W. Akin

Mr. AKIN

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. 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. 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. 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. 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. 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. 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. Proceed, please.

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.

Mr. AKIN. The EPA.

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?

Mr. AKIN. Isn't there actually like a bowling trophy with a big golden turkey on the top of it or something?

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. 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. AKIN. Manufactured with?

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. 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. AKIN. Now, let's not get personal about age here now.

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. AKIN. And the main thing that's wrong is, as Ronald Reagan said, we're buying too much government.

Mr. AKIN. Please, go ahead.

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. AKIN. Okay. You were thinking about it, though, perhaps.

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. AKIN. The tax cuts, yeah.

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.