Roscoe Bartlett

Mr. BARTLETT of Maryland

Mr. BARTLETT of Maryland. Mr. Speaker, I would like to come back for a moment to look a little bit more at these trust fund surpluses and the debt that we owe to this trust fund which is big and going to get bigger and bigger. One observation is that our law requires that we accumulate this. I say that because the only thing we can do with these surpluses by law is to invest them in nonnegotiable U.S. securities. I cannot imagine money laying around Washington that we do not spend. And so if it is invested in nonnegotiable U.S. securities, we are going to spend it. Now, the fact that we took monies from these trust funds and paid down for a little while some of the publicly held debt, that did a very nice thing for us today. What it did was to reduce our demand for money in the marketplace, and that competition dropped interest rates probably by about 2 percent. So the home you are buying costs you less per month. The car you are buying costs you less per month. The tuition payments you are making for the debt for your children or your debt if you went to school and you are now paying it off that cost you have is less. But the flip side of that is that what we are accumulating here is the largest intergenerational debt transfer in the history of the world. And although we are living better today because we are taking these trust fund surpluses and spending them and, therefore, we are not borrowing as much in the marketplace, our kids and our grandkids are really going to have to pay for this. Because when it comes their time to run this government, we cannot run it on current revenues. So what we are doing is borrowing from their generation. When it comes their time to run the government, not only are they going to have to run the government on current revenues, but they are going to have to pay back all of the money that we borrowed from their generation. Now, when I first ran for Congress 11 years ago, I promised I was going to conduct myself so that my kids and my grandkids would not come and spit on my grave because of what I had done to their country. I say to the gentleman, I am trying to do that; but I am not getting as much help here as I hoped I would get when I came here 11 years ago.

Mr. BARTLETT of Maryland. Mr. Speaker, the gentleman talked about hidden taxes. I would like to talk about the biggest hidden tax of all that most Americans are completely oblivious to. Now, if this year is like last year, May 10 will be a very special day because that will be Tax Freedom Day. That will be the day that you have finished working so that you can pay all of our Federal, State and local taxes. Now that is quite some weeks for now so you are still working to pay Federal, State and local taxes and will until May 10 of this year, if this year is like last year. But on May 11 you are not going to be able to work for your family to buy that car or pay something on that tuition bill or to make a mortgage payments on your home. Because for the next 7 weeks, right at 7 weeks, until July 6 every American is going to have to work to pay the cruelest tax of all. It is a hidden tax which is a very regressive tax, and by the way it is a favorite tax of my liberal friends. But it is the most regressive tax we have because the poorest of the poor have to pay that tax. They get no exemption from the tax. They can get no deductions from it. And what is this tax, this big hidden tax that consumes 7 weeks of the working time of every American? It is unfunded Federal mandates. Now, that is a mouthful, but let us point out what that is. It is a law which we passed in this Congress and, boy, are we fond of doing this, a law which we pass in this Congress which causes a State government or a county government or a city government or a business or your family to spend money that we do not provide. In other words, it is a mandate; but we do not provide any money for the mandate so it is an unfunded Federal mandate. And that consumes the working time of every American for just about 7 weeks out of the year. So you spend about 52 percent of your time working to support government. If you are in the average community, go out on the street and walk around and look at every fourth person you meet. They work for government at some level. Now, I would submit that the average American thinks that is just too much government. And if we could resurrect our Founding Fathers and have them see where we are, they would be appalled at what we have done to the dream that they had for this country, where they envisioned a very limited Federal Government, where essentially all of the rights and all of the responsibilities stayed with the citizens in the private sector. We have come an awful long way from that dream, have we not?

