Iraq

IRAQ -- (House of Representatives - February 16, 2006)

Mr. KING of Iowa. Mr. Speaker, this Member appreciates the privilege to address you, Mr. Speaker, and to stand on the floor of the people's House, the United States House of Representatives, and convey some thoughts that I think need to be shared with you, Mr. Speaker, and hopefully picked up by the American people.

As I listen to the presentation and delivery that continually comes here on this floor night after night, Mr. Speaker, and as I analyze the tone and the attitude and the lament that flows continually from the other side of the aisle, I hear this constant strain, this constant strain of, and this is a quote, "It would be different if we were in charge, but we are not in charge," meaning the minority party.

But I am going to say this, that the members of the minority party have the same individual responsibilities as the members of the majority party. Each one of us is 1/435th of this task that we have here, 1/435th of the total voice of the American people, designed by our Founding Fathers, written into our Constitution, drafted in such a way that we do redistricting in America and we do so every 10 years. We draw new lines. We make sure that each of us represents pretty close to the same number of people, approximately 600,000 people. And the voice when you hear me speak, Mr. Speaker, is the voice, hopefully, of the 600,000 people in western Iowa that I have the honor to represent. And I would like to think that when the voice of any of us steps down here and speaks, it is the voice of the collective opinions of their constituents within the districts of all the Members of this House of Representatives.

If one listened to this debate here on the floor night after night after night, one could easily, an uninformed person, come to the conclusion that if you are a member of the Democrat Party, if you are a member of the minority party, you are really powerless to do anything about this.

Take, for example, the case in point, the alleged $9 billion that is wasted in construction in Iraq. And I would point out, Mr. Speaker, that I came to the floor the night before last, and I spent perhaps 55 minutes outlining the effort in the Middle East, the effort in Iraq, and particularly the construction projects that have been initiated there. I led a CODEL over to the Middle East and particularly into Iraq for the very purpose to identify, follow through, observe the projects that had been initiated, those that had been constructed, to go in and probe and ask questions and get a sense of where those dollars, that $18.5 billion that was part of an overall appropriations bill, where they went, how they were spent, under what conditions, and what are the projects that have been initiated and the projects that have been completed.

I did not bring the poster over here tonight that has that chart on it, Mr. Speaker, but I do bring it in my memory. And as I discussed this with the United States Army, who had a responsibility for somewhere in the neighborhood of $13 billion in those projects, they have initiated over 3,300 projects with those dollars. They have completed over 2,200 projects with those dollars, and there remains another 1,100 projects that are either in the process of construction right now, soon to be completed, or they will soon be initiated, and the last projects will be completed some time after the first of next year. They will be the last pieces of that fallen place.

And I heard the statement on the floor the night before last that all of that money was wasted. All of it. So if it is not even going to be qualified that one single dollar out of $18.5 billion went to something good, I wonder how much value one would put on the rest of the statements that are made by that side of the aisle and by that "informative" team, and I put that in quotes, Mr. Speaker.

So I watched as they were nearing completion on the mother of all generators up by Kirkuk, a project that has 750,000 pounds of generator and turbine to drive that generator mounted there and is up and generating electricity for the people in that area.

We have heard the complaint that Iraq's oil production is not up to where it was at the beginning of the war, that there is less electricity available and less electricity production than there was before the war. Or before the liberation, I prefer to say, Mr. Speaker. And I can categorically inform you that that is simply not true. The oil royalties before liberation in March of 2003 that came into the Iraqi Government were $5 billion a year. The royalties for the oil that was exported and collected, royalties for the last year were $26 billion.

Now, one cannot conclude that oil production is down with five times the royalties being paid to the Iraqi people to help fund their overall budget. And, yes, we have put money in that and resources in that. We have put minimal dollars into oil development and production, and we have done so because we have said the United States is not in this for the oil.

We are in this for freedom for the Iraqi people. We are in this to erase the habitat that breeds terror, and there has been extraordinary success that has been accomplished there. But to own the oil or to invest United States taxpayer dollars into that oil infrastructure and then turn around and turn it back over to the Iraqis was never part of our plan. We did suggest that oil revenue in Iraq would go to pay for the reconstruction in Iraq. And after we had been there for 6 or 7 months, it was apparent that that kind of revenue just was not going to flow, that the infrastructure in Iraq was so dilapidated, that it had not been reconstructed, had not been modernized in at least 35 years.

So think, for example, of massive oil fields that have significant quantities of oil, oil so rich that it seeps to the top of the ground up by Kirkuk, but yet not drill a well. Or not drill wells in significant numbers. I should qualify that statement. To not build pipelines, to not build refineries, to not build a system to extract that oil, refine the oil, and distribute the oil to the rest of the world so that you can continue to increase your production while world consumption is going up, those are things that did not happen under Saddam Hussein's regime.

So the production that was there 35 years ago simply diminished gradually in increments as Saddam took those resources for his own uses and starved the Iraqi people. But the production of oil is up. The production and generation of electricity is up, Mr. Speaker. An average day of electricity before the liberation, and I will pick a month, early March, 2003, would produce over 2,000 megawatts of electricity.

Today, it is over 5,000 on peak days, and it falls off maybe 1,000 on your average days. But it is still significantly more production.

Now, the statement will be made on the other side of the aisle, if they are paying attention and if they are astute, they will say, but Baghdad has less electricity than they had before liberation.

Mr. Speaker, that also is true. And the reason for that is because Saddam focused his electrical resources into Baghdad. Baghdad had 10 to 12 hours of electricity every day under Saddam Hussein's regime. The rest of the country got very little at any time, an hour or two a day. Now it has been shifted so the distribution of that electricity roughly doubled the generation of electricity by setting up new generation plants, setting up new transmission systems and new distribution systems. And one of the things that is a constraint there now is not being able to wield that power anywhere in Iraq where it is needed, not having a central terminal where switches can be thrown and you can send electricity to Mosul or Kirkuk or Tikrit or into Baghdad, into sections and zones that need it. That is also going to be rectified within the next half a year or so so that the need for electricity can be targeted to the regions of Iraq where it is going to be the most valuable.

