[Congressional Record (Bound Edition), Volume 155 (2009), Part 23]
[House]
[Pages 31918-31924]
[From the U.S. Government Publishing Office, www.gpo.gov]




                        FRESHMEN REPUBLICAN HOUR

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 2009, the gentlewoman from Wyoming (Mrs. Lummis) is 
recognized for 60 minutes as the designee of the minority leader.
  Mrs. LUMMIS. Thank you, Madam Speaker.
  This evening's Speaker is a fellow freshman and it is an honor to 
serve with you, Madam Speaker. Thank you for your time this evening as 
we proceed into Hanukkah and the Christmas season.
  We are as freshman Republicans going to spend some time with you 
reviewing the episodes of the last 12 months: Where are we in terms of 
America's fiscal house? Where have we been in the last 12 months? And, 
more importantly, where are we going as we prepare for the new year 
2010?
  I am joined this evening by my colleague, Leonard Lance of New 
Jersey, and we will be joined by other freshman Republican colleagues 
throughout the next 60 minutes. We look forward to this opportunity to 
cover these subjects with you this evening.
  We began our freshman year by approving a $350 billion TARP extension 
without accounting for the first half of the TARP.

                              {time}  1845

  We then moved into a $787 billion stimulus package; $1.1 trillion, if 
you include interest. And Steve Austria, our colleague, will be 
discussing this evening how that and other bills were shaped by the 
fact that they were done without the kind of transparency that we 
expected to see when we came here and which our new President 
campaigned on.
  We then moved into a $410 billion addition to the 2009 budget. We 
then moved into bills that would take over the financial services 
industry, the automobile industry, the student loan industry, that 
created the largest tax increase in history by way of an enormous cap-
and-trade bill that places a tax on every single American that consumes 
energy. And we passed, about a month ago in this House, a health care 
bill that created an additional roughly trillion dollars in obligations 
for this Nation, that bill now being debated in the United States 
Senate.
  During the course of this year, all of those complicated pieces of 
legislation which were passed, frequently without the opportunity to 
read the full bill, created enormous debts for this Nation, and we want 
to talk about this fiscal picture this evening.
  Before we do, I want to yield to my colleague, Mr. Austria, to 
discuss the issues of transparency and the issues of the speed in which 
some of that comprehensive and complicated, lengthy legislation was 
brought to the floor.
  Mr. Austria.
  Mr. AUSTRIA. I thank the Congresswoman from Wyoming for her hard work 
here in Congress and for putting this freshman Special Order together 
this evening. I think it's a great opportunity for us, as new Members 
of Congress, to be able to give our points of view as to coming to 
Congress, as to what we're seeing and how we think we can do better in 
the future. I thank you for putting that together.
  As our class president, I think you would agree with me that we have 
a lot of talent that came in with this freshman class on both sides of 
the aisle. And I think most of us would probably say it's been very 
challenging, to say the least, our freshman year, sometimes very 
frustrating, but we're all committed to working very hard to represent 
our constituents, and that means listening to our constituents and 
understanding what they're talking about.
  And I think this week marks a defining moment for this Congress and 
our Nation. You know as we, as freshmen, finish our first year in 
Congress, our national debt continues to grow. It's now over $12 
trillion as government encroaches into every aspect of our life. And I 
fear that this administration and this Congress, as they continue this 
outrageous spending and running up debt, that we're reaching a point of 
no return, and it will take another piece of our liberty with it.
  I served 10 years in the State legislature in Ohio before I came to 
Congress, and in Ohio, we were forced to balance our budget. That meant 
tough decisions sometimes. We were willing to make those tough 
decisions. And those 10 years in the State legislature, I think, were a 
good learning experience and a training ground for Congress, but I 
don't think anything could have prepared us for what we've seen these 
first 12 months in Congress. If you think back to when we were sworn 
in, and when the President came in after his inauguration, in his first 
sentence of his Executive order, President Obama stated, my 
administration is committed to creating an unprecedented level of 
openness in government.
  In November 2006, Speaker Pelosi pledged to lead the most honest and 
most open Congress in history. Yet, what we've seen in our first year 
is that, time and time again this congressional leadership has rammed 
through costly bills with devastating consequences for America's small 
businesses and working families that no Member of Congress, in many 
cases, has had an opportunity to even read, and I think that's 
outrageous as a freshman in Congress.
  If we put things in perspective, the first 4 or 5 months in Congress, 
we were faced with voting on the second half of the bailouts, the TARP 
bill, the $700 billion for the financial markets. We were asked to vote 
on a $400 billion omnibus bill that contained over 9,000 earmarks. We 
were asked to vote on a stimulus bill, a 1,073-page, nearly trillion 
dollar stimulus bill that was posted online at 10 p.m. the night before 
it came up for a vote and that not one Member of Congress had an 
opportunity to read before we voted on that, and I think that's 
unacceptable and outrageous. We should have an opportunity to read the 
bill before we vote on it. And that bill, as we found out, contained a 
tremendous amount of infusion of government spending, expansion of 
government. It wasn't targeted

