Mr. AKIN. Mr. Speaker, it is a treat to be able to join you tonight, my colleagues and friends, and to talk about a great crisis that our Nation is facing. It is becoming increasingly apparent to Americans not only that we have a problem with unemployment and jobs, but we have a problem with the Federal budget and the deficit and the spending and the taxing--all of those things that go into an economy.
These problems are far more significant than I think many Americans are aware. I would like to talk about that tonight and to keep it fairly simple, and to let people know, as President Reagan said, while the solution is simple, it is not easy. It requires a great deal of courage.
I am going to start tonight in perhaps an odd way. I am going to ask you, please, to picture that you are either a Senator or a Congressman in 1850 in America. In 1850, you would have noted that there was increasing discussion as the new territories became available, whether they would be allowed to come into our Nation either as a free State or a slave State. It created a lot of political tension between the different Representatives representing different points of view on that subject.
By 1852, the book ``Uncle Tom's Cabin'' was written. It became a very popular book, and it tended to further inflame the issue, the great question of the day. The question was slavery; what would America do with that question.
By 1857, the Supreme Court, deciding to legislate from the bench, which has always turned out to be a bad idea and beyond their constitutional authority, came up with a decision that came from my State, the State of Missouri. It was called the Dred Scott decision. It said essentially that black people were not people; they were property. But beyond that, it also said to the Congress and to the Senate that they could not make any kinds of deals as to which State would be slave or free because each State could do whatever they wanted.
And so the stage was set as the tensions grew for Abraham Lincoln to be elected to be President. And as he was on the train approaching the capital, leaving Illinois, a number of Southern States seceded from the Union. And almost as though in slow motion, a great locomotive drove off the edge of the cliff pulling the train with it, and America was immersed in a terrible, terrible Civil War. It was a war that was ultimately to claim 600,000 lives. That is more than all the people who are Americans who have been killed in all of the rest of the wars we have fought in our Nation's history. Of course, a statistic like 600,000 may seem to make your eyes glaze over, but then you start to hear the individual and personal stories of people who were horribly touched and families that were destroyed by the horror of the war, and you recall the words of the second inaugural address of Abraham Lincoln and he talked about the fact that the war had been far, far worse than anybody had ever imagined was possible.
That great tragedy, that terrible cost that was paid by our Nation, was a result of a failure of leadership, a failure to deal with a massive fundamental question that everybody knew was there all through the 1850s--the question of slavery. And the failure was not just in the Congress, in the Senate, but it was in the people of the States for being too disengaged and unwilling to take that question head on.
The parallel today, I think, is a little bit frighteningly similar. Today, just as there was in 1850, there is a gorilla in our tent, and that is the problem with the Federal Government spending too much money. So what I want to do is put that in very simple terms not so your eyes will glaze over, but so we get some sort of a sense of balance as to what is going on; because my proposition is that we are spending too much money, the government is spending too much money, and it is unsustainable.
Now, this is something that many thoughtful liberals, as well as conservatives, agree is true. There is disagreement as to what to do about it. But the numbers are the numbers. There is something about mathematics that is that way. And that is what we are going to talk about: the simple view of what the numbers are today and why. This is a crisis that we must address. We cannot ignore the gorilla in the tent. This is something that all Americans must become aware of and must be participants in solving the problem.
As we do that, the jobs will return. America will hold her head high again; and almost, as a ship with a big wave breaking across the deck, the ship will shake loose the water that threatens to push it to the bottom and lift its bow in pride and sail further on.
So what I am going to do is just take a look at some stuff that sometimes politicians talk about in gobbledygook-speak and try to make it simple.
We have here a picture of all the things that the Federal Government is spending money on. It's your old classic pie chart. And I have over here Social Security, Medicare and Medicaid. You can see that's a pretty big piece of the chart. These things are called entitlements by politicians. An entitlement--I'm an unfortunate engineer that ended up in politics--is sort of like a little machine that's created by law. The machine might have been created 30 years ago and it's a little bit like the machine in the bathroom which you put your hand in front of it and it spits out paper towels, except this machine spits out dollar bills. The entitlement is like a little machine. It's put on a track and off it goes spitting out dollar bills. So anybody who qualifies gets money. These programs--Social Security, Medicare, Medicaid--if you qualify, you just get money.
There are other entitlements as well. In addition to other entitlements, there is something that acts an awful lot like an entitlement and that's the interest on our debt. When we sell a Treasury bill, the person that bought it expects to be paid interest, and so the Treasury bill acts like a little machine. It spits out dollar bills at the appropriate intervals.
The point is that if you add these entitlements here, the other entitlements, and you take the net interest on our debt and you put that together, it comes up to $2.2 trillion. What does that mean, anyway? $2.2 trillion is bigger than I can understand, but we can compare it to something else, and that is the revenue of the Federal Government. That is, when everybody in America pays their taxes, the money comes into Washington, D.C., that's our revenue. The revenue is $2.2 trillion. So the entitlements and debt service at $2.2 trillion is the same thing as our revenue.
Well, what's left over to pay for national defense? And what's left over to pay for the rest of the running of the government? This other non-defense discretionary would be things like the Congress and the Senate buildings, would be the Federal prisons, the Federal parks, Departments of Energy and Commerce and Justice and Education, all those different things. Those are this non-defense.
In other words, what I'm saying is this. If you zero out defense, so there's not a soldier left, not a rifle, not a ship, not a plane left and zero out everything else in the Federal Government, when you zero those out, you now have a balanced budget. Because entitlements and debt service are taking every last penny we get in revenue. That is a serious problem.
I am joined by a very good friend of mine from Louisiana, a man who is growing in stature and feared, loved and respected, my good friend Steve Scalise from the great State of Louisiana.
