I've just completed my 33rd round-trip of the year home to Springfi eld. Congress fi nally fi nished its work for
the year in late December. The bright spot for the session was a fi ve year transportation bill that will invest over
$2.7 billion in Oregon's highways, bridges and transit. For the fi rst time in recent memory, Oregon will get back
more in federal gas taxes than we paid in. Nationally, and here in Oregon, this investment will create good jobs
and stimulate the economy. Even better, not a penny for this program was borrowed (see p. 4).
Unfortunately, the rest of the federal budget is awash in a sea of red ink. The president and congressional
majority have agreed to a budget that mandates borrowing $1.4 billion a day. Just before we adjourned, the
House increased the defi cit by extending tax cuts that heavily favor those who earn over $300,000 a year. We
need to continue to fi ght to restore fi scal sanity and tax fairness in Washington (see p. 3).
Just over three years ago, Congress dodged its Constitutional duty on declaration of war and gave the president
blank check authority regarding Iraq. I voted no. The leadership in Congress continues to shirk their
Constitutional duty to conduct independent oversight or provide direction on the war but a number of us are
pushing to change that (see p. 2).
As always, I want to hear your opinions about these and other issues before Congress. If you have a problem
with a federal agency, my staff and I are ready to help. The addresses and phone numbers are listed on page 4.
A Growing Struggle For Working Families
Many so-called experts say there's nothing to complain about, the economy is growing, corporate profi ts
are strong, and the stock market is up over last year. So why are so many Americans struggling paycheck-to-paycheck?
Maybe it has something to do with the fact that wages have fallen 2.3 percent on average since May 2003, not
even keeping pace with infl ation. The sole exception is the top one percent of income earners, those earning
more than $300,000 a year, who have seen their income rise almost 4 percent. The top one-tenth of one
percent ($1.3 million-plus a year), have done even better, enjoying a nearly 10 percent increase in income. The
unemployment rate is up over the last four years and major employers are laying-off thousands of workers.
Gas prices regularly hit new highs. Health care costs have gone up 50 percent and college costs jumped by 36
percent in the last couple of years. No wonder families are struggling.
The reasons for income decline are complex. In part it is related to the tax policies of Congress and this administration
which favor the investor class and place a heavier burden on those who earn wages and salaries.
It's also linked to the budget priorities of Congress and the administration which favor corporations while squeezing students,
seniors, our veterans and working families (see page 3). However, one major factor identifi ed by many prominent
economists is our current trade policy.
The trade defi cit for 2005 is on track to hit more than $700 billion-$100 billion higher than the record set in 2004. The U.S.
must borrow nearly $2 billion every day from foreigners to fi nance this defi cit, which poses a national security and economic
threat to our country. Yet, the response from Congress is more of the same. In late July, the House voted 217-215 to expand the failed North American Free Trade Agreement (NAFTA) to Central America.
I voted against NAFTA under President Clinton, and I voted no on CAFTA. A NAFTA panel ruling this fall guts American sovereignty and threatens thousands of jobs in the Oregon timber industry. The NAFTA panel ruled that tariffs the U.S.
imposes on lumber from Canada to offset the signifi cant subsidies the industry gets from the Canadian government are illegal.
Just after the ruling, the Canadian government announced a new package of $1.2 billion in subsidies. I recently wrote to
Commerce Secretary Gutierrez and U.S. Trade Representative Portman to request that the administration reverse its decision
to slash tariffs on subsidized Canadian lumber in response to the panel's decision and to urge appeal of the NAFTA ruling.
I am not against trade. Trade can be benefi cial to consumers, workers and the economy. But the current rules of
NAFTA and the World Trade Organization (WTO) are stacked against U.S. workers and industry. An overhaul
is long overdue.
Here are some ways we can improve U.S. trade policy and work to maintain our manufacturing industry and well-paying
Vigorously enforce existing U.S. laws against the dumping of foreign products into the U.S., including imposing stiff
tariffs against countries that violate these laws;
Withdraw from the deeply fl awed WTO and rely on bilateral trade negotiations;
Repeal China's preferred trade status;
Renegotiate NAFTA and similar trade deals;
Repeal fast-track trade negotiating authority so Congress can amend trade deals rather than just voting up or down on
the President's proposal;
Include provisions to protect workers' rights and the environment in trade agreements just as they protect capital
Curtail tax deductions and federal contracts for companies that export jobs; and
Create a Congressional Trade Offi ce to provide non-partisan expert analysis and ensure Congress no longer depends
on the Executive Branch for information.
