PROVIDING FOR CONSIDERATION OF S. CON RES. 21, CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2008 -- (House of Representatives - May 07, 2007)
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Mr. RYAN of Wisconsin. I thank the gentleman for yielding, and I want to echo the point he made.
Our chairman, the distinguished gentleman from South Carolina, came to the floor and accurately said both budgets, the Senate budget resolution and the House-passed budget resolution, balance the budget. That is correct. They do. It is certified by the Congressional Budget Office. There is only one reason and way and method how they balance the budget, though, Mr. Speaker: by raising taxes.
The House-passed budget resolution relies upon, requires, in fact, makes sure that it passes the largest tax increase in American history in order to balance the budget. The Senate-passed budget resolution relies upon, requires and ensures that the second largest tax increase in American history be enacted on the American people, on the American taxpayers, in order to achieve balance.
I have two major concerns with this budget resolution, Mr. Speaker. Number one, it is very bad economic policy. And number two, it is an enormous missed opportunity.
Why is this budget resolution bad economic policy? Inflicting the largest tax increase in American history on the American family, business, entrepreneur, on American taxpayers, is bad economic policy. And here is why: Back in 2001, where we realized we had 9/11, and in 2003, where we realized we had a recession, with the dot-com bubble burst, with Enron scandals, we had job losses to the tune where we were losing about 124,000 jobs a month. We had to act quickly to get people back to work, so we cut taxes across the board. We cut taxes on entrepreneurs, on families, on workers, on businesses, on capital. What happened: 7.6 million new jobs were created since then. We have been creating on average over 200,000 jobs a month since then. The stock market turned around. The savings portfolios of senior citizens which were eviscerated in the market crash came back. The Dow hit 13,000 last week, an all-time high. We saw business investment, from negative decline after negative decline for 11 consecutive quarters, turn around and hit all-time highs. More jobs were created. And what happened at these lower tax rates? Revenues came into the Federal Government at a much, much faster pace, at about a 25-year high. So we saw more revenues coming into the Federal Government, which actually brought the deficit down at these lower tax rates.
What this budget resolution does is it puts that economic recovery plan in jeopardy. By raising taxes on people and businesses and entrepreneurs, you are reducing job growth in America. You are raising the cost of capital.
We have a problem, Mr. Speaker, and that is we live in the era of
globalization. The oceans no longer separate our economy from the rest of the world. Ninety-five percent of the world's consumers don't live in this country. They are overseas.
So, Mr. Speaker, we have got to wake up. Wake up to the fact that we have real competitive pressures. Countries like China and India, let alone Japan and Europe, are giving us real competitive pressures, real competitive challenges. And when we go back to the old adage of taxing, taxing and taxing, what we are going to do is tax more and more jobs overseas to these other countries. By taxing our economy and our businesses and our workers more and more than our competitors tax theirs, you know what happens? They get our jobs. That is a mistake. That is wrong.
America taxes capital more than any other industrialized country in the world except for one, Japan, and they just finished two decades of recession. So it is really bad economic policy to have all these tax increases.
You just heard the gentleman from Massachusetts talk about the reserve funds they have in this budget. They really want to make sure that they don't raise these taxes. So they put a reserve fund in the budget. And the reserve fund basically says, we don't want to raise these taxes; we would like to come up and pay for them, but our money is not there.
A budget is basically a page full of numbers, and numbers don't lie. The numbers in this budget require these taxes to go up, require these taxes to sunset; otherwise, they don't balance the budget.
You can't have it both ways. You can't balance the budget on the left hand and then say we are not raising taxes on the right hand. It is one or the other. So regardless of how many empty promise reserve funds you have in a budget resolution, the numbers don't lie, and the numbers say these taxes are being raised.
