Blue Dog Coalition

By:  Adam Schiff
Date: March 28, 2006
Location: Washington, DC


BLUE DOG COALITION -- (House of Representatives - March 28, 2006)

Mr. SCHIFF. Mr. Speaker, I thank the gentleman from Arkansas (Mr. Ross) for yielding to me. Once more I thank him for leading these Blue Dog hours each week and for the tremendous job he does in trying to balance our budget here in the Nation's Capital, as well as look out for those constituents back in Arkansas.

I wanted to join the gentleman from Arkansas and raise a number of concerns with the way that we are handling the Nation's budget, talk about some of the reforms that the Blue Dogs have been advocating. Let me just start out by talking about the budget picture. The chart that you have put up, Mr. Ross, really tells the story of the trillions of dollars' worth of debt we have acquired, the fact that for every man, woman and child in the country, we now owe $28,000.

I was out in my district last week talking to a group of school kids. They were asking me, what would I like to see different about the way the country is run. I said, well, for one thing, I would like to see us balance our budget.

Right now, we are spending your money, I told this young man. We are spending so much of your money, that when you graduate from college, if you graduated tomorrow, in addition to your student loans, you would owe the

country $28,000. By the time you actually graduate from college, it will probably be, on the present course, much more than that.

Now, why is it that we have this debt? Well, the bottom line is, we are spending money faster than it is coming in, and you can't vote. We are spending your money, because you cannot object. That just is not right.

Now, how did we get to this situation? I think we got here through some very creative accounting. It used to be that when we calculated our debt, we looked at a 10-year window. But the 10-year picture got so bleak, we decided that, no, we will start looking at, instead, a 5-year window. We won't look at what happens beyond 5 years because the debt just grows so large.

In fact, what we started to do is we started to craft some of the revenue and tax measures here so that they would balloon in the outyears, so the impact on the budget would take place in the outyears, so that if we only looked at the narrow 5-year window, we didn't see how bad the picture got when the full effect of our policies took place 5 to 10 or 15 years from now.

But we did more than that. When the administration, for example, says that their plan will balance or cut the debt in half over the next 5 years, they are taking great

poetic license with certain assumptions about what will happen in the next several years. For example, the administration's budget, the one they say that will get us to cut the deficit in half in the next 5 years, ignores the costs of the Iraq war after the end of this year.

That makes an assumption I think we would all like to make that there won't be any further war costs after December 31, but that is not a realistic assumption. Even if the last troops have come home by then, there are still billions and billions of dollars to repair, to maintain, to replace the equipment that has been degraded in Iraq.

More than that, we have to prudently expect that the expenses of the Iraq war are not going to come to an end on December 31. Even if all the troops came home, those expenses would not come to an end then.

What other fictions are we using in the budget process? Well, we are assuming that nothing is done about the alternative minimum tax. This tax that was started in the 1970s and was designed to apply to only a few families in the country was never indexed for inflation.

The basic theme behind that, or the theory of that, wasn't a bad theory, it was that several of the largest, wealthiest families in the country shouldn't escape any form of tax because they used a clever combination of tax loopholes. There ought to be some alternative minimum calculation. What was designed to and did apply only to a handful of families in the 1970s, because it was never indexed for inflation, now is applying to millions of people.

This cannot be left unchecked. If the AMT is not fixed, then all of the tax cuts that were given in the last several years will be completely wiped up and replaced with a very large middle-class tax increase.

Now, the administration knows this is a problem that has to be dealt with, but it is very expensive to fix this problem. It is going to require that we deal, very frankly, with some of the different budget priorities that we haven't been willing to deal with.

But by ignoring the impending AMT problem, by ignoring the ongoing costs of the war in Iraq, by narrowing the budget window that we are looking at from 10 years to 5 years, by engaging in these kinds of smoke and mirrors, by taking certain costs off the books, we can present to the country a budget picture which is not reflective of reality.

It doesn't show what dire fiscal straits we are really in. It is one of the reasons why I am so grateful for the work you are doing, Mr. Ross, to point out to the country just how bad it has got in terms of our fiscal picture to promote the Blue Dog's 12-point plan, part of which is very simple, that is, when you are in a hole the way we are, stop digging.

That is part of our PAYGO proposal that says that we want to stop the hemorrhaging, that when we agree to new spending on this House floor, we should find a way to offset that cost so that we do it in a revenue-neutral way. When we agree on new tax cuts, we should find a way to do that in a revenue-neutral way, either by cutting spending or raising revenues somewhere else.

PAYGO, pay-as-you-go, basically says there is no free lunch, and, indeed, there isn't, as you can see by the fact that every man, woman and child in this country now owes $28,000. From 2001 to 2003, just a couple-year period, the total government spending soared by 16 percent. We are trying to put a lid on those kinds of increases.

We are trying to urge that the Federal Government simply use accounting practices that the biggest and the best firms in the country have to use. The GAO did a study that showed that 16 of 23 major Federal agencies can't do a simple audit of their own books. Can you imagine, Mr. Ross, if one of the companies back in your district or mine did their accounting, if they were a public company, they did their accounting the way that the Federal Government does, how long it would be before they were indicted before a Federal grand jury? It wouldn't be long at all.

Now, why is it that we can require transparency and accountability and honest bookkeeping among our private firms in the interests of their shareholders, in the interests of their employees, but we don't seem to require it of the country itself? We haven't set aside funds for a rainy day.

It is something that most businesses do, it is something that most families do, so that when these tragedies occur, when we have natural disasters, when we have man-made disasters, we have some reserve to go back to. It makes infinite sense.

The economy is a cyclical phenomenon. We ought to have something stored away for a rainy day for when we are in a down part of the cycle. That is only prudent planning. That is part of the Blue Dog plan. We shouldn't hide the votes on this House floor when we are going to raise the debt.

Most Americans are unaware of the fact that the national debt is a little bit like a credit card debt. When we want to raise the national debt, that is when we want to authorize the administration to borrow more money. We have to vote to authorize it the same away that when people want to borrow more on their credit card they have to contact the credit card company and ask them to raise the limit.

How do we do that around here? Well, do we have an up or down vote where we can force people to go on the record and vote either to raise the national debt or against raising the national debt? No, we do more of that smoke and mirrors. We make it a procedural vote on top of a procedural vote on top of a procedural vote. Unless you are a sleuth, there is no way to find out that we have, in fact, voted to raise the debt on all Americans.

We shouldn't hide those votes. We should be open about those votes. We should be held accountable for those votes; and maybe, maybe, if each and every Member had to come to this House floor and defend a vote to raise the debt, we could compel the adoption of sound fiscal practices like pay-as-you-go.

I would love to see that. I would love to be able to join my Blue Dog colleagues and offer an amendment to a motion to raise the national debt that says, all right, we will agree to a short-term increase in the national debt provided that we adopt pay-as-you-go rules, provided that we come back here in a short period of time, we see what action the administration, the Congress are taking, that we don't raise the national debt by great leaps and bounds that let us off the hook for a year at a time, but, rather, give us only a short leash to get our fiscal house in order to show that we are diligently working on it.

These are some of the reforms the Blue Dogs are advocating. They were good public policy. They would enjoy, I believe, bipartisan support if we had the chance to actually vote on these proposals. And I want to compliment my colleague for all of his leadership on this issue.

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