[[Page 31919]]

on helping small business create jobs, small businesses that can 
sustain those jobs over the long run.
  Then we moved into the month of June and we took up an energy policy 
known as the climate change bill or cap-and-trade bill. What we saw was 
at the very end, a 300-page amendment that was tacked on to a 1,200-
page bill, which turned out to be a national energy tax bill at 3 a.m. 
in the morning that came up for a vote that, again, the Members of 
Congress didn't have an opportunity to read that amendment and fully 
understand what was in that bill before we voted on it. That's 
unacceptable, in my opinion. It was a bill that's not good for Midwest 
States like Ohio, that I represent, that have a lot of manufacturing in 
Ohio, and nearly 90 percent of our energy comes from coal. This bill, 
in my opinion, is going to cause unemployment and raise the cost of 
energy for Ohioans and Americans across this country. And during a time 
when we're going through a difficult economic time, that's not a good 
thing.
  This freshman class then came together, as you know, as the 
Congresswoman from Wyoming, as you know, because you participated in 
this, Congresswoman Lummis, and that was we had a press conference. We 
were upset about not having the opportunity to read this bill. And as a 
freshman class, we came before the national press, and we expressed our 
concerns about having an opportunity to read the bill before we vote on 
it and the importance of having that transparency, the importance of 
being able to let the American people know what we're voting on here in 
Congress.
  What we saw shortly after that--and we saw a number of people come to 
Congress the day before or a couple of days before we voted on the 
health care reform bill. What we saw, what was rolled out shortly after 
that press conference, was a 2,000-page health care reform bill that we 
spent days setting up a reading room to try to read through and 
understand what was in that bill and trying to get that message out to 
the American public. And what we found was it was a huge spending bill 
again, a $1 trillion health care reform bill that would raise premiums 
for many Americans to pay for that, would increase taxes by over $700 
billion. Most of that burden is being put on small businesses to pay 
for the health care reform bill, when we should have been focused on 
lowering costs and making it more accessible, or more accessible to 
families and maintaining that doctor/patient relationship. So we can do 
better.
  And what has all this led to? It's led to a tremendous amount of 
debt. You know, we're now borrowing 50 cents on every dollar that we 
spend. And I have three teenage boys at home, and I didn't come to 
Congress to run up these types of debts. And what we are doing is we're 
further increasing our Nation's debt and placing an astronomical amount 
of debt and burden on the backs of our children and our grandchildren, 
and that's unacceptable. And what we're seeing as a result of this 
tremendous amount of spending, this runaway spending, this huge amount 
of debt, is we're seeing unemployment now reach the highest it's been 
in recent decades at over 10 percent, and that's unacceptable.
  It's time that this administration and this Congress understand that 
government spending alone is not going to turn this economy around. We 
need to be helping our small business. We need to stop government 
spending. We need to stop increasing our debt, and we need to be 
focused on helping those that create jobs across this country, the 
economic engine across this country, and that is our small businesses. 
We have it backwards.
  I think as a freshman class, you know, we meet on a regular basis, 
and one of the things that we've talked about is how we believe that 
Americans, that we in Congress should allow Americans, allow small 
businesses, the taxpayers, give their money back to them, give them an 
opportunity to spend it to invest it back in the economy and be able to 
create jobs and sustain jobs, but unfortunately, what's happening here 
is we've got it backwards.
  Congress is taking the American people's tax dollars, and government 
thinks that it knows how to spend those dollars better than the 
American people, and they've got it backwards. And unfortunately, 
what's happening is that this leadership in Congress is brokering deals 
behind closed doors or not listening to the American people and their 
constituents. And that message is very clear to me, and that is that 
more government is not the answer.
  And with that, I will yield back to the Congresswoman from Wyoming. 
And again, I thank you for having this Special Order tonight with our 
freshman class.
  Mrs. LUMMIS. I thank the gentleman from Ohio.
  And the consequence of what the gentleman from Ohio pointed out is 
illustrated in this chart. Here is the Federal budget deficit when we 
began as Members of Congress. The budget when we came in had a $459 
billion deficit, or just under half-a-trillion-dollar deficit. But 
since we've been here, this amount of roughly half a trillion has been 
increased by almost a trillion, 950 billion in increases from 2008, for 
a total of over $1.4 trillion in deficits. Now, how did we get there?
  Three hundred twenty billion dollars of that, roughly, is from lower 
tax receipts due to the recession. That's the roughly 27 million 
Americans who are either unemployed or underemployed, and they're 
paying less in taxes, as are businesses and as are our families. So 
we're experiencing lower tax receipts because of our recession.
  In addition, the stimulus bill has added $200 billion to our deficit 
for this year alone, half in spending and half in lower taxes.
  Then, an additional $154 billion for bailouts for financial 
institutions and the auto industry; $91 billion in bailouts for Fannie 
Mae and Freddie Mac. Those, of course, are the GMAs that do housing 
programs.
  Seventy-three million dollars in unemployment benefits due to the 
recession, again, associated with this loss in tax revenue due to the 
fact that so many Americans are unemployed and the fact that the 
stimulus dollars that we spent were not adequately weighted towards 
infrastructure construction like was the bill that Mr. Austria and Mr. 
Lance and I cosponsored at the beginning of this year.
  And then $112 billion in other accumulated bills throughout the 
course of this year has gotten us to this point, $1.4 trillion in 
deficit.
  Now I'd like to yield to the gentleman from New Jersey (Mr. Lance) to 
talk more about what are the consequences of all this debt.
  Mr. LANCE. Thank you very much, Congresswoman Lummis, for your 
leadership. And certainly, it is a pleasure to be associated with this 
Special Order. And I commend you for your knowledge about what is 
occurring here in Washington. It's also a pleasure, always, to see our 
distinguished freshman colleague, Congresswoman Dahlkemper in the 
chair.
  Madam Speaker, I rise today to draw this body's attention yet again 
to our ever increasing national debt. In the next day or so, we're 
going to be asked to vote to raise our Nation's statutory debt limit.
  Back in April, the Democratic majority voted to raise the debt 
ceiling here in the House by $800 billion, and that would increase it 
to $13.29 trillion. That bill is still pending in the Senate. Now we 
are being told that due to the pace of spending of the administration 
and the congressional majority, an $800 billion increase in the debt 
ceiling will not be enough to get us through this fiscal year. We've 
been told that we will ultimately need to raise the debt limit by 
nearly $2 trillion, and that will be a total debt ceiling of roughly 
$14 trillion.
  Some blame the previous administration and the previous majority for 
our current fiscal situation. The fact is that the $2 trillion increase 
needed for next year is roughly equal to the total budget deficits from 
2001 to 2008. It is also true that prior to the onset of the economic 
crisis, the budget deficit had been decreasing for the previous 3 
fiscal years, reaching a low of $160 billion in 2007.