Now, as to the point that the sunset was put in by the Republicans, not by the Democrats, and we are simply letting this Republican policy manifest itself, and we are budgeting for it, that is not quite true, Mr. Speaker. And I remember being a member of the Ways and Means Committee and working on the conference committee at this time. When these tax cuts went through the Ways and Means Committee in the House, when these tax cuts passed the House floor, they were permanent. They never had a sunset in them. What happened? This arcane rule in the Senate called the Byrd rule was put in place. And the Byrd rule said for these tax cuts to be permanent, it needs 60 votes in the Senate. What happened? We had 52 Republicans voting to make them permanent; no Democrats would vote to make these tax cuts permanent. So the Democrats filibustered making these tax cuts permanent, and because of the Democrat filibuster in the Senate, these tax cuts were made temporary. The only way to get this tax relief to the American economy, to the American people, to get out of the job loss, to get out of the recession, was this temporary tax policy because of the Democrat-led filibuster by then Senator Daschle at the time in the Senate. That's why there's a sunset in this law.
We always kind of wondered at the time, why would they stand in the way of the taxpayer and make these tax cuts temporary? Why would they insist upon these sunsets? Well, now we know why. Because it is how they balance the budget because they plan on, bank for, certify, require, rely on these tax cuts going away.
The second reason I think this is a bad policy is it is an enormous missed opportunity, Mr. Speaker. The gentleman from South Carolina, who really is a gentleman from South Carolina, and I mean that sincerely, had a lot of good hearings in the Budget Committee. We have had a few in Ways and Means as well. We had all these experts coming to us from the left and from the right, from think tanks on the left side of the aisle and think tanks on the right side of the aisle, we had the Congressional Budget Office, the Federal Reserve Chairman, the Treasury Department coming to us, all saying the same thing: Entitlements are growing out of control. The entitlement program problem is enormous. We are doubling the amount of retirees in this country within one generation; yet we are only increasing the amount of workers coming in behind them by 17 percent.
We have an enormous unfunded liability, about $49 trillion. It's a mind-boggling number. But when you take three entitlements, Medicare, Medicaid and Social Security, those three entitlements right there, Mr. Speaker, will consume 100 percent of the Federal budget by the time my children are my age.
So all these experts came to us and said, Do something. You're the Budget Committee, you've got to do something to control the growth of entitlements. It's going to bankrupt America. And if we don't do anything, if we keep the government we have today and do nothing to reform entitlements, by the time my children are my age, they will literally have to pay double the amount of taxes for that Federal Government at that time.
Let me say it one other way, Mr. Speaker. Since about 1960, Washington has funded the Federal Government by taxing the U.S. economy by about 18 percent of the economy. About 18 percent of the gross domestic product has been required to pay for the Federal Government. It's been remarkably consistent. Now, if you take today's government, add no new programs, take none away, and transfer that out to about 2040 when my kids are my age, just to keep today's government afloat at that time you will have to tax 40 percent of GDP, 40 percent of the national economy just to pay for that government because of three entitlement programs.
You can't compete with China and India by taxing our economy at 40 percent, let alone Germany and Japan. You can't prepare for globalization. You can't help people get careers for tomorrow and enjoy higher standards of living if we don't address our entitlements right now.
That is the biggest travesty of this bill, Mr. Speaker. This bill says we will do absolutely nothing, nada, zilch, nothing at all either in the Senate budget resolution or the House budget resolution to attack and reform entitlement programs, to attack this problem for 5 years. This budget says let's do nothing to fix our entitlement programs for 5 years. That means we accelerate and exacerbate the bankruptcy of Social Security, of Medicare, of Medicaid. How is that helping senior citizens if we push these programs faster toward bankruptcy? I think that's wrong. I think we need to fix these programs so seniors can better rely on these programs.
And you know what, Mr. Speaker? In Wisconsin we say this a lot, and I think people say it around the country, and prior generations always told this to me, my parents and my grandparents, they said, the thing about America, what's beautiful about America is that one generation works hard and leaves to the next generation a country that's better off. The dream of parents is to leave your children with a country that's better off so you can enjoy a higher standard of living. That is the beautiful legacy of America.
Mr. Speaker, we are at risk of severing that legacy. If we don't address these entitlements, if we simply go the old easy Washington route of simply raising taxes and raising spending and doing nothing to address this entitlement problem, we will really run the risk of severing that legacy and giving our children a lower standard of living than that which we enjoy today.
We have new competitive pressures from other countries unlike any we have seen before. Raising taxes on families and workers will not bring more prosperity to America. It will give jobs to other countries. Doing nothing to attack the entitlement problem in this country will only ensure that an unprecedented mountain of debt is befallen onto our children and our grandchildren, and they are going to have to pay far higher taxes than any American has ever paid in the past.
