Mr. AKIN. Thank you, Mr. Speaker.
We are going to talk for a little while here this afternoon about a subject that is on, I think, everybody's minds regardless of their political affiliations. The more we look at it, the more significant it seems to be--in fact, the more frightening it seems to be. It is the simple situation with our economy and the level of what the government is doing in the ``spending money'' department. This, of course, ties into the job situation in America. The many people who are looking for work, some of the businesses that are struggling as well as the families who are struggling, all of it is tied together in the economy. It is also, of course, tied to the Federal Government and its spending.
What I'm going to try to do is paint a picture in simple terms. Sometimes economists make things seem a little bit too complicated. This doesn't have to be so complicated. In fact, the less complicated it is, the less frightening it becomes. So, first of all, I'd like to talk about some words that we use in Washington that we maybe aren't familiar with here, particularly our freshman Members. The first word is ``entitlements.''
I'm an engineer by training, so ``entitlements'' you could think of as a machine. In fact, it's a little bit like those machines in bathrooms, and when you put your hands in front of them, they spit out those brown paper towels you see. In fact, the entitlements we're talking about here spit out dollar bills. What happened is a legislator or a legislature maybe 30 years ago created some bill which automatically gives money to certain people who come and put their hands in front of the machine. Of these entitlements, the biggest ones are Social Security, Medicare and Medicaid. These are programs that have been around for quite a while, but they're a little bit like that, if you think of them as things that spend money automatically. So those of us here on the floor of the Congress talk about whether we're going to fund this or fund that or how we're going to run the government. These things were created a long time ago, and they just keep on running and spending money. Those are called ``entitlements.''
There is another thing that is like the entitlements, and it is the interest on our debt. When the U.S. Government issues a Treasury bill, the Treasury bill is supposed to pay some interest. It's a little bit like that machine in that it spits out some dollar bills. It, like an entitlement, is something that's spending money.
Now, here is the thing that I think is frightening, and I think you'll think it's frightening as you give this a little bit of thought, and this isn't sometime way out in the future but, rather, just this year. If you add up the Social Security, the Medicare, the Medicaid, and the other entitlements--there are some other smaller entitlements--and if you put those together with the interest on our debt, it comes to $2.2 trillion. I don't know what $2.2 trillion is in terms of trying to visualize the money, but it's very easy to visualize this. $2.2 trillion is also the total revenue that the Federal Government brings in in taxes, so that makes it easier to see. In other words, these entitlements and the interest on the debt, $2.2 trillion, is the same thing as the revenue that we get in from taxes.
Now, why is that frightening?
It's because it doesn't include two other things: the defense budget and what's called non-defense discretionary.
So what are these two things over here?
The defense budget is pretty obvious. Obviously, it's tanks and airplanes and ships. It's men with rifles, and it's our national security. That's a piece of that, and you can see that it's almost $700 billion. Then non-defense would be things like the building that we're in. It would be the Capitol building. It would be the Federal parks. It would be the Federal prisons. It would be the Department of Energy or Commerce or Justice or Education. All those different government things that we spend money on are in this non-defense.
In other words, if you want to balance the budget today, what do you have to do?
What you'd have to do would be to cut defense to zero: not one soldier, not one rifle left, not one uniform. You cut that to zero, but that's not enough. Then you'd cut the rest of the stuff the government is spending money on. You'd close this building down, the Capitol. You'd close the Senate and the House down. You'd close down the Federal parks. You'd close down all of those different departments, those of Commerce, Justice, Education, Energy, and all those things. You'd close them all down. When those are all zero, you will have a balanced budget.
How is that going to work? Not very well.
That's why I say what we're dealing with is a far bigger problem than, I believe, most Americans are aware of. If you think about that, you ask: How in the world can our government and how can America continue when we're doing this?
As I've said, I'm a conservative Republican. These aren't Republican or Democrat numbers. These are just the numbers. This is just our country. This is a country that we inherited. This is really our country, and these are what the numbers look like. So this is pretty frightening. What that means is we're going into debt, deeper and deeper into debt at an incredible rate right now, trying to do something that mechanically, economically, mathematically just will not work. That's the nature of the problem.
So, if anybody has a little bit of sense of intuition, if anybody has a good American spirit, one of the first things you ask when you see a good problem is: Oh, how can we fix the problem? Because this is something all of us have to deal with. Let's take a look at what the possibilities are.