Mr. BARTLETT of Maryland. Mr. Speaker, I say to the gentleman from Maryland (Mr. Smith), there is a good analogy of this that helps us understand what these Washington cuts are that are really not cuts. We have big cuts, and we are spending more money next year than we did last year in spite of a cut. It is like our son comes to us, and we are giving him a $5 allowance, and he comes and says, I would like a $10 allowance. But we say, gee, $10 is a little much. Suppose we give you a $7 allowance? So now the son goes and tells his friend, I just had my allowance cut by $3. Obviously the allowance went from $5 up to $7, it went up $2; but relative to his anticipation, his hope that it might be $10, he now has a cut. Most of Washington's cuts are those kinds of cuts. They are simply a cut in the increase in the rate of spending, increased rate of spending; they are not a cut, or are almost never. Just look at these curves. Almost never do we spend less money this year than we spent last year. So be careful that people define very carefully what they mean by a cut in Washington, because most of the time it is, in fact, not a cut; it is simply not as big a rate of increase as they would like to have seen. All of the cuts we hear my friends on the other side of the aisle talking about in our budget are that kind of cut. As far as I know, essentially nothing is being cut in the budget. We hope to cut the rate of increase of some of these programs, but as far as I know, essentially nothing is being cut.

Mr. BARTLETT of Maryland. The gentleman mentioned business taxes, and the fact that businesses really pass that tax on. I would just like to concentrate on that for a moment. In a very real sense, we cannot tax a business, because that simply becomes part of the cost of doing business. If the business is going to remain in business, if that company is going to remain in business, they have to pass that tax on or they cannot remain in business. I would like to make the argument, which I think is pretty hard to refute, that business taxes are probably the most regressive tax we have. I know my liberal friends are very fond of business tax, and they would like to increase it. I am not sure they have thought through what happens when we increase business taxes. Whenever we tax a business, it has to add the cost of that to their goods and services. Now, there is no deduction for that and no exemption from it. So the poorest of the poor, when they go to buy the services or the products of a business, have to pay more for that service or product because we tax the business. There is another way in which business taxes are very regressive and hurt people, particularly poor people. Another thing that happens when we tax a business is that we have increased their cost of doing business; so now that makes them less competitive with firms in other countries, and they may, in fact, not be able to continue doing business here, and those jobs may end up somewhere else in the world, more and more frequently on the Pacific Rim. There are some companies today, I say to the gentleman from Maryland (Mr. Smith), that are doing something that we call inversions. A company, when they look at the regulations that govern them here, when they look at the taxes here, they say, we just cannot stay in business in this climate, so what we are going to do is move our headquarters overseas to some island offshore or something like that. We are going to continue our major operations here, but for tax and regulatory purposes, we are going to move our headquarters overseas somewhere. The question we are asking ourselves is, how can we punish those people? I think that is exactly the wrong question. The question we ought to be asking is, why are they leaving this country? What is there about our regulatory climate, what is there about our tax structure that is forcing these businesses out of this country? What do we need to do so that we not only keep these businesses in this country, but we attract other businesses to this country? Do Members not think that that is the question we really ought to be asking here?

Mr. BARTLETT of Maryland

Mr. BARTLETT of Maryland. Mr. Speaker, today I rise to talk about a misunderstanding about our Constitution. It has been reported that some antiwar protesters destroyed a 9-11 memorial in La Habra, California, last Saturday. The memorial was on private property and was set up after 9-11 to honor those murdered by the terrorist attackers. The antiwar protesters burned and ripped flags while the local police watched and did nothing. It is unconscionable there would be Americans who would show no respect for those victims of 9-11. Even more outrageous is that the police department excused this vandalism by citing the first amendment's protection of freedom of speech. Freedom of speech is a God-given right of every American; destroying private property is not. What would the police officers do if a citizen wanted to exercise his freedom of speech by setting fire to city hall? Can a person express their freedom of speech by punching a speaker they disagree with? Obviously not. I encourage the La Habra Police Department and all police departments across this country to protect freedom of speech while at the same time not allowing vandals to destroy private property.

