[Congressional Record (Bound Edition), Volume 155 (2009), Part 23]
[House]
[Pages 31840-31841]
[From the U.S. Government Publishing Office, www.gpo.gov]




       FISCAL RESPONSIBILITY AND USING TARP TO REDUCE THE DEFICIT

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Virginia (Mr. Connolly) for 5 minutes.
  Mr. CONNOLLY of Virginia. Mr. Speaker, I am intrigued to hear my good 
friend from Florida talk about deficits as if the Republican Party, 
when it was in the majority and controlling the White House, had 
nothing to do with creating record deficits after inheriting record 
surpluses.
  Mr. Speaker, as we continue on the path to economic recovery, and as 
we maintain our focus on putting millions of Americans back to work, we 
must reduce long-term deficits, I agree. The actions we have taken to 
stabilize the economy and to spur economic and job growth will be for 
naught if our long-term economic health is imperiled by ever-rising 
budget deficits.
  I stand here today in favor of a significant tool for deficit 
reduction, the dedication of unused TARP funds.

                              {time}  0915

  When first proposed by the previous administration, TARP was a $700 
billion program designed to prevent the financial sector from collapse. 
In its own way it's had measured success. The bank stress tests applied 
earlier this year indicated that the financial sector was, in fact, 
stabilizing. A number of banks, most recently the Bank of America and 
Citigroup, have, in fact, begun to pay back their TARP loan funds.
  The unused TARP funds represent hundreds of billions of dollars 
potentially in deficit reduction. In fact, they represent what would be 
the largest single deficit reduction in American history. As we stand 
at an economic crossroads, I believe we must seize advantage of this 
prospect and dedicate a significant portion of those remaining TARP 
funds to deficit reduction.
  This would build on the actions we already have undertaken to reduce 
the deficit. In March, Congress passed the concurrent resolution on the 
budget for fiscal year 2010 that lowers the budget deficit to a third 
of the current amount within 4 years. This summer the House of 
Representatives passed legislation to reinstitute one of the most 
significant deficit reduction tools in recent memory, statutory pay-as-
you-go, or PAYGO, legislation. PAYGO requires all reductions in revenue 
or increases in entitlement spending to be offset with other spending 
cuts or alternative sources of funding, a mechanism the Republican 
Congress let expire in 2002.
  Yearly deficits, unfortunately, are not a new phenomenon. In fact, 
starting with fiscal year 1970, we had 28 straight deficits. But 
Congress took action and enacted statutory PAYGO in 1990. Starting in 
fiscal year 1998, President Clinton presided over four straight budget 
surpluses. The last time we had that many surpluses in a row was in the 
1920s. Sustained surpluses are the result of sound economic policy and 
fiscal responsibility, which, quite frankly, had been sorely lacking 
these last past 8 years, Mr. Speaker.
  Make no mistake. As this Congress took office in January, we were 
handed a deficit that was $1 trillion. How is that possible? How could 
we go from four straight surpluses with projected future surpluses 
totaling $5.6 trillion to an inherited $1 trillion deficit this year? 
How could record surpluses become record deficits? Fiscal 
irresponsibility.
  The current recession, which began in 2007 and accounted for $479 
billion of the fiscal year 2009 deficit, was the result of a concerted 
effort to avoid reasonable oversight of the financial sector. The risky 
and destructive behavior engaged in by a number of financial 
institutions was long ignored and in some ways subtly encouraged by a 
culture of deregulation on the other side of the aisle. The ensuing 
recession threw millions of Americans out of work and exacerbated the 
deficit.
  Fiscal irresponsibility was a hallmark of the Bush administration. 
Three of President Bush's signature policies--his tax cuts, his 
prescription

[[Page 31841]]

drug program, and his decision to start the Iraq War--resulted in 
further yearly debt of more than $670 billion. None of these policies 
were paid for. How could such gross fiscal irresponsibility occur by 
conservative Republicans?
  It occurred in large part because President Bush and the Republican-
controlled Congress allowed statutory PAYGO to lapse in 2002, perhaps 
the most intellectually honest budgetary action they, in fact, took 
during that time period. And what should have come as no surprise to 
anyone, because of that action, or lack of action, budget deficits 
returned the very next year. By allowing PAYGO to die, the Republicans 
were no longer constrained in their spending habits. They coupled 
reckless behavior with reckless disregard for the consequences and now 
expect the American people to believe their newfound concern for 
deficits. Where was that concern when we voted this year to reinstitute 
statutory PAYGO? Only 24 Republicans in this House of Representatives 
voted in favor of returning fiscal responsibility to the Congress.
  Mr. Speaker, long-term financial stability depends on the continuance 
of our fiscal responsibilities. Long-term job growth depends upon a 
stable and growing economy. Long-term economic stability depends upon 
sustainable Federal budgets. Now, Mr. Speaker, is the time for the 
dedication of a significant portion of unused TARP funds for deficit 
reduction. The American people count on us.

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