[Congressional Record (Bound Edition), Volume 156 (2010), Part 15]
[House]
[Pages 22246-22253]
[From the U.S. Government Publishing Office, www.gpo.gov]




                              {time}  2240
                      GROWING THE ECONOMY AND JOBS

  The SPEAKER pro tempore (Mr. Schauer). Under the Speaker's announced 
policy of January 6, 2009, the gentleman from Missouri (Mr. Akin) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. AKIN. Mr. Speaker, it is a pleasure to join you and my colleagues 
this evening on a subject that has been of great concern and attention 
to Americans now for a number of years, unfortunately, and that is the 
subject of the economy and jobs. This ongoing discussion and debate is 
taking new turns here the last few weeks, and I think it is helpful and 
perhaps informative to try to put that into perspective somewhat.
  The thing that I think that perhaps we have to understand from the 
beginning is that the whole question of the economy and jobs is owned 
right now by the Democrats, because that party has been driving the 
train for the last couple of years.
  The distinction between the parties has never been more sharp over 
the

[[Page 22247]]

past 2 years because of the fact that you have had almost entirely 
party-line voting on major piece of legislation after major piece of 
legislation. When it came particularly to the stimulus, it was called 
the stimulus bill, some people called it the ``porkulous'' bill of a 
couple of years ago. That was a black and white kind of party-line 
vote, along with quite a number of other items on the agenda.
  So what we have right now is essentially the Democrats have been 
running things for a couple of years, and we have got a recession 
going. And the question is, what are we going to do about the economy 
and about jobs?
  There are two solutions to the problem. The ones that the Democrats 
have proposed over the last couple of years have been a very, very high 
level of Federal spending, and what they consider to be stimulus, which 
is more Federal spending, which they think will somehow fix the 
economy.
  For a couple of years I have been here on the floor on Wednesday 
evenings saying, with all due respect, I don't think that solution will 
work. I am not saying that it won't work just because I think it won't, 
which I don't, but also because prominent Democrats have also said that 
it won't work.
  I have quoted Henry Morgenthau, FDR's Secretary of the Treasury. They 
tried a whole lot of Federal spending. It was the time that ``Little 
Lord Keynes'' had come along and it was all the rage. If you get in 
trouble economically, spend a lot of money, and that will get the 
economy ``stimulated'' and you will pull right out of the recession. 
That is the theory.
  It has not worked. It has never worked. And after about 8 years, 
Henry Morgenthau, a Democrat, came before the House Ways and Means 
Committee and said, it won't work. He said, we have tried spending, and 
unemployment is as bad as it ever was, and we have a huge deficit to 
boot. Well, it didn't work then. It still hasn't worked for the last 
couple of years.
  I think the point as we move forward into this discussion about what 
are we going to do with the expiring tax cuts left over from the Bush 
administration, I think it is important to understand where we are in 
context, and that is we have come to a point where the Democrats have 
been making the calls and they have been driving this equation and the 
economy and jobs has not turned around.
  We were told at the time of the stimulus bill that if we did not pass 
the bill, that we could have as much as 8 percent unemployment. 
Supposedly, if we did pass the bill, unemployment would be lower.
  We did pass the bill. Unemployment jumped to about 10 percent. And 
those numbers are pretty conservative, because people who have been 
looking for a job for over a certain number of months are no longer 
counted as unemployed. So in fact the unemployment number is probably 
higher, by the way many people would calculate it. So, that is what has 
gone on.
  Now, this is not complicated economics, if we are really serious 
about creating jobs. But there really are two different party 
solutions: One is more bureaucracy and food stamps; the other is more 
jobs and paychecks. That is America's choice, and America chose in the 
November election to move toward the more jobs and paychecks and less 
bureaucrats and food stamps. But this is some of the spending we are 
talking about in the last couple of years. You just can't do this and 
have it not affect jobs.
  We had the Wall Street bailout, which some of it was supported by 
Bush in the past, but also by the Obama administration. Then you have 
got this supposed stimulus bill, $787 billion, which was a total 
disaster, and other miscellaneous items here. Then, of course, health 
care reform, which is the biggest of all, ObamaCare, at about $1 
trillion. So you have a tremendous record of Federal spending.
  Let's step back a little bit and go back to the things that we know 
work. You can go to anybody who you know that started a small business, 
people that run businesses; you can go to Main Street anywhere in 
America and you can ask the people who run businesses, what does it 
take to make jobs? It is not very complicated. But you will never be 
able to, as the Democrats try to do, separate the employer from the 
employee. If you want jobs, you can't destroy the employer. If you 
destroy companies, you will have less jobs. It is that simple.
  So, let's say that you ask people on Main Street, well, what are the 
things that you have to worry about in terms of destroying jobs? The 
thing they are going to tell you probably first out of their mouth is 
going to be excessive taxes. When you have too much taxes on business, 
what happens is they use their money to pay the taxes and they don't 
use their money to invest in new equipment, new processes and new R&D 
and various ways that when they invest they create more jobs.
  So the first thing that is an enemy to job creation is, first of all, 
excessive taxation. So what we have coming along now, and everybody has 
known it for years, is these tax cuts are coming along, they are going 
to expire and it is going to be a massive tax increase.
  In fact, we have what in a way is a tax increase train wreck. You 
could think of it as the train is steaming along and everybody knows 
the bridge is out. The bridge is out on January 1st, 2011, the tax cuts 
expire, and what happens then, America receives the largest tax 
increase in the history of the Nation. Now, that is very bad medicine 
for an already-sick economy. So that is the situation we are facing.
  So there is no surprise about this. Everybody has known these tax 
cuts are going to expire and there will be this whopping big tax 
increase, and somebody has to do something about it. So now we are 
waiting to the last couple of weeks of December to try to deal with 
this problem. That is not particularly responsible, I suppose.
  So what is it when you go to Main Street and you ask businesses, what 
is it that kills jobs? Well, the first thing is major heavy taxes on 
businesses and on entrepreneurs and on the people that run businesses. 
That is the first killer of jobs. Now, we are doing that in spades. We 
are doing a lot of that. And if these massive tax increases come along, 
it simply makes it a whole lot worse.
  What is the next thing that businesses would talk about that would 
kill jobs? Well, it is something else that eats into their profits, and 
that is a whole lot of red tape and government paperwork. So how are we 
doing in that department?
  Well, one of the big bills that the Obama administration, the 
Democrats, wanted to push was cap-and-tax. That was the tax and 
tremendous amount of new red tape and bureaucracy to prevent global 
warming.
  Now, if you believe in the theory of global warming, one of the 
things it says is it is really bad to create CO2. An honest 
attempt to stop global warming would say, well, we probably need to 
stop burning as much carbon in any form and move to some other source 
of energy generation, which suggests nuclear. If you were to take the 
number of nuclear power plants in America and double them, you would in 
effect get rid of the same amount, if you did that, of all the 
CO2 produced by every passenger car in America.
  The bill didn't do that. The bill created instead more taxes, which, 
again, kill jobs; and, second of all, a tremendous amount of red tape.
  Now, that bill didn't pass because of the fact that even some of the 
liberals thought this didn't really make a whole lot of sense. Instead, 
the Obama administration has said, well, what we are going to do is we 
are just going to implement it through rules and regulations.
  What does ``rules and regulations'' mean? Well, in street language, 
that means a whole lot of red tape. What does that mean to businesses? 
It means less jobs. It means it either prevents jobs from being created 
or kills jobs that are already there, because the red tape again costs 
them overhead to have to deal with it, and the increasing volume of red 
tape makes Americans less competitive, which then, of course, shifts 
jobs overseas.
  So the second thing, after a whole lot of taxes that makes it hard on 
jobs, is too much red tape. Unfortunately, we are doing that as well.