New Iraqi Government Must Take Charge
I voted against the Iraq war in October 2002. Even with the fl awed intelligence that was presented, I did not
think Iraq posed a threat to our security. It was al-Qaeda who attacked us on 9/11, not Saddam Hussein. The
proven absence of weapons of mass destruction in Iraq has only reinforced my views. The administration failed
to stop the looting and disorder which helped kindle the domestic insurgency. They unrealistically projected
troop levels to drop to 40,000 within three months. Until recently, they have failed to admit mistakes and they
have yet to provide a clear plan for success and exit from Iraq. Some say we should have an open-ended commitment
in Iraq. I disagree.
Many experts agree that a negotiated drawdown and withdrawal would separate nationalist Iraqi insurgents,
primarily Sunnis trying to end the U.S. military presence, from the smaller number of foreign fi ghters in Iraq.
The Commander of U.S. forces in Iraq, General George Casey, testifi ed that "the perception of occupation in Iraq
is a major driving force behind the insurgency."
We have to end the perception that we're an occupying force. First, make clear we will not maintain
permanent bases in Iraq. Next, negotiate a withdrawal plan with the Iraqi government. This would boost their
new government's legitimacy and claim to self-rule. It could accelerate the development of Iraqi security forces,
eliminating the resentment some (particularly Sunnis) feel working for what they see as an occupier. As long
as the U.S. military remains stuck with an open-ended commitment in Iraq, Iraqi politicians and security forces
will use us as a crutch and will continue to fail to take the necessary steps to solve their differences and establish an
effective and inclusive government.
A plan for withdrawal could also help the United States in our broader fi ght against Islamic extremists by taking
away a recruiting tool and training ground. The Director of the Central Intelligence Agency, testifi ed to Congress
in 2005 that, "Islamic extremists are exploiting the Iraqi confl ict to recruit new anti-U.S. jihadists."
I have had the privilege of visiting with many of our men and women in uniform, both here at home and
in Iraq. I am continually awed by the professionalism, determination, and commitment of our troops. I honor
the sacrifi ces that they and their families are making as they serve their country and I have listed on my Web site
helpful resources for members of the National Guard and reserves (http://defazio.house.gov).
Our troops have done all that has been asked of them in Iraq. It's time for Congress and the administration to
do their job to bring an end to the confl ict and bring our troops home.
A Legacy of Debt
In 2000, the federal budget was in surplus by $1.5 billion and no money was being borrowed from Social Security.
This year, the defi cit will be over $500 billion and every penny of the $175 billion Social Security surplus will be
borrowed and spent. To fi nance the budget defi cit, our nation is borrowing $1.4 billion per day. Since 2000, the
federal debt has grown by $2.3 trillion, or $75 million per hour. We are saddling future generations with a
mountain of debt, which today averages $27,000 for every American.
In November, the House considered a bill to cut spending by more than $50 billion over fi ve years. Unfortunately,
the spending cuts fell most heavily on programs that benefi t middle and lower-income families, including student loans,
Medicaid, school lunches, foster care, long-term care, and child support enforcement, among others.
To make matters worse, the $50 billion in cuts was offset by companion bills that provide $70 billion in tax cuts heavily
favoring those earning more than $300,000 a year. The net impact increases the defi cit by at least $20 billion.
There are bigger and better cuts that should be made to the federal budget: reduce corporate farm subsidies ($25
billion); cancel the fanciful and defective "Star Wars" system and the Cold War-era F-22 fi ghter jet ($60 billion); cancel the
manned missions to the moon and Mars ($50 billion); reduce corporate subsidies in the Medicare prescription drug program
and energy bill ($30 billion); and reduce the number of consultants employed by the federal government ($33 billion).
Spending cuts in these areas would total almost four times the cuts proposed in the Republican-sponsored bill, without
targeting struggling families.
However, even if Congress was to eliminate the entire federal discretionary budget except for the Pentagonmeaning
no Centers for Disease Control, Border Patrol, Justice Department, Education Department, Department of Veterans Affairs,
Environmental Protection Agency, etc.the federal budget would still be in defi cit. Getting the federal budget under control will require discipline on both spending and taxation. Instead of extending new tax cuts for earners over $300,000, I have advocated restoring the rates they paid during the booming 1990's. That would reduce the projected defi cit by $327 billion in fi ve short years. If we restricted offshore corporate tax shelters we could reduce the defi cit at least another $33 billion. If we reinstated the superfund tax so polluters paid to clean up their own messes, we could drop it another $10 billion. Limiting the
estate tax exemption to $6 million and progressively taxing larger estates could cut the defi cit by $31 billion a year.
If my proposals above were adopted we would reduce the projected defi cit by more than $700 billion. It doesn't solve the
problem entirely, but it's a good start, and it doesn't require balancing the budget on the backs of working families, senniors
Providing Affordable Healthcare
Since 2000, the number of uninsured has climbed by six million to a historical high. Currently, 45.8 million Americans
and more than 600,000 Oregonians don't have health insurance. Those who do have insurance are struggling to keep it.
