THE ECONOMY AND OUR FREEDOM -- (House of Representatives - March 03, 2009)
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Mr. SCALISE. I want to thank my friend from Mississippi, as well as the gentlelady from Tennessee, because as we start to see the real numbers--and the American public has been concerned about where the economy is--but they are also real concerned--and we're seeing more and more each day--real concerned about the gross level of spending that's coming out of this administration as a response to the crisis.
I think if you look at what's being presented, and as people are now starting to look and grab some of these numbers--and we're not just talking about hundreds of billions of dollars now; we're talking about well over a projected deficit of $1.7 trillion in this budget. So it makes people harken back and say, number one, what levels do these compare to. And when you look back, you can go back--you have to go all the way back to World War II to find a budget, a level of spending that's presented in this budget, a level of spending that's as high a gross domestic product of a percentage of GDP that we've had. And we haven't had this high a level of spending since World War II.
So if you go back to World War II and, of course, the Great Depression right before it, it really sparks a lot of comparisons that are frightening. And I think that's where the public is, but that's where the markets are. I know my friend from Tennessee talked about that, too. The markets are responding to what's happening here in this city in Washington, D.C., and it's not good. Their reaction is not good, what that means for people's 401(k)s. Just in the last 2 months, people have lost 20 percent of their 401(k)s because of the results of these policies not only that were passed in the spending bill just 2 weeks ago, but this budget that's been presented with its gross level of spending with its absorbitant level of tax increases.
So if we look here at a chart, this is a break down of the President's proposal of tax increases that's in this budget, this budget that has $1.7 trillion of new debt--not debt that was carried over from the previous administration. The buck stops here. And this President submitted this budget, he created this new level of spending, and he's choosing to pay for some of it--clearly not all of it--but some of it by one of the largest tax increases in the history of our country.
And while he says that less than 5 percent of the people of this country will pay these taxes, this chart will show you something very different, a stark difference in what we've been hearing; $1.4 trillion has been proposed by this President in this budget in new taxes at a time, of course, that our economy is in a recession.
Mr. AKIN. Reclaiming my time a second.
That should send the alarm bells off in people's minds. When you're having not only just a little recession but what's starting to turn into almost a depression and you're talking about huge tax increases, you don't want those two things in the same sentence, I believe.
Mr. SCALISE. I think when we talk about, now that we're in a recession, will we be going to a depression, look at what happened in this 1920s and the 1930s as we did go into a depression. And in many cases, it was policies in Washington, D.C., that not only pushed us into the depression but kept us there for 8 years. We were in the depression for 8 years. It took World War II to get us out of it.
And if you go back to 1932, the President who raised taxes during an economic downturn that was so severe in the 1930s--Herbert Hoover raised taxes, of all things, while the country was entering a depression. In 1932, Herbert Hoover on his way out as being voted out as President, he raised taxes dramatically. We're seeing the same process followed again. And then the people say, ``Those who don't learn from history are doomed to repeat it.''
When this country was entering the Great Depression in the 1930s, they raised taxes dramatically, and it helped--that and the gross level of spending--helped make that an 8-year process instead of a short depression that we could have gotten out of.
So if I can go back to this chart. Where are the taxes going to be paid? Who's going to be paying for those taxes? It's $636 billion of those new taxes are going to be thrown onto the backs of our small business owners. So when they talk about people who make over $250,000 a year--and I know some people want to pay class warfare and try to divide this country at a time when we need to be uniting this country and finding real solutions--they talk about that top 5 percent. Well, who is that top 5 percent? That's the small business owners in our country who have created 70 percent of our jobs.
So if anybody can explain to me how raising $636 billion in new taxes on the backs of those very people who are creating the jobs that our economy needs, how is that going to get our economy back on track? That's something that the markets are reacting to and people across this country are starting to realize that it's a frightening realization.
Mr. AKIN. This is something I want to be very clear in our discussion this evening. We're having this, like a dinner conversation.
What I want to make clear is that the Republicans are not just saying ``no.'' What you're saying is, You're doing the wrong thing which will make the economy worse.
Now, what you've gotten to in your chart here is the absolute crux of what has worked in the past to pull us out of a recession. And it's not the government that pulls us out of a recession; it's the marketplace. And it's particularly the entrepreneurs and the inventors and the investors and those small business people. And what do small business people need in order to create all of those jobs--because depending on what you call a small business, you're talking 70 to 80 percent of the jobs in America come from small businesses.