Please join us, Steve.
Mr. SCALISE. I thank my good friend from Missouri. When we talk about feared and loved, I'm not sure where we fit in, but I do think it's important----
Mr. AKIN. The feared is because of the people who want to whitewash what was going on with that big oil spill and the fact that you got on it and told people the truth; and I respect that. Thank you, sir.
Mr. SCALISE. Thank you.
That's the beauty of the people's House. I think what you're doing, you hold this weekly town hall forum, as we call it, to talk to the American people about what really is happening here in the people's House, in the Congress, and how it affects people all across this country. Of course, I had three town hall meetings last week when I was back in my district, when Congress had finished dealing with one part of this budget problem.
I think when you talk about what's wrong with the spending, how out of control spending is in Washington, we had taken some action 2 weeks ago to say it's finally time to start righting the ship. Speaker Pelosi had the reins of the House of Representatives for 4 years. Of course during that 4 years that Speaker Pelosi was running the House, we saw unbridled runaway spending and record deficits, to the point where we now have a $1.5 trillion deficit.
One thing that she left behind that we're dealing with is the fact that Speaker Pelosi didn't even bring a budget to the House floor last year so there was not even a budget, when families across this country had their own family budgets and families and small businesses are dealing with their crises and shortfalls by cutting spending.
Mr. AKIN. Let me interrupt for just a second, gentleman, because you're bringing up a whole lot of additional facts and things. Let me try and put this in perspective.
In 1974, we came up with a budget act, and every year since 1974, there was a budget here in this House. You might have liked it, you might not have liked it, but there was a budget, anyway, for what's going to go on in terms of Federal spending. Last year, under Speaker Pelosi, there was just no budget. None. And so what a lot of people see us dealing with now, and I think you're getting to this point, and that is the fact that we're doing what you do in the Federal Government when you don't have a budget and it's called a continuing resolution. I think maybe you were going down that direction.
I yield to my friend.
Mr. SCALISE. You're exactly right, because when we're talking about where we are today, it's important to look at how we got into this mess and the mess that we're trying to clean up, but the fact that historically last year Speaker Pelosi failed to even bring a budget to the floor when she was Speaker and so there was no budget that was passed.
What that means is, like I said, while families are putting together their own budgets and families and businesses are dealing with the problems in the economy and shortfalls and they're cutting back and doing more with less, the Congress didn't even pass a budget. And so under Speaker Boehner now as we've got this new Republican majority here, we came up with a plan to fund the government for the rest of the year, but to fund it in a way that actually started cutting spending. I think one of the big problems that's been out there for a long time, things that you and I want to deal with, we want to cut spending and start putting our country back on a path to a balanced budget.
And so we had this debate 2 weeks ago in the House where we said, okay, we want to be responsible about funding government, but that means we've got to start making real cuts. You can't just keep spending at the rate you're spending with the deficits that go along with it. We've got to start cutting so that this pie that you showed actually starts getting addressed and shrunk in a way that the Federal spending starts getting closer to matching the amount of revenue that's coming in.
Mr. AKIN. If I could piggy-back in and jump to what you're saying.
A couple of weeks ago, we had basically a budget on the floor of the House. But the budget, interestingly enough, is what's called the discretionary side. So the budget was for this green, the defense, and this--what is that?--tomato soup. Maybe it's Campbell's tomato soup. This is the non-defense discretionary. So the budget only dealt with this section and we were making cuts to that section.
What, of course, you have to ask yourself is, how about all this other stuff? Of course, this wasn't touched.
So proceed, please, because I think it's a good story. People need to understand what we're working on was the first thing we had to work on which was the fact there wasn't any budget that we're running on, and so we're trying to put a budget together for between now and October 1, if I recall, sir.
Mr. SCALISE. And so finally, to address the real problem in the country with this runaway spending, what we said under both Speaker Boehner and then chairman of Appropriations Committee Hal Rogers is that we've got to stop the bleeding. We've got to start cutting spending. And we brought a bill to the floor that allowed for $100 billion in cuts. That's billion with a B. Real cuts to spending at the Federal level to finally start that process. By no means is this the finished product, but it was the first start of the process of finally getting spending under control.
That bill came to the floor. We had a lot of debate. An open process. Any Member could bring an amendment to that bill. I brought an amendment to get rid of a bunch of these czars, these czars that are killing jobs in our country, that are getting paid millions of dollars to go out there and try to implement radical policies that run jobs to China and India and other places. That amendment passed. A lot of good amendments passed to cut spending, but ultimately we set a new tone. We said, number one, we're going to put our money where our mouth is. We promised that if we get the reins of power in the House, that we would actually really start cutting spending. So we cut $100 billion. We sent that to the Senate. And we're almost at 2 weeks past the point where we sent that bill over to the Senate. They still haven't had one ounce, one minute, of hearings or debate on our bill that we sent to them to cut $100 billion in spending.
Mr. AKIN. Why do you think it was that they didn't want to take a look at the bill? They could have brought a bill up the same way. They could have gone through it and said, Well, we don't think they should have cut this much. They should have done this or this or this. They could have made changes on it and gone back and forth, and then we would have a budget for between now and October 1 and we could get on with what should be done this year instead of what should have been done last fall, or actually last year before the fall.