[[Page 31920]]

  2008 then saw a dramatic increase in the deficit as we started 
dealing with the fiscal crisis, and we hit a $454.8 billion deficit in 
2008. Unfortunately, the deficit for fiscal year 2009, which ended on 
September 30, nearly quadrupled to $1.47 trillion due to the TARP 
program, as Congresswoman Lummis has explained, and spending in the 
stimulus bill and other aspects of spending this year. Now we are being 
told that for 2010, we must go another $2 trillion in debt.
  I implore our colleagues to stand with us in insisting that we get 
this spending under control and do so now. The pace of irresponsible 
spending is not only unsustainable; it is dangerous to the long-term 
viability of our economy and, indeed, it is a matter of national 
security. This Congress must impose some kind of restriction on 
spending, and I will not be supporting any increase in our statutory 
debt limit unless it is directly attached to implementation of a 
bipartisan commission tasked with advising Congress on how to get its 
spending under control as quickly as possible.

                              {time}  1900

  I remain disappointed to hear that a $2 trillion increase may be 
attached to a bill to fund the military, including funding for our 
brave men and women currently serving in combat in Iraq and 
Afghanistan. We all wholeheartedly support our military and believe it 
should be provided the funding it needs. The attempt, however, to use 
the military as a political tool to pass a potentially massive increase 
in our debt limit is terrible public policy. There should be an up-or-
down vote on raising our debt ceiling.
  As a matter of history, Madam Speaker, in this decade, in 2001 there 
was a budget surplus of $128 billion; in 2002 the deficit for that year 
was $157 billion; the next year $377; the next year $412; the year 
after that $318; the year after that $248; the year after that $160; 
and the year after that $454 for a total for the 8 prior years, from 
2001 to 2008, of $2 trillion. That is 8 years. I am not excusing that. 
That is a great deal of money.
  This year, however, in the fiscal year that ended on September 30, we 
had a 1-year deficit of $1.47 trillion. That's $2 trillion over the 8 
years between 2001 and 2008, and in the fiscal year that ended this 
September 30, roughly $1.5 trillion. And that will be replicated again 
this year in the fiscal year in which we now find ourselves.
  Mrs. LUMMIS. Will the gentleman yield briefly?
  Mr. LANCE. Certainly.
  Mrs. LUMMIS. And the consequence of what you're just saying, which is 
so critical to this discussion, is the chart that appears here. The 
interest payments on that debt create a checkmark. In other words, this 
is 2008, the beginning of this chart. And we were seeing a bit of a 
decline in the interest dollars that we were paying. But here we are, 
today, right here, the end of 2009, and from here on, because of that 
accumulated $2 trillion that you discussed over the earlier part of 
this decade, and then, the additional $1.4 trillion of this year alone, 
boy, those interest payments just take right off. And it creates this 
checkmark effect to the point that at the end of this chart, 2019, U.S. 
net interest payments over $800 billion.
  My gosh, that is as much as the stimulus bill that we passed at the 
beginning of this year.
  Mr. LANCE. Thank you, Congresswoman Lummis.
  Madam Speaker, Congresswoman Lummis has pointed out what we are going 
to face over the course of this decade. And we have to pay our interest 
payments first before we feed any hungry children, before we engage in 
housing for those who need housing and jobs for those who need jobs. 
Before we even fund the military we have to fund our debt. It crowds 
out other needed spending. It also makes it much more difficult for 
there to be borrowing in the private sector, raising interest rates in 
the private sector to get this economy moving again.
  It is also ultimately a matter of national security, because who is 
purchasing our debt? It is being purchased by foreign nations, by 
China, by Saudi Arabia and by other nations across the globe. And 
ultimately, he who pays the piper calls the tune. And this is a matter 
of national security. And undoubtedly the American people will 
recognize now what Congress has not yet recognized, and that is we have 
to get our Federal spending under control.
  No one in Congress thinks that we can balance the budget this year. 
However, we need a glide path toward a balanced budget. And instead, we 
have a rocket in the other direction with ever-rising levels of annual 
deficits.
  The Congressional Budget Office predicts that by the end of this next 
decade, our total debt may approach $20 trillion. That is simply 
unacceptable. It places an undue burden on the next generation. For the 
first time in the history of this country, there is an open question 
whether the next generation will have a higher quality of life than 
this generation. The promise of America has always been that each 
generation works as hard as possible to make sure that our children 
will have a higher quality of life. Whether or not we will have a 
second American Century here in the 21st century the way the 20th 
century was an American Century is now in question based upon this 
fundamental issue that confronts all of us in Congress, and that is the 
issue of out-of-control Federal spending and a massive debt that is 
increasing enormously.
  Let me state, Madam Speaker, that in the 1990s, with a Democratic 
President, President Clinton, and a Republican Congress, we did a 
better job. In 1997, the annual deficit that year was $21 billion. The 
next year, there was a surplus of $69 billion, the next year a surplus 
of $125 billion, the next year a surplus of $236 billion, that's in 
year 2000, the last year of the Clinton Presidency, and in the first 
year of the Presidency of George W. Bush, a surplus of $128 billion.
  I want to give credit to President Clinton. I also want to give 
credit to the Republican Congress then in power. And I think that it is 
a responsibility of the Presidency and the Congress working together. 
In the 8 years of the Bush Presidency, 6 years with Republican control 
of the House and Senate, there was a combined debt in those 8 years, 
let me repeat, of $2 trillion, and in this last year, the fiscal year 
that ended on September 30, we had in that 1 year a deficit of over 
$1.5 trillion. And this year, we're going to have that amount yet 
again. I implore the White House to get serious on this issue of annual 
Federal deficits and the overall Federal debt.
  We, the Republican freshmen, want to do our part. We came here to 
reform the system. We want to reform the system in a bipartisan way. 
And Congresswoman Lummis is taking the lead for the freshman class on 
this, in my judgment, the most important issue confronting the American 
Nation, as important as reforming the health care system, as important 
as the burden that we share with others around the world, including the 
brave young men and women who fight in Afghanistan and Iraq. Because 
this, the debt issue, is a matter of national security as well as a 
matter of economic prosperity.
  I yield back to the congresswoman.
  Mrs. LUMMIS. I applaud the gentleman from New Jersey for his view 
that we need to have tied to an increase in the national debt a 
mechanism that will begin to address this problem. One of the 
mechanisms is one that you mentioned that you support, and that would 
be legislation that would create a commission to begin to advise us on 
this structural deficit. And this chart illustrates why this structural 
deficit is so much worse than it has ever been.
  One of the points in this chart you brought up in your discussion, 
and that was a point right here, this is the years when we had the 
Clinton Presidency and a Republican Congress, and you saw tax revenues 
increasing over expenditures as a percentage of gross domestic product 
and creating the very surplus that you discussed. But what's really 
interesting about this chart is the fact that it runs from the 1970s, 
actually from the year 1969 to 2009, so it's a 40-year chart that 
compares spending to gross domestic product, taxes to

