THE ECONOMY IN AMERICA -- (House of Representatives - January 14, 2009)
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Mr. SCALISE. I appreciate the gentleman from up north of the Mississippi River from my area in Missouri for yielding, and especially as you are talking about this latest effort that some people have to try to resuscitate Keynesian economics and reinvent history and try to make it out to be something it wasn't back when it was tried and failed decades ago.
But if you really look around and you look at what the taxpayers, the people who ultimately are the shareholders who I think are fed up with this whole mad rush to have bailouts and deficit spending, and then see more, trillions of dollars added to our national debt, what the people across this country are doing during these tough economic times, I think that is really the true indication of the direction Congress should be going, and, unfortunately, Congress is going in a different direction.
But people all across this country that are facing tough economic times, they are tightening their belts. They are making those tough decisions to live within their means.
Mr. AKIN. So the responsible people are saving money, yet the people in this Congress are talking about spending it when we don't have it. Go ahead. I yield.
Mr. SCALISE. Absolutely. And if you really want to go and look further into the States, each of our States, many are facing, I think a majority of the States are facing various budget shortfalls. My State of Louisiana is facing about a $1.3 billion budget shortfall.
But what our Governor is doing is what I think is the responsible thing
that we should be doing up here. Our Governor is actually going in and making responsible cuts to our State's budget. We have a $30 billion State budget and there is a lot of room to make cuts in our State's budget, and that is in fact exactly what our Governor, Governor Jindal is doing. He is going and making cuts.
Many States across this country are doing the same thing. They are actually going and doing the things that the American taxpayers are doing. They are living within their means. They are making cuts and responsibly handling a budget shortfall, as opposed to what is happening in Washington.
Mr. AKIN. Could you imagine if you were the Governor and you talked to your State of Louisiana and you said, hey, we are in economic hard times, so I have decided we are just going to spend a whole lot more billions of dollars. What would people do to you? Would they lock you up?
Mr. SCALISE. I think they have institutions where those people would go. But I think if you look at what is really happening across the country is people are making their responsible decisions, but they really want Washington to make those same responsible decisions. And when they look at what happened with the first bailout and recognize the failure of the first $350 billion, I think what they would want us to do in Congress is to pull back and say, wait, that approach didn't work. Don't spend the other $350 billion, and surely don't have some secret stimulus plan being developed.
Mr. AKIN. Do you know what happened to the first $350 billion? Is it your sense that in the last month or two that that has really given a whole lot of value for that $350 billion?
Mr. SCALISE. I think most people would recognize that bailout didn't work, including many of the people who initially asked for it. And while those of us who voted against it said there was a better way and presented an alternative approach, that was much more based on cutting taxes and encouraging the private sector to make investment. There are trillions of dollars sitting on the sidelines right now that we could bring back into the economy to turn this economy around instead of using taxpayer money and adding another trillion dollars on to a national debt that is already too large.
Mr. AKIN. So we came up with a solution that cost a whole lot of money, when there was actually a much lower cost way to solve the problem. And we are in danger of doing the same thing again in the near future if we don't use the right kind of tools to turn things around. I hear what you are saying.
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Mr. SCALISE. Thank you, Congressman Akin. And you know, when you showed the chart over there about the revenue, the dip and then ultimately as taxes were cut, Federal revenues actually increased. The same thing happened under President Reagan when President Reagan cut taxes. I think one of the myths that is out there is that the deficit grew. Some people tried to attribute that to the tax cuts. But if you really go and look, you'll see a similar chart, you'll actually see an increase in revenue. Unfortunately, you had a Democratic-controlled Congress that spent even more money than the new money that did come in. But in fact, more money came in as taxes were cut. And so I hope we use history as a guide.
As you talked about earlier, there is no bill filed yet on this economic stimulus plan. We are expecting in the next week to possibly 2 weeks, there will be a bill filed. And unfortunately, right now what you've got is a bidding war. What started off as maybe a $400 or $500 billion proposal has now reached over $1 trillion where the proposals that we're hearing now are $1.3 trillion.
Mr. AKIN. Congressman Scalise, did you say that basically we have already gone from 700,000 now to a trillion? Is that already that high?
Mr. SCALISE. We've gone from 700 to a trillion, and now more people are coming up with more ideas of how to spend taxpayers money; not today's taxpayers, but the next generations and the next generation after that tax money because we don't have enough money.
Mr. AKIN. So it's our grandchildren's money we're starting to spend.
Mr. SCALISE. It's our grandchildren's money. And if my daughter, Madison is watching, I'd ask her to turn away for a moment because I don't want to frighten her. But my 21-month old daughter, with a $1.3 trillion bill, will take on an additional $4,000 in debt, just my daughter alone. Every man, woman and child in this country, if we pass a $1 trillion deficit-laden spending bill, every man, woman and child in this country will take on another $4,000 each in additional national debt. And that's what this really means to people in this country.
