Budget of the United States Federal Government

Floor Speech

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Mr. RICE of South Carolina. I thank the gentleman for yielding. South Carolina thanks you.

What an honor it is to stand here before this group to talk about the Federal budget. These were a couple of slides that were actually handed out to the Budget Committee that illustrate very wonderfully the challenge that we face.

The total revenue for the Federal Government for fiscal year 2014 is $3.02 trillion, most of it from individual income taxes. And then social insurance is the payroll taxes we pay for Social Security and Medicare, and then we have the spending. You can compare the two.

Revenues are $3.02 trillion. Spending is $3.5 trillion. Our deficit is half a trillion dollars, roughly, projected this year. That sounds terrible. Of course, 3 years ago, just before I was elected to Congress, it was a $1.4 trillion deficit. So it has, in fact, been cut well down. It is about 40 percent of what it was. And I will take all the credit for that.

Actually, it has come down dramatically. But we are still on an unsustainable path, and it is projected to rise, largely because of demographics. The baby boomers are retiring, and the need for social insurance is going to rise in the coming decades. It will overwhelm us if we do not prepare for it.

Republicans, Democrats, the Congressional Budget Office, the Office of Management and Budget, and any known economist will tell you that if we don't deal with this issue, it will overwhelm us. We are on an unsustainable path. We are piling billions and billions of dollars in debt on our children and our grandchildren every year.

Right now, we stand at $18 trillion in debt. On our current path, I believe the number $25 trillion is what they are projecting at the end of 10 years if we don't do something to deal with it.

If you look at the spending, you can see the red areas are what they call entitlement spending or mandatory spending, Social Security being the biggest part of that, and Medicare, Medicaid. Then interest on the debt is here at $229 billion a year. And then other mandatory, which would be unemployment, welfare; the ObamaCare insurance subsidies will be in that. You can see that red area is about two-thirds of our total spending of $3.5 trillion.

The blue area is what they call discretionary spending. Discretionary spending is the only part that Congress has a play or a say in every year. If you break that down further, the discretionary spending, defense is this part here in dark blue that is about half of it, and nondefense discretionary is the remainder.

Nondefense discretionary is the thing most people think of as government; the FBI, the CIA, the White House, the Department of the Interior, Park Service, EPA, Army Corps of Engineers, all these things are in nondefense discretionary. People think: Well, gosh, we should cut the Department of Education, we should cut the EPA.

Well, that is great. If you cut every dime of nondefense discretionary spending out of the budget, every cent of it, we would still have a deficit. If you eliminated every part other than defense, we would still have a deficit, so you see how severe the problem is.

Another thing people don't understand is, because of the sequester, defense and nondefense discretionary have been whittled down over the last several years; and, in fact, nondefense discretionary spending is below 2008 levels right now.

It is as low as it has been since President Barack Obama has been in office because of the sequester spending. Defense spending has been cut to the bone. It is below levels that the Pentagon is telling us are necessary to maintain our readiness in this troubled world.

Now, there is always waste, and there is always further room to cut. The point of all that is, with these things having been whittled as low as they have, it is very obvious that we will not be able to handle our budget problems.

We will never be able to reach a balanced budget unless we deal with this area in red, what is called mandatory spending, the entitlement programs. There is no way to fix this problem without dealing with those.

Now, you say: Well, why don't we just raise taxes? Right now, we are taking in, I believe it is, about 17 percent of our gross domestic product in tax revenues. It is more money in real dollars than this government has ever received.

We are getting more revenue than we ever have, and it is a higher percentage of our gross domestic product than has been received on average over the last 40 years. We are already at a higher level of revenue. Revenue is not the problem. The problem is that spending is out of control.

For the last 3 years, the House Committee on the Budget has issued its own budget. It has been called the Ryan budget. It has been called the House Committee on the Budget budget. It has been called the Path to Prosperity. That budget takes reasonable steps to balance the budget over a 10-year period.

Now, the President issued his own budget this year. The way this is supposed to work is the President is supposed to issue his budget by the end of January. This is the first time since he has been in office that he has actually done that. We actually got it on time.

The House is supposed to issue its budget, I think it is, about March 15th. It goes over to the Senate; they do their version. The House and the Senate conference, and then we send it to the President.

