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Veterans Jobs Corps Act of 2012--Motion to Proceed

Floor Speech

By:
Date:
Location: Washington DC

BREAK IN TRANSCRIPT

THE DEFICIT

Mr. JOHNSON of Wisconsin. Madam President, I have been listening to the debate on spending and taxes and our debt and deficit. I come to the floor this morning with a few visual aids and charts and graphs to try to dispel some of the myths I have been hearing.

The first myth I constantly hear is about the Draconian cuts being proposed in the House budget. I think this chart pretty well dispels that by showing that 10 years ago, in 2002, the Federal Government spent $2 trillion. This last year--this year--we will spend about $3.8 trillion. We have doubled spending in just 10 years. The debate moving forward shows that under the House budget, we would spend $4.9 trillion. President Obama's budget proposes spending $5.8 trillion. I think it is clear to see from this chart that nobody is proposing net cuts in spending. We are just trying to limit the rate of growth in spending.

Another way of looking at spending is over 10 years. In the 1990s, the Federal Government over a 10-year period spent $16 trillion. The last decade, from 2002 through 2011, the Federal Government spent $28 trillion. Again, the debate moving forward is, over the next 10 years do we spend $40 trillion, as the House budget proposes, or do we spend $47 trillion? Again, no cuts, just trying to reduce the rate of growth.

Let's talk a little bit about what the Federal Government has spent under the current administration. Over the 4 years of President Obama's administration, the Federal Government in total will spend $14.4 trillion. Think back to the last graph. That is almost as much as we spent in the decade of the 1990s. The entire deficit for that time period was $5.3 trillion. In other words, we had to borrow $5.3 trillion of the $14.4 trillion we spent; that is, about 37 cents of every dollar spent, we borrowed. We put that debt burden on the backs of our children, our grandchildren, and our great-grandchildren.

I often hear that the whole problem with the deficit is caused by the war costs or the 2001 to 2003 tax cuts. We added those to the chart here. We can see that the total amount over that 4-year period of the overseas war costs and the Bush tax cuts was $1.2 trillion. It is less than 25 percent of the total deficit. Again, they are a factor but not the cause of the deficit. The cause of the deficit primarily is spending.

This chart basically shows what has been happening over the last 50 years. The structural deficit we have incurred is a basic result, on average, of the Federal Government spending 20.2 percent of the gross domestic product from 1959 to 2008, prior to this administration. On the other hand, revenue generation averaged about 18.1 percent of GDP, which gives us a 2.1-percent structural deficit. That is why our debt has continued to grow.

Under this administration, starting with the recession, that structural deficit exploded, with tax revenue dropping to about 15 percent and spending skyrocketing to 25 percent and now to about 24 percent. It is on a trajectory to hit 35 percent by the year 2035.

Clearly, that is unsustainable.

Another way of taking a look at the tax cuts of 2001 and 2003, in terms of their total effect on our deficit figure, is to actually put them on a bar chart. The red bars represent the total deficit. The blue portions on the bottom of those red charts are the actual reductions in revenue from those tax cuts. We can see it is not a very large figure. In total, over that--I guess that is an 11-year time period, the total Bush tax cuts were about $1.7 trillion, while the entire deficit was about $7.5 trillion. The tax cuts represent about 22 percent of that total deficit--but, again, when we take a look at the last 4 years, a far smaller portion of the deficit, because the primary deficit over the last 4 years has been on the spending side of the equation.

What does the President offer us for solutions? Last year, he proposed the Buffett rule. In a speech on September 26, in proposing the Buffett rule, he used the basic principle of fairness that he said the Buffett rule represents, and if that was applied to our Tax Code, it could raise enough to not only pay for his jobs bill, it would also stabilize our debt and deficits for the next decade. Think about what President Obama said there. He said the Buffett rule would not only pay for his jobs bill but would stabilize our debt and deficits for the next decade. Here is the chart and here is the fact: The Buffett rule for 4 years--4 years of the Buffett rule, it was projected, would raise about $20 billion total. President Obama's 4 years of deficit is $5.3 trillion. So let's state it a different way: $5,300 billion. It doesn't take a math major to realize $20 billion doesn't even come close to stabilizing a deficit of $5,300 billion. President Obama misled the American people. I think the President of the United States has a far higher duty to the American people. He should be honest with them.

Last week, we debated the other tax proposals offered by our friends on the other side of the aisle. In proposing this and actually, unfortunately, passing this piece of tax legislation, the majority leader said this piece of legislation is about debt. It is about the debt, he said. We have to do something about the debt, and we have tried mightily to do that. We have tried mightily.

Again, let's take a look at the facts. The first years of that tax legislation--the only years that count--would have raised $67 billion a year on average compared to last year's deficit of $1,326 billion. Is that trying mightily to fix the debt and deficit? I don't think so.

If we were serious about fixing our debt and deficit situation, if we were trying mightily to do that, we might have tried passing a budget in the last few years. We might have actually brought appropriations bills to the floor so they could be debated and passed in the House and signed into law so we would not be faced with what we are faced with right now, which is a continuing resolution to fund the government in 2013.

Again, dispel the myth: The Democrats' tax proposal would do nothing--almost nothing--to stabilize our debt and deficit. It is simply a political exercise. It is political demagoguery. It is class warfare.

I ask the American people to consider a simple question: Are they for increasing taxes on the productive sector of our economy, the small businesses, those 1 million small businesses that would be affected by this? The money that would be taken out of those small businesses that they would use to expand their business, to buy capital equipment, to increase wages, to pay for health care, and invest in 401(k) plans, it does not stabilize the debt and deficit. It does nothing to do that.

I think Republicans basically agree with President Obama and President Clinton. Back on August 5, 2009, just as we were coming out of recession, President Obama said: ``You don't raise taxes in a recession.'' I agree with that. Republicans agree with that.

Back in December--the last November and December of 2010--right after the lameduck session when all the tax rates were extended for 2 years, President Obama said: ``If we allow these taxes to go up ..... the economy would grow less.''

He was right. Back then, by the way, average growth in our economy was about 3.1 percent. During the last four quarters now, the economy has only grown about 2 percent. Our economy is in worse shape. It only grew at 1.5 percent in the last quarter. We can see the downward trajectory.

Of course, President Clinton also said probably the best thing we could do is to extend all the tax rates to take that sense of uncertainty off the table. That is what Republicans are proposing.

Let's not increase taxes on any American at this point in time. Let's not threaten any kind of government shutdown. As much as fiscal conservatives do not like the Budget Control Act or those spending limits, we think it is reasonable policy to pass a 6-month continuing resolution so a responsible leader can come into this town and actually start fixing our debt and deficit situation.

That is what Republicans are all about, taking the uncertainty of a shutdown off the table, taking the uncertainty of what people's tax rates will be over the next year off the table, and being responsible.

With that, I yield the floor.

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