THE BUDGET -- (House of Representatives - April 27, 2005)
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Mr. COOPER. Mr. Speaker, I appreciate the gentleman yielding. I would like to ask a question on this, because I think it is a very significant chart the gentleman is pointing out.
It is my understanding it took the first 204 years of American history to run up $1 trillion in debt, and that chart seems to demonstrate, what, that in just 2 or 3 years-
Mr. SPRATT. Every 18 months we are adding $1 trillion to the national debt, to the statutory debt to the United States. Nobody in his right mind thinks this is something that can be sustained.
Mr. COOPER. So to put the cookies on a low shelf, it took the first 204 years to do $1 trillion worth of damage to our Nation, and now the Republican majority is doing that every 18 months?
Mr. SPRATT. Roughly that. Even the CBO tells us that another substantial increase in the debt ceiling will be necessary by at least January or February of next year.
Mr. COOPER. If the gentleman will yield further, this is probably hard for the folks back home to understand, and I know it is hard for many Members here to understand, but this news simply has not gotten out to the American people. It is my understanding that, what, votes on raising the debt ceiling anymore do not happen?
Mr. SPRATT. This is past history. What I was giving you is a projection. You can look at the last three increases over the last 4 years, and the bottom line is $2.234 trillion. As Yogi Berra liked to say, you can look it up. It is a matter of record.
Mr. COOPER. Numbers do not lie. I appreciate the gentleman yielding. So the total national debt now is about $7.7 trillion.
Mr. SPRATT. That is correct.
Mr. COOPER. We pay the interest on that debt largely to foreign nations now, right? More and more foreign nations are lending us this money, so we are owing more and more money to foreign nations, is that correct?
Mr. SPRATT. Reclaiming my time, that is correct.
Mr. COOPER. Mr. Speaker, if the gentleman will continue to yield, Japan, China, Europe, nations like that, we will have to write checks to for many, many years in order to service the interest.
Mr. SPRATT. This chart shows the percentages of our debt that are held by foreigners. As you can see, they have steadily increased to the point where in 2004 the share of foreign-owned debt rose to 44 percent. One of the reasons that it is difficult to get this message across to the American people is that they are not really feeling the effects of it, since foreigners are buying for now a lot of our debt. But when and if they cease buying it in huge quantities as they have been, we have got a problem.
Mr. COOPER. So almost half the mortgage on America is owned by foreigners, and they have been kind to lend us that money, but they could change their minds and stop lending us money at almost any time? Because we sell Treasury bonds, notes, other papers, every day in the market.
Mr. SPRATT. Reclaiming my time, in the meantime, they are accumulating claims against the United States that could some day be called.
Mr. COOPER. What happens if we cannot pay the debt?
Mr. SPRATT. Well, we have to probably inflate our currency. But let us not get into that. We are still not in that bad of shape, and I do not want to get into dire predictions. But we are forewarned. We all know there are limits to which anyone can go, governments, individuals, households, companies, corporations, there are limits to which you can go in borrowing money. It is a function of what your income is, and we are beginning to approach those limits.
Mr. COOPER. Mr. Speaker, the gentleman mentioned we certainly do not want to inflate the currency, but the dollar today is weaker than it has been in some time, the dollar vis-a-vis foreign currencies. If an American travels abroad and pays in dollars, you discover today it buys very little under Bush administration policies. A few years ago it used to buy a whole lot more. That is a sign of a weak dollar that we are already facing today because of our dependence on foreign borrowing.
Mr. Speaker, I appreciate the gentleman yielding. I did not mean to distract from your presentation.
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Mr. COOPER. I think it is important to return to the fact that we are going to be voting tomorrow on the budget for the United States of America, and it is a budget that no one has seen yet. They only appointed the conferees yesterday.
Mr. SPRATT. $2.6 trillion budget, which no one has seen.
Mr. COOPER. $2.6 trillion, covering all of the priorities of this great Nation, the fact that we are at war, Social Security and Medicare, all domestic spending, cancer research, CDBG grants, everything is rolled up into it and no one has seen it.
Now, last year we did not have a budget at all, so maybe the prospect of voting on a budget this year is a good one. But from all that we do know of the budget, and we will probably vote on it apparently about 2:00 tomorrow afternoon, it will be crammed down our throats with no one having seen the text of it. And the New York Times and responsible publications like that are saying it is really the worst of both worlds. It is going to help the people who need it the least and hurt the people who need it the most. It is going to hurt poor people. It is going to hurt middle-class people. It is going to hurt small businesses. It is going to hurt our schools, and that is irresponsible budgeting.
Mr. SCOTT of Virginia. Will the gentleman yield?