The real possibilities remind me a little bit of all of these kinds of funny weight-watching programs that are out there. I always think it's sort of interesting when people say they're going to go on a low-carb diet or this diet or that diet or something. When you come to be a little bit older, such as I am, you're really faced with two realities. You either get more exercise or you don't eat so much. It's about that simple. You don't have to have a lot of fancy dietary programs.
This situation suggests that it's kind of simple. It's either don't spend as much money or tax everybody a whole lot more. The trouble is, in this situation, the ``tax everybody a whole lot more'' doesn't really work. Let me explain why it doesn't. We'll take a look at another chart.
What happens to our economy is that we have these different taxes that we run. In spite of all the different taxes--sometimes we raise them and sometimes we lower them--what the experience of the Federal Government has been is that our revenue kind of comes in at this 18 percent average. So you say, Well, look. We've got way too much spending and not enough revenue coming in, and we need an extra $1.5 trillion in revenue, so we're going to just raise taxes about 30 percent. The trouble is, if you do raise the taxes, you don't get more revenue coming in. That's sort of a weird thing, isn't it? Let's talk about that for just a minute.
Why would it be that if you raise taxes the government wouldn't get more revenue?
The reason is, if you tax the economy to a certain degree, then you start to collapse the jobs and the economy. The economy goes south. When it does, it stalls, and you don't get as much tax revenue. Think about it this way. I'd like to explain it by just having you picture yourself, if you will, as being king for a year and that your job is to try to raise some tax revenue for your kingdom.
And the only thing you can do is to tax a loaf of bread. And so you start thinking in your mind about this. You say, well let's see, in my kingdom they eat a lot of bread. So I could just tax a loaf of bread for just 1 penny a loaf.
Or you could say to yourself, ha, I know how to get a lot of taxes. I am going to put a $10 tax on every loaf of bread. But you think, yeah, but I bet nobody would buy any bread if we did that.
So your common sense would say somewhere between a penny and $10 for that loaf of bread, there is going to be an optimum tax. If you raise it or lower it either way, you won't get as much money raised in taxes, and that's what's going on here.
You can raise the tax rate, but what happens is people find out ways to avoid it. The economy stalls and so, in fact, your revenue starts to fall off, and you don't get any more money in. Of course, the problem is your spending is still going like mad.
So the solution to this problem isn't even as easy as trying to lose weight. You really don't have two alternatives. What you have is really one alternative, and that alternative is you have got to get these entitlements under control.
Now, the fact of the matter is that even if you look at a snapshot of this year, you have to get the entitlements under control, but particularly this graph shows that the entitlements here, these are just three of them, the big ones, Medicaid, Medicare, Social Security, that these entitlements are growing rapidly over time.
So even if we went to the scenario up here, and we got rid of defense and nondefense spending, and we balance the budget with the government spending nothing, except just entitlements, even if we did that, in a couple of years these entitlements are going to eat our lunch.
The problem is you can't fix it by getting more revenue in. And so what's your alternative?
The alternative is the uncomfortable fact that America cannot continue to afford these entitlements.
Now, of course, that's radioactive to say that politically. I am surprised I haven't been hit by lightning yet. But that is, unfortunately, the pure mathematics of it. Now, there are some people in politics, they like to sugarcoat things and may not tell you absolutely all the truth, but those are the facts. That's where we are.
Now, how are you going to deal with these things? None of us really know. We have a bunch of ideas. We are struggling with how you are going to do it, but there are a lot of people that are dependent on these entitlements. Yet, the money is not going to be there.
We can't keep borrowing money from the Chinese to pay for these things because sooner or later what's going to happen, the interest rates will go up on that money, and the whole Nation will be bankrupt.
And I don't quite know what that would look like. What does it look like if you picture, you get up one morning and you find out that the dollar bill doesn't work any more? You go to your grocery store and it seems like everything stopped moving. The trucks aren't moving and you can't get food for the shelves because the trucks don't have gas. The whole thing just kind of comes to a stop because the dollar bill, the whole country has gone bankrupt.
I don't know what that looks like. I don't think it's particularly pretty, but that's going to be the picture if we don't deal with this problem.