[[Page 22248]]

  So then you have got a whole series of other things too that are all 
contributing to this excessive loss of jobs, and that is going to be 
uncertainty. Now, one of the things the way businesses operate is if 
you don't know what the future is going to be, you are going to be very 
careful about taking any risks or making any investment in new 
equipment or new processes or new technology which is going to create 
jobs. So uncertainty is the third big enemy of job creation. How are we 
doing in uncertainty?

                              {time}  2250

  Well, what is being talked about as a way of stopping this massive 
tax increase is simply kicking the can down the road somewhere between 
a year to two years. And so does that help in terms of uncertainty? 
Well, people argue is the glass half full or is it half empty? It seems 
to avert the train wreck, but it is like you've got a train about to go 
off of a bridge that's out and you build a couple more spans of track 
further out but the track still ends. And so I suppose you avert a 
problem but, on the other hand, from an uncertainty point of view, it 
still creates uncertainty.
  If you're wanting to know how you're going to do estate planning in 
terms of the death tax, to know that the thing is going to be extended 
with additional coverage up to $5 million and cover a 35 percent tax 
rate, but you know that's only going to happen 2 years, that doesn't 
help you a whole lot in estate planning. It may help for a year or two, 
but it still leaves a huge question mark.
  But not only is the death tax a question mark, but capital gains and 
dividends. Another thing that takes time to plan for is a question 
mark. Is it better than having the train go off the cliff? Perhaps. But 
it still does not solve one of the things that makes it hard to create 
jobs, and that is if you've got a whole lot of uncertainty. So this, in 
a sense, may increase, but it certainly doesn't help the high level of 
uncertainty that's coming along.
  In fact, it's been argued in the Wall Street Journal that the whole 
tax policy now, because there's so many different parts of it that are 
part of this deal that's been struck, that you really do create almost 
more uncertainty because there's no definitive final solution. What are 
we going to do? What is Federal policy on the death tax? Are we going 
to tax people after they die? One more chance to get them after we have 
taxed them all their life, the money that they have saved that they 
didn't get taxed on, we're going to get it again a second time or a 
third time. So the uncertainty is a big factor in jobs.
  The next one is liquidity, which we, again, have not done a good job 
with. Liquidity is the business owner may want to go to a bank and get 
a loan. Typically, those loans are negotiated on about a 5-year basis. 
They pay a pretty good interest rate because the banker is taking some 
risk. So the banker, if things go well, does well with it. On the other 
hand, if the small business struggles or fails, then the banker gets 
caught, too. So there's the question of liquidity, do the small 
businesses have the liquidity they need to move forward.
  With the new banking regulations you have Federal bureaucrats all 
over the bank saying, I don't think that's a good loan you've made to 
Joe Blow over there. And so the Federal Government is second-guessing 
what the banks do and requiring the banks to have much higher interest 
rates but also higher percent of collateral for anybody who borrows 
money. That makes liquidity more difficult. That makes job creation 
more difficult.
  And the last thing of the five things that you will hear when you go 
to Main Street and ask a business owner what are the things that make 
it hard to create jobs, they're going to say Federal spending. Federal 
spending just absorbs money out of the economy. It makes it so the 
businesses are starving. If you starve businesses, then you're going to 
starve jobs. You cannot disconnect the business from the jobs that it 
creates because if you're going to get a job, you're going to work for 
an employer. It sounds not very complicated. And yet somehow here in 
Congress we seem to forget--the Democrats seem to make the disconnect 
on those things.
  So these are all policies that have been set up by the U.S. Congress. 
It is not a surprise that there's unemployment going on because we're 
violating all five of these basic principles of job creation. So then 
the debate comes, Well, what are we going to do about these taxes that 
are expiring? We have had a number of years to think about it, but 
nobody wanted to do anything about it. But now, after the election, 
we're starting to say, Hey, this really may be a problem. And the 
President, because the buck stops with him, to a large degree, has been 
the first to acknowledge within the Democrat groups between Reid, 
Pelosi and the President, the President is saying, Hey, we better do 
something about this. If nothing else, whether he is seeing the light, 
at least he felt the heat in the November elections.
  So the question is then you have got this pattern of all five of 
these things being wrong--the taxes, the red tape, the uncertainty, 
liquidity problems of the banks, and the Federal spending. All of these 
things are done the wrong way. And so the Republicans, because things 
have been so polarized, we voted ``no'' on all of this stuff, it is 
quite clear that there is this sharp contrast between what we're going 
to do now.
  Now the contrast becomes more blurred with the proposal of trying to 
do something at the last minute with the Bush tax cuts. So we're going 
to do a look at that in a minute and what is the nature of those tax 
cuts and what was the effect when the tax cuts went into effect.
  So, moving along, we continue to see the deficit under the Democrat 
budgets. Now there was a lot of talk that the Republicans under Bush 
overspent. And it's true that the Republicans did overspend. You can 
take a look at some of these. 2002, you had a $400 billion debt here. 
It went down, until we get to 2008, this was under Speaker Pelosi's 
Congress, but you had $459 billion when Bush was President of deficit, 
and that a lot of people objected to and said, Hey, that's terrible. 
We're going to change these elections around. We're going to elect a 
different President, et cetera, et cetera.
  So these were the Bush years; and now look, all of a sudden here you 
get to 2009, with Obama, and you have got these trillion-dollar 
deficits, which are three times the very worst that Bush ever had. So 
we're talking about a level of spending that's unprecedented. So when 
we use this term on this chart ``stupendous spending,'' it really is 
stupendous spending. It is unlike anything we have seen before, and it 
makes George Bush look like some sort of a Scotch Presbyterian or 
something because he is not spending at all compared to this trillion-
dollar operation that's going on here. Of course, that results in 
unemployment.
  Now I have been critical of the Democrat policies because 
historically and economically they're going to create unemployment. 
They have done that. And so the question is, Do you want more 
bureaucrats and food stamps, or do you want jobs and paychecks? That's 
what America has to answer. Now what is the solution to this? One of 
the proposals is to not let these tax cuts expire. Then the question 
becomes, Well, then doesn't that add to the deficit? Well, part of it 
does and part of it doesn't. That's kind of the interesting thing that 
goes on here. If you continue to pay people for not working, which is 
extending unemployment, and certainly because there is a high level of 
unemployment, that's appealing. But the trouble is the unemployment is 
created by those terrible policies of too much taxes, too much Federal 
spending, the uncertainty, and liquidity, and those other component 
parts.
  So here's the solution to some degree, and that is when you cut 
taxes, in fact what happens is you don't build a deficit. You reduce 
the deficit. Well, how can that be? If you cut taxes, it means the 
government gets less money, doesn't it? If the government gets less 
money and keeps spending at the same rate, doesn't that mean you