Mr. SCALISE. I think it became very clear very quickly just what is at stake here. There was a battle line that was drawn. In fact, as we were debating that bill to cut $100 billion and, as I said, with a $1.5 trillion deficit this year, $100 billion is just a start. Well, President Obama comes out and actually starts criticizing us for cutting $100 billion. He said $100 billion is too much. Senate majority leader, Harry Reid, said $100 billion is too much to cut. Again, we're saying $100 billion is just the beginning. We've got to cut more than $100 billion. And so you quickly saw a divide. There is a divide right now in Washington. I don't think there's a divide in this country. I think most people, people I talk to when I go back home to south Louisiana, my colleagues that I talk to that are going back home and having town hall meetings, meeting with their constituents, families and small businesses are saying, it's about time that we're finally seeing real cuts coming out of Washington, but yet the President and the Senate leader that were saying $100 billion is too much to cut. And so we've sent them $100 billion, but what's at stake here, it's not just getting spending under control, it's getting jobs created again in America.
One of the reasons we are seeing such stagnant job growth in this country is due to the uncertainty that is created by the runaway spending. These are interlinked issues--the spending problem in Washington and the problem with the slow economic recovery--because people are afraid to create jobs. Our job creators are under attack by Federal bureaucrats, who are bringing out all these regulations every single day to kill jobs.
We are seeing in my home State, in south Louisiana, where the administration doesn't even want to explore for energy in America. They've only issued one permit in 10 months to drill. In fact, now we're looking at the Middle East. We're putting more dependence in this country on Middle Eastern oil, under the Obama administration, at a time when the Middle East has never been in more disarray, which is why people are seeing over $3.20 or so a gallon at the pump. It's because of the President's own policies. This is killing jobs. It's not only running more jobs overseas, but it's also raising the prices of energy and gasoline for families.
Mr. AKIN. You're getting this down to the place where we really need to be talking this evening, and that's about jobs, because Americans are wanting to know: Hey, where are the jobs? So let's take this thing straight head on.
The fact of the matter is, first of all, if you allow this monkey business to go on here, this is just silly. There is no way you can excuse kicking the can down the street and ignoring this huge problem, and this huge problem really is connected to jobs. Specifically, there are things you do to kill jobs. We had a forum back in my district of St. Charles, Missouri. We had a whole bunch of businessmen come in, and we asked them: What do you have to do to create jobs, and what do you have to do to kill jobs? The thing that you do to kill jobs is exactly what we're doing.
So what are those things?
First of all, we're going to tax the owners of businesses--that's the first thing--because if you tax the owners of businesses, they can't expand their businesses, and they can't invest in their businesses, so the businesses just sit there. In fact, as you tax them more, they take money out of the businesses to pay the taxes, and they start laying people off because they can't run their businesses. So the first thing is: If you want to kill jobs, raise the taxes on the people who own businesses.
The second thing you do is bury the business in redtape. Now, we've got an EPA that feels like they can run redtape without Congress even passing a bill, so they're going to try and pass cap-and-tax and all these kinds of ridiculous regulations that cost a whole lot of money. It's not like a tax, but it ends up costing people business.
One of those very interesting actions on the part of the EPA, just to illustrate redtape, is the idea of requiring cleanup in case you spill milk. Usually, on farms, the cats lick up the milk.
We have with us a genuine hero in the U.S. Congress, Congresswoman Black from Tennessee, who won a coveted award just earlier this day. It's the Golden Turkey Award. It's for the silliest, dumbest regulation that you could find. Now, I know the competition is going to be fierce in this category, but Congresswoman Black won it by plenty of extra as she got her award. We're going to recognize her tonight for this award that she got, which ties right into our subject of jobs, and that is: If you want to kill jobs, raise taxes on business owners, and bury them in redtape.
Congresswoman Black from Tennessee.
Mrs. BLACK. Thank you. I am so honored to unveil this new initiative from our Republican Study Committee.
This right here is the Golden Turkey Award. Each month, the RSC will be bestowing this dubious award to highlight the most absurd, the most ridiculous and obscure regulation that taxpayers foot the bill to enforce and have to live by. This month's Golden Turkey Award goes to a regulation that I have been talking about in my district and here also in Congress for the past month. The March 2011 Golden Turkey Award goes to the Environmental Protection Agency.
Mr. AKIN. The EPA.
Mrs. BLACK. The EPA. The EPA recently discovered that milk contains fat. Can you believe that? It's also considered an oil. So what did the EPA do? It decided to regulate milk spills.
Well, the EPA is currently developing a rule that will subject dairy farmers to the Spill Prevention, Control, and Countermeasure Program--that's sort of a long name--which was created for oil contamination in waterways, and now they're applying it to dairy farmers. So, when Nellie kicks over the bucket, our farmers will have to build berms around the area where they milk. They will have to have an emergency responder's plan so, in case milk is spilled, all of their employees will be trained in the containment of this spilled milk.
Mr. AKIN. Now, if you had some cats around in a cage and could open the cage, do you think that would work or do you think the EPA is going to want something more expensive than that?
Mrs. BLACK. That's an excellent question because, when I talked to the dairy farmers back in my district and when I told them about this great idea the EPA has for them, one of my farmers told me he already has this plan in place. When asked, he said he has a barn with about 15 stray cats, and he's going to open the doors and yell, ``Here, kitty, kitty,'' and that will take care of the emergency spill.
Mr. AKIN. How many millions of dollars do you think it's going to take to get this tremendous hazard of spilled milk under control? I'm glad that our Federal Government is really dealing with tough issues like this.
Mrs. BLACK. It's good that you asked, because the rule requires that these emergency protocols be in place by November 10 of this year. The U.S. Department of Agriculture has already initiated a $3 million pilot program through the Natural Resources Conservation Service to help the farmers and the ranchers comply with the on-farm oil spill regulation. So already we see $3 million that's going to be wasted in just getting the farmers up to speed on how they have to do these plans.
When I was in my district last week and spoke to people about this, they were absolutely speechless. It has been told to me by many of the businesses in my district that what they really want is just for the government to get out of their way, to let them do their jobs, to stop overtaxing them, and to stop overregulating them so that they can actually grow their businesses. They have the capital to do so, and if we would just leave them alone, they could grow their businesses.