For the first time since the President has been in office, we are on track to actually have a budget. It is an amazing fact to me that, since President Barack Obama has been in office, we have not had a budget.

You can't run your household without a budget, you can't run a bakery without a budget, and here we are, trying to run the most complex institution on Earth without a budget. It is not just a lack of long-term planning; it is a lack of even planning for the current year. You have to have a budget.

Anyway, we are on track to have a budget. The House Committee on the Budget has put one out for the last 3 years. The President has issued his budget now. The House Committee on the Budget's budget over the last 3 years would have balanced in 10 years.

I anticipate we will do the same thing this year. We will put forth a budget that has reasonable adjustments and balances in 10 years and stops piling mounds of debt on our children and our grandchildren.

The President's budget, on the other hand, increases spending from $3.5 trillion a year to a little over $4 trillion a year. It adds $2 trillion in taxes over the next 10 years, and it never balances, ever. It continues to pile debt on our children and grandchildren. The House Committee on the Budget's budget doesn't raise taxes, and it does balance in 10 years.

This is the projection by the Congressional Budget Office--nonpartisan, not Democrat, not Republican--of the path that we are currently on. The cutoff of the blue area there is where we are today.

You can see with the demographics and with the burden that we are going to be placing on our social safety net and our entitlement programs--Social Security and Medicare--right now, where we are, if you look back in history--this goes back to 1941--never in the history of the United States has the debt as a percentage of our gross domestic product been as high as it is right now.

The debt is about 70 percent of our gross domestic product, the debt held by the public. The only other time that it was this high was in World War II.

We can adopt changes. We have time. We can adopt some modifications to bring this back under control; but, if we do not, you can see the mushrooming effect of the additional debt, interest rates climbing, the interest that we pay on our debt rising, the effect of the entitlement programs, running our debt to over 100 percent of our gross domestic product, which will make it difficult for us to recover from.

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Mr. RICE of South Carolina. I thank the gentleman for his remarks.

Mr. Rokita, were you aware that by the year 2030, according to CBO's projections, that our spending just on Social Security, Medicare, Medicaid, and our interest, just those four things will take up the entire revenue of the United States Government, leaving nothing for other mandatory programs, like welfare, like unemployment, like food stamps, like all those things?

It will also leave nothing for other discretionary spending like the FBI, like the Park Service, like border security, and like the CIA; but even more importantly, it will leave nothing for defense, nothing for the Army, the Navy, the Coast Guard, nothing to buy the first bullet.

By 2030, just those four programs--Social Security, Medicare, Medicaid, and the interest on our debt--will take up every dime that the United States Government brings in if we don't change something.

Now, the President's budget adds $2 trillion in taxes, but it adds even more than that in spending. What does he spend the money on? It is a lot of additional programs. He adds a little bit to defense, he adds a little bit across the board to other discretionary, but he throws in a lot of other programs--for example, his proposal to pay for community college, which is a nice idea, a wonderful idea--but the problem is that we can't pay for the promises we have made already.

Mr. Speaker, shouldn't we, before we make new promises, find a way to pay for the promises that we have already made?

The President's budget, in addition to more taxes, more spending, and more government programs, it is just another big growth of government, which we have seen over and over again during this administration. From Dodd-Frank to ObamaCare and other things, you have seen a huge explosion in government.

Now, what has the effect of that been? The President loves to say, Mr. Speaker, that he is for the middle class, but I want to show you an interesting graph.

This blue line here going down is the median household income in the United States. This is the middle class that the President is always saying he is for. You can see from 2008--when he took office--until today, that blue line has gone down 8.7 percent.

Median household income in the country has dropped 8.7 percent--more government programs, bigger government, more intrusion on government in your life, more intrusion of government in our national economy--and you can see the stifling effect that it has on our economy.

I think we had 2 percent growth last quarter. Here we are, 7 years after the Great Recession. We should have had a huge snapback. All we are doing is muddling along, trying to swallow this giant addition of Big Government that is being created. Middle class income is down 8.7 percent.