This, Mr. Speaker, is why I say vote against this rule and vote against this budget resolution, which includes and relies on the largest tax increase in American history and the biggest missed opportunity by doing nothing to reform entitlements over the next 5 years.
This could have been a bipartisan opportunity to fix these problems. Sadly, it's not.
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Mr. RYAN of Wisconsin. Mr. Speaker, will the gentleman yield?
Mr. SPRATT. I yield to the gentleman from Wisconsin.
Mr. RYAN of Wisconsin. No. It increased Medicare spending. It just didn't increase it as fast as it is projected to grow at this time.
Mr. SPRATT. Well, the President's budget cut Medicare by $252 billion over a 10-year period of time and cut Medicaid by 50 to $60 billion over the same 10-year period of time.
Mr. RYAN of Wisconsin. Will the gentleman yield for a question?
Mr. SPRATT. Those numbers are correct, are they not?
Mr. RYAN of Wisconsin. The President's numbers on the 10-year? I think they are probably correct; I have no reason to dispute them. But remember, Medicare spending goes up every year and thereon after under either of these budgets.
Mr. SPRATT. Well, I can only surmise what happened to your budget resolution. One reason it didn't muster, besides the fact that you lost 40 votes, as you recall, is I am sure there are certain Republicans on your side of the aisle who did not want to vote for those massive cuts emasculating Medicare and Medicaid.
Mr. RYAN of Wisconsin. The question I have for the chairman is, if we're not going to fix these entitlements in the budget, then where are we going to fix them? If we don't put it in the Federal budget, then how do you get it done? If you don't have reconciliation protection to do entitlement reform, then when are you ever going to do it?
The 1997 bill that President Clinton passed through on a bipartisan basis was reconciliation.
Mr. SPRATT. If I could reclaim my time, it takes a bigger forum than the Budget Committee provides. It takes more participants than just the Congress. Everybody has got to be a player in this game to make it happen in a significant way because it has got to involve, as you and I know, systemic change. No question about it.
And, finally, PAYGO. We are proud of the fact that we adopted the PAYGO rule in 1991, and it contributed significantly to the fact that over a period of 8 years during the Clinton administration the bottom line of the budget got better every year for 8 straight years to the point where we had a surplus of $236 billion under the Clinton administration resulting in part from the Balanced Budget Act of 1993 and 1997. $236 billion we handed over to President Bush. By the year 2004, between 2001 and 2004, we went from a surplus of $236 billion to a deficit of $412 billion. That happened on your watch. The Republicans controlled the House, they controlled the Senate, they controlled the White House. There is no way you can escape responsibility for what happened in those circumstances.
Mr. RYAN of Wisconsin. Will the chairman yield for an additional question?
Mr. SPRATT. I yield to the gentleman.
Mr. RYAN of Wisconsin. Why doesn't the gentleman's PAYGO apply to discretionary spending? Why doesn't the gentleman's PAYGO apply to current Federal spending?
Mr. SPRATT. PAYGO is never applied to discretionary spending. It would be very difficult at this time to do it when every year we have an end run around discretionary budget with the President's supplementals for Iraq and Afghanistan. It would be very difficult to cap discretionary.
Your party, on its watch, allowed PAYGO discretionary spending caps, all of those constraints in 1990, to expire and did not renew them. The main reason you didn't was you knew if we had a double-edge PAYGO applicable to tax cuts as well as mandatory increases, you would be unable to pass additional tax cuts as part of your agenda.
Mr. RYAN of Wisconsin. May I make an entreaty to the chairman?
Mr. SPRATT. Yes, sir.
Mr. RYAN of Wisconsin. I would love to work on a bipartisan basis to put discretionary caps in place. I would be delighted to work with the chairman of the Budget Committee to put discretionary spending caps in place. Is that something that you would be willing to work with us on?
Mr. SPRATT. We'll talk about it. If we've got a forum, the Budget Committee, once we've got this budget resolution behind us, and that is the order of the day, there are lots of things along those lines that we can explore, and we will.
Let me conclude by saying everybody should vote for this budget resolution if they want to see an orderly, fiscally responsible, disciplined process in the next fiscal year.
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