[[Page 22249]]

have more and more deficits? The answer is, No.
  Because of a very interesting effect that was made public I suppose 
by an economist by the name of Laffer, quite a cheerful fellow. He was 
here in the Capitol no more than a few weeks ago. He was an economist 
under the days of Ronald Reagan. And what he has shown is this red line 
is the rate of the total Federal tax. The blue lines are the total 
Federal tax receipts in dollars. And this is the top marginal income 
tax here, going from all the way up at 90 percent, dropping way down. 
And it's the top marginal rate that is the rate on all of these 
supposedly rich people who, by the way, the rich people are the ones, a 
lot of them, own those businesses that create the jobs. So if you tax 
them into the dirt, what is going to happen to the jobs? You won't have 
the jobs. You broke the code. If you want jobs, you're going to have to 
allow people to keep their wealth and invest in business.
  So what Laffer is saying here is we dropped historically. As we drop 
this top tax rate, take a look at what happens to the total tax 
receipts of the Federal Government. The tax receipts are going up. 
Doesn't that seem counterintuitive? Doesn't that seem as though you're 
making water run uphill? The answer is, no, it is not. And here's, I 
think, a simple way to try and understand it and it helps cast light on 
the votes that are coming up here later this week and perhaps even the 
week of Christmas. There has been certainly the threat that we'll come 
in on Christmas week and maybe New Year's week as well. It's 
interesting that we couldn't get our business done so we're going to 
try and jam it all in at the last minute. And it's also interesting to 
see what the real priorities are.
  So what does this say? Well, for instance, let's say that you are 
made king for a day or king for a year and your job is to try to raise 
as much revenue for your kingdom as you can so you can run your 
government.