So that's why the inaugural Golden Turkey Award is being presented to the EPA and to its proposed overregulation of dairy farmers with spilled milk. I am going to work as hard as I possibly can to make sure that this does not get initiated and that our farmers will be freed from this onerous regulation.
Mr. AKIN. I have to wonder, particularly of the people out in my State of Missouri, what they'll be thinking when they find out that $3 million of their money is being used to come up with a program to take care of spilled milk.
I don't know how you found this treasure out. I heard there was another one that was similar. I think it was an EPA requirement that you couldn't have rogue dust. So, if you're a farmer, you can't farm with rogue dust, which is dust that comes off your property and goes over onto somebody else's property.
It makes me think that whoever is writing these regulations lives in one of these office buildings downtown here. If there happens to be anybody who is working on the rogue dust program, I'm sure that's another $3 million wonder--or maybe worse--just to go out on a combine in the good old State of Missouri and just run down a couple of rows of corn and see what happens when that old, dusty corn hits the combine and how they're supposed to keep all that dust right over their own properties. So that's another one of these examples.
I think Ronald Reagan talked about the fact that we're buying too much government, and that's what we've been doing these last number of months.
The point of the matter is, when you start cutting a lot of this government trash, you're going to create jobs in a couple of ways. The first thing is: You don't put us in debt so much, but you start cutting that redtape, which is overhead that our businesspeople have; and if they're not having to pay for all that overhead, they can hire people and get the economy going.
Hats off to Congresswoman Black from Tennessee for winning this prestigious Golden Turkey Award. Actually, I suppose the one who technically won it was the EPA; is that right?
Mrs. BLACK. That's right. The EPA has won.
Mr. AKIN. Isn't there actually like a bowling trophy with a big golden turkey on the top of it or something?
Mrs. BLACK. You're so right, and it's proudly displayed on my desk. It is a trophy that stands about 12-inches high, and it is golden and has a golden turkey on the top of it. I'm challenging all of my colleagues to find places that we're having overregulation, killing our businesses, stifling the growth of our economy, and stifling job growth.
Mr. AKIN. Who says we can't have fun in cutting the wasteful spending out of the government and at least do it with a little twinkle in our eyes?
It is noteworthy that a freshman Congresswoman could walk away with this kind of a prize. Certainly, there will be competition to have that Golden Turkey passed around.
I appreciate you joining us tonight.
We have some other distinguished guests. My good friend, Congressman Walberg, I'm going to ask if you'd like to join us. We're talking a little bit, first of all, a big picture about how much money there is in the entitlements, the trouble with trying to balance a budget. And also we've talked about jobs and how much jobs relate to a government that's out of control, has forgotten they're supposed to be servants and are just running mad, making redtape, which again is excess overhead for the businesses and kills jobs. But please join us with your unique perspective.
Mr. WALBERG. Well, I appreciate my colleague from Missouri. I appreciate you holding this time this evening as we can talk about those things that impact our whole way of life in the United States.
We, I'm sure, understand here on the floor this evening the impact of what our Framers and Founders had in mind of a limited government, a government that believed very clearly that free people, with the opportunity to be creative and use the resources that they have, could indeed make a life that was filled with happiness in their pursuit that involved property and all that went with it.
As the subcommittee chairman for Workforce Protection, I had the opportunity to look at some things that are coming up right now that are being proposed as workplace safety standards. And this goes into cost issues that are huge regulatory costs, but also costs that ultimately reduce jobs and opportunity. One such regulatory issue is related to the noise regulation being proposed by OSHA. Now fortunately that has been pulled for the time being. It was pulled a couple days after we introduced the fact that we're going to hold hearings on it, continue to hold hearings. We found out in the process that noise standards--and all of us here would say that a worker ought to be safe, reasonably speaking, in their workplace.
I worked at U.S. Steel South Works shortly after high school, worked in the furnace division. I worked on a mole platform. I worked in a hooker shaft, which was lifting and holding pig iron and a number of other things. And I had reasonable expectation to be safe, including using hearing protection that involved either earmuffs or earplugs. What this new standard would have required would not have been simply putting earplugs into employees that would meet the standard, or earmuffs, but would require businesses to purchase machines that weren't only guarded or shrouded safely for hearing protection, but machines that would be reduced in the noise standard to a point that, as we looked at it more carefully, most likely weren't even machines made yet. They hadn't been produced. So we're talking about businesses that want to employ people that increase the economy--because you and I both know that the economy is produced in the private sector, not in the public sector, that the private sector entrepreneur, the taker of risk, produces an idea, comes up with it, ultimately hires employees to carry out the job, and then we put reasonable regulations to make sure that those employees are safe, that the hearing is protected as well. But we don't say to the employer you must buy a machine that isn't even produced yet, that isn't made yet in order to protect--
Mr. AKIN. You know, I really appreciate your example. And that's the trouble with these things. It's not that maybe there shouldn't be some workplace safety rules, but these things have just gone beyond the realm of what even makes sense.
I have even greater respect for you now. I also worked in a steel mill. And the noisy place at our steel mill was the pipe shop where they're loading the pipe. And you take a whole big bundle of pipe and drop it or hit it against something, and boy does it make a racket. So they always had ear protection and things in the pipe mill there. And certainly businesses know that that's necessary to do that. But when you start loading that kind of extreme redtape and regulations on a business, the business has to use their money to pay for all that, and they can't hire employees. So taxes, redtape, those are job killers.