[[Page 31921]]

gross domestic product, and then the deficit to gross domestic product. 
And the amazing thing is that when you look at gross domestic product, 
that is, the value of everything we produce in this country every year, 
and use that as your constant, so we're comparing that over 40 years to 
the way that Congress has spent money, the way that Congress has taken 
in taxes, and then to the deficit, what you see is remarkable 
stability, remarkable stability for 40 years. It has always hovered 
around a little over 20 percent of gross domestic product in terms of 
spending, and around 18 percent in terms of taxes.
  So there has been a structural deficit for all those years of roughly 
2.4 percent, meaning for about 40 years we've taken in a little bit 
less in taxes than we've spent. And so it has created some deficits 
over time. But even the deficits have hovered within that average of 
about 2.4 percent. The average then is this dotted line down here, 
remarkably stable over 40 years.
  Now, look at what is happening in the future. These are projections. 
The sources are the Congressional Budget Office and the Office of 
Management and Budget. So we're talking about government agencies that 
are projecting this. Here is the line for where we begin the next 
decade starting in January. Spending and taxes separate dramatically. 
As you can see, the year 2009, which is illustrated by this tremendous 
separation right here, this is where we are now, and the reason we've 
taken in less taxes is because of the recession. But the reason that 
we've spent so much are all the bills that we discussed from the 
beginning of this hour. It has just become completely out of the realm 
of anything we've ever seen in the last 40 years.
  So it creates a structural deficit, meaning a very, very wide gap 
going forward between taxes and spending. This gap is projected by CBO 
to be between 5 and 6 percent. That's more than twice of what it has 
ever been over the last 40 years. And it goes on and on from there. And 
so you can see this projected deficit in the decade coming forward, 
down here, is an enormous gap over what it has been. That is what you 
were talking about when you said, will we give our children a better 
country than we received? And there is a real question about that now. 
And that is why we have to address it.
  I know you're on a committee where Federal Reserve Chairman Ben 
Bernanke has come, as am I, and said, you've got to come up with a plan 
to deal with this problem, this specific problem, the structural 
deficit. This is the structural deficit. And it is caused by the 
mismatch between taxes and spending. And while we as partisans get 
under each others' skin by saying, Democrats, you have spent too much; 
and the Democrats saying, Republicans, you gave tax cuts at a time when 
we were at war. Well, we're both right. And now here we are. I yield 
back.
  Mr. LANCE. Thank you, Congresswoman.
  Madam Speaker, the fact that for a generation, spending has been at 
roughly 20 percent of gross domestic product for 40 years is 
noteworthy. And the chart that Congresswoman Lummis has is extremely 
informative and revealing. However, we are entering a new era where as 
a percentage of gross domestic product, governmental spending is rising 
dramatically to 25 percent. This is a significant and very disturbing 
difference. And the fact that over the next decade our projected 
deficits are so much larger than they have been historically as a 
percentage of gross domestic product is also disturbing. And in a 
bipartisan fashion, we have to have a glide path toward fiscal 
responsibility.
  I think that it is impossible to balance the budget until we get out 
of this deep recession. But once we are out of this deep recession, and 
in my judgment we are still in the recession, because unemployment 
rates in this country are at 10 percent, the highest they have been 
since 1983, a generation ago--once we get out of this deep recession, 
we have to have a plan to make sure that we move toward the historic 
average of no more than 20 percent of spending in the governmental 
sector at the Federal level as percentage of gross domestic product.
  My own view is that we need a bipartisan commission to advise us, 
like the BRAC commission regarding the closing of military bases, and 
then there can be an up-or-down vote on what is recommended by that 
commission here in Congress. Some oppose that, but do not provide an 
alternative as to how we are going to do a better job. And to do 
nothing is to condemn the next generation to a lower standard of 
living. It is to condemn the next generation of businesses across this 
country with much higher interest rates because the government crowds 
out private-sector borrowing.

