Concurrent Resolution On The Budget For Fiscal Year 2008

Floor Speech

CONCURRENT RESOLUTION ON THE BUDGET FOR FISCAL YEAR 2008 -- (House of Representatives - May 08, 2007)

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Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the motion we are offering today reflects a very simple up or down choice: One, rejecting the largest tax increase in our Nation's history, which is contained in the House budget; two, insisting on the lowest possible level of taxes available in the budget conference; and three, stopping the raid on Social Security's cash surpluses.

Both the House and the Senate Democrat budgets call for historic tax increases, and we in the minority can't do anything to prevent that. But we hope that, with this vote, we can at least minimize the damage that these tax hikes will bring.

Let me take a moment to describe the options that we have to work with as a minority. The House-passed budget would impose a tax hike of $392 billion from such things as reimposing the tax penalty on married couples, cutting in half the child tax credit, and raising marginal income tax rates on low- and middle-income working families.

This would increase the average family's tax bill by roughly $2,900 a year and likely reverse the economic progress we have achieved over the past few years. So, right along with their higher tax bill, Americans would see fewer jobs and slower wage growth.

This massive tax increase was the only way the House Democrats could accomplish their massive increase in spending. Their budget makes no effort, none, to moderate the growth of spending. It simply requires taxpayers to send more of their money to make the Democrats' budget numbers add up.

In our debate a few weeks ago, the Democrats tried gamely to assert that their budget doesn't increase taxes after all. And as proof, they pointed to the novel policy language that claims that they will extend some of the tax relief provisions enacted in 2001 and 2003. They have these reserve funds that say they don't really want to raise taxes. But if you read the fine print, this would only happen later and only if they hike some other taxes by the same amount. So even with the flowery reserve fund language, the goal, the preference of not raising taxes can only be met if they raise taxes.

But the numbers in this budget tell a very different story. By the numbers, which is what a budget is all about, the House budget raises taxes nearly $400 billion, and numbers do not lie.

The other option is the Senate budget, which raises taxes by about $216 billion, the second largest tax increase in American history. This will include higher taxes on middle-income earners because the Senate budget still raises marginal income tax rates across the board. But at least it attempts to protect the marriage penalty relief, child tax credit and estate tax relief.

Unfortunately, the other Chamber, like their Democrat counterparts in the House, also call for large spending increases. And as a consequence, their budget will continue to raid the Social Security trust funds in fiscal year 2012, something the House-passed budget and the Republican substitute did not do.

So while the Democrat budget in the Senate didn't raise as many taxes, it did raid the Social Security trust fund, and the House Republican and the House Democrat budget resolution did not.

So, what we are simply trying to do is get the best of both products such that it can be had. Accordingly, our motion would simply direct the conferees to do two things: First, reject the House's $392 billion tax increase, again, the largest tax increase in American history, and keep their tax hike to the lowest possible level permitted under the rules. Second, insist on the lowest possible level of taxes between the House-passed and Senate-passed Democrat budgets. This language is included because the motion is required to stay within the scope of the two budgets. We wish we could do more, but this is the scope we have been dealt. Third, it would direct the conferees to stop raiding Social Security for the government's operating budget. They should do this by running a unified surplus, including Social Security, of $96 billion in fiscal year 2012, which is equal to the Social Security cash surplus for that year.

We know that this is possible because we proved it could be done in our own budget. Our Republican budget not only balanced the budget without raising anyone's taxes, we ran a surplus that ensured the Social Security trust funds would not be raided.

So, again, today we are simply asking our Democratic colleagues to do the following: one, reject the largest tax increase in American history; and two, stop the raid of the Social Security cash surplus.

This is a simple choice. A ``yes'' vote supports these objectives. A ``no'' vote rejects them.

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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. This assumes a $96 billion unified budget surplus after those tax cuts are extended.

Mr. SPRATT. How much?

Mr. RYAN of Wisconsin. A $96 billion cash surplus unified budget after the extension of those taxes.

Mr. SPRATT. So what is the surplus before these tax cuts are taken?

Mr. RYAN of Wisconsin. I don't know off the top of my head.

Mr. SPRATT. It would have to be pretty substantial. Isn't the cost of these tax cuts in the first year $180 billion or more?

Mr. RYAN of Wisconsin. The gentleman's budget resolution that passed the House had, I think, about a $150 billion cash surplus and raised all those taxes; so he had a sizable surplus.