Mr. COOPER. I would be delighted to yield to the gentleman.
Mr. SCOTT of Virginia. When the budget left the House, what did it do to things likes Medicaid?
Mr. COOPER. I believe they recommended a $60 billion cut in Medicaid.
Mr. SCOTT of Virginia. Did they direct the Education and Workforce Committee to cut mandatory spending?
Mr. COOPER. Well, unbelievable cuts are in this and unbelievable aid to countries like Iraq. It is really a crazy set of priorities and unbelievable tax cuts.
Mr. SCOTT of Virginia. And if you cut mandatory spending and the education budget, the only thing you have for school lunches and student loans, that is the only thing you can cut under that program.
Mr. COOPER. One thing we know will go up is interest expense on the national debt because the deficits are the largest in American history. It is getting harder and harder to blame 9/11 for that because they have produced the largest deficits in American history year after year after year, as this chart shows right here. As the gentleman illustrated earlier, the sea of red ink is continuing; deficits, the largest in American history, as far as anyone can see.
Mr. SCOTT of Virginia. The gentleman mentioned 9/11. It seems to me that it is fair to have been surprised in September of 2001 or maybe later that you suffered 9/11. Does the gentleman find it surprising that people still appear to be surprised that 9/11 happened here, 4 years later, that we are budgeting as if it did not happen? And surprise, after you pass the budget, oh, we forgot about 9/11?
Mr. COOPER. All the experts, including Chairman Greenspan of the Federal Reserve, say right now under these Republican budgets we are clearly on an unsustainable path, a literal road to ruin for our Nation. And the head of the GAO, the Government Accountability Office, David Walker, has said the same thing. In fact, he pointed out that 2004 was the worst year in American fiscal history, the worst year in our entire Nation's fiscal history because we are piling up deficits in such an irresponsible fashion. It is time for that to stop, but the situation will not be helped tomorrow when they cram down a budget on us that literally no one has seen. But if it resembles the House Republican budget or the Senate Republican budget, it is likely to be bad news for the American people.
Mr. SCOTT of Virginia. Let me ask one more question. The gentlemen mentions interest on the national debt. I remember in 2001 when this administration came in, when Chairman Greenspan was testifying, the questions he had to answer were along the lines of should we pay off the whole national debt or should we pay off just the short-term debt or the long-term debt? What will happen to the interest rates when you pay off the national debt?
Were the projections not at the beginning of 2001 when this administration came in that we could pay all the debt held by the public, we could pay it off by 2008, and by 2013, 2015, we could have put all the money back into the trust funds that we borrowed from like Social Security?
Mr. COOPER. The gentleman makes a great point because we have gone from the prospect of being a debt-free Nation to being one of the most indebted nations in the world.
In fact, there is a tragic tipping point that will occur in the last year of the Bush administration, because in that year, and this is according to the House Republican budget, we will actually be spending more on interest payments to our creditors than we spend on all regular domestic government in America. So in a sense it will be a better deal to be a bond holder of this country, even a foreign bond holder, than to be a citizen of this country. And that is the classic result of budget mismanagement which we are seeing year in and year out under this administration.
Mr. SPRATT. The gentleman mentioned what they told us about repayment of the debt. If the gentleman recalls, they said if you pass our budget, including these tax cuts, $1.5 trillion, $1.6 trillion in tax cuts, with interest even more, we will not be back until 2008, if you implement our budget, to ask you for an increase in the debt ceiling. We will not need to come back because we will have ample room beneath that ceiling.
In the Clinton administration the last 3 years we paid off over $300 billion of national debt. That is the first time that has happened for a long time. So they said that trend is going to extend and we will not need to come back and ask for an increase in the debt ceiling in 2008. History shows in 2002 they were back, hat in hand, saying we need $450 billion. The next year, 2003, they needed 984.
As the gentleman from Tennessee (Mr. Cooper) pointed out, that was equal to the entire debt of the United States in 1980. And then only 16 months later, they were back asking for another $800 billion which was provided in November of last year; and as a consequence, the total increase in the debt ceiling of the United States to accommodate the Bush budget from 2001 through 2005 is $2 trillion 234 billion. That is simple arithmetic, back-of-the-envelope analysis, but it is truly astounding to me, given the fact that they told us we would not need to raise the debt ceiling until 2008.
Mr. COOPER. The gentleman mentioned earlier that in early 2006 they will be asking for another increase in the debt ceiling, perhaps even 2005.
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Mr. ALLEN. If I could just jump in here, I wanted to come to a conclusion about what this means, these huge deficits, these unprecedented deficits, the highest deficits in American history. They mean higher interest rates in the long run, higher interest rates than we would have otherwise.
Mr. COOPER. On car loans.
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