What I am suggesting is that, first off, what we have to do, every one of us as Americans, we have to educate ourselves on the simple facts. You don't have to be a wizard on the budget or economics; all you have to realize is that the entitlements are using up all of the tax revenues. That's a problem. Plus the entitlements are also growing, and you don't really have flexibility to raise the taxes too much more.
Let's take a look at the problem a little bit more closely. This is a picture of what's going on relative to the national defense. I am on the Armed Services Committee. We have spent 10 years, all kinds of hearings, listening to what the Russians do, what the Chinese are doing, what the different threats are, and also understanding the logic of why America has a strong national defense, why that buys us a great deal.
You might ask yourself why in the world do we have nuclear aircraft carriers. What exactly do they do, because other countries that are allies of ours, they don't have ships like that. Why would we? Well, the reason is because if you think about America and the globe you find that America is sitting there a little bit to a degree by itself, a little bit of an island. And our two main trading partners, which is Europe and all the way around to China and Japan and India, those trading partners are a considerable distance around the world.
And it is in our interest because of all of the things that we buy that are traded that we protect those trade routes from some hegemon that might want to cause trouble. So we have things like our Navy and our nuclear-powered aircraft carriers so that we can go to the other side of the world and conduct operations and not to worry about fueling these things up. That's the reason why we have a lot of national defense. This started a long time ago, and you can see this blue line here talks about our defense and what's going on with defense spending, and then what's going on with entitlements.
You see entitlements back here in 1965, this is just Medicare, Medicaid, and Social Security. This chart says it's 2.5 percent of GDP. You see defense is much, much higher, it's jumped up to above 9 here.
But then over time these entitlements are going up. That 9.9 percent is low because it doesn't add all of the entitlements. That's just three of the big entitlements, and defense spending is going down. So people that say, well, aren't you open-minded, shouldn't we be cutting defense and cutting other things as well?
The answer is no, not really. Because you see any freedom that you enjoy in this country isn't worth anything if we are being attacked by an enemy and there are bombs falling and there is chaos all around us. Our national defense provides us with what we enjoy in a peaceful and decent world to live in.
As you see, the defense budget is going down and yet the entitlements are going up. So this gives you a sense, again, that you can't fix this by cutting defense. You could cut defense to zero and you still are not going to deal with the problem here.
Here is another way of saying that you can't really fix the problem by raising taxes. This is a curve of the very highest marginal income rate, back here in 1960. If you were very well-to-do, your tax rate is 90 percent. So if you earn $1, you give 90 cents to the government.
Well, you can imagine the people that are making a whole, whole lot of money aren't dumb enough to give 90 cents out of a dollar away. So what they find a way to do is move to another country, or they find different tax shelters and things to avoid paying this. But, anyway, you have this very high tax rate here on the people that are very well-to-do.
These lines show how much revenue comes into the Federal Government. You see, as this highest tax rate is decreased, that's the red line, what you see is that actually the revenue that the government is collecting goes up. This is reflecting that same idea that we talked about, the loaf of bread.
If the loaf of bread is overtaxed, people won't buy much of it, and you won't get that much tax. If you put a thousand-dollar tax on a loaf of bread, nobody would buy any. Golly, you have got nice, high taxes. Should you have a lot of money coming in? No, because it doesn't make sense. That's what this chart is showing: That as the taxes actually come down, you actually get more revenue with the government.
Has this actually been proven to happen? Yes, historically it has. There are several times when it did.
And those times were, first of all, when JFK inherited not a very good economy, I mention this because JFK was obviously a Democrat, a Democrat President. He understood these principles, and when the economy was bad, what JFK did was he decided to cut taxes.
Now, doesn't that seem like an odd thing? The economy is bad. The government needs more money, and yet he cuts taxes. What an odd thing to do. Yet it certainly worked. It worked beautifully.
So how did it work?
Well, over a period of time by putting more money back in the economy, the people that were small business owners took the money, invested in their businesses, and they built warehouses, new machines, new technology, new research to develop better products.
As their businesses grew, they hired more people. And as they hired more people the government got more tax revenue. The economy got better and better, and as the economy got better they made more money. So the result was, by actually cutting taxes, particularly cutting taxes in certain ways, that is you cut taxes on the people that own the businesses, when you do that, you can actually pick an economy up and get it going so you get more revenue coming in.