Look at this, Mr. Speaker. This purple line here represents the consumer price index for medical care. Over that same time, it is up over 10 percent. This red line represents the consumer price index for gasoline, which is now turning down, but it is still above where the President took office.

This green line is the consumer price index for food and beverages because, you see, gasoline and heating oil and electricity all go into the cost of food. You have to fertilize it, you have to prepare the seed, you have to transport it. All those things go into the cost of food.

So, you see, food has gone up 20 percent, gasoline has gone up 10 percent, health care has gone up 15 percent--all these additional costs on the middle class.

At the same time, the median household income has dropped by 8.7 percent. When the President gets up and talks about how the stock market is doing and how the economy has recovered, I can tell you, Mr. Speaker, you can look at this chart and very easily see why the average middle class family doesn't feel it. They don't agree with it.

The President's proposed budget, by adding more taxes and more government programs, will do nothing but exacerbate this problem, the middle class squeeze. We are going to squeeze the middle class until there is nothing left. I cringe when the President says he is for the middle class. Don't listen to what he says; look at what he is doing.

Mr. Speaker, I believe in the House Budget Committee's budget that balances in 10 years, that makes responsible adjustments to our social safety net, that makes responsible adjustments to our discretionary programs, and that brings our budget into balance in 10 years.

When I came to Congress, I thought our debt was the biggest problem we faced. I no longer believe that. I know we can handle it. I have been through the budget committee. All we have to do is start now to make responsible adjustments. The longer we wait, the more difficult it becomes.

My tenure in Congress is and will continue to be focused on American competitiveness. I think we have given away a lot of our competitive edge to the rest of the world. I think, if we decide we want to compete, that nobody can stop us. The only people stopping us is us.

We have tied a noose of tax and regulation around our own neck, and we are running our businesses and our jobs overseas. That is my focus. We cannot fix this problem with our budget unless we have growth, and the way to increase growth is to increase our competitive status in the world.

This is a list of things created by a Harvard economist and a good friend named Michael Porter. He has been to Congress more than once. He has talked to over 100 Congressmen about how to make this country more competitive.

These are eight items. One of them is--in fact, the most important one is to create a sustainable Federal budget because you see, my friends, without a sustainable budget--now, you remember, the Office of Management and Budget that works for the White House says we are on an unsustainable course. Congressional Budget Office, we are on an unsustainable course.

Step number one to make this country competitive and to bring jobs back to this country: create a responsible Federal budget. I submit to you, Mr. Speaker, that the President's budget fails miserably in that regard. Just as his policies are failing the middle class miserably, this budget will make us less competitive in the world.

Second, it says simplify the corporate Tax Code. Simplify and streamline regulation. The House budget assumes many of these things that make this country more competitive in adopting its budget.

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Mr. RICE of South Carolina. In closing, my friend, I just wanted to point out what the House Budget Committee does to bring the budget within balance within 10 years, and it is not all this but three major things.

One, it repeals ObamaCare, which costs $2.1 trillion over the next 10 years.

Two, it initiates what is called premium support for Medicare, what you are just talking about, and it doesn't do away with Medicare, and it doesn't affect anybody who is either retired or retiring within 8 years.

What it does for people that are outside that window, Medicare is still offered, and they will allow four other insurance companies to bid for Medicare coverage.

The government won't pay for the cheapest; it will pay for the second cheapest. If you want to buy a cheaper policy, you can, but it brings private industry in it. If you want to buy a cheaper policy, you can, and you will get money.

If you want to buy a more expensive policy, you can, and you will have to pay a little bit more for it. That is a huge savings in Medicare and something that we have to do.

So premium support for Medicare, repeal ObamaCare, and, third, it doesn't cut discretionary spending, defense and nondefense, but it slows the growth a little. Those three things go 80 percent of the way to bringing our budget within balance within 10 years.

Let me tell you, my friends, we don't have a choice. We are piling debt on our children and grandchildren. CBO, OMB, they will all tell you, Social Security trust fund, it will be broke in 2030 or thereabouts. Medicare trust fund will be broke in 2030 or thereabouts.

You know the problem with Federal trust funds? They are not funded, and you can't trust them. Other than that, they are great.

Mr. Rokita, I appreciate you allowing me to participate in this.

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