As I recall, I think there was a gentleman last week that shared, somebody that had a drycleaning facility, and they found something like a spoonful of some water underneath a concrete slab that had a small amount of cleaning fluid--I guess carbon tetrachloride--in the water or something. They had to do like a $60,000 remediation, which for a simple dry cleaner just about took every penny that the owners had out of their bank, because of one teaspoonful of some water that had a little bit of the cleaning fluid they use on people's clothes. And that's what we're talking about. This is just bizarre kinds of stuff.
We have Dr. Boustany from Louisiana here, and I think he was going to share with us for a minute. And Congressman Walberg, we'll come back to you. Congressman Walberg is from Michigan and a great Member of the caucus. And doctor, please.
Mr. BOUSTANY. I thank my friend from Missouri for giving me time to speak here.
As we talk about American competitiveness and growing jobs, private sector jobs in this country, coming off the heels of this recession where we still have high unemployment, there are two aspects to it: One is cutting back on government spending, as you've already suggested with the pie chart you have there. We have to get our debt under control. This is imperative because it's going to strangle private investment in the form of higher taxes on the American people.
But the other side of this is the growth side of the equation, stimulating economic growth. And if you look at how to do that, we want economic growth in the private sector which will help spur job growth. The way we have to do that is we have to look at an energy strategy for the United States because so much of what we do depends on cheap, affordable energy to fuel our plants, our factories, transportation, you name it. So it's critical that we have an energy strategy for the country, which we don't have, and we never have had one. In fact, what you're seeing now, instead of the lack of an energy strategy, we're actually seeing energy proposals that are detrimental to the country that are being proposed by this administration. Let me list what's going on.
First of all, the moratorium on drilling for American energy in the Gulf of Mexico has been in place since May. This is killing jobs back home in Louisiana, along the gulf coast, but it's also hurting our energy security in this country. As we lose these jobs--these are highly skilled workers, as they leave this industry and go find other jobs and move, you cannot turn that light switch back on and get that kind of skill back on these platforms. That's number one.
Mr. AKIN. Now wait just a minute. Just on the surface of what you're saying, if somebody were really to listen to what you're saying, it sounds like insanity. Because here's what my thinking would be: You're saying that we've got all this unrest in the Middle East, which threatens the oil production there, which increases the cost of Middle Eastern oil. So we pay even more to countries that don't like us and use the money for advancing terrorist kinds of causes----
Mr. BOUSTANY. That's exactly right.
Mr. AKIN. And we have oil right under our feet and we're saying no, you can't drill for that stuff. And gasoline is $3-something a gallon, and we're not even drilling for the silly oil that we've got.
Now let me add one thing that gets me even more fired up, and that is, you go north, north of Louisiana where it's cold--we're talking out in the ocean outside Alaska. You've got foreign countries that are drilling on what is basically our coastal plain and they're drilling for oil. And here we are paying $3-something, and we're not drilling for any of this stuff. I mean, isn't this weird?
Mr. BOUSTANY. We have basically shut down our production in the Gulf of Mexico, and it's a boneheaded policy to do that. But not only that, the administration in its budget proposal is now proposing nearly $50 billion in new taxes on small, independent oil- and gas-producing companies. Now that's going to put a lot of these guys out of business; they can't cash flow. And they do a lot of the work on the Continental Shelf in shallow water areas, and also our onshore production in oil and gas. And there's a distinction between oil and gas----
Mr. AKIN. So here we are again. Because I started just a little while ago, we talked about if you want to kill jobs, first of all tax small businesses, tax them so much they can't run their business, or at least chase people out of them so there goes the jobs. The second thing you do is bury them in redtape. Now we're coming back to what you're saying--the very people we should want to be working and drilling for oil for us, we're going to tax them out of existence. Isn't that ridiculous?
Mr. BOUSTANY. It's ridiculous. And these taxes are indiscriminate; they hit oil companies, those drilling for oil, but also natural gas.
And there are many--even our friends on the other side of the aisle will admit that natural gas usage is a very important transition strategy as we look at our energy needs going into the future whether for transportation fuel, electricity generation. Those taxes proposed by the administration will put a lot of these gas companies out of business. And keep in mind, 97 percent of the natural gas used in this country is produced here in this country by these small companies.
A given rig will employ 65 people on one rig. So, if a company that has--let's say they have to cut back 50 rigs. Do the math. You're talking 3,000-plus jobs.
Mr. AKIN. The very jobs that we should be encouraging because we're so dependent on foreign oil.
Mr. BOUSTANY. These are private-sector jobs. They're good-paying jobs, and they help promote U.S. energy security. It's critical.
So what we have is an administration that is proposing policies counter to what American interests are with regard to our energy security, and I would submit to you it hurts our national security as well.
And I'm really worried about the situation in the country of Oman, for instance. It's right across the Strait of Hormuz from Iran. That strait is very narrow. Forty percent of the world's oil crosses through that strait, and if it were to shut down because of unrest in Oman and Iranian mischief, we would see oil prices spike up to $400 a barrel, and we'll pay a lot at the pump.
It will hurt our farmers. Rice farmers back home are trying to export rice and grow rice for domestic consumption. It will hurt our chemical manufacturing.
And speaking of the natural gas piece----
Mr. AKIN. Maybe I could just stop. I want to hit you with a "gee-whiz'' statistic because I'm kind of an old geezer. I've been here for a while, and I've watched voting patterns, and here's something that might be interesting to you. And I tell this to some of my constituents back home.
If I were to say that the Republicans and Democrats in the House are divided on the abortion issue, people would go, Well, no big surprise. What I think's interesting is if you look back over the years, at least the 10 years I've been here, the two parties are more divided on developing American energy than they are on the abortion subject. And I find that just amazing to me because it seems so obvious that we're still using gasoline in cars. Until we get away from that, we need to be trying to produce our own gasoline.