What we're getting at is the part of the solution to the problem that we talked about in the very beginning. And the solution is two-fold. The first is fairly obvious: We have to cut spending. And particularly we must cut these entitlements in some way. The second thing, though, is that you don't have to cut them entirely. What you can do probably is also to some degree grow your way out of the problem.
In May of 2003--George Bush had been elected in 2001, the same time I was elected--and when we came in, there was a recession going on. You can see that reflected in some of these graphs. This is the time period of 2001 on up to about 2006. This chart is a little bit old, but it makes an interesting point. And so this is the gross domestic product before and after tax relief. The tax relief is this vertical line right here. This was not a particularly popular tax. It was a tax relief to get rid of capital gains, dividends and get rid of the death tax.
People say, well, those are taxes that favor the rich. Well, the problem is, if you want jobs, you've got to have employers. If you tax small business into the dirt, you won't have as many jobs. And so you can't have it both ways. If you want to allow small business owners to keep enough money that they can invest in their business, you can't tax them very, very heavily.
And so the deal was here, you change capital gains, dividends and death taxes. That freed money up for small businesses to invest. Now look what happened. This is the GDP, or the growth of our economy. Here's the tax cut. These average about 1.1 percent of GDP. And then here after that tax cut, this thing averages 3.5 percent. This, then, is the result of generating a lot more money for the Federal Government.
So when business is doing well and when people are being employed, when people have good job markets and the economy is strong, not only do individual citizens prosper, the Federal Government prospers. It gets more money. So let's take a look at this question. And we're going to look at this exact same graph. This is May of 2003 when those tax cuts went into place; they were called the Bush tax cuts, as you recall.
Here's the chart on employment, job creation, before and after tax relief. You see here, these lines, anything going down means we lost jobs, and so you're seeing we're losing a lot of jobs in the front end when we were in the recession. Then as we did some tax cuts in here, it helped a little bit. But still when we do this tax cut, take a look at how things turn around; and this is the average loss of 100,000 jobs per month, this is a gain of 168,000 jobs a month after this tax cut goes into place.
So, you can see where I'm going. I'm starting to get to a solution to this problem, and there are really two pieces of solution. And so let's take a look at the final chart here. This is government revenues. Again, May of 2003: Capital gains, dividends and death tax. So this tax goes into place.
This is the Federal revenues coming down here from 2 trillion down to 1.9 down to 1.8. Revenues are going down. The country is in a recession. We do the tax cuts. And take a look at government revenue. Government revenue takes off. Because the economy is starting to strengthen now, so are the revenues for the Federal Government, 4 straight years of increases right after the tax cut. What an odd thing. You might not have expected that.
What does that say then about our problem overall? Coming back to our first chart here then, the problem is that the entitlements are eating our lunch. Entitlements are taking everything that the Federal Government has.
And so the solution is what? Well, it's two-fold. First of all, we're going to have to reduce the amount of spending here, reduce spending anywhere we can, for that matter, particularly in this sector, because a lot of the spending over here creates a tremendous amount of red tape and regulations for businesses. If we can reduce the red tape and regulations on businesses, if we can also cut taxes on businesses in certain specific ways, you can start to get this economy growing again.
And if you do that, then what starts to happen is instead of having 2.2 trillion in terms of receipts from the Federal Government, they will start to go up. We will get more tax revenues so we have less debt, and so we both reduce here, but we also grow our way out of the problem.
And so that's the general strategy that I think most any economist would say that you're going to have to do faced with the problems. Now, of course, there's a whole lot of politics, as you can imagine, that's involved in these questions and these issues.
The politics are, the main political questions would be, first of all, what should the Federal Government do? Is it really the job of the Federal Government to get involved in education per se? Or is that something that should be done at the local level? Is it really the Federal Government's job to get involved in flood insurance? Is the Federal Government to be involved in providing loans to people? Is that really the job of the Federal Government? What really is the job of the Federal Government? That is the biggest political question here and what we argue about quite a lot, and with good reason, because that is the big question.
As you recall, there was a nation that believed that the job of their federal government was to provide you with a good education, to provide you with health care, to provide you with a home and some food, provide you with a job and a future. It was the federal government's job to do those things. And that particular nation went into the dustbin of history.