Mr. SPRATT. It's my understanding, roughly speaking, that the cost of these tax cuts, the revenue impact of these tax cuts, in the first year was about $180 billion. If you take that kind of charge against the surplus and still have a surplus left of $96 billion, then you've got about a $276 billion surplus in that year.

Mr. RYAN of Wisconsin. If the gentleman will yield, not only did the Republican budget substitute accommodate for that, it accommodated for an extension of all of the tax cuts that expire in 2010 in addition to having a surplus equal to or greater than the unified Social Security cash surplus. So the Republican budget substitute accommodated all of these tax cuts and stopped the raid on Social Security.

Mr. SPRATT. Is this the CBO number?

Mr. RYAN of Wisconsin. Yes.

Mr. SPRATT. CBO's projection.

Mr. RYAN of Wisconsin. Yes.

Mr. SPRATT. And what you would then expect is a $276 billion surplus before the tax cuts?

Mr. RYAN of Wisconsin. I can't speak to that number. I don't know that number off the top of my head.

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Mr. RYAN of Wisconsin. Mr. Speaker, at this time I yield myself 30 seconds.

I say to my articulate friend from New Jersey, I think what he mentioned was a real good highlight on the philosophical differences between our two parties. The question is, who is first in line, the taxpayer or the government? We believe that the taxpayer ought to be first in line by keeping more of their hard-earned money, not the government. The State of New Jersey, which is a high tax-paying State, on average under these tax increases will pay an average of $3,780 more under Democrat-passed budget per taxpayer in the State of New Jersey.

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Mr. RYAN of Wisconsin. Mr. Speaker, if the gentleman will yield, the $96 billion unified surplus reflects the cash surplus, meaning the amount of overpayments on FICA taxes, payroll taxes for Social Security, that gets spent on other government programs that ought to go to Social Security. The interest on top of that is the number that the gentleman from South Carolina is talking about. That reflects past borrowing, past raiding of the Social Security surplus. We would like to fix that, too.

We think that is a good start. Let's say from now on if you pay FICA taxes to Social Security, let's not spend it on all these other government programs. So the cash surplus that occurs in 2012, that is what we are talking about with that $96 billion, not the interest on top that reflects all of the past borrowing and raiding of the Social Security trust fund.

Mr. SPRATT. Mr. Speaker, reclaiming my time, I understand that. But the Social Security surplus is $255 billion.

Mr. RYAN of Wisconsin. That is the cash surplus, plus interest. We are talking about the cash surplus.

Mr. SPRATT. Mr. Speaker, on the other hand, if you look at the surplus you are claiming, $96 billion, and also provide for these tax cuts, my information is that these tax cuts have a revenue impact of at least $180 billion. That would mean in the year 2012 there has to be a bottom line surplus of $276 billion before the tax cuts are taken.

Mr. RYAN of Wisconsin. Mr. Speaker, that is not all in the year 2012, I believe. There is a problem with the numbers here.

Mr. SPRATT. $180 billion I believe is 1 year.

Mr. RYAN of Wisconsin. We seem to have a difference of opinion. But let me make one point: We showed you how to do it.

Mr. SPRATT. But you haven't shown us the arithmetic. We are not sure your arithmetic is correct.

Mr. RYAN of Wisconsin. We showed you with our budget substitute, we do not raise taxes on the American economy and family, and we can also stop raiding the cash surplus of Social Security. And the reason I can tell you we showed you is that is exactly what the Republican budget resolution substitute did, as scored by CBO.

Mr. SPRATT. Mr. Speaker, I reserve the balance of my time.

Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself 1 1/2 minutes to make a couple of comments before I yield to the gentleman from Texas.

Mr. Speaker, I think I made the point on the Social Security cash surplus. We are talking about how much overpayments people pay in their payroll taxes in any given year. We don't want to keep spending that on other government programs. That is point number one.

Point number two: The very fact that the gentleman from South Carolina is suggesting that they are going to accept this motion to instruct, that they are going to accept this, means they agree there are tax increases in this budget.

They are saying right now, I just heard him say it, we don't want to raise taxes on the middle-class. We don't want to get rid of the child tax credit. We don't want to bring back the marriage penalty. We don't want to do away with the 10 percent bracket. So we will accept this motion to instruct. I.e., the other tax increases in this budget are just that, tax increases. Death tax, the marginal income tax rates across-the-board, capital gains, dividends.