And the predictability that has been established there, it used to be unpredictable under Saddam for the outlying cities, more predictable in Baghdad because he took care of Baghdad. Today, it is predictable in most areas of Iraq. But the areas of Iraq outside of Baghdad have gone from one to two hours of electricity a day to 10, 11 and 12 hours of electricity a day, at predictable times, so people that are running a business or doing a little manufacturing or maybe there is someone doing their laundry, they can plan their lives around having a stream of electricity.

We don't know what that is like, to have to think about managing our lives so that when the electricity is on we turn on the washing machine, plug in the iron, turn on the air conditioner and go start the pump to pump water for our livestock or even our irrigation. We don't think about that. But that has been a fact of life in that part of the Middle East from the beginning of electricity.

So all of the country of Iraq is far better off in access to electricity and consistent supply, substantially better off, four to five times better off, with the exception of Baghdad.

Baghdad is about one-fourth of the population of all of Iraq, excuse me, I should say one-fifth of the population of all of Iraq, and their daily electrical supply is down from what it was. It is no longer 10 to 12 hours a day, it is 2 to 4 hours a day. And that needs to be ramped up, Mr. Speaker, and it will be. As soon as they are able to wield this power in a more efficient fashion and get a couple more generating systems up on line, then Baghdad will be moved up into the level with the rest of the country and provide some stability for that city as well.

But it is important that Baghdad be brought into the level of electrical supply as the rest of the country. As Baghdad goes, so goes Iraq. With that kind of a population of about 5 million people, it is the core of the country. It a large metropolitan area, of course, Mr. Speaker.

But they made significant progress. Some of that money went to great good. Some of that money went to security. When you are going in to lay a sewer plant because there are children playing in raw sewerage in the streets of Sadr City and you have insurgents shooting at your construction workers, some of that money needed to go for security, and some of it did.

But if there is some money missing over there, and Paul Bremer says it is not, and if the Inspector General says it is, then I go back to the King law of physics, and that is everything has to be somewhere.

So if it is alleged that $9 billion are missing, Mr. Speaker, then my challenge to the people that make that allegation would be, where is it? Did it disappear into thin air? Whose hands did it go into? Was there graft and corruption? If so, what? Be a little more definitive. Don't throw out just some wild allegations that here is some money that is missing and it is somebody else's responsibility to address this.

We all have the same responsibility, 1/435th of the responsibility, all of us responsible to the people of the United States of America. And to stand here and admonish night after night after night that if they were just in the majority somehow they would do their job, but they are in the minority so they don't have to do their job, that their job is to criticize people in the majority, well, that is a bitter pill to swallow for those of us who get out of bed here, go to work, work late and do the research, and our staff goes to work in our district and here on the Hill, and we have a network with people around this city, around this country and in our districts and in our States and, in fact, around the world.

I have watched my colleagues over here on this side of the aisle age in the few years I have been here. I can look at them today and see lines that weren't there 3 and 4 years ago. I see hair that is absolutely gray that had a trace of it 3 and 4 years ago. They are working hard for the people of this country. And things happen around the world, and anything you can find to criticize can't be laid at the feet, not everything, of the people on this side of the aisle that work hard for the people of the United States of America.

In fact, I don't agree with all the decisions that are made by the majority of this Congress, and who in the world would? If you agreed with the decisions that were made by the majority of the United States Congress and you served in this place, or you are someone who hopefully aspires to come serve in this body someday, if you agree with the majority opinion, that means you are not thinking for yourself.

Of course, we are critical among ourselves. We are critical among ourselves as a Republican majority. We are critical on the other side of the minority's opinion. But in the end we have to stand on our own integrity, use our own intelligence, use our own research and be objective, open up our eyes and ears, read, listen, hear, think, analyze and resolve to do the right thing for the American people in a bipartisan fashion that brings us toward a conclusion and towards a successful conclusion. And that success is not defined as if the Democrats were just in the majority in the House and in the Senate and had the White House the world would be a different place. Yes, I am convinced it would be a very different place, Mr. Speaker. But that is not how you define success.

You have to lay out a plan and vision for the American people. You need to stick to that plan. It has to have vision. It has to have foresight. It has to have a short-term, midterm and long-term vision. It has to be something that the American people can subscribe to and believe in, something they can work for and work towards. In fact, Mr. Speaker, it needs to be something that the American people can sacrifice for so that they know that the delayed gratification can one day turn this country into a better country, tomorrow, next week, next month, next year, next decade, next generation, next century, and on and on into the future of this great Nation, the United States of America.

So I would submit, Mr. Speaker, that it is not that "it would be different if we were in charge." No, it won't be different. You will still hear complaints. What makes things different is if you lay out a vision.

So, in the brief time that is here on the floor of this Congress, Mr. Speaker, I don't propose to be able to lay out a complete and total vision for America. I would touch a few subject matters that were raised here and then move on to the subject I came down here to talk about.

One is the issue of foreign debt. I would agree, we are borrowing money from foreign countries in order to provide for the funding to run this government, and that is because we have deficit spending.

I am one that stands here and says I am for a balanced budget. I am for a balanced budget without taxing the people of America any more than we are today. In fact, the Bush tax cuts that were passed in 2002 and in 2003 were tax cuts that don't affect the bottom line of our deficit in a measurable fashion. But what they did do was stimulate the economy.

I would back us all up to the day, Mr. Speaker, that we had a recognizable, identifiable dot.com bubble. We saw great growth in this economy. It was speculative growth in the economy for the most part.

People said, well, we are in the information age. We have gone through the stone age, we have gone into the industrial age, and now we have transformed ourselves into the information age, and the information age is an era by which the ability to store and transfer knowledge in and of itself apparently had a lot of value.