And we thought, as the Soviet Union collapsed, oh, that will never work. That's communism. Communism doesn't work very well. Socialism doesn't work very well. And yet, here, years later, in America, we're thinking the Federal Government should be providing health care, the Federal Government should be providing housing, the Federal Government should be providing food, the Federal Government should make sure that you have a job, the Federal Government should be doing this and that and the other thing. And so we're wondering why we're starting to get in trouble.
Now that's a debate. What should the Federal Government be doing? Should it be doing all these entitlements? Well, if you go to the U.S. Constitution, you would find out, well, no, in fact, a lot of these things are unconstitutional. The Constitution says that the only things the Federal Government can do are the things which are specifically enumerated. Well, what's one of the main ones enumerated? Well, you don't have to read past the, not only the first page, it's in the first paragraph, it's in the Preamble. As a Federal Government, we're supposed to provide for the common defense. First of all, the job of the Federal Government is to protect our country. Any other rights you have mean nothing if you're being bombed and people are attacking your shorelines.
The main job of the Federal Government is to provide for the national defense. A lot of these other things, they might be nice. They're probably, even though they've been around for generations, not constitutional because they're not specifically enumerated powers of the Federal Government. And what we're seeing happening, what was a safety net has become a way of life for huge blocks of our citizens.
And we're getting to the point where, in fact, we are and have arrived at the point where the numbers don't work. America's solvency, everything you and I think of as America, is up for grabs. This is a very, very sober moment for our country.
I would ask you to, if you will, just pretend in your mind, pretend that you were a Congressman or a Senator in the year 1850. In the year 1850, you might recall, there was this 10,000-pound gorilla in the tent. People politically didn't quite know what to do with it. It was called the issue of slavery. And the way politics was working, you had the Southern guys and the Northern guys, and so the power was somewhat divided, and the people that were Congressmen and Senators didn't know what to do with this huge gorilla which we call slavery. They didn't know what to do with the issue, so they sort of tried to step around it the best they could politically. And they said, well, we'll let one State come into the Union, and it will be a free State, and then we'll let another one come in, and it will be a slave State. They tried to make a compromise instead of dealing head-on with a massive problem that they had.
In 1852, there was a book, ``Uncle Tom's Cabin,'' and it increased the rhetoric and the tension of the slavery issue. So the issue of the gorilla was now glowing, and he is there and he is threatening. By 1857, the terrible decision from the Supreme Court, the Supreme Court again decided to act like legislators. Instead of just interpreting the law, they decided to create law. They decided in Dred Scott that Dred Scott was not really a person, he had to go back to slavery, et cetera, he was property. They made other decisions that the Congress couldn't decide whether new States coming in were slave or free. So now this whole great big slavery gorilla was really ready to storm out and cause trouble.
President Lincoln, the first Republican President, is elected. The South knows he is against slavery. He gets on the train, and he hasn't even gotten here to Washington, D.C., and the Southern States start to secede. America, like a train going off a cliff, starts in the Civil War. After 4 years, Abraham Lincoln writes his second inaugural address, and he references the fact this war is more miserable, there has been more suffering, and it has been much, much worse than anybody imagined it would be.
So what's the point? The point was that there is this gorilla in the room that the leadership failed to deal with, and the results were absolutely horrible. Statistics don't touch your heart, but statistics also are helpful to know. Six hundred thousand Americans died in the battles of the Civil War. That is more than all of the Americans killed in all the wars of our past other than the Civil War.
But the stories that come from that war are even more compelling. I recall one that every time I think of it, it puts a face on the Civil War. There was a Northern unit that was trying to take a position occupied on some higher ground by a Southern unit. The Northern unit seemed like they had the South just wavering. They were about to be able to take the hill, and there was a young officer at the top of the hill who would reappear, almost not worried about his own safety. He would reposition his Southern troops, and they would settle down and fight the North back. They fought back and forth a number of times until the officer of the Northern unit remembered he had an older man who was an excellent shot with a rifle. He said: There is a young officer up there that is really the one who is holding this hill, and I want you to use your great marksmanship ability, and I want you to take that officer out.
So the next time that young officer showed himself, this crack marksman shot him. And the young officer, the Southern officer, dropped dead on the spot. The Northern troops moved up and by the time they took the position, the marksman went over to see who he shot. He realized he had shot his own son. He was so distraught that he just stood up and ran across the field where the Southern army was shooting, and he was killed by rifle fire.