Mr. AKIN. Now, Congressman Scalise, you made a point that I think, and I think it is, it almost seemed counter-intuitive to me when I first heard this before I came to Congress, the idea that the government could actually cut taxes and raise more revenue. Doesn't that seem like making water go uphill?
Mr. SCALISE. On the surface it definitely doesn't seem to mesh until you look at what happened. And a real good example of that was something that those of us here that have been talking brought up, along with other colleagues of ours, when there was an alternative proposal to the original $700 billion financial bailout.
One of the things that was brought up was, back in 2005 they tried an experiment. Congress actually did something that I think was smart. They said, look, we're seeing that a lot of American companies that have operations overseas in other countries where they're making a profit, those companies aren't bringing those profits back here to America. And the reason they're not is because there's a 35 percent tax if they bring that money back, whereas they don't pay any taxes if they leave that money in other countries helping those other economies. So for 1 year, they relaxed that tax. They brought it down to, I believe, 5 percent for just 1 year. And you know what? They brought in over $300 billion in money, American companies' profits that they were not bringing to our country because they were going to be taxed on it. For that 1 year where they didn't get a tax they brought $300 billion back into our country.
So guess what Congress did in 2006 when that expired? Congress let it expire and didn't renew it, so guess what happened to that $300 billion? It went back out of the country and it's still sitting over there helping those other countries when it could be helping our country, by not raising the tax, by cutting the tax. By cutting the tax you bring the $300 billion back.
Mr. AKIN. Congressman Scalise, I don't know if you were aware of it, but did you ever hear the story of what the Irish did? Their economy was in trouble about 15, 20 years ago, and they decided they were going to cut their corporate taxes really to the bone. They really cut the corporate taxes.
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Mr. SCALISE. If the gentleman would yield.
Mr. AKIN. I will.
Mr. SCALISE. I've heard those analogies before.
Really, what's happening up here is an insult to sailors who drink, because they don't act irresponsibly like that in terms of spending.
One thing we can use is history as a guide because these aren't ideas we're just pulling out of the sky. What you have been talking about and what your charts prove is that these are all things that have been tested and proven. When you cut taxes, the income to the government actually goes up because people make better decisions. The Federal Government isn't going to tax people more. They're just going to go turn on the printing press and print up another $1.3 billion that doesn't even exist yet, and then they're going to go and spend it.
Does anybody really think that that $1.3 billion would be spent anywhere near as efficiently as if you had just gone and cut tax rates in areas where it's stifling growth and where it's keeping people from making good decisions so that their families can have basic education that they might want or so that their families might be able to get better health care or so that their families might be able to make better decisions in buying a car to help the auto companies rather than bailing out the auto companies for failed decisions?
Mr. AKIN. The little trouble with what you're saying is that it requires people to be responsible, doesn't it?
Mr. SCALISE. Absolutely.
Mr. AKIN. I mean, in politics, it's nice just to tell somebody, It's okay to be irresponsible. We'll just bail you out. The only trouble is that, when you allow that to grow to a certain level, the whole country crashes.
Mr. SCALISE. It's really sad to see. The people out there are being responsible. Our people all across our districts are making those tough decisions, those responsible decisions to cut back. Our States are making those decisions. It seems here in Washington that the Federal Government is the only entity that doesn't seem to get it. Hopefully, before anything does pass, because we do still have time, we can turn this train around and get it back on track.
Mr. AKIN. So we're basically saying that there are two courses before us. We're standing at a crossroads.
One of them is the old Keynesian theory that we're just going to spend a ton of money and slop it into everybody's pockets. The people who get the money may like us, but the whole economy is going to go down, not just into a recession but into a depression.
The other alternative is to get the government out of the way and allow the small businessman to make the investment to drive the economy.
Those are the two choices before us. We're not trying to criticize the Democrat Party for the past things--for creating the problem by making loans to people who shouldn't have gotten the loans, for refusing to regulate Freddie and Fanny--but now it is their responsibility because the voters have put them in charge, and they're going to have to take one of these two courses. We're standing here today, saying: You need to choose the responsible course, which is empowering small business to create those jobs.
Mr. SCALISE. One last thought, if the gentleman would yield.
Mr. AKIN. I will.
Mr. SCALISE. We are at that crossroad, and that's why it is so important we have this conversation now, because this is a bipartisan issue.
If you look at what is happening all across the country, it's not just Republican Governors, but it's Democrat Governors who are also making those same responsible decisions to cut back rather than to increase taxes and rather than to go into deeper debt. It is Republican and Democrat and independent families across our country who are making those tough decisions.
So I think that we, as responsible Members of Congress, can join on both sides, Republican and Democrat, and do what's right for the taxpayers and for the future generations so that they're not saddled with this extra $1.3 billion of deeper deficit spending.
Mr. AKIN. Congressman Scalise, that is a great summary. We appreciate the wisdom that you've brought for us from Louisiana.
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