                              {time}  1915

  The government is the borrower of first resort.
  And of course ultimately it could mean a lowering of the credit 
rating of the United States of America. Obviously, we now have the 
highest credit rating, but there are some who predict that over time 
that will not occur. And also, there are some who predict that there 
should be a new currency worldwide, that the dollar should no longer be 
the currency that is favored across the world. Obviously, all of us in 
Congress, including freshmen Republicans who are discussing this issue 
tonight, favor a continuation of the American currency.
  The dollar is the currency that is honored across the world, but the 
Chinese, for example, have floated the idea that there should be a new 
international currency, not the dollar, regarding international trade. 
This is as a result of the fact of these ever-rising deficits year in 
and year out and the result of the fact of an overwhelming Federal 
debt, now at $12 trillion. In the next week before Christmas we're 
going to be asked to raise it to $14 trillion.
  We are not going to be asked to raise it on a stand-alone vote on 
that issue. It is going to be part of a bill related, I believe, to the 
military. I call again for a stand-alone vote on this issue, and that 
stand-alone vote, Madam Speaker, should include the establishment of 
some sort of mechanism to get a handle on this situation, this, the 
most critical issue confronting us not only economically but also as a 
matter of national security.
  I yield back to the Congresswoman from Wyoming.
  Mrs. LUMMIS. I thank the gentleman from New Jersey for yielding.
  The Federal Reserve Bank, in my opinion, is now overleveraged. The 
Federal Government is overleveraged, meaning we have taken on too much 
debt both at the Federal Reserve, while they've been trying to help our 
banking system right itself, and we, in Congress, by not recognizing 
that in this recession we, too, should be making sure that government 
isn't growing in an outsized way when it is, in fact, the private 
sector that creates wealth.
  We are joined by the gentleman from Colorado, who is on the Small 
Business Committee. And small businesses in our communities are really 
hurting, as are community banks.
  Among the things that we have talked about with the Federal Reserve 
Chairman is the issue of how community banks sometimes have loans that 
are performing, that every year the borrower is making the payments, 
principal and interest. But when bank regulators come in and look at 
those loans, they are worried that the asset that is backing that 
borrower might be a little shaky, so they might require the banks to 
write down that loan even though it's performing. I know that the 
Federal Reserve Chairman says that should not be happening if the 
regulator is the Federal Reserve because they've instructed their 
regulators not to do that, but we also know there are multiple 
regulators, including the Department of the Treasury, the Comptroller 
of the Currency, and some of these regulators are still requiring that 
these loans be written down. That is a tremendous disservice to our 
community banks and to their borrowers whose loans are performing.
  I yield to the gentleman from Colorado.
  Mr. COFFMAN of Colorado. Well, thank you, Congresswoman Lummis.
  That certainly is the case. I think that smaller banks in the United

[[Page 31922]]