We have very large reserves of oil that we could be drilling. And my understanding is on many, many of those locations where we could drill and hope to find oil, there are environmental lawsuits blocking drilling in all of these different locations where we could legally drill--not mentioning ANWR, which is off bounds to us right now--and now the regulations in the gulf which, again, I don't have any problem with people wanting to say, hey, we need to see what went wrong with the oil spill. How do we make sure that we get a very deep high-pressure situation, that we've got the proper devices to stop that up if we need to. But just to basically shut down and then tax everybody, this is just bizarre.
Mr. BOUSTANY. Well, it is bizarre.
And again, Americans want to compete. And we know, if given the opportunity to compete, we can win in the global economy. And we've got to have energy production in this country to allow our companies to compete.
Now, let me point out something. One of the biggest areas of exports for the United States is chemicals, petrochemicals and other chemicals, fertilizer, that are produced here, manufactured here in the United States.
Mr. AKIN. Manufactured with?
Mr. BOUSTANY. Natural gas and petroleum products. And if you shut down our natural gas production, then our companies, which have a price--on a basis of price, we can compete because we have cheap natural gas here in this country compared to around the world. Our companies are competitive.
Mr. AKIN. Now, you haven't even mentioned the massive new supplies of natural gas they're finding, particularly under Pennsylvania. That's an incredible find.
Mr. BOUSTANY. Yes.
We know we have the world's largest reserves in coal. We have potentially the largest reserves in the world in natural gas here in the United States. And some argue that the estimates of oil are vastly underestimated because of two things: one, the shale oil that's available that currently is off limits because of administration policy and environmental policies; and, secondly, on the east coast and west coast, Outer Continental Shelf area, we don't have accurate seismic information. So when they say we only have 3 percent of the world's reserves, that's an inaccurate figure. That's not been thoroughly looked at with modern seismic activity.
But our companies that manufacture these chemicals and fertilizer have a competitive advantage because of the low price of natural gas in this country. If we tax it, as this administration is proposing, it will actually make us less competitive. Our exports will go down, and it will be counter to what the President wants to do by expanding exports. It makes no sense whatsoever.
Mr. AKIN. Well, I think what you're getting into, Doctor, is something that I wanted to talk to a little bit tonight. And that is the assumption that you can just go taxing and taxing and always talk about the rich guy and, oh, we're going to talk about the rich guy and think you can get away with that without consequences.
Because it seems to me that there is a disconnect with the current administration and the Democrats as well policywise because they talk about the fact they want jobs, but then they destroy the companies that create the jobs. And you can't kill the company if you want jobs because the company is the one that hires people. And they seem to miss that connection there.
I'd like to go back to my good friend from Michigan--I had to check to make sure, Congressman Walberg--and I wanted to give you a chance to jump in to our discussion.
But I'd like to start going--talk a little bit in the direction about taxes, what happens with taxes and how it is that we can deal with some of the tough problems budgetwise here, and at least one piece of that is the proper tax policy.
Mr. WALBERG. I appreciate my good friend from Missouri again holding this conversation tonight.
And I think you're leading into the key point here. Because bottom line, when you talk about entitlement spending, those entitlement programs that we've come to expect in the United States, whether it be Medicaid, Medicare, Social Security--and most of us, at least in this room tonight, have paid into Social Security a long time.
Mr. AKIN. Now, let's not get personal about age here now.
Mr. WALBERG. It's not a voluntary tax. And in just a couple of short years, I will be capable of receiving that myself. I've not had a choice to do that.
And yet the only way that we can see those entitlement programs continue, at least if we did it right, is have an economy that's growing, have people that are employed, that are paying into the entitlement programs, the taxes that are there. Even if we don't talk about any alternative way for younger employees coming down the road in the future, we still have to have the ability to put dollars in. That comes from having a job.
So when we go back to what Dr. Boustany was talking about on the issue of energy, when we talk about the regulatory concerns that I expressed that are destroying jobs, I go back to my own home State of Michigan, my own district, Seventh District. Michigan, who led the Nation for 4 straight years on unemployment. A State that was known for its manufacturing, its auto industry, always having jobs, high standard of living.
And yet, as a result of government growing too large, too strong, too intrusive, and spending too much and taxing too much, we've destroyed the economy in Michigan. And now the new administration comes in and has to go through almost insurmountable odds to try to restore an economy that has jobs so they can pay in to this.
Mr. AKIN. Let me just ask you whether this gets under your skin, because I'm on the Budget Committee. But I hear all the time that my Democrat colleagues are saying the recovery is fragile; therefore, don't you go cutting any of this government spending. And I'm just thinking, wow. I totally don't see it that way at all.
When you have a government that's busy spending money trying to regulate a milk spill in a barn, you have a government that's wanting to talk about rogue dust that comes off of a farm when you're basically running a combine through a row of corn, and you've got a government with duplication after duplication--and we're talking about let's cut just some of the edge of this stuff--and they're saying, careful, don't destroy a fragile economy, hey, the economy is fragile because they're doing everything wrong to it.
Mr. WALBERG. Everything wrong. Everything to destroy it.
Mr. AKIN. And the main thing that's wrong is, as Ronald Reagan said, we're buying too much government.
Mr. WALBERG. Right.
Mr. AKIN. Please, go ahead.
Mr. WALBERG. I assumed I would get you into a rant on that because I know you're passionate about that. It's absolutely true.
I can show you from experience in Michigan as we went through this type of downturn back in the 1980s: too-large government, increased taxation, increased spending for all sorts of programs.