Let me just make the point more clearly, by not quoting a think tank that may be left of center, right of center, whatever of center. Let me quote the Washington Post, clearly no paragon of right-wing thinking.

The Washington Post, right after the Democrat budget came out: ``And while House Democrats say they want to preserve key parts of Bush's signature tax cuts, they project a surplus in 2012 only by assuming that all of these tax cuts expire on schedule in 2010.''

They further go on to say about the Democratic budget plan, ``The budget plan expresses support for certain cuts, including the extended child tax credit, elimination of the marriage penalty, and the 10 percent bracket, that would require another reserve fund to be filled with hundreds of billions of dollars in tax increases to cover the cost.''

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Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself 2 minutes.

One additional point I wanted to make, Mr. Speaker, is the point about PAYGO that the gentleman from South Carolina mentioned. As it is well known, we have a problem with their version of PAYGO. When PAYGO is designed to raise taxes, we don't like it. When PAYGO is designed to control spending, we like it. That is why we are for PAYGO on spending, not on raising taxes.

But if this amendment is accepted, if this motion to instruct is accepted, let's just be very clear, it does violate their PAYGO. Because the Baucus amendment, which is what we are referring to, which is the amendment that passed in the Senate, uses their surpluses, quote-unquote, to pay for these tax cuts. PAYGO says if you are going to reduce taxes, you have to offset them with either a tax increase or a spending cut, not with surpluses.

So this amendment, we believe if you are going to have a surplus, it should either go back to the Social Security trust fund and pay down debt, or reduce taxes. That is what we are proposing.

But just so we are very clear with ourselves here, this Baucus amendment, this acceptance of this policy of not raising all of these taxes, just some of them, which is the best choice we have between the two options as the minority, does violate their own PAYGO rule by dedicating their surpluses towards this tax relief, rather than having offsets, either coming from spending cuts or tax increases.

Mr. SPRATT. Mr. Speaker, I yield 3 minutes to the gentleman from Virginia (Mr. Scott).

Mr. SCOTT of Virginia. Mr. Speaker, PAYGO is a very simple concept. If you are going to increase spending, you pay for it. If you are going to cut taxes, you pay for it. You don't go into the ditch. If you have a tax cut, you have to pay for it either with increases of other taxes or spending cuts to pay for it. If you have spending increases, you have to pay for it with cutting spending somewhere else or increasing taxes to pay for it. It is a very simple concept.

Mr. RYAN of Wisconsin. Mr. Speaker, will the gentleman yield?

Mr. SCOTT of Virginia. I yield to the gentleman from Wisconsin.

Mr. RYAN of Wisconsin. If you are going to reduce taxes, you have to pay for it by either raising taxes or cutting spending. That is what your PAYGO is, correct?

Mr. SCOTT of Virginia. That is correct.

Mr. RYAN of Wisconsin. Well, you are violating it if you accept this amendment then.

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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. I wish we were talking about all of the tax cuts. Unfortunately, what we have in the Baucus amendment, that is only $132 billion in 2012 because the Baucus amendment only extends some of the tax cuts.

The point we are making is, if we want to stop raising taxes and raiding Social Security, we are going to have to control spending. That is what we propose to do; and sadly, that is not what the majority budget does.

Mr. SPRATT. The point, I am sure, is you are supportive of all of the 2001 and 2003 tax cuts. You are limited by procedural rules to only dealing with that which is in the scope of the two resolutions. But, in fact, I am sure you are supportive of that. If that is true, you have to acknowledge that the number is $231 billion. That is the revenue impact of extending all of the tax cuts. If you add 96, which is the surplus you project, you get a big, big number.

Mr. Speaker, I reserve the balance of my time.

Mr. RYAN of Wisconsin. Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Campbell), a member of the House Budget Committee.

Mr. CAMPBELL of California. Mr. Speaker, I have been listening to all of this debate, and I guess what I don't really understand is, why? I mean, why the Democrats here on the other side of the aisle want to oppose this motion to instruct.

