Administration has pursued 
     the most fiscally irresponsible policies in American history.
       Second, the Democratic Party is the party of fiscal 
     responsibility today--which is a very under-reported story.
       Third, the President needs to put down his veto pen and 
     pick up the telephone. Our differences on funding levels for 
     domestic appropriations for Fiscal Year 2008--which begins on 
     Monday--are relatively minor. We need to work out those 
     differences, rather than engage in political posturing.
       And finally, we must not allow our disagreement on 
     appropriations to distract us from the ominous, long-term 
     fiscal challenges that confront our nation. The United States 
     of America is on an unsustainable fiscal path--and the longer 
     we wait to address our challenges, the more difficult it will 
     be to avert a fiscal crisis.


                  THE REPUBLICANS' FISCAL TRAIN WRECK

       There's no other way to say it, the Republicans' fiscal 
     record is like a decades-long train wreck. For 18 of the 26 
     years that I have served in Congress, a Republican has 
     occupied the White House.
       And, in every single year of those Republican 
     Administrations, the federal government ran a budget deficit. 
     The cumulative deficits under Presidents Reagan, George 
     Herbert Walker Bush, and George W. Bush total more than $4.1 
     trillion.
       In contrast, the Clinton Administration had a cumulative 
     surplus of nearly $63 billion over eight years. Under 
     President Clinton's stewardship, the federal government 
     reduced the deficits he inherited and recorded four 
     consecutive surpluses--the first time that had happened in 70 
     years.
       So, forgive me for dismissing the Republican Party's claim 
     that it is fiscally responsible.
       Forgive me for rejecting the Republicans' repeated 
     assertion that supply-side tax cuts pay for themselves--an 
     assertion that has been challenged by the Treasury 
     Department, the Congressional Budget Office, and the current 
     Chairman of the Federal Reserve, who told the Senate in 2005: 
     ``I think it's unusual for a tax cut to completely offset the 
     revenue loss.''
       In fact, revenues have grown by just 3.6 percent since the 
     President's 2001 tax cut was enacted--less than half the 8.4 
     percent annual growth during the Clinton Administration.
       And forgive me for being somewhat amused by the 
     Administration's defensive push-back on Alan Greenspan's 
     recent comments.
       The President claimed last week that his fiscal record is 
     ``admirable and good.'' Does he really believe this? He came 
     to office inheriting a projected 10-year budget surplus of 
     $5.6 trillion, and proclaimed, ``We can proceed with tax 
     relief without fear of budget deficits, even if the economy 
     softens.''
       But then, the Republican-controlled Congress passed and the 
     President signed the largest tax cuts in a generation--tax 
     cuts disproportionately skewed toward the wealthiest 
     citizens--while increasing spending at a rate (7.1 percent) 
     nearly twice that of the Clinton Administration.
       As predicted, these irresponsible policies turned surpluses 
     into massive deficits: $158 billion in Fiscal 2002, $378 
     billion in Fiscal 2003, $413 billion in Fiscal 2004, $319 
     billion in Fiscal 2005, and $248 billion in Fiscal 2006.
       On Sunday, when we close the books on Fiscal 2007, we'll 
     record another $158 billion deficit. The President will crow 
     that he is reducing the deficit, ignoring the fact that, but 
     for his policies, we would not even have deficits. And 
     consider: The Administration projected a budget surplus of 
     $573 billion this year when it took office. So, Fiscal 2007 
     really represents a swing of three-quarters of a trillion 
     dollars, virtually all of it the result of policies enacted 
     by a Republican Congress and signed by President Bush.
       The exploding national debt is equally disturbing. Today, 
     the debt stands at more than $9 trillion, a 56-percent 
     increase (or $3.3 trillion) under President Bush. That's 
     $29,728 for every man, woman and child in our nation.
       All these figures can be mind-numbing. So, let's put them 
     in perspective:
       In 2007, the interest payments on the national debt--the 
     fastest growing major category of spending in the budget--are 
     a projected $235 billion. That's more than Congress 
     appropriates in discretionary spending for any government 
     department or agency other than Defense. It's four times more 
     than we spend on education, and seven times more than we 
     spend on the Department of Homeland Security.
       In other words, these interest payments--which increasingly 
     are paid to foreign governments that hold our debt--cannot be 
     used to build roads and bridges; to invest in research and 
     development; to improve education, to protect our nation, or, 
     yes, to provide tax relief.
       The Republicans' record of fiscal irresponsibility speaks 
     for itself. As Republican Congressman Jeff Flake of Arizona 
     said last year: ``Whether we want to admit it or not, the 
     Republican Congress's failure to discipline itself is sending 
     us all down a flower-strewn path to fiscal insolvency.''


