The Federal Budget
THE FEDERAL BUDGET -- (House of Representatives - May 02, 2006)
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Mr. CHOCOLA. Mr. Speaker, I want to thank the gentleman from Texas for yielding and thank him for his leadership on budget process reform, spending and many other very important issues. I appreciate you bringing us to the floor tonight to talk about what I think is the most important challenge we face as a Nation, because if we don't solve our fiscal challenges, really nothing else matters.
Since I was elected a few years ago, one of the probably most knowledgeable, honest, straightforward people I have talked to about fiscal issues in Congress is a guy named David Walker. He is the head of the GAO, the Comptroller General of the United States. What I would like to do is just share with you part of an op-ed that he put in an Atlanta newspaper recently. I will share here.
``News flash: The largest, most complex and arguably the most important entity on the face of the Earth recently failed an external audit for the ninth straight year.'' Let me repeat that, Mr. Speaker. Entity failed an audit for 9 straight years in a row. ``It also received an adverse opinion on its system of internal control over financial management and reporting.
``If that is not bad enough, this entity overspent by $319 billion on a cash basis,'' that is billion dollars, on a cash basis, and on an accrual basis, it was $760 billion in fiscal 2005. ``Worse yet, the accumulated liabilities and unfunded commitments for this entity have risen from about 20 trillion,'' that is with a T, ``at the end of fiscal year 2000 to more than 46 trillion,'' with a T, ``at the end of fiscal year 2005.
``If this news flash were related to any multinational corporation, it would have been on the front page of every newspaper in the world and at the top of every news broadcast in the world. However, this news flash doesn't relate to a company, it relates to a country, the United States of America.
``As Washington embarks on its budget cycle, the facts are clear and compelling that the Federal government is on an imprudent and unsustainable fiscal path that, if not effectively addressed, could serve to swamp our ship of state. Our current course doesn't just threaten our future economy and quality of life, but also our long-term national security.''
Mr. Speaker, I think we could talk about a lot of things tonight. We could talk about immigration. We could talk about just about anything, and it really doesn't matter as much as what I just read from David Walker. Because, by 2040, we will spend on entitlement spending, including Social Security and Medicare and interest, more than we have in revenue coming in. So that means by 2040, not that long from now, we will not have any money for education, we will not have any money for defense, we will not have any money for agriculture, we will not have any money for anything.
I think it is important. To solve a problem, we have to define a problem. Unfortunately, the American people and many Members of Congress don't appreciate the situation we are in fully.
So I have introduced a piece of legislation. I think it has been cosponsored by the gentleman from Texas. It is called the Truth in Accounting Act. All that that does is require the Federal government to share with the American people and all Members of Congress fully the extent of our unfunded liabilities.
Today, our unfunded liabilities stand at $46 trillion. Just a few years ago, in 2000, they were at $20 trillion. So just over 5 years they have more than doubled.
When I go around my district and talk about fiscal issues and people say how big is the national debt, I say $8.3 trillion. People are appalled. But to put this in perspective, we could fully pay off our national debt today and we wouldn't even come close to meeting our financial obligations. The $46 trillion is money we know we owe. If the United States Government was a public company, it would have to disclose those unfunded liabilities.
I am the only Member of Congress that I am aware of that ever served as CEO of a publicly traded company. Because of that, I understand that if any public company in America accounted for its business the way the Federal government accounts for its business, the management team would be in jail.
Public companies are required to account a certain way to result in transparency and accountability. I think we should expect no less from the Federal government. So, again, the Truth in Accounting Act simply requires the Federal government in the annual financial reports to disclose the unfunded liabilities that this Nation faces.
Why I think it is so important is because the better understanding there is of our financial challenges, the better policy we can enact. Because until we can define the problem, we won't have serious efforts to solve the problem, and I think it is so critical that we don't pass along a debt to our children that they simply can't afford.
The analogy I use is Congress is kind of like the Levee Commission. If recent history has taught us anything, when a storm is coming, you must strengthen the levee. We know that the storm is coming. In fact, it is a Category 5 hurricane. By publishing our unfunded liabilities clearly and accurately, I think that we will see that the sirens will go off, that the American people will demand that we address this responsibly, and they will not reelect Members to this body that don't stand up and do the right thing and not pass it along to future generations or future Congresses.
I appreciate the gentleman bringing us down here tonight. I appreciate his leadership on these issues. Certainly as responsible Members of this body, we must address this sooner, rather than later.
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Mr. CHOCOLA. Mr. Speaker, I thank the gentleman for yielding again. And, you know, the story you just told I think can be told millions of times around the United States. Certainly small businesses are the backbone of our economy. Something like, you know, well over half of the employees in this country work for small businesses, and something like 90 percent of the employers are small businesses in this country.
We were home a couple of weeks ago. I have a small business advisory council, and one of the members of that council was talking about the 179 expensing that you were referring to, that allows small businesses to go out and buy capital goods, and they can expense it so they can invest in their business, grow their business, create jobs, provide benefits, contribute to the local economy and the national economy all at the same time, which is kind of a neat thing.
The good news is that there is a bill that is offered by Mr. Herger, a member of Ways and Means, that would expand 179 expensing and make it permanent, which I think is good pro-growth tax policy.
I also heard a quick story that I got from my small business advisory council. A small businessman that has a business in LaPorte, Indiana, used to have to go borrow money to pay for his taxes, which is kind of crazy.
Because then he would restrict his flow of capital, was limited in being able to make the investments in his company, because he had to go out and borrow money to pay his taxes. But once we passed, in 2003, the 179 small business expensing provision, he did not have to do that any more. And he has been able to invest that money in his business and grow his business.