States are paying for the sins of the larger banks. The Comptroller of 
the Currency has just come down on these banks and has mandated a 20 
percent increase in their capital requirements, and that forced them, 
as well, to pull back on lending. And so credit is really the lifeblood 
of small business, and small business is the economic engine in terms 
of jobs for this country.
  Small businesses in my district and districts across this country are 
hard hit right now in terms of credit, in terms of their ability to get 
extensions on their credit lines and their ability to fund capital 
purchases. All of these things have led to downward pressure in terms 
of their ability to be that employer, that engine that drives this 
economy.
  Mrs. LUMMIS. Indeed, we are finding that there are changes in our 
economy that are going to exacerbate some of the problems that we have 
discussed.
  Here is another fund chart. I want to point out that some of the 
things that I am discussing tonight have been influenced by an article 
that I read in the National Journal by John Maggs, which I commend to 
your attention. The date was Saturday, November 7, 2009, National 
Journal. The name of the article, ``The Debt Problem is Worse Than You 
Think,'' not a very uplifting title, but I think very reflective of the 
problems that we are in and that we, on a bipartisan basis, need to 
begin to address after the first of the year.
  This chart I found to be tremendously interesting. The source, again, 
is the Congressional Budget Office. Look at how, in the 1970s, which 
are represented by this quadrant of the chart, then followed by the 
eighties, nineties, and this first decade of the 21st century, look how 
much defense accounted for as a percentage of the Federal budget near 
the end of the Vietnam War, or, I guess, 1969, probably about the 
height of the Vietnam War. A tremendous amount was spent on defense and 
very little on medical care for the indigent and the elderly as a 
percentage of our Federal budget; whereas, Social Security and 
nondefense discretionary funding--which is, of course, what we spend 
most of our time talking about here in Congress--have been remarkably 
stable over that time.
  Defense has dropped dramatically over time. Here you see the decade 
that then caused the buildup into the end of the Cold War. And then you 
see a declining, the ``peace dividend'' as we called it, during the 
1990s, which allowed Congress and the President to balance the budget. 
It has stabilized at a point of about 20 percent, even in this decade 
that we have just completed.
  So it's amazing how much defense has declined as a portion of the 
Federal budget. But what is equally amazing is the amount in which 
Medicare and Medicaid have risen as a portion of our Federal spending 
and increasing. This is an ever-increasing line, the red line, because 
of people like the three of us in this room. We are all baby boomers, 
and as this massive generation approaches retirement and Medicare, that 
number is just going to go up and up. So unless we address Medicare in 
particular as part of this commission that you mentioned, we are not 
going to get there.
  I yield to the gentleman from New Jersey.
  Mr. LANCE. Thank you very much for yielding, Congresswoman Lummis.
  In 1982 and 1983, President Reagan established a bipartisan 
commission to deal with the issue of Social Security. Based upon that 
bipartisan commission, action occurred here in the Congress with the 
support of the administration that had the result of making Social 
Security solvent for almost a generation. We now have another challenge 
regarding Social Security, and particularly Medicare and Medicaid. I 
think we should replicate what occurred in 1982 and 1983 with a 
Republican President, President Reagan, and a Democratically controlled 
House of Representatives--and the Democratic Party controlled the House 
of Representative from 1954 until 1994, for 40 years. We should come 
together in a bipartisan fashion to establish another commission to 
deal with the enormous Federal debt. This commission could also have 
the responsibility perhaps to discuss and evaluate the Medicare and 
Medicaid and Social Security issues. Perhaps there should be a second 
commission for that.
  But it is clear, based upon the chart that Congresswoman Lummis has 
in front of the Chamber, that Medicare and Medicaid are rising rapidly. 
The largest cohort is the baby boom generation, those born between 1946 
and 1964. Those of us who are on the floor this evening are in that 
generation. Obviously, Congresswoman Lummis is at the end of that 
cohort, whereas Congressman Coffman and I are in the middle of that 
cohort. Let me say that it is the responsibility of us working together 
to address this issue.
  Let me also say that we count funds that go into the Social Security 
Trust Fund as part of Federal revenues. If we had segregated them 
separately, our annual deficits would be even higher than they are. And 
when I state that the deficit for the year that ended September 30 of 
roughly $1.5 trillion--precisely $1.47 trillion--that includes the 
monies that are paid into the Social Security Fund. So if we were to 
place them in a separate pot of money, the annual deficit would be even 
higher than it already is.
  Mrs. LUMMIS. Will the gentlemen yield?
  Mr. LANCE. I certainly will.
  Mrs. LUMMIS. Will the gentleman remind us to whom has the so-called 
Social Security Trust Fund been lent?
  And I yield back.
  Mr. LANCE. Thank you.
  It has been lent to the fact that we are funding these programs that 
we cannot pay, and really the deficit is much higher than that. And 
Medicare will be in the red in the next several years, and Social 
Security not too far beyond that.
  Mrs. LUMMIS. Will the gentleman yield?
  Mr. LANCE. Certainly.
  Mrs. LUMMIS. Are you telling me that Social Security dollars that 
Americans paid into a Social Security Trust Fund have been lent to the 
Federal Government to spend on these programs we've been discussing 
tonight?
  And I yield back.
  Mr. LANCE. I thank you for yielding, Congresswoman.
  Absolutely, 100 percent accurate. It is not going for the purposes 
for which it was intended based upon the Social Security program 
established in 1935. I do believe that those who established the Social 
Security program--Franklin Roosevelt, distinguished Members of 
Congress, including Sam Rayburn, Francis Perkins, the Secretary of 
Labor--that that generation would be appalled by how we use Social 
Security funds in this year of 2009.
  And I yield back to the Congresswoman.
  Mrs. LUMMIS. And I yield to the gentleman from Colorado.
  Mr. COFFMAN of Colorado. Thank you, Congresswoman Lummis.
  I think there is a fear of the American people, as well as some of us 
in Congress that are here tonight discussing this issue, and that is 
that the health reform bill that has passed the House and they are 
debating iterations of it over in the United States Senate, that both 
versions--the one that is being debated in the Senate that we're aware 
of and that which was passed in the House--plant the seeds for new 
entitlements. And so I think that the American people are distrustful 
because they know what government promised in terms of what the impact 
of Social Security would be. They can remember what the impact of what 
Medicare would be and how explosive the realities of those are in terms 
of Federal deficits, and now the rising debt for this country, and how 
damaging that will be. And so I think there is real concern, and that 
concern is very legitimate.
  So I think that before the Congress of the United States engages in 
new entitlements, it needs to take care of the ones that we have and 
get them under control so that they don't totally envelop this 
country's budget and capacity to borrow.
  Mrs. LUMMIS. Will the gentleman yield?
  Mr. COFFMAN of Colorado. Yes.
  Mrs. LUMMIS. Is it true that the health care bill that passed the 
House

[[Page 31923]]

of Representatives a few weeks ago accumulated about 10 years of taxes 
and fees to pay 6 or 7 years of benefits?
  And I yield back.
  Mr. COFFMAN of Colorado. Thank you, Congresswoman Lummis.
  Yes, that's accurate. Because what it did is the--I don't think the 
benefits were effective until 2013, but the taxes started right away. 
And so it is deceptive in terms of saying that--you have to use some 
fuzzy math, some new accounting, new age accounting, to be able to say 
that it's deficit neutral.
  Mrs. LUMMIS. Will the gentleman yield?
  Mr. COFFMAN of Colorado. Yes.
  Mrs. LUMMIS. Are you saying that, then, 10 years of taxes are going 
to begin right away under the House health care bill and the benefits 
are not going to begin to be paid out until year 2013?
  Mr. COFFMAN of Colorado. That's correct.
  Mrs. LUMMIS. And so what happens at the end of 10 years?
  Mr. COFFMAN of Colorado. Well, as in all, it seems, programs that 
Congress starts, unfortunately, historically they've been financially 
disingenuous, because at that point in time, clearly we are moving 
forward into a deficit situation.