        DEMOCRATIC MAJORITIES WORK TO RESTORE FISCAL DISCIPLINE

       The truth is, Democrats are the party of fiscal discipline 
     in Washington today.
       In one of our first acts after regaining the Majority, we 
     reinstated the pay-as-you-go budget rules (or PAYGO) that are 
     widely credited with producing record budget surpluses during 
     the Clinton Administration. In a nutshell, PAYGO means the 
     federal government must offset tax cuts or spending increases 
     elsewhere in the budget. It's a common-sense rule that 
     millions of American families apply to their own personal 
     budgets.
       Adopted on a bipartisan basis in the 1990s, PAYGO was even 
     rhetorically supported by President Bush in his first three 
     budgets--although he exempted his 2001 tax cuts from the rule 
     and Republicans allowed it to expire in 2002.
       The President's new Director of OMB, former Budget 
     Committee Chairman Jim Nussle--who supported PAYGO in the 
     `90s--later had a change of heart, explaining: ``We don't 
     believe you should have to pay for tax cuts.''
       And so Republicans didn't. They just kept on billing the 
     costs of tax cuts and spending increases to future 
     generations through higher deficits.

[[Page 26091]]

       Today, Democrats are fighting to restore the fiscal 
     discipline that has been sorely lacking since 2001. Why? 
     Because we believe deficits and spiraling debt threaten our 
     future prosperity and national security. And because we 
     believe that it is simply immoral to force our children and 
     grandchildren to pay this generation's bills.
       That's why we passed a budget for Fiscal 2008 that would 
     bring the budget back to balance by 2012. Last year, the 
     Republican Congress failed to even pass a budget.
       And, that's why we have honored our commitment to PAYGO. We 
     have not violated the PAYGO rule once in the approximately 30 
     bills with direct spending or revenue provisions of more than 
     $1 million, as will be detailed in a report next week by John 
     Spratt, Chairman of the House Budget Committee.
       If you examine the four major House bills with mandatory 
     spending increases--children's health insurance, the farm 
     bill, higher education and energy--you'll see that 
     approximately 80 percent of the spending increases have been 
     financed by spending cuts.
       For all their talk about being tough on spending, our 
     Republican friends in the House actually have opposed the 
     spending cuts that we have put forward. House Democrats, for 
     instance, paid for our SCHIP bill by, among other things, 
     cutting subsidies for insurers--cuts Republicans opposed. We 
     have made the tough decisions with respect to spending 
     priorities that Republicans never made when they were in 
     power.
       And, as we enter the final stages of this session of 
     Congress, I want to make one thing clear: The House will not 
     waive PAYGO for any tax cuts or entitlement spending 
     increases that are not offset.
       Today, we are examining different proposals to permanently 
     reform the alternative minimum tax, as well as a temporary 
     AMT fix that would be offset by closing tax loopholes and 
     cracking down on special interest tax breaks. In either case, 
     simply waiving PAYGO is not an option--even if some members 
     of the other body prefer that we do so.


              The Current Appropriations Fight in Context

       Now let me focus on the current disagreement between 
     Democrats in Congress and the Administration over domestic 
     appropriations. Don't be fooled. This is not a fight about 
     spending. This is a fight about our priorities as a nation--
     and about the Administration's desire to posture for its 
     base.
       Let me say, I am not pleased that we have not completed our 
     appropriations work on time. The Administration's unjustified 
     veto threats have only impeded our progress. Nonetheless, we 
     have passed a continuing resolution to ensure that our 
     government is funded and functioning, and to give us time to 
     work out our differences.
       But the bottom line is, the Administration is itching to 
     instigate an appropriations fight with Congress in a vain 
     effort to establish its bona fides with its conservative 
     base.
       After failing to veto even one appropriations bill or other 
     legislation that substantially added to the deficit during 
     his first six years in office, the President is now 
     threatening to veto eight of the 12 annual spending bills for 
     Fiscal 2008 over a total of $23 billion.
       There is no question that $23 billion is a lot of money. 
     However, let's put it in perspective: $23 billion is about 
     eight-tenths of 1 percent of a total federal budget of nearly 
     $3 trillion.
       Twenty-three billion dollars is not quite half of the $42 
     billion in additional funding for Iraq that the 
     Administration requested on Wednesday, and about 12 percent 
     of the Administration's total request of $190 billion for the 
     war for 2008--a war the White House estimated would have a 
     total cost of $60 billion.
       The truth is, $16 billion of the $23 billion that Democrats 
     are fighting for would simply restore cuts proposed by the 
     President to key programs--a 50-percent cut in vocational 
     education; the elimination of student aid other than work 
     study and Pell Grants; and deep cuts in medical research, law 
     enforcement grants and rural health programs, to name a few.
       This is a fight about whether we adequately fund No Child 
     Left Behind, special education, medical research, Head Start, 
     clean water programs, public safety, and appropriate health 
     care for our veterans and men and women in uniform.
       Please, Mr. President, do not lecture us about fiscal 
     responsibility. And please, do not tell us that we cannot 
     find funding to invest in our children, our infrastructure, 
     and our future when you are proposing to spend another $190 
     billion on the war in Iraq.
       Democrats believe the President's priorities are deeply 
     misguided, and not supported by the American people. We 
     believe, in this appropriations fight, the President is 
     playing politics, pure and simple.
       If you doubt that, just consider that funding for non-
     defense appropriations in 2008 (when adjusted for inflation 
     and population growth) is actually below the funding levels 
     passed by the Republican Congress and signed by the President 
     for Fiscal 2002, 2003, 2004 and 2005.
       I know that Chairman David Obey remains hopeful that in the 
     next few weeks the Congressional leadership and White House 
     will sit down and negotiate a reasonable agreement on funding 
     levels.
       But as the rhetoric heats up, ask yourself: If the 
     President is really fiscally conservative, why didn't he veto 
     one appropriations bill in six years? Why didn't he veto the 
     corporate tax bill in 2004--a bloated bill that doled out 
     $139 billion in corporate welfare when all that was needed 
     was a $5 billion tax fix to put us in compliance with our 
     trade agreements?
       We Democrats are going to fight for the priorities of the 
     American people. The President should not try to rehabilitate 
     his fiscal record by vetoing responsible appropriations 
     bills--or, for that matter, the bipartisan children's health 
     insurance bill.