So if you harm the small business guy--even though he may be fairly well-to-do--you're cutting off your nose to spite your face. And what's going to happen when you take $636 billion out of small businesses--that's the money they need to invest in new equipment, new processes, new procedures and innovation which is going to result in hiring the people that need to be hired.
So what's happening here is this policy is economically crafted to make the problem worse.
I would yield to my colleague.
Mr. SCALISE. What you said is exactly true. And there is a double whammy on this budget on the tax increases that have been proposed. Not only do $636 billion in new taxes get thrown onto the backs of small businesses all across this country, but then they come through the back door; and this is where the rest of the 95 percent of the people that supposedly aren't going to pay a new dime in new taxes, this is where they get hit.
This is their energy proposal on cap and trade. A carbon tax. This is something that you haven't heard a lot of people on the Democratic side talking about because as people see what this does, they realize this is where everybody else pays more money: $646 in new taxes on energy production in this country. And, of course, all across this country as energy taxes are increased, who pays for those taxes? That's not something that they just absorb. They have the authority to pass that on to rate payers.
Mr. AKIN. Reclaiming my time.
I think there must be something wrong with your chart here because I was just on this floor last week, and I heard the President say that nobody making less than $250,000 is going to pay any of these taxes. And I said, ``I'm glad I'm not going to have to pay these taxes because I make less than $250,000 a year.'' And now you're ruining my whole evening by telling me that that isn't true. Is that what you're saying?
Mr. SCALISE. I'm sorry if you already ate dinner. I'm sorry to upset your stomach. But a lot of people across the country are starting to get very upset as they see the realization of these proposals because change as a concept sounds great. There are a lot of things we need to change about Washington, D.C. In fact, we've proposed an alternative H.R. 470. You can actually go on line. We put our proposals on line. We put that proposal out there weeks and weeks ago. H.R. 470 is a true alternative to get our economy back on track.
What we've been presented with, unfortunately, with this administration is the oldest failed policy that will keep us deeper in a, not only recession, but can throw us into a recession; and that is a tax-and-spend approach, which has been proven to fail every time.
So this cap and trade program right here, this is--they can call it whatever they want, but when you start having to pay higher fees on your utility bills, that's a tax to you. That's a tax increase. If your utility bill goes up and you're using the same amount of energy because of this carbon tax $646 billion, if people across the country don't think that's going to result in something that's going to have a significant impact on their budgets as they're tightening. And people are conserving energy. People are tightening their belts.
But as they're conserving that energy, they're going to be getting hit with $646 billion in new taxes on top of the $636.00 billion that our small businesses will be hit with.
Mr. AKIN. Reclaiming my time.
You can be making $20,000 dollars a year, and you are still going to be burning some natural gas and using some electricity; is that right?
Mr. SCALISE. That's not only right, but those people in the lower incomes are the ones that are least likely to be able to afford these massive tax increases they get on their utility bills. Because if your utility bill goes up even though you're using the same amount of energy, or in some cases you're using less energy--maybe you actually went and put some insulation in your attic because you wanted to lower your rates--this carbon tax is actually going to raise your utility bills even though you've done those things.
Mr. AKIN. Reclaiming my time, gentlemen.
You're getting me all upset. You're ruining my entire evening here. But I have a feeling what you're telling us is true. In fact, I know it is true.
Mr. SCALISE. If I could ask for the gentleman to yield for one moment.
Mr. AKIN. I would yield for one minute.
Mr. SCALISE. There is one bit of good news. While these are difficult times, while there's a lot of bad news--and as people look at these details, it frightens a lot of people. But this has not been passed into law yet. These are proposals the President just filed this last week. We haven't even started having hearings in Congress. If people all across this country--as I'm sure they will do when they start realizing the negative impacts to our economy of these new taxes, these massive taxes--people, I think, are going to start lighting up those phones. They're going to start calling their congressmen. They're going to call the White House. And they are going to say enough is enough.
The spending and the taxes, just like in the 1930s, didn't work. Don't take my word for it. Listen to the Treasury Secretary under FDR. This has been tried before and it's failed before. Not only did it fail, it pushed us into a deeper depression. And I think the public across this country is going to say, ``Enough is enough. We're not going to take these new taxes and this ridiculous level of spending,'' and the public can stop this.