                              {time}  2300

  You're allowed to do one thing. You can tax a loaf of bread.
  Now you start thinking and contemplating, and you say to yourself, 
Well, if I were to charge a one-penny tax on every loaf of bread--and 
there are millions of loaves that are sold--why, we'd raise some money.
  Then you'd say, hey, instead of a penny, what happens if I charge $10 
for a loaf of bread? Why then, certainly, that would make a difference. 
If you charged $10, you'd get much more.
  Then you think, Well, wait a minute. Nobody would buy any bread if 
you put a $10 tax on it. So you start thinking to yourself, There is 
probably some optimum between a penny and $10 where I would get the 
most revenue on the bread. If I were to raise the tax, I'd actually 
lose revenue because more and more people wouldn't buy any bread, and 
so I'd actually have my tax revenue go down even though I'd raised the 
taxes. On the other hand, if I were to lower the tax too much, then I 
wouldn't get as much revenue as I could.
  So there is an optimum point, and that's what Laffer is really 
pointing out here, that the taxes are so high that, when you actually 
drop the tax, the Federal Government makes more money. You can see it. 
This is one graphical display. This is just talking about the top 
marginal income tax rate. We're going to see it even on the larger 
scale as we take a look specifically at the Bush tax cuts in 2001, 
particularly the Bush tax cut of May 2003.
  So how did things unfold back then in 2003? I have some charts I 
think you will find very interesting.
  These charts are all laid out in essentially the same way. I have 
three charts in a row. The line that appears right here on all three 
charts is for May 2003. These are the years across here. This is 2001 
March. There were a bunch of tax cuts here. You can see that the job 
creation isn't looking too solid in here. Some of the tax cuts we did 
were politically ``feel good'' kinds of things--giving people some more 
money to spend and a few things like that--but there was another tax 
cut which was part of this whole series in May of 2003.
  What we're going to focus on is this tax cut. This was capital gains, 
dividends, and the death tax. Now, those are not popular tax cuts 
because it seems like they're tax cuts for people who have more money, 
but again, the people who have more money are also the ones who are 
driving a lot of those businesses that have the jobs.
  So let's take a look at what happens.
  This is May 2003. We introduced the tax cut to cut the capital gains, 
to cut the death tax and the interest, the dividend rate. So let's take 
a look. This is pretax relief. This is job creation. Every line that 
goes down indicates that we have lost jobs out of the economy. That's 
what we've been doing now for a number years. We've been losing jobs 
out of the economy. This isn't good. We don't want to lose jobs.
  Why do we lose jobs? Because we are violating the basic principles of 
economics.
  Now, we were losing jobs during these early years. We did some tax 
cuts, but the tax cuts didn't seem to turn this around, which suggests 
that not all tax cuts are necessarily going to create jobs.
  Here we go May 2003. Take a look at what happens now to job creation. 
All the lines going up are creating jobs. You can see there is a pretty 
good difference between here, which is before the tax cut, and after 
the tax cut. So we see the immediate reflection in terms of jobs.
  Now, are jobs the only things created by this tax cut? That's kind of 
interesting.
  This is what we've been saying all the way along for a couple of 
years now. My Republican colleagues and I have respectfully stood on 
the floor and have said we love the Democrats, but they're doing 
everything wrong to the economy. They're going to create unemployment. 
They're going to create distress in the economy. They're going to make 
it hard for businesses, and they're going to ship jobs overseas. We've 
been saying that. We're saying this is not going to work. You're not 
going to be able to reduce the deficit. You're going to increase the 
deficit, and you're going to break the back of America economically if 
you keep on doing this. We've been saying this over and over again from 
this floor. Now the numbers, after the last few years, indicate that 
that's exactly what's happening.
  The fact of the matter is we don't have to not learn from history. We 
can learn something from history here, which is that this tax cut 
particularly seems to have done an awful lot to change the job picture.
  Now, of course, you could always make the case. You could say, Well, 
maybe it wasn't the tax cut that produced this effect. Maybe something 
else was going on here that would explain this.
  The only other thing that is happening in the economy here is that 
Greenspan has got the interest rate close to zero, and that of course 
was driving the big real estate bubble, we now know. That's what 
happens when the Fed drops their interest rate very low. You have all 
of this easy money looking for someplace to invest. In this case, they 
landed on real estate, and created a big problem. So you could say that 
the interest rate being low could contribute to this, but it's 
interesting that you get this very stark and immediate contrast when 
this tax cut goes into place.
  Let's continue this because it's kind of a little bit of history that 
is going to inform us as to where we need to be in the decisions going 
into the new year.
  Here is the same tax cut here. This is again the beginning of 2003, 
but this is the gross domestic product. Of course, that's a measure of 
the overall productivity or of the efficiency of the U.S. economy. This 
is pretax relief. The average GDP was 1.1 percent. You can see it was 
not only 1.1 percent, which wasn't great for GDP, but it also was kind 
of spotty. You had this one where it was actually going down in gross 
domestic product, and these numbers were not very high.
  Then you go to the tax cut--capital gains, dividends, and the death 
tax. Now this is only carrying the thing over to 2006. These are older 
charts, but they're interesting charts. You can see

[[Page 22250]]

the effect afterwards--at least it appears to be an effect--of going 
from 1.1 to 3.5, depending on which year, but the difference is that it 
is a marked difference.
  The scary question then to suggest is: If there is a causal 
relationship between this tax cut which allowed businesspeople to make 
more investment in American businesses, what happens if you turn the 
economics upside down and do it in reverse? What happens if that tax 
cut goes away? What does that mean relative to job creation if, all of 
a sudden, this thing, this event which created more jobs--what happens 
if you do it upside down? Isn't it logical that if these tax cuts 
expire that it will have the reverse effect? That it will do the very 
thing opposite of what it did when it went the other way?
  That's a very scary thought because, if all of a sudden we have now 9 
or 10 percent unemployment and we do something to make that worse, 
that's not a very good idea. That's why even moderates and even the 
President are starting to say, I'm not so sure we want to burden 
America with the biggest tax increase in the history of the country 
right at the time when it's not at all clear that we're even out of the 
last recession.
  There are some people who are optimistic. They think, Oh, we pulled 
out of the other recession that we were in.
  I'm not so sure.
  I measure that based on those same 5 points we've been talking about, 
which is the problem with excessive taxes, the problem with excessive 
redtape, the uncertainty created by all kinds of government actions in 
the marketplace, the liquidity problem in the banks, and of course 
excessive Federal spending.
  So here is GDP after the tax relief. Do you see that the GDP has gone 
up? The job creation looks good.
  Here is the last chart--also very interesting. This is the one that 
we talked about just a few minutes ago, which appears to almost 
invalidate the law of gravity. You cut taxes here. This red line here 
is Federal revenues, and Federal revenues are going down. Then we cut 
taxes, and you think, Oh, they're going to go down even more. Terrible. 
There's going to be a huge deficit because we've cut taxes, and now 
there's going to be a deficit. So the Congressional Budget Office adds 
it all up, and says, Well, golly. If we're making $100 with this tax 
now and if we cut it in half, why, we'll only make $50.
  It seems like a logical assumption, but it's not. Take a look at what 
happened.
  When you cut taxes, businessmen invested the money. Businesses 
started getting going. As businesses got going, they raised more taxes. 
So what happened is the Federal revenues actually went up as a result 
of the tax cut.
  That's one of the reasons there is this fundamental difference 
between Democrats and Republicans. Democrats always want to say, if 
you're going to do a tax cut, you have to pay for it by cutting 
something. It sounds like good economics. It's not good economics. The 
fact of the matter is, if you do tax cuts, if they're the right kind of 
tax cuts, you actually get more Federal revenues, and it does not hurt 
the deficit. It helps to reduce the deficit.