Because whenever we would come up with a microchip that could store and transfer information more effectively and more software programs and more creativity that had to do with all of the intel industrial out there, the investors of the world looked at this and said, my gracious, I can't wait to jump on that, I can't wait to buy some shares of this intel company, because it is going to grow, and I am going to double and triple and quadruple my money, and I will be a rich person someday because we are in the information age. Surely, this company can store and transfer information faster and better than ever before. That has to have value.

So that created this dot.com bubble, because we forgot something. We forgot that the marketability of everything that we have has to come back down to something that has substance, that is sustainable, and that is this, and it has always been the case in the economy, you have to produce a good or a service that has a marketable value.

Now, what does information have for a marketable value? Well, companies will want to be able to purchase information and the ability to store and transfer and sort that information because it makes them more efficient in their decisionmaking process and in the delivery process of their products or service.

So if I am in manufacturing, I will have sales and I will have inventory coming in and I will be manufacturing things and my inventory will be going out. We will have our marketing and distribution. All of those things happen to be working.

Now ways that I can use the dot.com industry on that, this information age, is that if I can sort my inventory better, if I can order more efficiently and precisely, if I can get better bargains because I am doing an Internet negotiation auction as opposed to a purchasing agent sitting there on an old black dial telephone, yes, information has value then.

If it allows me to store just-in-time inventory so I can bring the trucks of my raw materials in just in time, so I cut down on my own inventory, that capital investment, turn it into a product and turn it out the door more efficiently, and if it helps my sales people get out there and market that product, and if I can get that product made with computerized equipment so that it is done with better precision and more cost-effectiveness and better quality and get that on the truck and get it delivered to the customer in just-in-time delivery time, reliable, all of that information has value.

So we paid for those things because information had value. But we created our ability to store and transfer information way beyond our ability to utilize it within our economy. In fact, we created it to the point where information itself had a recreational value, and that recreational value became in some components of the Internet.

So here is the day today where a vast majority of the households in America have Internet access, including mine, wireless. I was one of the first ones wireless, one of the first ones with high-speed Internet in my office. Actually I was the first one in the telephone service company where my construction office is and my campaign office. That office was the very first customer for high-speed Internet services for that telephone company.

Out in the country where Marilyn and I live, it is another telephone service company, we were the very first customer there to have DSL high-speed Internet services in our house, because we also ran the business out of the house and we needed access to high speed. So I love technology. It has value.

But, in the end, when you pay for all of this information and this technology and even when you market it to people for recreational purposes, that means their disposable income, people say I have an extra 25 or 40 or 50 dollars a month that I want to put into this Internet. Even though I can get along without it, I really like the convenience of being able to send out the e-mails to my friends and be able to find the answer to any question I want to ask just simply by going up on the Internet, do a search, and here it is.

So we marketed that as well off of the information age. But we produced the ability to store and transfer information way beyond our ability to market it. That was the dot.com bubble. You knew I would come back to that, Mr. Speaker. That was the dot.com bubble.

So this bubble in our economy was the speculative bubble that was created because there was investment made in the information age that went beyond the amount of information that could be sustained by the economy. And, like any bubble, bubbles will burst, and that bubble did burst, and it burst about the same time, just before we had a transition from President, from President Clinton to President George W. Bush.

The bursting of the dot.com bubble, Mr. Speaker, and we forget that so often, and as we saw our economy take the downturn and plummet and try to adjust for the bursting of the dot.com bubble, we also saw two planes go into the Twin Towers on September 11, 2001, right dead center into the financial center of America and the world. At the same time, a plane went into the ground in Pennsylvania and into the Pentagon.

We were all of a sudden from a nation that was scrambling to recover from a dot.com bubble, we were thrust into a worldwide war on terror, with our financial centers crashed down around us and left just a smoking hole in the ground at the Twin Towers. Our economy went down with that. It already was headed down, and as it ran down the hill, it was pushed off the cliff by September 11.

So what did we do here in this Congress? A number of things to react. And the decisions that were made were astonishing in their efficiency. I look back on that era and I commend the people in this Chamber and across in the United States Senate and the President, Mr. Speaker, because two big decisions were made and made fairly quickly.

One I will just briefly reference, the PATRIOT Act, the need to be able to protect us from an intelligence perspective from those who would wish to do us harm and protect the privacy rights of the American people at the same time.

I have sat through 12 hearings of the PATRIOT Act. We need to reauthorize that, Mr. Speaker. That piece of legislation is far better in its quality, and we have improved it some, more than anyone had a right to expect, considering the pressure that this Congress was under at the time to make those changes.

But the PATRIOT Act has sustained itself, and to this date, not a single critic, not in the United States House of Representatives, not in the government function, not in a hearing, even under specific requests of the witnesses that were there in the hearings, not a single critic has been able to name an individual who has had their privacy rights and constitutional rights usurped by the PATRIOT Act. Only hypotheticals, Mr. Speaker, and as we know, hypotheticals don't get you very far in this world.

So that was one thing, one action that was taken by this Congress that was an amazingly efficient action, and we are to this day 4 years beyond, and we have not suffered another attack on American property or people on this soil since that period of time.

So the PATRIOT Act was extraordinarily effective. The Bush tax cuts came right behind that, because we knew that with the bursting of the dot-com bubble, and the attacks of September 11 and the crashing down into a smoking hole with 3,000 American lives along with it, was our financial future.

Now, if we had listened to the naysayers on this side of the aisle at that period of time, we would have said, gee, we got to have a balanced budget here, so let us raise taxes. That is how we will get ourselves out of the smoking hole of the Twin Towers. We would have raised taxes so we had enough money to do what? Arm this huge police force to go out and serve warrants and try to identify these al Qaeda people that wish us ill and go around the world and work with Interpol, and maybe we can bring them to justice in handcuffs.

Some of them said we are not really at war here, and some of them said, well, no, you need to understand them. Some of them said that one man's terrorist is another man's freedom fighter. Those words were spoken here, Mr. Speaker. And I think they were completely and utterly wrong.

I think the people who have pledged to do us ill mean it. I think they have proven it. And I think it is up to us not just to protect and defend ourselves in this country, but carry the battle to them; and we need to do that with a strong economy.