We ran businesses out of the State. We turned that around in the nineties, and we cut taxes 26 times. We right-sized government. We put Workfare and Edufare in in place of welfare. We encouraged businesses to thrive and grow. What happened? By reducing taxes, cutting spending, the economy grew. More revenue came in, and then government had to control itself from spending those revenues from less taxes, but still increased revenue because people were working, they were spending, they were saving, they were investing, they were taking care of themselves.
Lo and behold, the American people with their own intellect, their own intelligence, their own creativity began to grow an economy that made things right for themselves. And then they had choice. They had opportunity. They could be creative. They could build new machines. They could build machines that met the noise standards that were presently available, as opposed to saying we're going to create jobs by saying you can't have this noise standard here and you can't take care of it with an ear plug or an ear muff; you are going to have to produce a machine that isn't there. So look what we're doing.
And my good colleague, I have a letter from OSHA that says that was part of an economic development plan, to encourage the development of new machines that would meet these noise standards so that then you would have new jobs. Well, wait a second. The people that would produce those, and more importantly the people that would buy those machines, could not do that because they couldn't afford it. So here's Big Government again with its own ideas that ultimately destroys an economy.
Mr. AKIN. Let's take a look at you just talked about an example from the great State of Michigan. And just hearing you talk about it just made me feel good. It's America on the move again. It's individual citizens taking risks, going out there working hard, making a good living; and then because of the things they've done, other people get better jobs and they make a better living, and everybody does better.
I mean, you cannot ignore the fact that the standard of living that we enjoy in America is because a whole lot of people could be free, free to succeed or free to fail.
Mr. WALBERG. Right.
Mr. AKIN. But it's called free enterprise. Now, let me give you another example that occurred when I was a Congressman here, and I think the beginning of when you were, and that was that the second Bush, G.W. Bush, copied the example of JFK and Ronald Reagan. And both of those Presidents understood that when the government cuts taxes in the right way, it actually gets the economy going. In fact, what happens when you cut taxes the right way, the government actually gets more revenue.
Now, that sounds weird. Let me just try and explain. I have done this a couple times before, but tell me if you think it makes sense. How is it that the government can cut taxes and get more revenue in? Well, think about it. Let's say you're king for a whole year. And the only thing you can tax is a loaf of bread, and so you start thinking if I put a penny tax on that loaf of bread, I can figure out how much bread people are eating and figure out how much to get for tax revenue. Then you think, hey, how about I put $10 tax on every loaf of bread. Then you think maybe people wouldn't buy any bread. So you start to think there is probably an optimum point where you can put some tax on the bread, people will still be eating bread, but you will get your most revenue. That's what goes on.
Here is an example. May of 2003, were you here then, Congressman?
Mr. WALBERG. I was not.
Mr. AKIN. Okay. You were thinking about it, though, perhaps.
Mr. WALBERG. I was thinking about it.
Mr. AKIN. Good for you. Anyway, May of 2003 we cut three taxes, not popular, because everybody, oh, the Democrats, that's all rich-guy stuff. It was capital gains, dividends, and death tax. Now, I don't know if you're a rich guy if you're dead, but anyway we're going to tax death. We tax everything else, so why not that.
So we cut capital gains, dividends, and death taxes at this time right here. Now, I have got three charts that show what happened. This is job creation before and after the tax relief. This is some of the taxes we extended into this year. Okay. The lines that go down are job loss by month and the lines that go up are job gain.
And so what you have right here is that's the tax relief goes into effect. And take a look at the jobs, the more lines coming up over here. I mean, that's really pretty substantial and pretty interesting, whereas these you are losing. So this tax appears to have had a good effect. Let's check it on not just job creation, let's check it against----
Mr. WALBERG. You meant the tax cuts, the tax relief.
Mr. AKIN. The tax cuts, yeah.
Mr. WALBERG. It gave incentive.
Mr. AKIN. So the tax cuts go into effect same place here, this line, this is the GDP, this is actually losing GDP or gaining; you can see the average here is about 1.1 percent; but after those tax cuts, it jumps to 3.5. You can see these are a lot stronger economy. So the economy seems to do better when you allow business people to take the money, put it in their business, create jobs. There is more people working, more tax revenue comes in.
Well, wait a minute. You cut taxes, that means your revenue's going to go down? Well, let's see what happened to revenue. Here's the story. Here's the tax cut right here. The revenue has been going down. They cut the taxes, and 4 straight years of increase in revenue. So what's happening there is that actually if you do the right kind of tax cut, just as you say you get the free enterprise system working, and you can turn the economy around. JFK understood that. He did it. It worked for him. Ronald Reagan did it. They said, oh, trickle down economics and all this kind of stuff, but it worked.
In fact, here is another chart. This is the tax rate on the most wealthy people. This is this red line. It started at 90 percent; it's come down. You notice as the tax on the wealthy people comes down, the amount of Federal revenues goes up. Now, that's weird. Why would that be? It's the same principle. You can overtax and basically run the economy into the dirt.
Mr. WALBERG. Isn't it the simple principle that what you give incentive you get more of, and what you discourage you get less of?
Mr. AKIN. Yeah, you are absolutely right.
Mr. WALBERG. You give incentive to people to use their own resources with American exceptionalism and let the market forces work, everybody benefits.
Mr. AKIN. And we started out tonight talking about the overall fiscal problem we have in America, and the fact that it's really unique. This is a pretty scary situation that America's in. And the solution, as Ronald Reagan said, the solution is simple, but it's not easy. And the solution really comes in two sides. The first is we have to be cutting all of what the government is spending. We have to do some cuts. But on the other hand, what we have to do is to selectively do the tax cuts to allow the economy to really get back in a strong recovery.