That is a little personal tragedy. The Civil War was full of those. But they are full of them because there was a leadership failure to deal with the crisis that America had to deal with, and they didn't do it, for whatever reason.
Today, we also have a crisis that is right here in front of us. And as Americans start to understand where we are with the budget, we also have to deal with this thing. The face on our entire economic system collapsing could be very ugly indeed.
And so my point of being here on the floor today is not to be particularly partisan, but simply to acknowledge that the numbers don't work. Now I have to be somewhat partisan because our President submitted the 2012 budget. The 2012 budget is irresponsible because it refuses to deal with these mathematics. It pretends that it is a budget but it never deals with entitlements, for whatever particular reason, and tries to kick the can down the road, pretending that the gorilla is not there. That we cannot do.
The fact is that we are overspending. We are overspending at a horrendous rate, and something has to be done. So America now faces a great challenge in the next couple of years as to how are we going to deal with this problem.
As I said before, the solutions are not simple. In fact, the solutions are simple, they are just not easy. I think Ronald Reagan said that. The solution is simple, but it is not easy. The simple part is we have to cut the spending. The simple part is we need to grow the revenues of the government by getting the economy and the jobs going. We know how to do that. We have to cut the redtape. We have to cut taxes on small business owners, and we have to try to make sure that the liquidity is available to small business owners through the banks. And then we have to stop the era of uncertainty so the businessman feels like the economy has settled down and they can actually make some investments. Those are the things you do to get jobs going. We know it is fairly simple what it takes to get jobs because we know employers make jobs, and that means businesses have to be healthy and we have to do the things so they are not red-taped out of existence. We have to allow them to be competitive with businesses overseas. I would stack up Americans competition-wise with any foreign country as long as we don't burden them down with too many taxes and redtape and uncertainties and things, and scare all the jobs overseas. So it is simple, but it is not easy.
Also, cutting the tremendous level of entitlement spending. You can see you have to do it. You just can't not do it. But how do you do it? That is not easy. That is where we are. But we cannot continue to ignore the gorilla that is in the tent. If we do that, we threaten all kinds of very serious problems in our economy.
The other different pieces that have to go into place--we have to stop all of the regulations that make it so we can't drill for oil. We have a Federal Government now that ever since the oil spill has shut down drilling for oil. I guess they have got one well working. You have chaos in the Middle East, and we are dependent on foreign oil, which we shouldn't be because we have a lot of oil in America. We have great natural gas resources that we just discovered, all kinds of coal to last us for hundreds of years. We have the resources in America, but we are not developing them. We don't have drilling rigs going out and drilling where we know there is oil. Those drilling rigs are silent. Why? Well, because there is an environmental lawsuit on almost every promising well--the big, heavy wells that could really bring in oil. Or, if it's not that, there are regulations that say you can't drill. There is an area in Alaska called ANWR. It is basically like Oklahoma only frozen. It is very flat and cold. The idea would be you could bring drilling rigs when it is frozen solid, drill down there and pull them out before it is thawed. You have a pipe, and you would pump the oil out of that area. And you could pull the pipes out later after the oil is tapped out. Why are we not drilling?
Why is it, on our Continental Shelf, foreign nations are coming onto our Continental Shelf and drilling for oil and we are not? That just doesn't make sense.
So there are some policies that kind of come over in this area where America can do some things to get our economy back in shape. We can cut a lot of the ridiculous regulations that come from places like the EPA.
There was an award that we presented last week here on the floor. I think was called the Golden Turkey Award for the fact that the EPA decided that milk, because it contained oil or fat or whatever it was, had to be treated like an oil spill. And so farmers had to put containment around their dairy barns instead of having a few cats to lick up the milk that was spilt. I guess it is a sort of cry over spilt milk type situation. But talk about overregulation, my goodness.
Another part of EPA was a decision now that we cannot, if you are a farmer, have any rogue dust. Well, what would rogue dust be? That would be if you are plowing a field, if any dust comes off your field, that would be terrible. So the EPA is very concerned about rogue dust. They haven't been to my good State of Missouri and seen, when you are harvesting corn in the fall and that stuff has got all kinds of dust that the rain has deposited on it. And, boy, when that machine goes by, it is a cloud of dust. Still the corn is good, and it feeds a lot of cattle. What would you do with all of that rogue dust? Somehow that just seems a little absurd to me. So we have to get rid of all this redtape and ridiculous kinds of things and let good old American innovation go.