I mean, do you want to raid the Social Security surplus? Do you like telling people that they are paying money for their own Social Security and retirement and then taking it and using it for other things? Do you like that? Do you want to do that? I mean, do you want to enact the biggest tax increase in American history? Do you want really to tax people more on capital gains and dividends when over 50 percent of Americans now own some sort of stock? Do you want to go back to penalizing married couples and having them pay more taxes after they get married than two people would when they were single? Do you really want to reduce the child care tax credit? Do you want to stifle economic growth?

I know some of you say you don't think that these tax cuts caused this economic growth. Let's assume they didn't cause it all. It can't be a coincidence that since the tax reductions went into place, we have had enormous economic growth, enormous job growth and enormous revenue growth to the Federal Government.

Do you really want to do all that? Do you really want to pass the largest tax increase in American history; and for what? So you can raise spending a lot over the next 5 years because if you just didn't increase spending, you could do all of this. You could allow Americans to keep their own money.

But no, you want to take their money from them and spend it on your priorities. Now I guess that is what you want to do. I still don't understand it. I don't understand why the government having money is so much more a priority, but I guess it is because you look at all money as the government's, and you allow people to keep some. We look at money as belonging to the people who earned it, and we allow the government to take that which is necessary.

But understand that if all you did was keep spending level or increase it a little bit over the next 5 years, then you wouldn't have to raise taxes and then you wouldn't have to raid the Social Security surplus. But apparently that is what you want to do.

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Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, let me concur that the resolution does say what the chairman says it does. The reason it points to the words in the House budget resolution, which say that the policy of the House is to keep these tax cuts, but we refer to the deeds of the Senate is because the House didn't pay for those tax cuts, didn't extend those tax cuts. The Senate extended those tax cuts.

The House used the words that said, we hope, we wish, we would like to extend these tax cuts, but they didn't do that. They raised the taxes. It is the Senate.

The mere fact that the Senate passed the Baucus amendment in the first place is a repudiation of the claim by the House that they are actually not raising taxes.

The Senate looked at the House budget resolution and said, you know what, this thing is the largest tax increase in American history. We don't want to raise taxes on middle-income earners, child tax credit, marriage penalty, 10 percent bracket; and therefore, they passed the Baucus amendment.

What we are saying is we wish we could extend all of the tax cuts. Since the scope is limited, we are saying, let's stick with the Senate and actually put numbers where the words are in the House by actually lowering the revenue number.

Now, the chairman is right. He is saying it is a reach to reach these surpluses. It is too tough to do it to reach these surpluses if you accept his premise. And the premise of the chairman's budget is do nothing to control spending.

Mr. Speaker, we don't have a revenue problem in Washington. Just the last 7 months alone we had 11 percent revenue growth. That is 3 straight years of double-digit revenue growth at these lower tax rates. We have plenty of money coming in from taxpayers. The problem is we are spending it too fast. That is the problem in Washington, not a revenue problem, a spending problem.

If you accept the premise of the chairman, the esteemed gentleman from South Carolina (Mr. Spratt), that there is no spending problem in Washington, which I don't accept, then he is correct, you can't balance the budget. You can't stopped the raid on Social Security and you can't extend tax relief.

We disagree. How tough is it to do it? Let me tell you what our budget accomplished, the Republican substitute. We simply said in order to stop the raid of the Social Security surplus and make all these tax cuts permanent, spend $14.977 trillion over the next 7 years instead of the current projection, $15.286 trillion. That is what we are saying. We are saying instead of spending over the next 5 years $15.286 trillion, spend $14.977 trillion. Instead of growing mandatory spending by 5.2 percent, grow it at 4.3 percent.

Is this Draconian, is this crazy, is this hard core? No. It's what families do around a kitchen table every day. We are simply saying put taxpayers first. Don't make people wait for 3 years to see if they're going to have their per-child tax credit, if they're going to have the marriage penalty, if the estate taxes are going to be higher, lower or somewhere in between. Tell them now. Let's tell taxpayers, first you get to keep your money; then we're going to tighten our belt here in Washington by controlling spending.

Mr. Speaker, the taxpayers deserve this respect. They don't deserve to be jerked around. We should control spending, and by golly, we need to prepare for the retirement of these baby boomers. We need to reform these entitlement programs so we can extend their solvency, extend their reliability, and that is the biggest shame of all.

Not only does this budget have the largest tax increase in American history; it proposes that we do nothing for the next 5 years to control and reform entitlements to do anything to control spending. That's a shame. That's why we should pass this motion to instruct.

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