                    OUR LONG-TERM FISCAL CHALLENGES

       Finally, let me say that as important as this disagreement 
     over appropriations is, we must not be distracted from the 
     long-term fiscal challenges that face our nation. Fiscal 
     responsibility is not some virtue that exists in a vacuum. 
     It's vital to our future.
       As Bob Bixby of the Concord Coalition points out: ``The 
     basic facts [of our fiscal challenges] are a matter of 
     arithmetic, not ideology. Two factors stand out: demographics 
     and health care costs.''
       With the imminent retirement of 78 million Baby Boomers, 
     and the attendant demands on Social Security and Medicare, we 
     are on the cusp of a fiscal tsunami that threatens to drown 
     our nation in a sea of red ink.
       Over the next quarter century, the number of Americans 65 
     and older will nearly double--from 12 percent of the 
     population today to 20 percent.
       Medicare and Medicaid will grow by nearly five times as a 
     share of the economy by 2050, if we assume the growth of 
     health care costs does not slow. And these programs will 
     absorb as much of our nation's economy by the late 2040s as 
     the entire federal budget does today.
       According to the 2006 Financial Report of the United 
     States--signed by Treasury Secretary Paulson--our fiscal 
     exposures (explicit liabilities and implicit obligations) had 
     a present value of $44 trillion, or about as much as the net 
     worth of all household assets.
       We are not going to grow our way out of this problem, 
     through some magic supply-side solution. The GAO estimates 
     that it would require inflation-adjusted average annual 
     economic growth in the double-digit range every year for the 
     next 75 years to close the gap through growth alone.
       It is imperative that we get serious about our long-term 
     fiscal challenges. There is plenty of room for debate over 
     the mix of options that should be considered. But we do not 
     have time to waste.
       Senators Conrad and Gregg and Congressmen Cooper and Wolf 
     have put forward proposals for a bipartisan task force. While 
     I would like to believe that Congress could address these 
     issues through the regular legislative process, the 
     experience of recent years suggests that this is extremely 
     difficult in the current political environment.
       Thus, I support the Conrad-Gregg and Cooper-Wolf proposals 
     in concept, although I have concerns about several specific 
     provisions.
       My preference certainly would be to have Members of 
     Congress and this Administration make recommendations that 
     are considered in this Congress. But there are two problems 
     with that: First, this is now an outgoing Administration, 
     with little over a year left. And second, despite the good-
     faith efforts of Secretary Paulson, this Administration is 
     loath to put all options on the table.
       As a result, I believe that we must move forward with such 
     a task force after our new President is inaugurated in 
     January 2009, with a process allowing the President and 
     Congress to consider alternatives.
       Turning a blind eye to our long-term challenges would not 
     only be irresponsible, it would be unforgivable. As 
     Comptroller General Walker has warned: ``Continuing on the 
     unsustainable fiscal path will gradually erode, if not 
     suddenly damage, our economy, our standard of living, and 
     ultimately our national security.''
       Our fiscal future need not be filled with peril--if we have 
     the courage and will to recognize and address these 
     challenges.

                          ____________________