                              {time}  1930

  Mrs. LUMMIS. You are telling me that there is going to be a 
structural deficit in the very health care bill that we passed, in 
addition to the structural deficit we have been discussing tonight?
  Mr. COFFMAN of Colorado. Welcome to government accounting, and I 
think that that's unfortunate.
  I would hope that the American people would grow to understand this 
particular issue and ought to express their concern to their Members of 
Congress, because we already have deficits and debts that are out of 
control, and I believe that can very well choke off the ability for 
this economy to ever recover because of interest rates and inflation 
that are derived from deficits, prolonged deficit spending. This is 
merely going to exacerbate the problem.
  Mrs. LUMMIS. I thank the gentleman from Colorado for raising that 
point.
  Mr. LANCE. This has the potential of bringing about generational 
conflict, because we rely on the working generation to fund programs 
through the taxes that they pay, not only the income tax, but also 
payroll taxes such as Social Security and Medicare. If the next 
generation, beginning in the workforce, is going to shoulder this 
tremendous burden regarding our debt, and, in addition, shoulder a 
tremendous burden regarding Social Security and Medicare and Medicaid, 
there is the potential of generational conflict.
  It is incumbent upon those of us who serve here to make sure that 
that generational conflict does not occur. It is the height of 
irresponsibility and, might I suggest, it is, indeed, immoral to place 
on the backs of the next generation this ever-increasing Federal debt. 
This is new in its percentage.
  As you have rightly pointed out over the course of the last 
generation, spending has been at roughly 20 percent of GDP. It is going 
to expand greatly, and the chart indicates, to 25 percent, and some 
have indicated--some economists have made it, increased it to 30 
percent of GDP. That is a dramatic and unprecedented expansion.
  The yearly deficit for the fiscal year that just ended on September 
30 was the most amount of money, as a yearly deficit, as a percentage 
of GDP, since 1945 at the very end of World War II, when we were 
fighting for our existence and, obviously, during World War II, the 
most extensive war in the history of the human condition. We were in a 
situation where we had to have deficit spending.
  But the fiscal year that ended on September 30, 2009, had the highest 
annual deficit as a percentage of GDP since 1945. Let me repeat: That I 
believe that in this new fiscal year that runs from October 1, 2009, 
until September 30, 2010, we are likely to have an annual deficit that 
approaches the $1.5 trillion annual deficit of last year.
  This is simply unacceptable. Before we raise the debt ceiling, as the 
majority intends to do in the next week, we should have a fundamental 
discussion about where we are headed. We certainly should have an up-
or-down vote in this regard.
  I have written the Speaker of the House for an up-or-down vote. I am 
joined by freshman Republican colleagues in this request and, instead, 
we are likely to have a vote that is part of a larger appropriations 
act for the Defense Department.
  Mr. COFFMAN of Colorado. Congresswoman Lummis, you and I were both 
State treasurers; you from the State of Wyoming, myself from the State 
of Colorado.
  One thing that we had, I am sure that you had in the State of 
Wyoming, was a balanced budget requirement that every year we had to 
balance the budget. It created a sense of fiscal discipline where you 
had to make tough decisions in terms of tradeoffs. You simply couldn't 
have everything and drive your State into deficits and further into 
debt.
  What is absolutely essential to have in the Congress of the United 
States is a balanced budget requirement where the tradeoffs have to be 
made, where hard decisions have to be made, where there has to be a 
reference point that at the end of the day, revenues have to equal 
expenditures. Without that, I really fear for the future of the 
country, I think, for the first time in my life, when we look at these 
deficits, when you look at the debt, when we think about the future of 
the country.
  I know that Democrats have pointed to Republicans and said, well, you 
did it in the past. Now it's our turn.
  Well, but, you know, I used to use that with my mother when I was 
growing up. I used to say all the other kids are doing it. My mother 
didn't buy it, and the American people aren't buying it today.
  The American people aren't buying it, and they realize, I think, that 
they have unease about what is going on in the Congress of the United 
States. They have an extraordinary feeling of insecurity about what is 
happening in this country, not simply because the way the economy is 
right now, but they understand that the political class in Washington, 
led by the majority party, is pushing this country over a cliff, and 
the American people get it.
  Mrs. LUMMIS. The alarm you expressed is shared by others. I would 
like to quote one sentence from this article to which I referred 
earlier by John Maggs in the National Journal, ``The Debt Problem is 
Worse Than You Think,'' for your reaction.
  ``Simply put, even alarmists may be underestimating the size of the 
problem, how quickly it will become unbearable, and how poorly prepared 
our political system is to deal with it.''
  Your reaction?
  Mr. COFFMAN of Colorado. Well, the tragedy of what I have seen in my 
first year here in Congress, as one of your fellow freshmen here, is 
that it is all about the politics of the moment. It is all about the 
immediacy of how can we placate the American people through spending 
and not the consequences of what's going to happen to the next 
generation.
  The only thing is that it's done at such a rapid pace right now that 
it's going to envelop this generation even before it hits the next 
generation in terms of its adverse effects.
  I just think it's extraordinary. Again, I believe that the deficits 
are such, and I think the American people are beginning to understand, 
that unless Congress can control its spending, that the ability of this 
economy to ever fully recover, that the consequences of this level of 
debt, in terms of higher inflation, in terms of higher interest rates, 
will choke off this economy's ability to ever fully recover.
  In addition, the situation is so bad that internationally the focus 
is on the United States and the mismanagement of fiscal policy, where 
you have a country like China, the largest holder of U.S. public debt, 
foreign holder of U.S. public debt, stating their concern about what 
America is doing to itself.
  Mrs. LUMMIS. Are you prepared to say that the Republicans were wrong

