[Congressional Record (Bound Edition), Volume 156 (2010), Part 1]
[House]
[Page 1004]
[From the U.S. Government Publishing Office, www.gpo.gov]




                         FISCAL RESPONSIBILITY

  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Virginia (Mr. Connolly) for 5 minutes.
  Mr. CONNOLLY of Virginia. Madam Speaker, the time for fiscal 
responsibility is now. Unfortunately, budget deficits are not a new 
phenomenon. We had budget deficits in 74 of the past 100 years. In 
fiscal year 1969, under Lyndon Johnson, we had a budget surplus of $3.2 
billion. However, each of the next 28 budgets was in deficit. But 
starting in fiscal year 1998, under President Clinton, we had four 
straight budget surpluses, totalling more than $559 billion. In fact, 
the long term budget outlook predicted $5.6 trillion in surpluses. The 
last time we had four consecutive budget surpluses was in fiscal year 
1930.
  The Great Recession, which began in 2007, dramatically increased 
unemployment to a peak of 10.2 percent, a 26-year high. For those 
fortunate enough to remain employed, the recession led to depressed 
wages and benefits; growing at just 1.5 percent, the lowest level since 
1982. As a result, families suffered and Federal income revenues 
declined precipitously. In 2009, corporate income revenue declined 55 
percent, or $166 billion, from its 2007 level, and individual income 
revenues fell 20 percent, or $230 billion.
  In addition to the tremendous toll this recession took on the 
American public, rising unemployment and stagnant wages added almost 
$400 billion to our debt. In fact, total Federal revenues, which 
historically have represented roughly 20 percent of our gross domestic 
product declined to 14.8 percent in 2009. Although the recession did 
not create budget deficits, it exacerbated their severity enormously.
  In the face of this budgetary maelstrom, we took decisive action. 
Last year, the House of Representatives voted to reinstitute a 
statutory pay-as-you-go piece of legislation. In 1990, Congress enacted 
that statutory PAYGO rule, and required spending increases and revenue 
decreases to be offset so as not to increase the deficit. PAYGO was one 
of the critical tools used to control Federal spending and effectuate 
eventual budget surpluses.
  Unfortunately, in 2002, a Republican Congress and a Republican 
President, President Bush, failed to reenact PAYGO, and allowed it to 
expire. The results were predictable and disastrous with respect to the 
Federal deficit. The expiration of PAYGO conveniently allowed the Bush 
administration to enact three budget-busting initiatives: tax cuts for 
the wealthy; a prescription drug plan, prescription part D, unpaid for; 
and two wars, one in Iraq and Afghanistan, none of these initiatives 
paid for. These actions dramatically increased spending and reduced 
revenues, adding $6.7 trillion to the national debt, and leaving the 
Federal budget fundamentally unbalanced for the foreseeable future.
  Combined with the Great Recession, these actions led to the fiscal 
year 2009 budget, which began in October of '08, with a deficit of more 
than $1 trillion. For the better part of the past decade budget 
deficits were ignored and fiscally irresponsible behavior reigned 
supreme. A true commitment to deficit reduction will require further 
action. And just as the previous surpluses were the result of prolonged 
fiscal responsibility, we must demonstrate a long term focus. Budgets 
do not go from significant deficits to surpluses overnight. Therefore, 
it is critical that we set specific milestones and identifiable budget 
reduction goals.
  The President's new budget reduces deficits to 3.9 percent of the 
GDP, a more sustainable level. This is a reasonable beginning for the 
next several years. However, more will be necessary, and our goals 
should continue to further reduce the deficit over the long term.
  President Obama's spending freeze proposal is painful, but itself it 
is a small, though significant action. It demonstrates a return to 
fiscal responsibility, and represents $250 billion in deficit 
reduction. Additional action, however, will have to be taken. For 
example, the ever-rising cost of health care not only affects every 
American family pocketbook, but also is a significant contributor to 
budget deficits. Today health care costs are 18 percent of our GDP. 
Without reform, that will rise to a staggering 34 percent by 2040. The 
House health insurance reform legislation was a first step in 
controlling these costs, and reduced the budget deficit by $139 billion 
over the next decade.
  Our efforts already have shown modest success. Although we are still 
in the throes of a fragile economic recovery, the improving conditions 
recently resulted in a $50 billion reduction from the '09 deficit. 
While we cannot completely grow our way out of deficits, creating 
conditions for economic growth is critical to deficit reduction, and 
the President's budget reflects that.

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