                              {time}  2310

  That was the effect in 2004, -5, -6 and -7. You can see 4 straight 
years of increases in Federal revenues as a result of these taxes.
  Now, here's the scary question again. I'm going to say it over and 
over: What happens if you turn this math upside down? Instead of 
reducing capital gains and death tax and dividends, what happens 
instead of reducing them if you increase them in the biggest tax 
increase in the history of the country? Will it not do the exact 
opposite? And when you increase those taxes, is it not possible that 
the Federal revenues will drop even more rapidly and the deficit will 
become even more unmanageable? I think there's good evidence, and many 
solid economists would say that we do not want to allow these things to 
expire.
  Now, let's just say that the Congress votes in the next couple of 
days, as I think, being a Member of Congress, I suspect we might well 
do this. We'll vote and we will pass this supposed tax cut deal. Does 
that solve the problem of excessive taxes? Well, it gets rid of a 
problem of the biggest tax increase in the history of the country 
coming, so it's averting damage. But if you take a look at where we are 
right now, we are still overtaxing and we've got the unemployment 
problem. So it's good to avert the evil, but does it really fix where 
we are? No, it doesn't.
  And does that then change the red tape picture? No, the red tape 
picture is still bad. Does it change the liquidity picture of the 
banks? No, it doesn't change that. Does it change the high level of 
Federal spending? No. It makes it worse, because we're spending some 
money which is not tax cut money, but we are spending money on 
extending unemployment, which is a legitimate form of Federal spending 
which does affect the deficit. So it doesn't help the deficit in that 
way.
  And certainly the question of uncertainty is one of those things. Is 
the glass half full or half empty? Right now, we have certainty there's 
going to be a train wreck, there's going to be an economic disaster on 
January 1 because we have not dealt with the massive, massive tax 
increases coming. There is some certainty in that. It also means there 
is a big problem coming.
  On the other hand, is kicking those tax cuts forward by 1 year or 2 
years, does that create more certainty? Well, the answer is no. It's 
maybe a little more certain, but it still doesn't give you a basis for 
planning, for estate planning or for capital gains dividends, those 
kinds of things for the businessman, no. Their loan cycle is typically 
a 5-year cycle to the banks, and so having a capital gains dividends 
policy that's extended out a couple of years doesn't get within that 5-
year window. So is there more or less certainty? Well, you can argue 
back and forth.
  So the Republicans are caught sort of in a weird situation. We think, 
well, certainly you shouldn't nail America with the biggest tax 
increase in the history of the country, that doesn't make sense, but 
even if you avert that disaster, does that mean these other elements 
are taken care of? And the answer is clearly no.
  Do you think that the things that are burdening our economy, that's 
holding down job creation, that makes it very difficult on families, do 
you think those conditions have been mitigated? No. No, we're still 
taxing too much. We're still have too much red tape, too much 
uncertainty, too much Federal spending, and the liquidity problem with 
the banks is still not taken care of.
  So here we are. We've got before us a bill. Republicans are kind of 
scratching their heads on it because it has some bad parts and some 
good parts, and we understand what we have to do. This bill is not 
really going to solve the problem of unemployment. It's not going to 
solve the problem of overtaxation. It just prevents an evil from 
happening.
  But it is interesting to note what level of risk there is ahead for 
America if this issue of these taxes is not dealt with, and we're not 
in a position to be able to do that. That's something that has to 
happen with the Senate and it has to happen with the President, and 
they're going to have to get serious about reducing spending and also 
reducing taxes. And over the next number of months, I have not the 
slightest doubt that a Republican-run House is going to choose, they're 
going to choose jobs and paychecks over bureaucracy and unemployment. 
Not bureaucracy and food stamps. That's not our choice.
  Our choice on the American Dream is to allow people to take risks, to 
invest their own money, and to get jobs and to receive paychecks. We 
think that's the best form of security. Economically, it is a good 
paycheck. It's the best thing for a healthy Nation.
  And so we will be making proposals to cut taxes, to cut red tape, to 
create certainty, and to reduce Federal spending, all of those things. 
We'll be making those proposals, but we won't be able to pass them. We 
can pass them out of the House, but it's got to get through the Senate. 
And if it gets

[[Page 22251]]