The Bush tax cuts provided that. And in spite of the criticism, in spite of the things that have been laid out in opposition that say that the deficit is because of the tax cuts, can you go back and calculate the loss of revenue because of the tax cuts and will you see there has been an increase in revenue that came from the growth in our economy. The number is over 14 percent over anticipated revenue over the last year, Mr. Speaker, and the deficit that was projected is significantly reduced, and that is because we have had tax cuts that stimulate business.

So I do not think I would want to have people in charge that do not believe in free enterprise or people that believe that you could tax your way into prosperity. These are the kinds of people that if you give them the goose that lays the golden egg, they wouldn't think you could feed the goose, but they do think you can cut the goose apart and take the eggs and then go on and live in happy prosperity with that basket of golden eggs the rest of your life.

That is the attitude that comes. At some point it goes backwards on you. We have to have a revenue stream. We need a low broad tax scale so that we can stimulate this economy.

With regard to the foreign debt, if we can balance this budget, we can eliminate the increase in foreign debt. If we can produce a surplus, we can pay down the national debt, which reduces the foreign debt. But we have debt to American domestic indebtedness, as well as foreign debt. Both of those concern me. The foreign debt concerns me more than the American domestic debt.

We also have, Mr. Speaker, a negative balance of trade. That number should come out fairly quickly, within the next 30 days. As I recall, it was about this time last year when the 2004 balance of trade number came to us, $617.7 billion negative.

That meant that we purchased $617.7 billion more from foreign countries than we sold, than we exported to them. And some say, yeah, and it was all purchasing oil that was part of that, that was most of that deficit. But, Mr. Speaker, it was a significant portion. I do not deny that. It was over $200 billion that we spent in purchasing oil from foreign countries that added to this $617 billion in red ink trade deficit.

And I submit that we can fix that a number of ways. One of them is drill in ANWR, get that oil coming down here. That will be at least a million barrels a day. That will reduce our dependency on foreign oil.

We are bringing in liquefied natural gas that has got to be compressed in the Middle East and brought over here on a compressed tanker and brought into a terminal and converted back to gas again and delivered up here into the United States.

We sit on enough natural gas under the non-national parks, Federal lands in America, to heat every home in this country for the next 150 years. And we can drill natural gas wells, but we cannot get the distribution systems laid, we cannot get the roads built, because the environmentals are in the way.

They seem to think that we should not develop our natural resources, that this Earth is for every species except homosapiens, Mr. Speaker; and I submit that we are here to have dominion, to manage all of the species. But these resources are here for us.

We got that message clearly from God in Genesis, and I stand by that need for us to develop our natural resources. So we should drill on Federal lands for natural gas and oil. We should do it in an environmentally friendly fashion.

We should build a distribution system so we can heat our homes in America and run our factories and produce our fertilizer. Being from the Corn Belt, Mr. Speaker, I have to say that corn uses more nitrogen to produce it than any other crop. All crops use nitrogen. Corn just uses more than any other. And the production of nitrogen fertilizer uses natural gas.

It is essential in the production of nitrogen fertilizer. In fact, the very cost of the fertilizer, the composition of that cost, out of every dollar of nitrogen fertilizer, 90 cents out of that dollar is the very cost of natural gas.

So if we can cut the cost of natural gas in half, we would nearly cut the cost of nitrogen fertilizer in half. But instead, we have watched fertilizer go from $2 up to $15 in America because we are not drilling on our federally owned lands. We cannot get access to get the gas out, if we can get in there to drill.

We are not drilling on the Outer Continental Shelf because there are environmentalist extremists in the way. These are people that argue, well, if you drill a natural gas well on the Outer Continental Shelf, it will pollute our beaches. So I simply say, please submit to me a single case in all of history when a natural gas well polluted anything.

If you have a natural gas leak, what happens to it, especially offshore in the ocean? The gas bubbles up to the top of the ocean and dissipates. It does that whether you drill wells or whether you do not, because a significant amount of that natural gas just percolates up out of the ocean floor anyway.

So it would not be measurable if we had a natural gas leak, but the gas does not pollute anything; it just dissipates into the air. So before it all does that, we should go get that gas, tap into that gas, pipe it in here to the United States, and put it into these States that can use it for fertilizer.

And so those things, those things alone would go a long way, Mr. Speaker, towards reducing our dependency on foreign oil. Reducing our dependency on foreign oil helps our balance of trade. But these are components of the fix, Mr. Speaker, and I would say there is one more step we need to take, and then I will go back to how we repair this balance of trade and how we eliminate the foreign debt, how we eliminate the domestic debt of this country and get us on sound fiscal foundation.

One more component, before I go to that solution, Mr. Speaker, and that component is to produce a balanced budget. Produce a balanced budget so we do not have deficit spending, so we do not have to borrow. If we produce that balanced budget without raising taxes so that we diminish the production in this country, then we can have this robust economy that we have today.

And this robust economy that we have is an economy that has grown at a rate of more than 3 percent increase on its gross domestic product each quarter for the last 10 quarters at a minimum. It has reduced the unemployment rate to under 5 percent over that period of time. By anybody's measure, that is the longest, most healthy economic growth period since the early part of the Reagan years. So more than a generation has passed since we have seen this kind of growth.

And I would point out that during the Reagan years we had high inflation, the early part of the Reagan years. Before we got it under control, we had high inflation, we had high interest rates. So that kind of economic growth and that kind of lower unemployment ratings, there was not as good an environment as it is today, because we have got gradual growth, we have got controlled growth, we have got not too hot in our economy, we have got not too cold in our economy, Mr. Speaker, we have got just right.

It is cruising along here at a more than 3 percent growth, less than 5 percent unemployment. It is not as good as it can be. Unemployment can be better than this. By historical standards, it is a high standard. So I would say let us balance the budget without raising taxes. Let us get our spending down. Let us tighten our belts, Mr. Speaker; let us get our house in order.

