Hidden Taxes
Floor Speech
HIDDEN TAXES -- (House of Representatives - March 17, 2009)
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Mr. BURGESS. I thank the gentleman for yielding. And I really appreciate your energy and enthusiasm with coming to the floor at this late hour of the night. You and I serve on the same committee, and our committee has been extremely active for the past several weeks. I think we spent 10 hours today talking about health care. We will spend many hours tomorrow talking about the carbon tax that is going to be enacted before Memorial Day. And then on Thursday we will have another lengthy hearing dealing with food safety; all terribly important issues to the American people. It's good to be up here doing the people's work. Unfortunately, on the floor of the House this week we're not really doing very much, but at least in our committee there is a great deal of work going on.
I will say that I am grateful that this week the President chose to stop talking down the economy and Wall Street, and we perhaps had a little bit of a respite from the inexorable downward spiral that we had seen from Inauguration Day forward. That has been a welcomed respite, I know, to my constituents back home.
I so appreciate the gentleman having the poster which shows the differences in the deficit by the time we lost control of the House with the 2006 election. We were told that we lost the election for the majority of the House in 2006 because of spending, because we had a deficit of $160 billion at the end of that fiscal year. Mind you, that was a year that had seen Federal expenditures go up because of Hurricanes Katrina and Rita, the continued fighting of two wars in the Middle East. We had a tsunami that we had to help with right after the 2004 election. There were some significant expenditures which were really once-in-a-lifetime expenditures, and our deficit was $160 billion.
Now, 3 years later, we are looking at a projected deficit 10 times that much, 10 times $160 billion. And we're told, don't worry, all is well, we can, indeed, spend our way out of this crisis. But I will tell you, I have not been in favor of any of these spending bills that have come through the House of Representatives in the past year. I think, going back to January of 2008, the so-called stimulus bill of $170 billion at that time was an error; it was wrong, and it didn't deliver as intended.
The bill to bail out Fannie and Freddie in July that had to be redone in September didn't have the intended result, and then finally the big bailout that occurred right at the end of September, the first of October, in the election process clearly was a spending bill that we should not have undertaken.
Now, it's instructive to know if you're spending all this money and you're not bringing it in in tax revenue, we are intending or at least the signals are there that the Democrats are intending to raise taxes considerably on every American, as has already been alluded to, this carbon tax. Yes, you won't pay more tax if you earn less than $250,000 a year, unless you turn the lights on, in which case you're going to spend more in taxes, unless you drive a car, in which case you're going to spend more in taxes. So there will be massive tax increases visited upon the middle class of this country. But if you can't tax enough to cover this much spending, where do you get it? Well, you either print it or you borrow it, and right now we are in the process of borrowing this money.
Just a little less than a month ago, I spent an interesting afternoon down at a Federal agency called the Bureau of Public Debt. The Bureau of Public Debt that day was having its third of three auctions. Each auction was to be $32 billion, so roughly $100 billion which was going to auctioned off that day. Each auction lasted 30 minutes. Each auction, fortunately, was fully subscribed, in fact, oversubscribed. So the notes that we had to sell as a country to keep our economy afloat did sell. The interest rate was not terrible. It was 1 1/3 percent. At the same time, a month ago we were selling about $160 billion in paper every week. A year before, it was a little less than $100 billion, and it has obviously gone up every year, year over year, and will continue to do so.
What is the effect of putting $2.1 trillion in new paper on the market in a very short period of time? Well, one of two things can happen: Your interest rates will go up or the paper won't sell. If the interest rates go up, that crowds out the private sector, which is also competing for that money to borrow to expand business and grow business. We're going to make it that much harder to add new jobs because we're going to add to the expense of a business growing or expanding. In addition, the tax burden that we are going to be adding in the energy sector alone will be a job-killing crush that most people at this point, quite frankly, haven't engaged upon. They do not comprehend the danger that is coming their way as we seek to recover our economy and grow new jobs and grow new sources of revenue.
One of the things that I have been so concerned about is here we are talking about a very enormous budget, an enormous amount of Federal spending. Have we really corrected the problems that were the underlying difficulties before? And I'm not certain we had. I came to Congress in 2003. I was elected in 2002 and was sworn in in 2003. We had just come through a very significant economic downturn. We had just come through some very significant corporate malfeasance with the implosion of Enron. We had new regulations enacted in Sarbanes-Oxley. And the feeling was that we had done all we needed to do and we had gotten it right. But the reality was there were still problems and we hadn't gotten to the bottom of it.
I urged the prior administration to proceed upon a course with engaging--I don't like to use the term ``Special Prosecutor.'' Perhaps we should call it a ``Special Inspector General''--to look into the problems in the financial institution that caused us to be in this place. That did not happen.
Within the next 2 days, I am going to be introducing with another member on the Joint Economic Committee, another Member of the House, a bill to ask for a commission to study the problems that brought us to this point. I am not a fan of commissions. I think, in fact, most of the time they detract from congressional power and they are something that we should not do. But in this instance, the stakes are so high and the price we will pay if we get this wrong yet one more time will be so large that I, frankly, do not know if the country can sustain that. So I will be introducing legislation to ask for a commission to study not only what went wrong but who should be held accountable at this point. The same as we did with 9/11. The same as we did with the Iraq Study Group. I was not in favor of those commissions, but I think in this situation it does warrant that type of intervention because we cannot allow this to happen again.
And I don't know about you, Mr. Scalise, but when I go down to Denton, Texas, when I go home to Fort Worth, Texas, or Lewisville, Texas, and I talk about these problems, everyone wants to know who is responsible and when are we going to see someone held accountable? And the fact that we see more people receive bonus money for driving their companies into the ground because, oh, I'm so sorry, it's contractual obligation; so we have no way around it. Nonsense. Ask any Delta pilot what happened to their contractual obligation about their pension. Ask any United pilot what happened to the contractual obligation with their pension, and they will tell you what those contractual obligations were worth. These contractual obligations to AIG border on criminal. There is no defense for our continuing down this road, and those need to be stopped.
I do hope that people will take a look at the concept of having a commission to study this problem because I do believe that the difficulties are so deep and so entrenched that if we do not correct them, if we do not get rid of the dry rot that's in the system, we will build an entirely new house of cards on an unstable foundation, and we know where that will lead.
But I do thank the gentleman for bringing this forward. Again, I know it's been a very long day at least for members of our committee. We will have a long day again tomorrow. We'll have a long day on Thursday. I wish our floor schedule mirrored that. Unfortunately, right now we don't seem to feel the same urgency on the floor of the House that the American people are feeling every single day as they watch the job losses mount in their communities and their area.
But I thank the gentleman very much for allowing me a chance to talk on this.
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