through to the Senate, it has to be approved by the President. So 
everybody will be able to see what's going on.
  Now, in the past when I was here, 2001, 2002, 2003, we passed a 
number of things through the House that were very good policy that no 
one paid any attention to. They were killed by Democrats in the Senate 
because we never had 60 votes in the Senate. A couple of those are kind 
of interesting.
  One of them is an energy bill, because it said we've got to pay 
attention to the fact that we are dependent on foreign countries, 
particularly the Middle Eastern foreign countries, for our oil supply. 
We are too dependent on foreign oil, and so we put a number of energy 
bills together, killed in the Senate by Democrats.
  We also recognized that there was a problem with health care, that 
there were some things that were out of balance. We said there's some 
things that have to be done. We've got to do some tort reform. We've 
got to do some associated health plans. We've got to make some changes 
in health care. All of those proposals were killed in the Senate by 
Democrats. 20/20 hindsight, just like energy, fixing health care was an 
important priority.
  And then we also passed a bill particularly to try to rein in the 
excessive practices of Freddie and Fannie. President Bush on September 
11, 2003, in The New York Times, not exactly a conservative oracle, 
said he wanted authority from the House and from the Senate to allow 
him to regulate Freddie and Fannie because their financial practices 
were out of control and were really going to become a liability. We 
passed legislation to do that. It went to the Senate. It was killed by 
the Democrats in the Senate.
  In each of those cases, a Republican House passed legislation that 
historically, you look back and say, policywise, you're right, nobody 
noticed it. The media didn't cover it but it occurred, and you can 
check it. It's part of the Record. And the same thing could happen in 
this next year, but I don't think it will. I don't think it will, 
because I believe that Americans have been paying more attention to 
what's going on in government.
  I believe that Americans are fed up. I believe that Americans are at 
the point where they're saying that government is no longer the servant 
of the people, that government is becoming a master. It's an out-of-
control government, and it's time to start putting the genie back in 
the bottle, and they're going to do that one way or the other. The 
question is whether those of us that have been elected to serve as 
servants are going to step up to our job, cut the red tape, cut the 
bureaucracy, cut the Federal spending, cut the taxes, and make the 
Federal Government a servant of the people.
  In order to do that we can't just simply say, well, we're going to 
take 10 percent off of this department, 10 percent off of that 
department, 10 percent off another department. We can't say we're going 
to cut waste, fraud, and abuse, because there isn't any budget item 
that says waste, fraud, and abuse. It's a more complicated process than 
that.
  What we have to do is go back to the drawing board, which is the U.S. 
Constitution, and we have to start asking ourselves what are the 
essential functions that the Federal Government must do and those we 
must fund. And particularly, that includes providing for the national 
defense and the other things that are not essential that the Federal 
Government do. We must start to say maybe we should just plain get out 
of that business and turn that back over to the States and turn it back 
over to local cities and to the citizens of America and let them deal 
with those things, because Americans are fed up. They're fed up with 
unemployment. They're saying no more bureaucrats, no more food stamps. 
What we want is jobs and paychecks. And I think that's where the public 
is heading.
  So the question then becomes, well, what's everybody going to do on 
this big tax bill? The answer is we could avert some evil, but we're 
not going to solve the real problems that we have to do by simply 
postponing or kicking these things down the line a little bit and 
creating more uncertainty and postponing them.

                              {time}  2320

  On the other hand, we cannot allow the major tax increase to go 
forward, so you're going to see a checkered pattern in the voting, 
particularly the Republicans. There will be some for and some against 
them, arguing whether the glass is half full or half empty.
  But there won't be any argument about what we need to do. There is no 
argument about the fact that we do not want 10 percent unemployment. 
There is no argument that we want the Federal Government to be a 
fearful master. We are sick of that, and it's time for things to 
change. And that is, to some degree, what has led me personally and 
quite a number of other Republicans to understanding that as we 
approach this next year, that there is a new area that we have to go 
to. And that is, we have to take a good look at this wonderful Chamber; 
we have to take a good look at the U.S. House and say, Have we really 
run this place the way it should be run? Or have we allowed a series of 
fiefdoms over the years to build and develop where we have created a 
structure that is so unmanageable, so crusty, so interconnected, and 
from a systems point of view, so unmanageable that even if you put good 
people in it, you get bad results?
  I believe that the results of the excessive growth of the Federal 
Government indicates that there is a need for a redesign of the House 
entirely. We need to take a good look at the budget process. There is a 
lot of confusion over earmarks and what should or shouldn't be the job 
of the Congress to appropriate money constitutionally. We need to take 
a good look at--you can see that we have started that process by the 
new schedule that's being published already. It says, we are going to 
tell people ahead of time, we're going to be in, serving in Congress, 
on these particular days. There won't be votes before noon time, so 
committees can actually do their work without telling witnesses that 
have flown across the country to testify that they have to wait 45 
minutes while we name another post office after somebody. And we are 
going to know for sure that on the day we get out that there won't be 
votes after 3 o'clock so people can schedule their flights home and can 
be doing work back in their districts.
  So what we're trying to do is to redesign the entire system so we can 
deal with these kinds of problems. But we're not going to do it with a 
quick shot that says, Hey, let's just postpone this problem for a year 
or postpone another problem for another year and a half and have the 
thing still hanging out there. There has to be specific tax policy. It 
has to be a tax policy that is friendly to American jobs and allows us 
to be competitive.
  It gives me no satisfaction to see us create a set of rules which are 
guaranteed to have the international corporations in America say, Hey, 
you're making the rules so that we can't put jobs in this country. 
We'll still make a profit. We'll still create jobs. The jobs will be in 
a foreign country. What good is that to us? It maybe makes some 
business people or investors a little bit more money, but it isn't 
where we should be going with Federal policy. Our policy should be, 
America can be competitive, but let's not create a system where we 
basically are destroying ourselves. And that's what's going on with 
excessive taxation and with excessive red tape and all. So that's where 
we are.
  What we're seeing again is this rush in the last week or two of this 
year to do things that show a priority that is a bit weird. Today I was 
on the floor a little earlier, and I commented on the fact that a long, 
long time ago, there was a chance to see a total solar eclipse. Now if 
you've never had a chance to see something like that, they don't happen 
very often. But I was out on the edge of Massachusetts, on Cape Cod, 
and it was an area of the U.S. where there would be a total shadow; 
that is, the Moon totally comes in the way of the Sun. And right in the 
middle of the day, the Sun just darkens up slowly. And light doesn't 
totally disappear, but it is an eerie and strange feeling. That doesn't 
happen very often that you can observe an eclipse.