If you were running a company or running a business or taking care of your family budget, and you realized that on the portion of your budget that had discretion on the parts that you were going to spend, now we all have fixed costs, we have to make our house payment or rent, we have to keep the lights on, we have to keep the heat up some, maybe we have some other fixed costs there, we have to buy some groceries, and this cost of living, you can make a minimal budget on the amount that is a fixed cost.

That is the equivalent to the entitlements in this Federal budget, those things that are fixed today that are very difficult to change, those items in our budget such as Medicare, Medicaid, Social Security, and even to a lesser degree interest. They are all fixed costs. They are growing, entitlement costs. We have to have national defense, certainly, in this time. So if you would reduce those things down to eliminating the nondiscretionary spending, which is Medicare, Medicaid, Social Security, and you eliminate the Department of Defense, and by the way I would reduce Homeland Security's funding, they have raised that budget out of sight without the accountability that I would like to see.

But if we go to non-defense discretionary spending, those things that we do have control over, those things that if it were your family budget, your going-out-to-dinner money, your vacation money, your recreational-tickets-to-the-ball-game money, going-off-to-golf money, those kind of things that you would naturally tap into if your budget got tight, the discretionary spending portion.

If you looked at your budget and said, well, I have got it in mind for $2,500 this year that I am going to spend to make my life a little richer, but I am spending too much, and one of the ways I can balance my budget is simply take that hundred percent of your $2,500 for your recreational discretionary spending, reduce it down by 5 percent, down to 95 percent.

Now who would not do that if they were running a family budget, or if you are running a company, Mr. Speaker? Would you not do that? Would you not look at those items that you could control and simply say, I am not going to take this procedure of spending the red, I am going to tighten my belt? I am going to do without for a little while so I can get my budget back under control.

Well, what I have described is all we really need to do in this Congress, Mr. Speaker. We need only address the other spending, the non-defense discretionary spending portion, and we need to reduce it by 5 percent.

Now I do not think this is the best way to balance the budget; but it is a way, an understandable way to balance the budget. Reduce that by 5 percent and we have balanced this budget, and in fact it balances the budget under current increases of the entitlement spending on out another 15 to 18 years, which becomes almost as far as we can to predict any economy, in fact beyond our ability to predict the economy.

So we can balance this budget. We do not have the will to balance the budget, so we borrow money because the people on this side of the aisle cannot get along without their programs. They are afraid somebody will throw them out of office if they say tighten your belt.

There are some people on this side of the aisle who feel the same way. They band together. It only takes about 10 or 12 people on this side of the aisle to see to it. Everybody on this side of the aisle will vote against the budget, I guarantee it.

There will be a budget come to the floor of this Congress within a month, and that budget will be debated on this floor. It will be one that is crafted to be as responsible as it can be. When it is done, I will make the prediction that not one Democrat votes for a responsible budget that comes here on this floor, not one, because it is a political vote and it is not an economic vote.

And so the belt is tightened over here. We try to send the right message. And then the criticism flows out of the other side. You cut my program. You squeezed this out. You starved children. You froze old folks. That is an old line. You hear it over and over again, Mr. Speaker.

I have not noticed that it works with the thinking people that have watched history flow. But we should balance this budget. I testified before the Budget Committee the day before yesterday, Mr. Speaker, and I requested that they produce a balanced budget. Whether they can produce the votes to pass it or not, I do not think they can get the votes to pass it, they need to put a target up on the wall so the American people know what it would take to balance the budget.

And I will be supportive of that in seeking to produce and develop a balanced budget. I cannot hide behind the Budget Committee and say, well, my friend, Mr. Nussle, did not produce a balanced budget. He is doing the best he can. He has got to get 218 votes, and it has been astonishing his ability to do so. He can take a 2.4 or $2.7 trillion budget and spin it around his head and calculate it all out, break it apart in pieces and put it back together.

He can go out and get the votes that he needs to get that done. I am impressed with the work that he has done. But I still challenged them to produce a balanced budget so that we know what we have to do and that will help inspire the American people to come forward and say, let me tighten my belt. I am willing to tighten my belt if my neighbor tightens his. Cut my program here, if you like, just do not cut me out of proportion to the person over here. I will take my fair share of the load as long as you do not put the unfair share on me and give that other person a pass.

But we cannot get there in this debate, because the demagoguery gets so heavy. And in fact last year we had reconciliation in the Ag Committee. We needed to reduce the spending over 5 years by about $3.7 billion. We needed to find a way to do that. That is $3.7 billion out of an annual expenditure of about 34 billion, by the way. So multiply that by five and you are up there in this 165 or $170 billion range to find $3.7 billion in savings there.

In the food stamp program alone there has been identified, even today, by Secretary Johanns' announcement a 5.88 percent error rate in handing out food stamps. Now that error rate, I suppose it could be by that percentage that we missed that many people that should have had food stamps, but I do not think so, Mr. Speaker. I cannot imagine that there would be an error on that side that we did not reach out and help enough people. In fact, we are out there marketing those services to people in a fashion that I think we are going to find them instead of them finding us.

I would submit that nearly all of that 5.88 percent of error rating in the food stamp program is all on giving food stamps to people who did not qualify, and this does not constrain some of the qualifications. We could tighten those qualifications down, too.

For example, when people come into this country legally, we say you have to be here for 5 years before you can access benefits, welfare benefits from our Federal Government. We could raise that up by a couple of years without too much pressure, raise the standards. But 5.88 percent of inaccuracy translates into over $2 billion a year in waste. And that $2 billion a year over 5 years is easy math. $10 billion dollars could be saved there.

But, you know, even though the numbers were bigger last year, I could not get one soul on that side of the aisle to support one dollar in cuts when we had the waste lying right in front of us, Mr. Speaker. And, in fact, there has been more waste there than they have even alleged took place in Iraq. But that does not disturb them because the waste is going into the households of some of their constituents and they have to answer to them. It is not the matter of the waste that concerns them. It is the opportunity to be critical.