On the subject of innovation, that is what free enterprise is all about. That is what we are pretty good at. There is guy in my district that I am just so proud of. His name is Kent Schien. He has a company called Innoventor. One of the things that he started playing with is something that some of us who grew up a little closer to town try to avoid at all cost. We try to avoid it at a distance. It is called pig manure.
It has its own special smell. Some people can take it and some people have trouble with it. He thought, well, maybe if we could find something good to do with this pig manure, we'd really have something. As you can tell, he's a guy with a lot of imagination.
So what did he do? Well, he gets this pig manure. He puts it in a big kettle. He puts it under pressure and temperature and works something like a petroleum cracking process until he breaks the stuff down into sort of a primitive asphalt. They've then taken the asphalt, mixed it with gravel and used it to asphalt some roads. You may think, that must be a smelly road, but it's not. It doesn't have the smell anymore because of the temperature and the changes chemically. So now they're testing out a section of highway that's been made with pig manure. He has this thing designed so that it's not that big a unit so you could put different ones of these units in areas where there are pig farms and they could bring over their pig manure and get paid for it and still make a profit on selling the asphalt.
That's the kind of thing that makes America. That's the kind of thing that has made America such a special place. It's called freedom. It's called free enterprise. It's called innovation. It's talking about somebody that has a dream in their heart, and they're willing to take a risk and to try to do something that no one's ever done before. They hear people say, you can't do that and you can't do that, and the American in them comes out and the American says, ``Ain't no such word as `I can't.' '' And so they go forward.
America has been built that way. This great nation was built that way, by all these people that had some crazy dream that became a vague possibility, and then a possibility, and then it actually happened. America was built one dream at a time. A beautiful country. But a country now that because of government irresponsibility is in a crisis state and something that we all have to deal with.
Some of us that hold elective office, we travel around. We talk to our constituents. We talk to people in different States, but our own particularly, and there's a perception out there that we can solve this problem by taking out a line in the budget that's called waste, fraud and abuse. Now, we've never found that line. It's like a fat marbleized in meat. It's all over the place. We try to get at that and get rid of waste, fraud and abuse. But you're not going to fix this problem by fixing waste, fraud and abuse. You're not going to fix this problem by more efficiency. You're not going to fix this problem by saying we're not going to send any more money to foreign countries. You're not going to fix this problem by trimming a little bit here and there. This is a massive problem, and it's going to require a rework of the entire way that we're spending money in the Federal Government. That doesn't mean that it can't be fixed.
I recall Ronald Reagan. It seemed like things were kind of in rough shape when he took over as President. But he had that can-do attitude, his little twinkling sets of wit. He would kind of cheer America along and he put us on the right path, got the economy going and basically won the Cold War. He was a great man, a great leader, that God brought to our Nation at a critical time.
I think we need to be praying now for great leaders in America, people who understand the problem, are not going to turn their tail and run away from it; they're not going to pretend it doesn't exist but take it straight on, because I believe the American public, when they understand the nature of what we're dealing with here, I think they're willing to roll their sleeves up and say, Let's do what Americans have always done so well. Let's just move forward and solve this problem. Let's figure out what each of us has to do, what's reasonable, and let's move forward and get this thing done.
It was my father's generation. My father served with General Patton, and there was that phrase, everybody did their bit. That was kind of the speak of the day. We, likewise, are challenged now that we have to do our bit. We have to be making the wise decisions to put our business and industry back in place.
Now, that's very controversial. You might be surprised here on the floor of the U.S. Congress--you wouldn't be surprised if I said Republicans and Democrats are pretty polarized on the abortion issue, and they are. But you might be surprised to know that in terms of voting, Republicans and Democrats are more polarized on the energy issue than they are on the abortion issue. But I believe that the fact that the foreign oil is starting to become very expensive and more scarce is going to tip the balance of that argument. And I believe that America is going to start developing our own supplies of energy, and I think that's the way we have to go. I think we have to get rid of the redtape and the ridiculous regulations like rogue dust and spilled milk in the dairy barn and things like that that just don't make any sense. There's a Clean Water Act, also, that has incredible kinds of regulations and things that don't make any sense at all from an engineering point of view.