[[Page 22252]]

  What happened today was also a kind of eclipse, what's happening at 
the end of this year. This is the first time in I believe it's 48 years 
that the House has not had a defense budget. That is weird. That's an 
eclipse of reason that we have no defense budget. And so today when the 
House has no defense budget, instead what do we vote on? Well, we vote 
on getting rid of the Don't Ask, Don't Tell, so we're going to deal 
with gay policies in the military. We don't even have a military 
budget, and we're pushing some social agenda here in the last couple of 
days for fear that the new people that come in won't really want to do 
this thing. So at the last minute, we're going to hurry up and do 
something which you've got three generals--a general of the Army of 
America, a general of the Air Force of America, a general of the Marine 
Corps all are saying it's a bad policy. We have got two wars going on. 
And what are we doing? Are we doing our business? Are we passing a 
defense budget?
  No. No, instead, we're tampering around with social policy to try to 
make some constituency happy. Why do we want to burden the military 
with social policy anyway? Why not allow them just to defend us and 
keep the discussion on social policy as an American and a local kind of 
question. Let the States deal with it. No, we're not going to pass a 
military budget. We're going to do that. It is a question of priorities 
here.
  And this effect that we're seeing says there is big trouble next year 
if we don't do something about what happens. Because if these numbers 
go in reverse, what you're going to see instead of Federal revenues 
going up, they're going to go down. What you are going to see in 
reverse is, if you do the reverse of this change here on GDP, you'll 
see GDP going from--which is too strong now, it's going to get worse. 
We can't afford that. We don't want that to happen. And particularly--
and this is cruel and harsh to Americans--you're going to see jobs 
vaporizing and disappearing.
  That's not where we need to be going with this Congress. Even in the 
last couple of days, in the last week or two, depending on if they 
decide to call us in for Christmas and New Year's, I'm not sure about 
that. We're not calling the shots on that. But we are not creating the 
policies which support a good stable economy.
  And the policies are available. It's not just Republican policies. I 
might mention that the person that understood this effect was JFK. He 
had a recession; and what he did was, he treated it with a good dose of 
solid, sound tax policy by cutting taxes. And JFK saw this same kind of 
turnaround while he was a Democrat President. Also Ronald Reagan did 
the same thing. He inherited a lousy economy, just as Bush II had done, 
and he had cut taxes aggressively. People made fun of it. They called 
it Reaganomics and trickle-down economics and things like that. They 
made fun of him for a year or two until the economy snapped around, 
jobs were created, the economy steams off strongly for many years, and 
these same policies were vindicated. They work. And it worked for 
George Bush when he did it here.
  The question is, Are we going to learn from history? Or are we going 
to take a recession and turn it into a Great Depression? I'll tell you, 
there are some areas where we have serious problems in this country 
that are not all clear, and it gets into some very esoteric areas in 
the area of real estate, both commercial and residential real estate.
  And we have not fixed Freddie and Fannie as a result of this last big 
housing bubble which has affected people's savings terribly in '08. 
Many people lost a great deal of savings in '08, and it was caused by a 
series of things in the housing industry that were not done properly. 
It's courtesy of the U.S. Congress. It was the fault of the U.S. 
Congress and the Senate and our policies, relative to loan policies. 
And we haven't fixed any of those things.
  So not only have we not fixed tax increases, not only have we not 
fixed red tape, not only have we not fixed the problem of liquidity, 
not only have we maintained an air of uncertainty which is problematic, 
not only are we excessively spending at the Federal level, we've got 
some other problems in real estate that are still out there.
  So all of these things lead us to understand that there has to be a 
fundamental change by the way things are done here in Washington, D.C., 
and it says that we cannot afford the level of Federal spending and the 
excessive taxation that have burdened our economy the way it has.
  It's a treat to be able to join everybody this evening, and it's a 
treat to be able to talk about these things because this is current and 
relevant. It's quite possible tomorrow that the vote will come up on 
the tax thing. And I think what you'll see, as I've said, is kind of a 
mixed pattern from Republicans.

                              {time}  2330

  There's bad stuff in the bill because it's going to increase the 
deficit. Good stuff in the sense we're preventing a terrible tax 
increase, but yet, overall, it's not fixing the problem. And the 
solution to the problem is going to come and it's going to be something 
that we'll do one piece at a time. We're going to send it over to the 
Senate, and we're going to give them an opportunity.
  One of the things we'll do will be to take the death taxes and say, 
Let's make a decision. What are we going to do on this? This thing has 
been running along since May of 2003. Everybody knows you need to make 
a decision on it. What are we going to do? Are we going to make it 
permanent in some way? We're going to let people plan and know what the 
Federal policy is going to be? Are we going to--after we nail people 
for taxes all their life, are we going to nail them again when they 
die? When a son inherits his farm from his dad and the farm is worth a 
number of million dollars and the protection is only for a $1 million 
cap, does the son have to sell the farm, in fact, liquidate the farm, 
in order to pay the taxes we're going to extract from the person who 
died?
  That's the question. And it's time for us to make a decision. Is it 
going to be more bureaucrats and food stamps or is it going to be jobs 
and paychecks? That's the decision before us.
  We will send those pieces of legislation to the Senate. You need to 
look for them. I guarantee you that we'll send them. The question's 
going to be: What's the Senate going to do and what's the President 
going to do?
  I'm joined here by a very good friend of mine, Congressman King from 
Iowa, somebody who has a passion and love for America and a love for 
free enterprise. And he has a good reason to have a love affair with 
free enterprise, because he is a small business man, started his own 
business, sustained his family and has held his head high and proud. He 
has some tendency to speak sometimes on the floor here in Congress. 
Many of you may know my good friend Congressman King, and I'm going to 
call on him and just ask him if he'd like to make a comment or two 
about this whole situation that's coming up this week and how it 
relates to the Bush tax cuts and whether or not it's really going to 
solve all the problems that the country has and what the solutions 
really would be. And I believe you'll hear a story that's very common 
sense, very much in line with free enterprise and the American Dream 
and refreshing and hopeful. My good friend, Congressman King.
  Mr. KING of Iowa. I thank the gentleman from Missouri for bringing 
his insight here to the floor of the House so many nights in a row when 
others might decide to call it a day. There are Americans that are 
lying awake that are worrying and concerned about what happens here in 
this United States Congress, this great deliberative body, and the 
future and the destiny of this country established here often on the 
floor of the House of Representatives, and that's why every word that's 
spoken by the gentleman from Missouri and others is essential and it 
contributes to the direction that America takes.
  And as I listened to the gentleman from Missouri, Mr. Akin, present 
this very cogent and factual presentation here tonight with the charts 
to back it