[[Page 31924]]

when they simultaneously passed Medicare part D, the Bush tax cuts, and 
tried to sustain that during wartime. Are you prepared to say that?
  Mr. COFFMAN of Colorado. They were absolutely wrong. There is no 
question about it.
  Mrs. LUMMIS. I would like to ask the gentleman from New Jersey, do 
you agree with that? Do you think we were wrong?
  Mr. LANCE. I campaigned last year against the policies, when it was a 
Republican President and a Republican-controlled Congress that had 
these deficits. I point out that over the 8 years there was a $2 
trillion deficit. That was too large. It's even larger now, and we have 
to work in a bipartisan fashion to get this under control.
  Let me also say that I commend both the Congresswoman from Wyoming 
and the Congressman from Colorado, both having been State treasurers, 
because you had constitutions in your State that required a balanced 
budget.
  Unfortunately, in New Jersey, we have had a system where we have 
borrowed without voter approval for about 15 years. That was put to an 
end last November when we changed our State Constitution. My 
constitutional amendment, the Lance amendment, that prohibits further 
borrowing in New Jersey without voter approval. New Jersey is in the 
equivalent situation of California, and we have not discussed here the 
fact that there are quite a few States, including California and New 
Jersey, that have tremendous annual deficits.
  Of course, this comes out of the other pocket of taxpayers' in these 
States, and taxpayers are burdened not only here at the Federal level 
but at the State level as well.
  I certainly agree that we have to work in a bipartisan capacity. I 
also agree with my colleague from Colorado that simply because, in the 
first decade of this century, the 8 years from 2001 to 2008, there was 
a deficit of $2 trillion, that does not mean that we should continue on 
this route and, indeed, accelerate on this route of irresponsible 
spending. Two wrongs do not make a right.
  I agree with my colleague from Colorado. My late mother, when my twin 
brother and I were children in the little town of Glen Gardner, 
Hunterdon County, New Jersey we would say other children are doing 
this. My late mother would say, I don't care what other kids in Glen 
Gardner do. You are not going to do that.
  We have to acknowledge that, what occurred in the past, recognize 
that there has been overspending. There is overspending now. It has 
accelerated, a yearly deficit of $1.5 trillion, to be replicated, in my 
judgment, this year. This will mean leadership will pass to China or to 
some other Nation in the world. And all of the democratic values we 
share together, freedom of speech, in which I am now engaged, freedom 
of association together here on the floor of the House of 
Representatives, freedom of religion and all of the other values we 
share together, is ultimately based on American leadership.
  We do not want that leadership to pass to some other place on Earth, 
to China, to India or to some other country as a result of these 
massive Federal deficits year in and year out and an overall Federal 
deficit now of $12 trillion and rising, based upon nonpartisan 
Congressional Budget Office analysis, to $20 trillion in the course of 
the next 10 years or so.
  Mrs. LUMMIS. It is the rare man who has a constitutional amendment 
named after him. The Lance amendment in New Jersey will help right the 
ship in New Jersey. We compliment you for that work.
  We are now about to begin to summarize. I would ask the gentleman 
from Colorado to summarize this evening's discussion.
  Mr. COFFMAN of Colorado. As freshmen we went to an orientation where 
part of it was on the financial crisis which has morphed into an 
economic crisis. And we had economists from all political stripes brief 
us. They said, You know, that it was right to do a stimulus, it was 
right to deficit spend, but it had to be very temporary. It had to end 
with 2010 because the economy was expected to improve and you didn't 
want public-sector borrowing colliding with a greater demand for 
private sector-borrowing.
  It also said that it also needed to be timely and that it needed to 
be fast-acting. Unfortunately, it hasn't been. Also it needed to be 
targeted, and they differed about what being targeted was. But it was 
interesting, the fact that they all felt you had to start controlling 
the deficit by the end of 2010 or you were going to have dramatic 
effects on the ability of the economy to fully recover.
  It seems that when we look at this $787 billion stimulus bill, more 
money, I think, will be spent in 2011 than has been spent this year. It 
hasn't been fast-acting. It certainly isn't temporary, and it goes on, 
and I would argue that it is not targeted, although the economists 
differed on what was targeted.
  One thing they did say: They questioned if you went to the 
bureaucracy, if you chose government to be the stimulus, would it be 
fast enough? Could the government bureaucracy and the Federal 
Government move the money through fast enough? Clearly we have been 
able to see that it hasn't been able to get the money out the door to 
make a difference to the economy.
  Mrs. LUMMIS. I wish to thank my Republican colleagues this evening, 
the gentleman from Ohio, the gentleman from New Jersey, and the 
gentleman from Colorado. We are hoping that in the next year we will 
see a bipartisan effort to address this problem.

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