Mr. BARTLETT of Maryland

Mr. BARTLETT of Maryland. I think the most important thing to remember here is what we are doing here does not affect just you and me this year and our taxes; it is going to affect our kids and our grandkids. I just cannot in good conscience continue to pass on to my kids and my grandkids this ever-increasing debt. What we are telling them is that it is impossible for us to run our government on current revenues because our needs are so important; they need to understand that we have to borrow from their generation so that we can continue to live the way we are living now in our generation. We are telling them that, Sally and John, when it comes time for you to run the government, not only are you going to have to run the government on current revenues, but you are going to have to pay back all the money that we borrowed from your generation. Milton Friedman observed that government spends all the money you give it plus as much more as it can get away with. Washington loves to spend money. Whenever a new bill comes up that has more money in it than we had in it last year, the question is always asked, if we spend more money, can we help more people? That is not the right question to ask. Of course if we spend more money we will help some more people. But the right question to ask is would this money help more people if we left it in the private sector than if we took it into the government and spent it? The answer to that question is almost always, except for running the military perhaps, that the money will do more good when left in the private sector. So you listen to people here on the floor, they are always making the wrong point. They are always asking the wrong question. What they are saying is, if we spend more money, will we help more people? Yes. But that is not the right question. The right question is, if we left this money in the private sector, would it help more people than if we took it into the government and spent it? Almost every time the answer to that question is, please leave it in the private sector.

Mr. BARTLETT of Maryland. I would like to talk about the balanced budget that we had and surpluses. There was a balanced budget, and there were some surpluses. The balanced budget was the unified budget. That is all of the money that comes into Washington and all of the money that Washington spends. But about 10 percent of the money that comes into Washington should not be Washington's money to spend because it is taken from the American people presumably to be put in trust for the American people to make available to them such things as civil service retirement, as Medicare benefits, and as Social Security retirement in later years. So there was a surplus, but it was not a surplus that resulted in paying down the debt. Now a debt was paid down. The debt that was paid down was the public debt, and I am sure the average citizen had no idea that there were two debts, a public debt and the national debt. While we paid down the public debt, the national debt kept going up. As I mentioned earlier, I checked with the CBO, and there was not a moment in time during those 4 or 5 years when Washington was telling the American people that we were paying down the debt when in fact the debt that really mattered, the debt that we are passing on our children and grandchildren, there never was a moment in time when that debt went down. It went up. That debt is projected to go up faster and faster over the next several years. Looking at the curve, in the next 2 years, this jumps up just about half a trillion dollars. The advertised deficit is only $245 billion; but the real deficit is going to be roughly twice that because we have to add to whatever Washington tells us the deficit is, we have to add to that the monies that are taken from the trust fund. Now, this whole trust fund charade started during the Johnson years. Those who are older remember his guns and butter. He was running deficits that were embarrassingly high. So what his administration did to hide those deficits was to move those trust funds on budget and then take the surpluses in the trust funds and spend them and pretend that was not debt. They make the perfectly silly statement the Social Security surplus offsets the deficits. For me this year that is true because I did not have to go, as a part of this government, out in the marketplace and borrow dollars because what I did, without their consent, was to borrow that money from my children and grandchildren. As a matter of fact, what we have here, what we are amassing here is the largest intergenerational transfer of debt probably in the history of mankind. Eleven years ago when I ran for Congress, I promised my constituents that I was going to conduct myself down here so my kids and grandkids would not come and spit on my grave. I have tried to do that. That is why I have always been honest with my constituents. For all of those years that we were saying that we had a surplus and were paying down the debt, I told audiences that it will probably not surprise them to learn that Washington is not being altogether truthful. We are paying down the debt. It is the public debt; but the public debt is only part of the national debt, which is a sum that is really important because we have to add to the public debt the debt accumulated in the trust funds which we have borrowed. That just keeps going up.

Mr. BARTLETT of Maryland. I thank the gentleman. And this is an interesting curve. When the gentleman said we are increasing our spending by about 7 percent a year, that seems to be a steady rate of increase. But it is interesting that when we have a steady rate of increase, the amount that we are increasing rises exponentially. And that is just the characteristic of this kind of a rise. So if this continues, just at the 7 percent, this curve gets steeper and steeper and steeper and steeper as time goes on. It is compounding interest. There is a namesake of mine, I guess he is my namesake, because he is a bit older than I, at the University of Colorado who says the biggest failure of our industrial society is our inability to understand the exponential function. That exponential function, if we keep on increasing spending at this rate, will eventually bury us. Let me put this original chart back up for a moment, and I just want to talk for a moment about these trust funds and lockboxes. Now, we heard an awful lot, while we had surpluses, about lockboxes. And, by the way, that is a word we have not heard since we stopped having surpluses. Nobody talks about lockboxes anymore. We had a lockbox first on Social Security and then we had a lockbox on Medicare. Now, what this lockbox said was if we had a surplus in those accounts, and we did, and we do, and we will have for a while, but the reason we have surpluses in those accounts now is because actuarially we have a generation of people that are going to retire in the future. And unless we accumulate a lot of money for their retirement, there will be no Social Security checks for them. There will be no Medicare coverage for them. So that is the reason we have these accumulated surpluses. It is not that we can cut taxes because we have these surpluses, because we are going to need them in spades. Now, that lockbox had nothing to do with preserving or protecting Social Security. We have not, as a matter of fact, done anything to preserve and protect Social Security. I am delighted we are talking about it. Seven years ago, 8 years ago, if I talked about Social Security, that would have been perceived by seniors as a threat to their Social Security. I would have lost a lot of votes. And so nobody even talked about Social Security.