So I actually came to this floor, Mr. Speaker, to talk about a different subject matter, but, as I listened, it changed the subject for me. So now I promised that I would come with a solution on how to repair this deficit in foreign trade and how to fix the foreign debt.

I would lay out real clearly, there is a policy out here, there is a bill, H.R. 25, the FAIR Tax. The FAIR Tax is a piece of legislation that takes the tax off of production in America and puts it on consumption. It is a consumption tax. It is a national sales tax, and it truly is an aptly named bill, the FAIR Tax.

Now, the way we fix this foreign trade deficit with a fair tax is simply this, that whenever anyone goes to buy something off a shelf, a product, and pays retail price for that product, imputed into that cost is the Federal tax composition. For example, if you are a corporation and you are producing a widget, you are going to need to calculate into that your corporate income tax, any other Federal excise taxes that are part of that that you would have to incorporate in your share of the wage withholding in the employees. There are a number of other taxes into that. You build that tax all into the price.

Corporations do not pay taxes. Private companies, sole proprietorships, partnerships, LLCs, they do not pay taxes. Mr. Speaker, that may be a shock to a lot of the American people, but I will explain this. That is that, no, corporations do not pay taxes because they have to add those taxes into the price of the products that they produce, the goods and the services, and pass that along to the consumer. If they did not do that, they would go broke. How could a corporation have any capital to work with if they were going to pay that tax and not incorporate it into the price of what they sold? So they pass that price along, and it is built into the pricing mechanism of everything that they sell.

When that product reaches the retail level, it has in it when you take it off the shelf, a person, and that $1-widget you lift off the shelf has 22 cents of imputed Federal tax built into that, 22 cents. So if we could pull the Federal tax out of those goods and services, the goods would go down by 22 cents, so your $1 widget becomes an 88-cent widget.

But if it is a service and you take the tax out of that service, it is higher yet. Now your 1 dollar's worth of service that you pay your plumber, say your $100 plumber bill becomes a $75 plumber bill because 25 percent of that is imputed price, is built in there to pay the taxes, passed along to, no big surprise, Mr. Speaker, people.

People pay taxes. Corporations do not pay taxes. Businesses do not pay taxes. They collect them. And the reason they do is because government has found out that they are more efficient in collecting taxes than government can be. So we put that on the burden of the businesses to collect the taxes. They impute it into the prices of the goods and services they are producing. They tack it onto that price, and you, the consumer, go up to the shelf, pull that widget off of there for $1, and it is really 78 cents.

Mr. Speaker, let me correct the earlier statement. I am doing my math on the run here. It is a 78 cent widget as opposed to $1 on the shelf because you get to take 22 cents out of that price.

Now, another truism, Ronald Reagan said, what you tax you get less of. And we know that. If you have to pay taxes, it is a disincentive. So if you were going to produce a product and we were going to tax you for it, you would look at that equation and say, why should I do that? I have to pay too much taxes on this.

How about if you are going to work an extra 10 hours a week and it comes in at time and a half and it puts you in another tax bracket and we come along and say, but Uncle Sam will get 50 cents out of every dollar that you earn. Now your $30 an hour that you can make on overtime becomes $15 an hour. Are you going to work or are you going to say, hey, boss, I would like a little time to go fishing, maybe a little golf and spend some time with the kids. I do not really need this overtime because I do not get to keep it. No, the tax is a disincentive to produce.

So when Reagan said, what you tax you get less of, Mr. Speaker, that is the equation that is there. And yet the Federal Government in its wisdom, I will say lack of wisdom, has the first lien on all productivity in America, every bit of productivity in America. Whether it is a good or whether it is a service, when Americans step up to the time clock and punch their time card in at eight o'clock on Monday morning, thunk, Uncle Sam holds his hand out like that and he gets the first of everyone's productivity. And Uncle Sam holds his hand there until you paid your taxes for that day. Then he puts it in his pocket and then you can go to work for the State and that gets put in the other pocket, your State, Uncle Sam, and the other various taxes that come along with this. And then at some point late in the afternoon you are working for you.

Or you can compute it the other way, and you can take a look at Tax Freedom Day. I do not know the exact date. It changes a little bit year to year. How many days do we work before we are working for ourselves? Tax freedom day falls in April or May. I am not sure of the precise date.

Uncle Sam has the first lien on your labor, he has the first lien on the earnings from your checkbook or passbook savings account, and he has the first lien on the delayed earnings of your 401(k) and also any mutual funds you have invested, all of the interest dividend earnings, the capital gains. You buy a piece of property and you turn around and sell that property, the margin will be taxed, and Uncle Sam will be there with his hand out. That productivity that comes from labor or capital is the productivity that Uncle Sam taxes. He taxes it all.

What I am proposing, Mr. Speaker, is that we step in here and we recognize that and we take the tax off of all productivity in America. Eliminate the IRS, the Internal Revenue Service, eliminate the IRS Code, wipe that thing out all the way back to the early 1900s, 92, 93 or 94 years ago that that began, Mr. Speaker, and pass the elimination of the repeal of the 16th amendment so that we no longer have a constitutional authority to put an income tax on our people.

That sounds really interesting and exciting and thrilling, and it is, but we have to find a way to replace the revenue, and that is the hardest question. I have asked a lot of different questions myself on how to do that, but as I worked this policy out 25 or 27 or 28 years ago, Mr. Speaker, I came to the conclusion then that the only way we could fund the loss of revenue for eliminating the IRS would be to produce a consumption tax, a sales tax, like 45 States have today.

The system is there. It is there to collect the sales off all of that revenue. It is a very simple equation to say to the States, keep the system you have in place, change the rates so we can fund the Federal Government. We will pay you one-tenth of 1 percent commission for collecting the Federal tax through your State Department of Revenue. You send the check out here to the U.S. Treasury, and we will put that into the general fund here.