We have to look at those things. We're going to have to trim out some of those things in this budget in order to create that environment, a good, strong environment for business. But we're going to also have to look at this spending. We're going to have to figure out ways to reduce that spending.
As a member of the Armed Services Committee, and actually I'm a chairman of the subcommittee that deals with the Navy, the Marine Corps and projection forces--that would be things like bombers and long range--we realize that there is not a whole lot we dare to cut here because of the various other nations and the rate that they're spending on defense and the threat they could be to our country. This money is not always spent as wisely as it should be, but, again, the Navy right now, the American Navy, has the same number of ships as we had in the year 1916. That's not enough ships to do what we need to do in order to try to create a peaceful and free trade area where we can trade back and forth across the
oceans of the world.
And so there's not going to be a lot here to be able to solve this problem. We can spend this money more efficiently probably, but we're not going to be able to cut a whole lot there. The solution to this is, once again, pretty straightforward: We have to cut particularly the amount of spending we're doing on entitlements, and particularly we have to reduce the growth where the entitlements, as the years go out, are going to become more difficult. This growth is induced because of the fact that the population is getting older and the older people are taking up more of these entitlement programs, so it becomes more expensive.
So people like me, I'm a baby boomer, as the baby boomers get older, then they're going to get onto these programs. It's going to cost a lot more, and there's not as many younger workers to be able to pay. That's part of why this gets high. We have to be able to bring that curve down, and we have to cut the level of spending in that area.
So we have to do the cutting on the one hand, and the other thing is we have to grow the economy. We know how to do it. It's been done by other Presidents. We understand the economics of it. But it's just a big challenge. The sooner that Americans across the board understand what we're dealing with, say, ``Okay, let's roll up our sleeves. Let's get to work on this thing,'' I have tremendous confidence. Americans in the past have always rolled up into challenges. They've done well, and we've gotten through many things.
I think the way we'll get through them, also, is something we can learn from the past. That was what the Pilgrims did when the Pilgrims first landed. They had a dream of creating a nation that was designed in an entirely different way than the European countries. They arrived here, and in the first couple of months half of them died. The Mayflower, in the time spring came around, up anchor, was headed back to England. The captain said, Come back to England with me, but 50 Pilgrims said--52 or 53--said, No, we felt like God called us to this country to do something new and different and unique, and they stayed, and that dream started the great American Dream.
Later on, 160-some years later, there was a general by the name of General Washington at Valley Forge. He also was forced to his knees looking to God for help in America's time of crisis. He saw the answer to his prayers. In fact, there was this old guy with bifocal spectacles when the first Constitution was going to be ratified that talked about those days when George Washington ran the army. He rose to speak because the politicians were disagreeing with each other at the Constitutional Convention, and old Ben Franklin with his glasses down on his nose, 80-something years old, which of course was very old in those days, stood to address George Washington.
He said: I have lived through a long time, and the longer I have lived, the more convincing proofs I see of this truth, that God governs in the affairs of men. And if it's possible that a sparrow cannot fall to the ground without His notice, is it probable that a nation can rise without His aid?
Then he goes on to say that in the recent war we saw frequent instances of God's superintending Providence. And he closed by saying: We need to be in prayer as a Constitutional Congress here as we look at adopting the new U.S. Constitution.
Well, Washington called the first day of Thanksgiving as America adopted the U.S. Constitution, but that tradition that when we got in a jam that we looked to God continued. General Eisenhower, recognizing that trend, decided to add it to our Pledge of Allegiance. And so it was that he added words that came from Lincoln, from his Gettysburg address, the words ``one nation under God.''
And so Eisenhower, on just the front steps behind me of this Capitol, recited for the first time the new pledge, which included ``one nation under God, indivisible.''
And so as we approach this crisis in our history, I have faith, faith in the American people that we will take a look at the problem, that we will solve it, we will do the right thing, and that we will recognize that the problem is bigger than we are, and that we will have the wisdom to also ask God's blessing on our efforts, and that by His help we will be able to overcome and put America back on a more solid fiscal footing.
I thank you for allowing me to do, I suppose you'd call it, a 30,000-foot view of the budget, not a lot of details, but the big picture, a very sober, a very serious big picture, one that we all have to think about, we all have to become engaged in and take part in.
Mr. Speaker, I thank you for your indulgence. I thank you for your attention and the attention of my colleagues and friends. God bless you all and God bless America.