[[Page 22253]]

up, and I remember my good friend from Minnesota, Congressman Gil 
Gutknecht, who used to say that if you have a chart to back it up 
you're 40 percent more believable. And of course I don't know how you 
improve upon being completely believable, which is the case with the 
gentleman from Missouri. But I was inspired as I listened to the 
gentleman's discussion about the estate tax and what happens, and I 
think it's so important that we think about the function of tax 
policies.
  And I listen to the class envy on the other side of the aisle. And 
there are many over there that are steeped in class envy and think that 
if a person works their entire life and compiles enough money to be 
worthy of the trouble of the tax man stepping in and taking a chunk of 
it, as much as they can get, that somehow there's a justice at the end 
of the generation to take the earnings of that generation and spread it 
out amongst the other people instead of allowing it to go to the next 
generation.
  And I think about my ancestors that came across the prairie in a 
covered wagon. I think about my great-grandfather who arrived here from 
Germany on March 26, 1894, and he had four or five of his children with 
him, and the balance of his nine children were born here in the United 
States, the ones that survived. And his dream was to be able to 
homestead, buy and build a farm for each of those children, nine 
children that reached maturity. And he bought nine quarter sections of 
land, 160 acres each, and that's what it took to support a family. You 
need to raise, oh, six, seven, eight, nine or ten kids on 160 acres.
  And he had a diversified farming operation that had a few milk cows, 
some sows. He raised some corn and later on some soybeans and some oats 
and some hay ground, and everybody went to work and they built their 
future and their destiny on that land. And the dream was: Can we hand 
that land over to the next generation? Can we take this unit and 
deliver it to the next generation? And his dream, with nine children, 
buying those nine quarter sections of land was, if he could set each of 
them up on 160 acres of land that they would inherit from him, that if 
they took care of the land, they took care of the livestock, it would 
all take care of them, and they could raise their children, and the 
next generation could go build upon the equity that was earned in his 
generation.
  Mr. AKIN. You know, I can't help but get excited about what you're 
saying. You're talking about the American Dream before there was all 
this tampering government. And the thing that I find just absolutely 
amazing--let's compare your grandfather to somebody else. And I don't 
know who it was, but somebody else who, instead of making those 
sacrifices and doing the hard work, went out and drank and gambled 
everything away so he died penniless. Now, the system of tax that is 
being proposed by the Democrats is going to reward that guy because he 
won't pay any death taxes at all. And yet your granddad, who made all 
kinds of personal sacrifices and hard work to set up his children and 
grandchildren, he's going to get his hide taxed off of him. What kind 
of tax policy is that? A tax policy should encourage the American 
Dream, not destroy it.
  Mr. KING of Iowa. And if I would say that if he was sitting in 
Germany in 1893 planning his trip here in 1894, thinking he was faced 
with tax policy that would confiscate his life's earnings and pass it 
back to the government and distribute it to the people that were not 
engaged in the free enterprise--
  Mr. AKIN. Fifty percent of his earnings
  Mr. KING of Iowa. Or 55 percent. Even if the ball drops at Times 
Square and we don't get this thing resolved, taking away half of what 
he'd earned in his lifetime, he would have not had that dream. He's 
unlikely to have even come to the United States. But he's really 
unlikely to have bought those nine quarter sections of land, because he 
would know that before he could hand it off to the next generation, the 
tax man would come in and swallow up half of it.
  And so here's the scenario. I mean, unfortunately for my great-
grandfather, he lost all of that land when the stock market crashed in 
1929. He didn't lament that. He'd engaged in free enterprise, 
capitalism, and commerce, and it didn't work out for him. The timing 
was wrong, and he lived the rest of his life in Pierson, Iowa, a lonely 
man in a tiny little house. But he had the dream. He had the chance to 
access the dream. And it didn't work out for him, but his children 
received the vision of his dream and they went to work and they built, 
and they raised their children with the same dream that brought him 
here to the United States.
  And so I think today, even though it hasn't worked out for my family 
in the way that it was envisioned, and there isn't wealth on either 
side of my family that counts as taxable in the estate tax 
configuration, no matter what it is, it inspired them nonetheless. They 
worked nonetheless. They invested capital anyway, and they went to 
work. And so--
  Mr. AKIN. You know, just stopping your story for a minute there, it 
strikes me that the policies that killed your grandfather's dream in 
the Great Depression were the same policies that we've been following 
for the last 2 or 3 years. There's nothing new about it. It was 
excessive Federal spending, excessive Federal taxation all packaged up 
as Keynesian economics. And Henry Morgenthau, after he killed that 
dream, came to this Congress and said, Guys, it didn't work.
  And we're not listening to it, and here we go again doing the same 
thing. I just feel like we have got to learn something from history. 
And your grandfather is such an inspiration. And certainly what he 
passed on was the vision of the fact you can make it in this country. 
You can go from being poor to being well-to-do if you work hard and you 
try hard and you live that dream that's in your heart. That's what 
America's supposed to be about.
  I yield.
  Mr. KING of Iowa. Well, in the succeeding generations, the dream was 
passed on even though the equity was not, because they didn't build the 
equity but the dream was there. The obligation and the duty and the 
appreciation for America embracing my ancestors coming here was passed 
on to me, and it said stand up for this United States of America, this 
free enterprise dream. And today, the families that it's worked out 
for, those who have made that investment, that hung on to that land, 
that spent two or three generations or more building a family farm--and 
let's say now, today, it's not 160 acres that it takes to sustain a 
family but 1,000 or 1,500 acres that it takes to sustain a family. And 
that's more accurate.

                              {time}  2340

  Let's just say that that unit that was put together, two sections of 
land now, 640 acres a section, 1,280 acres altogether.
  The SPEAKER pro tempore. The time of the gentleman has expired.
  Mr. AKIN. Mr. Chairman, I thank my colleagues for joining us in the 
discussion here about really the future of America.

                          ____________________