It is an easy tax to collect. And the other five States that have to generate a sales tax collection system, it has been done in 45 States. It has to be a lot easier than having these 100,000 plus IRS agents running all over here into our kitchens and our offices, prying into our business, making Monday morning quarterback judgmental decisions on the decisions of family and business that we have made and tried to do things in an honorable and ethical fashion and still be dinged for interest and penalty. When you cannot get two IRS agents themselves to agree on this convoluted tax policy that is so confusing that I can find no one on this planet, even the people on this side of the aisle would not argue that if we had a chance to do this over that we would construct anything that looks like what we have with the IRS Code today. It is a disaster.

The cost of collection is beyond the comprehension of people who have not drilled into this and put the pieces together and tried to add it up. But I will give you the total on when you compile the costs of collecting from the IRS.

Now there is some literature that is out there, and some of this has come from Harvard University's Department of Economics, some of it is coming from other economists, but it kind of works out this way, Mr. Speaker. By the time we pay the IRS and fund their infrastructure and build their buildings and maintain them, pay their travel and the overall expenses of the entire agency, that 100,000 plus that are out there every day, I am sure with a smile on their face, trying to increase the tax revenue, and I give them credit for being good servants, but I think they can do a little better in the private sector. They are smart people.

By the time we fund the IRS and by the time we pay for our tax preparers, our H&R Block people, if you will, Mr. Speaker, as a euphemism. By the time we pay ourselves say $10 an hour to sit up half the night on April 14, then you add to that the disincentives we talked about on why people will not work that extra 15 hours of overtime because the tax liabilities are too great.

When you open up the economy, when you accept the increase in productivity that we will have if people are not punished in producing and investing and saving, that adds up to a number that in 1991 was over $700 billion and today it is over $1 trillion.

Think in terms of this. This economy, think of it as a huge cruise ship out there sailing across the ocean in smooth sailing and this is chugging along at maybe 10 knots. Because it is not going any faster than that, Mr. Speaker, because we are dragging this anchor. This anchor we are dragging is the IRS, the cost of compliance, the decisions that are made to not invest, the disincentives for producing because of the tax liability. You add that up to that trillion dollars a year and think of that sitting in a treasury chest hooked to our anchor chain, and we are chugging along in this economy at about 10 knots.

Now, we passed a FAIR tax, H.R. 25. We get to cut that anchor chain, that trillion dollars we are dragging across the bottom. It floats to the top. We throw it on board our cruise ship, and we get to invest that in our economy. Right away the 10 knots turns to 20 knots, and we are going along in 10 years in a doubled economy, at least doubled economy from the freedom that comes from taking that anchor that we are dragging and turning it into something that is productivity. It is really that simple to take that economic incentive of the trillion dollars and roll that back into our economy.

There is another perhaps $11 trillion in stranded capital that is stranded overseas that cannot be repatriated into the United States because of the tax disincentive that is there; and that money would come back to the United States, too. The United States of America would become the destination nation of choice for that capital that is stranded out there in foreign countries. It is really naturally American capital, $11 trillion. A trillion dollars a year that we are dragging around in our treasure chest anchor across the bottom of the ocean, the doubling of our economy that comes.

I would point out also, Mr. Speaker, that to get a handle on the magnitude of a trillion dollars injected into our economy every year that today is an anchor that turns into an asset, think in terms of, if you will, Mr. Speaker, 1992 Bill Clinton was elected President. He was elected President in part because he alleged and there were some statistics that supported his argument, I do not agree with it totally but there were, that our economy was in a downturn.

So when he took office and was sworn in on the other side of the Capitol building, Mr. Speaker, one of the first things he did was to ask for a $30 billion economic incentive plan. So he went to the Congress and said, we need to borrow $30 billion, 30 with a B, and we need to put it into make work projects, much like Americorps is today, and once we put this $30 billion into the hands of these young people that will go out and go to work in our communities to make the world a better place here, that money will be spent. It will stimulate our economy. It will get us out of this economic doldrums that it was bad enough that it removed George Bush, Sr., from office.

That was some of the psychology of the voters of the American people at the time. President Clinton came to Congress and asked for $30 billion. Congress debated and deliberated and they negotiated, and they reduced the $30 billion, Mr. Speaker, down to finally $17 billion. It would have been borrowed money. But, finally, they all looked at the $17 billion dollars and said, it is not worth the trouble.

We are not going to go ahead and borrow $17 billion, put it into make-work programs, try to get it into the hands of the people so the money could be spent to stimulate the economy, because it was not worth the trouble; but if it was even arguable that it was at $17 billion and if it was a matter of consensus that it would have been at $30 billion borrowed money, annual spending $30 billion, think, Mr. Speaker, what $1 trillion of wasted money, $1 trillion of maintenance costs and overhead costs that go because of the IRS for tax collection.

Think what that $1 trillion turned into the asset side of the ledger, into the productive sector of the economy could mean. That $1 trillion would stimulate this economy massively; and inject in behind that $11 trillion that sits overseas, and you can see, I think, with ease, Mr. Speaker, what would happen to the economy in this country.

We would double this economy in 10 years. We see the soundness of our dollar come back. We quit punishing people for savings and investment. Why are you putting money in your savings account with after-tax dollars? How can you get ahead doing that? Or when you make an investment and it is trapped here in a real estate investment, a capital investment, and you see an opportunity to make some money and roll it into something else and meanwhile give an opportunity to a young person to start a business or establish a residence and you sell that property, why do we punish you for that? Why do we give you incentive to hang on to that property until your inheritance right? Because you are afraid of being taxed?

This frees up the capital in America that would not be a punishment for transferring that capital into other hands, that theoretically in every case will do something more productive than it is today. Otherwise they could not afford to bid on the value of that property. That is the theory.

So the things that we need to do in this economy that are good, Mr. Speaker, are the things such as we need to incent savings and the fair tax incents savings. We need to incent investment, and of course, savings is investment. We need to tell people to put your dollars into mutual funds and a company investment and capital investments and we will not punish you for that. We will let you make all the money you can make, and if you want to sell these shares and invest them over here, then do so.