Small businesses and even large corporations are hard-pressed to provide coverage for their employees. Something has
One of the major factors in rising costs is prescription drugs. There are several strong steps that we should take to
bring down the cost of pharmaceuticals for all Americans: (1) immediately allow the reimportation of affordable FDAapproved
prescription drugs; (2) allow the U.S. government to negotiate lower drug prices for all, or at the very least
Medicare benefi ciaries; and (3) restore "fair pricing" clauses for drugs developed with taxpayer money.
Every American should have basic health insurance coverage. Both the government and private insurers would offer
a standard package and compete on price. Premium assistance would be provided to lower-income individuals and
families. Individuals and employers who want broader coverage could build on the standard package.
To improve their bottom line, both GM and Ford have moved some production to Canada, which has a single-payer
universal health care system. The companies estimate that they save about $2,000 (U.S.) in health care costs for every
car they manufacture in Canada. It is estimated that we could save over $286 billion a year in total health care costs with
universal standard coverage.
But to make it work, we have to take on the middle-manthe insurance industry. I've introduced legislation to
repeal the antitrust protections for insurance companies, stop the collusion and price fi xing, and make the industry play
by the same rules as every other American business.
127,000 Jobs in Oregon Through Transportation Bill
After nearly 20 years of service on the Transportation and Infrastructure Committee, my seniority brought me to the table as one of a handful of lawmakers to craft and negotiate a fi ve year federal highway and transit spending bill called SAFETEA-LU. I was able to secure $2.7 billion for Oregon's roads, bridges, highways and transit, which is estimated to create over 127,000 jobs and provide a big boost for Oregon's economy over the next fi ve years. This funding couldn't come at a better time. Traffi c on Oregon's highways is increasing, and according to a report issued by the American Society of Civil Engineers, 51 percent of Oregon's urban roads are congested and 38 percent of the state's major roads are in poor or mediocre condition.
Driving on aging roads costs Oregon motorists $684 million a year in extra vehicle repairs and operating costs. That's $264 per motorist. Oregon is also facing a massive $4.7 billion bridge problem that threatens the movement of freight within the state and across the country. Although the state has dedicated signifi cant resources to this problem, Oregon needs federal assistance to ensure interstate and international freight on I-5 isn't disrupted by weight restrictions due to failing bridges.
Under SAFETEA-LU, I was able to secure $200 million that will be directed to the reconstruction of bridges in Oregon on I-5 and across the state. I was also able to change the highway funding formula so Oregon will now consistently receive more gas tax dollars than it contributes to the Federal Highway Trust Fund for the fi rst time in many years. And because Oregon supports a large amount of federal lands, I was able to negotiate a change to lower the "local match" for most transportation projects in Oregon under this law.
What's best is that all this work will be done without adding to the federal defi cit. Unlike most federal legislation, SAFETEA-
LU will not increase the U.S. defi cit because it is paid for through the Highway Trust Fund, which is sustained with
gas tax receipts.
Good News For Veterans
I've been fi ghting hard for years alongside veterans groups and my colleagues in Congress to provide the benefi ts to
veterans that they have earned and deserve. I'm pleased to report two recent victories. The Republican majority fi nally agreed to address the severe veterans budget shortfall, and Congress added $1 billion to the president's budget this year and $2.6 billion in 2006. The VA recently announced that it would stop an unfair review of veterans' post-traumatic stress disorder (PTSD) cases. It is shameful that any veteran was subjected to the trauma and emotional stresses of proving for a second time
the wounds they suffered on the battlefi eld. But I am pleased the agency has brought an end to the review. Our veterans
fought to protect the rights and freedoms we hold dear. They should not have to fi ght their government for the
care and benefi ts they were promised.
Rx Plan Confusing
I voted against the complicated $800 billion Medicare Modernization Act that provides generous subsidies to the
pharmaceutical and insurance industries but does little to ease drug costs for many of Oregon's seniors.
We could provide affordable prescription drugs to seniors, and at the same time save taxpayers billions by: (1) allowing
the government to negotiate lower pharmaceutical prices for all seniors, (2) allowing the safe reimportation of FDA-approved
prescription drugs from abroad, (3) allowing seniors to purchase a single comprehensive Medicare prescription
drug benefi t with a sliding-scale premium. But we're confronted with the reality of the complicated
Medicare Part D prescription drug plan, and we must help seniors who might benefi t from this program enroll in the
most appropriate plan. A list of resources that can help seniors make an informed decision on their enrollment options
is on my Web site (http://defazio.house.gov/PartD).