The one thing I agree with that the Democrats are saying is that the recovery is fragile. I think they picked that up from Bernanke, the Secretary. But I think it is. I think it's fragile because of the fact we've still got the problem of excessive taxes, excessive red tape, and a whole lot of uncertainty in the markets.
Mr. WALBERG. And a lot of spending.
Mr. AKIN. If we can do those, that's going to help. So the first thing is we've got to cut taxes, but we tremendously have to cut the overhead. And the thing here, and I think the public is becoming aware of this fact, we can't make it by cutting defense and non-defense discretionary. That was the budget we were doing 2 weeks ago on the floor. We cut $100 billion out of that. If you know what the real problem is, as we talked about earlier, the total of these entitlements plus debt service is $2.2 trillion. The Federal revenue is $2.2 trillion. You can zero this and this out, and you just barely have a balanced budget; and that's not talking about the out-years, when it gets worse.
So these areas must be dealt with. Now, supposedly if you talk about changing anything with Social Security, Medicare, or Medicaid, lightning will fall and you'll be struck dead politically. But the fact of the matter is we must deal with these. How we deal with them is one of those things that we need to have a conversation on it.
But to do what the President did and submit the 2012 budget and not deal with these at all is being disingenuous. It's kicking the can down the road and ignoring this massive problem, which is a little bit like that gorilla in the tent.
I started, my dear friend from Michigan, I started by talking about--and it's sort of sometimes I think about this: What would it be like to be in the year 1850 and be a Congressman or Senator and you have this huge issue of slavery and we didn't deal with it? We just ignored it, and then we got slammed by the Civil War.
And my question is, are we as Americans going to deal with the fact that our entitlements and debt service is using up the entire revenue of the country? I mean, that's not just a little bit of a budget problem; that says we have a fiscal crisis on our hands and we're responsible. And our American citizens that elected us here expect us to deal with this problem. And the first way to deal with it is to at least acknowledge that we got the problem.
Mr. WALBERG. And I believe that more and more people, even those that are using the entitlements, the Social Security, Medicare, understand that and are growing in their fear that unless we do something, they indeed will be hurt. But I think that you and I together, and many who are of like mind, understand that we must do something, but we can do something that's better.
We can do something that assures people that they will have what they expect.
Mr. AKIN. That's exactly the point.
Mr. WALBERG. And we can do it the right way without the Big Government issues and getting down to that American exceptionalism that says we can trust people to do for themselves, if given the incentive and opportunity, better than what Big Government can do.
Mr. AKIN. You see the point of the matter is is there are people who are dependent upon these programs, older people. They are going to be in trouble if the wheels fall off this thing. So what we need to do is craft a solution that allows the older people that are on these programs to stay there, and as people become younger, give them alternatives and to have a transition so that you can get these costs under control.
That is the way to manage a solution. Everybody has got to suffer a little bit. But at least we are not allowing the whole thing literally to crash like some sort of a train off the edge of a cliff.
Mr. WALBERG. Well, I think, not necessarily the suffering idea, I think in doing something that's credible and the right thing to do, it gives people optimism that the answer is here. It will take some tough decisions but ultimately the people who are in need will be taken care of.
The other people with the great creativity, the American exceptionalism that's there will find ways to do it and do it better, and ultimately a greater opportunity for the future, and that's optimism.
Mr. AKIN. You know, and I think that is a thing that's so exciting, because I don't think you are being a Pollyanna by saying what you just said.
Mr. WALBERG. Not at all.
Mr. AKIN. The reason I say that is because we have been through, as Americans, a lot of dicey situations.
Our own parents, known as the Greatest Generation, as they would say it, did their bit. My father was with Patton in Europe, and they fought World War II. And then there were the days when Ronald Reagan came to a discouraged Nation, and he said America's got brighter days ahead. With that twinkle in his eye, and he had such a way of putting it, you know the solution is simple but it's not easy.
We have come to another one of those pivotal times in history where it is our responsibility to deal with a massive problem and not to ignore and try to pretend it doesn't exist and just try to lie to people and let the government run a little longer until we are gone, and then everything comes down in a big heap. That's not what the American public wanted of their leadership.
As long as you and I are kicking, my friend, we are going to stay here. We are going to talk about this. We are going to talk about the great days ahead for America and some of the things that could possibly be.
You know, we take a look at some of these medical costs. They are really, really busting the budget. Maybe one of the things we need to do is to say, hey--I think it was 1950, somebody calculated the cost of polio that had cost us a trillion dollars a year in America today, the polio costs.
They forgot something. We figured out a cure for polio. Maybe it's time for us to target the most expensive diseases, things like diabetes or Alzheimer's, things that are very, very big-ticket items. Maybe that's part of that American exceptionalism to leave the world a better place, to leave our kids freer, not taxed into the dirt, to leave our economy the strongest of any in the world, that America could be a shining city on the hill, a light to the people around the world.
That was the vision of our forefathers. Why don't we grab ahold of that have and say, hey, we have got way too much government that we could afford. Let's turn loose the American people and let's not trust so much in government. I think that's the big question coming up. Do we really want more government, more taxes, more spending, more debt, and less freedom, or do we want more freedom and a whole lot less government, and the government that's there to really be a servant to the people and not have the attitude that they know better than everybody else. Don't you think that's where we are?
Mr. WALBERG. And I think the people spoke in November. I think that speech they gave to us, my good friend, is that we must take this opportunity. This is our point in time. This is our date with destiny, as it were. If we back off from tackling the big things, we will not only lose there, but all of those little special things will be taken away as well.
Mr. AKIN. Congressman Walberg, with you and the other great people at work down here and the American public, I believe we can do it. It's time for us to roll up our sleeves. Let's get busy cutting, let's do things the right way. Design programs that work and not threaten people, and let's move forward, because there are brighter days ahead.