You can make the very best decision that you like, and we are not going to be in here with Uncle Sam's hand in the way, grabbing something out of every single transaction, not having a first lien on all productivity in America, but incenting earnings, savings and investment, research and development, Mr. Speaker, capital investment, higher education. That is where this money is going to go. The future of this capital would go into those three things, Mr. Speaker.

So I would point out that there is a divide in the House of Representatives. There is a divide in our philosophy. There is a divide that I believe is rooted in this philosophy that of all of us here on this planet, if you could somehow shake us up, erase our institutional memories, start us as unbiased people again, and scatter us all over the globe, without having a network that is going to tell us how to think or indoctrinate us, some of the people would see their glass as half full, and they would begin filling that glass up in an industrious fashion, in a faithful Christian fashion many of them, and filling their glass up because that is the thing to do, go out and earn, save, invest, buy, sell, trade, make, gain.

When we do that, everybody prospers. Pull everyone up the ladder next to us and strive for a better future for ourselves and for the succeeding generation, for our babies that we have in our arms and for our children that are growing up and for our grandchildren. That is what this does for the next generations that are here and across this country, Mr. Speaker.

Half of the people, well, probably not half, a portion of the people see the glass as half full, and they would seek to fill it up, and they seek to help others fill their glass.

There is another percentage of the people, the ones that are on the floor with their lamentations night after night after night that say, but my glass is half empty; and you know, I have sat in here for a lifetime and that person over there that was filling their glass did not put a single thing in my glass the whole time. Never mind they did not lift a finger themselves to do a thing, but they see it as a glass half empty. They see it as the economy is a zero sum game. They see it as a pie that is never going to be bigger, that only can be sliced up and however you distribute that pie, it will always be unfair in their mind's eye.

But we see this as a Nation of opportunity, individual rights and a Nation of opportunity, and we challenge people to be the best you can be, be as productive as you can be, and we struggle to put policies in place and encourage people to be as productive as they can be.

That is why I support H.R. 25, the fair tax, because it encourages everyone to do as good as they can, to produce as much as they can. It punishes no one for productivity. It takes the tax off of productivity, puts it on consumption, and thereby incents earnings, savings, investment, higher ed, research and development, capital investment. All of those things improve the productivity of the American worker, and those things increase the overall revenue and income of Americans.

We really have a choice. We can accept the standard of living of the rest of the world. We can watch them catch up with us. We are on this treadmill. We are on the front of the treadmill, and as they catch up with us, we can begin to accept their standard of living or we can go faster and we can go faster with technology, with education, with capital investment.

Those are the things that we need to do, Mr. Speaker; and so I would point out that before I came over here on the floor I did not know if I would use it, but I used some of this technology that I spoke of earlier and tapped in and did a little search for "the 10 'Cannots' of Abe Lincoln," and Abe Lincoln had this figured out and laid it out in 10 Cannots, and many things he has gotten credit for that he did not do. I have no idea if he actually did this or not, but I am going to give him credit because I think a lot of the man. I would point these points out, and I would like to drill them into the brains of everybody that votes for the future of America on this floor and across this country Mr. Speaker.

Abe Lincoln said 10 points. You cannot bring about prosperity by discouraging thrift. The fair tax encourages thrift and savings. You cannot bring about prosperity by discouraging thrift, Abe Lincoln's statement. So we want to encourage thrift.

He said you cannot keep out of trouble by spending more than your income. You heard me say, Mr. Speaker, balanced budget. We want to come with a balanced budget, and we want to put a tax policy in place that encourages more productivity so that we can spread this tax out among more people and have a lower rate and more individual productivity. The sum total of the strength of a nation's economy is the total productivity of its people.

Item number three, you cannot establish security on borrowed money. Brings us all to a pause, Mr. Speaker, because we are paying for Department of Defense spending on borrowed money. It is necessary that we have Department of Defense spending, but that is something that causes me to want to back up, take a look and determine that we can pay our way, pay as we go. That means tighten the belt; we are at war.

Item number four, you cannot help small men by tearing down big men. A little bit different verbiage in those days than there is today. In other words, you cannot help the poor by tearing down the weak. And I think he actually says that.

Item number five, you cannot strengthen the weak by weakening the strong. Use your strength, build on those, help others, ask them, come on up the ladder with me; but do not pull someone down that has climbed up a few rungs. I keep hearing it over and over again, let us pull those people down; the oil companies made too much money. Why did they? Because the environmentalists would not let us drill for more and the price went up. They invested at least in the energy future of America. They will quit doing that if we punish them. You cannot strengthen the weak by weakening the strong.

You cannot lift the wage earner by pulling down the wage payer. Another solid point that needs to be hammered home.

You cannot help the poor man by destroying the rich. It is important that we have people that have a level of prosperity. They build new houses. They move out of those houses and build a bigger and newer house. They sell that house to someone that can afford it and on and on and on until they get down a level of ways where you and I can afford. So you cannot help the poor man by destroying the rich.

You cannot further the brotherhood of man by inciting class hatred. Class hatred is incited every single night on the floor of the House of Representatives, Mr. Speaker. It does not help the brotherhood of man. It drives a wedge between the brotherhood of man.

You cannot build character and courage by taking away man's initiative and independence. One of the ways that that is done is to create independence, and I spoke about individual initiative and individual responsibility and individual rights, and I pray that we can protect and defend those rights for all Americans, rich or poor, weak or strong, whatever color, whatever sex they might be. We need to guarantee their individual rights and protect them and give them that opportunity.

The tenth one, you cannot help men permanently by doing for them what they could and should do for themselves. I remember that statement of Lincoln's.

So all of these principles of Abraham Lincoln's, the 10 Cannots, have been violated on the floor over here night after night after night. If we could get back to those principles, Mr. Speaker, if we could get to this point where we understood that individual rights, individual responsibility, if we all could begin to climb that ladder, if we could see our glass as half full and begin to fill out, and as we did that, reached out and help our fellow man, if we could take the tax off all productivity in America, we could prepare this future for the young people, for the children, for those that are here tonight, Mr. Speaker, and with that, I thank you for your indulgence.

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