Just going back to the tax chart you had up a second ago, you know, it is kind of funny that opponents of tax relief, mainly our friends on the other side of the
aisle, say we cannot afford to have tax relief. But your chart shows clearly, and the statistics that you talked about, tax receipts up 15 percent in 2005, the deficit is actually down in 2005 by about $100 billion, I think clearly shows that we cannot afford not to have tax relief to continue to have our economy grow.
Now, we can cite economic statistics all night long, and they are true, and they are relevant and they matter. But they probably do not matter to the guy without a job. But what does help the guy without a job is a growing economy, because when the economy grows, everybody has more opportunity; and what is important to do is to focus on the pro-growth policy that has resulted in those economic statistics.
And the pro-growth policies that have resulted in those economic statistics, I would say in large part, is the tax relief that was passed in 2001 and 2003, just like the section 179 expensing.
Now, when we talk about the deficit, there are only two ways to get a deficit. One is we tax too little. The other is we spend too much. And I do not know about the rest of the congressional districts around this country, I do not think they are a whole lot different than the Second District of Indiana. The people in the Second District of Indiana do not feel like they are taxed too little. They think we probably spend too much.
And so we have to move from using our measurement of success, how much we spend, to how well we spend. We spend enough here in Washington. We do not prioritize enough.
And just going back for a second to the Truth in Accounting Bill, we see that our spending is getting more challenging as we go forward. Just recently, yesterday I think, there was a report issued that showed that the Social Security trust fund will be exhausted by 2040. That is 1 year earlier than was projected last year, and Medicare by 2018. And I think last year it was projected by 2020.
So every day we wait to start using the measurement of success, how well we spend, rather than how much we spend, the situation gets worse. And, again, the best way that we can solve problems is to define problems and making sure that the Federal Government shares a clear picture of our financial challenges with the American people. I think that will result in the American people demanding that their elected representatives quit playing the politics of no, quit saying what they are against and start saying what they are for.
We are not elected to be against stuff. We are elected to be for bipartisan practical solutions, and the Truth in Accounting Bill is a bipartisan bill. It is co-authored by Jim Cooper of Tennessee, a conservative Democrat, and Mark Kirk from Illinois, a moderate Republican.
I consider myself a conservative Republican. We may not agree on all of the answers, but we certainly agree on the problem. And we have to get to a bipartisan solution, and I certainly hope the American people send people to this body that will not avoid this problem and be part of the ostrich generation.
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Mr. CHOCOLA. Mr. Speaker, well, the gentleman brings up a great point.
The gentleman asked the question earlier, what kind of country do we want, what kind of America do we want? I think we also have to ask the question, what kind of government do we want?
When we talk about raising taxes, talk about raising revenue, which we have already learned that good pro-growth tax policy at lower rates actually increases Federal revenue, but you ask why would we raise taxes and what do we need to spend money on. I think it is important to recognize that we can actually have better government at a lower cost.
Every business in America and every family in America has to find a way to do more with less, find a way to be more efficient. For some reason, we do not think government can achieve the same standards. For some reason, we think the government does not have waste, fraud, and abuse.
Let me just share a couple of things with you. Recently, the Inspector General found that Social Security sent $31 million worth of Social Security checks to dead people. That is money that did not go to help anyone.
They found in 2003 that the food stamp program spent $1.1 billion in overpayments. That is with a B.
In 2001, the GAO reported and said about Medicare, there are no reliable estimates to the extent of improper payments throughout the Medicare program because they cannot audit their books, they cannot even tell the kind of financial controls they have.
In 2002, the Inspector General found that Medicare had $12.3 billion in overpayments and in 2001 found they had $12.1 billion. That is $24.4 billion in Medicare payments that were improper, did not go to help anybody, did not go to help any seniors that needed Medicare, did not go to help any low-income Americans, simply was money wasted. I always ask, what is compassionate about wasting $24 billion on mismanagement when the money does not go to help anyone, when there are certainly people in this country that need government help, and why is it compassionate to ignore that, not address it and get better government at lower cost by simply applying the same management tools and techniques that every business in America has to follow?
Certainly, I hope the American people are more demanding upon us to give them a good return on their taxpayer dollar and not stand for $24.4 billion being wasted in Medicare over a 2-year period of time.
I could go on for a long time. In 2001, HUD had overpayments of 10 percent of their budget alone. It is kind of depressing to keep going down this road. It is time that we find ways to have better government at lower cost, better management, better oversight; and I certainly appreciate, again, the gentleman bringing us here to highlight these issues because the more people understand, the more demanding they will be that we fix things and only elect people that will address these issues, not avoid these issues.
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Mr. CHOCOLA. Mr. Speaker, I thank the gentleman for yielding.
Recently, I was having a conversation with a friend of mine that said when you are talking about tax policy, he said, well, maybe it would be a prudent thing to raise taxes. This person was in the financial services industry, and I said, let me ask you a question: you do research on businesses and you do research on a business where every year the company has increasing losses and increasing debt. The company has not passed an audit in 9 years. The management is ineffective at combating waste, fraud and abuse; and the only strategy the management team can come up with to turn the tide is to raise prices on their customers. Do you think that is a business you would invest in? He said, you know, you have got a point; I do not think that that would be a good investment.
So it is interesting when our colleagues on the other side of the aisle say, well, gee whiz, we have got to raise prices on our customers to pay for our lack of proper management. I do not think that that is respectful to the American people, the American taxpayer, and certainly not a winning strategy.
I think the gentleman from Texas can wrap us up here; and, again, I thank him for bringing this very important subject to the floor tonight.
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