Mr. BARTLETT of Maryland. Well, that is exactly right. And if we look at the size of that expenditure, 11.4 percent, that is just a little lower than the roughly 15 percent that we spend on our military. And if interest rates rise, the amount of money that we spend on servicing the debt could be larger than the amount of money we spend on our military, which for a single item is certainly the largest number in our budget. So the interest on the debt could become the largest single expenditure in our budget. Every year that we do not balance our budget makes it just that much more difficult to balance the budget the next year because we are going to have to pay more interest on the additional money that we have borrowed. So as year by year goes by and this debt goes up and up and up, it is going to be increasingly difficult to balance the budget. Now, what we are telling our children and our grandchildren is that we cannot run our government on current revenues. And because the things we want to spend money on are so important, we hope that you will understand that we have to borrow money from your generation. So that when it comes time for you to run the government, not only will you have to run the government on current revenues, but you are going to have to pay back all of the money that we have borrowed from your generation. I do not think that is fair. I do not believe my children think that is fair. And I do not believe my grandchildren think that is fair. I would like to talk for just a moment about this debt held by government accounts, or the trust fund debt. By law now the only place that we can invest surpluses in our trust funds is in nonnegotiable U.S. securities. That means when they take some FICA money, tax, from you, you see it on your pay stub and that goes into this account in Washington. Immediately there is a big computer that recognizes that that money has gone there, and so it, in effect, prints an IOU and it puts the IOU in the account and it takes the money out so that there is, in fact, no money in any of these trust funds. Now, there are a lot of different trust funds, 50 odd trust funds. The largest of these trust funds is Social Security. The surpluses this year in the Social Security surplus will be about $161 billion. The next largest trust fund is the Civil Service Retirement Trust Fund, then the Railroad Retirement Trust Fund, and the Transportation Trust Fund, and the Airport Trust Fund, and it goes on and on through a list of smaller and smaller trust funds equally, about 50 of these trust funds. This year, the accumulated surpluses in these trust funds will be almost $200 billion, $191 plus billion surpluses, in these trust funds. Now, what this means is, since the only place by law that we can invest surpluses in these trust funds is in nonnegotiable U.S. securities, this debt is bound to go on as long as this law stays in effect. What that means is that government will always be increasing the debt by that amount. Because that money comes in and it can only be invested in nonnegotiable U.S. securities. And there is no way that money in Washington will not be spent.

Mr. BARTLETT of Maryland. I thank the gentleman very much. I spent, in a former life, 24 years teaching, and so this is like coming home to me. This is a very interesting graph, and it points out some interesting things about the budget and about the deficit and about surpluses. Here we have three curves, and these three curves are labeled. The gross Federal debt. That is more often referred to as the national debt. And then there is the public debt. Now, this is the debt that we advertized that we were paying down during the 4 or 5 years of surpluses. And it is true. You can see that debt fell off slightly during the 4 or 5 years of surpluses. But look at what was happening concomitant with that, and that was the debt held by government accounts. Now, another way of referring to that debt is that this is the debt owed to our children and our grandchildren, in large measure. This is the trust fund debt. These are the surpluses and the trust funds that we have collected from our working people, many of them our children and our grandchildren, to be there for them for their retirement and for their Medicare. We have taken that money and spent that money. So all the while that we told the American people that we were paying down the public debt, the total debt, that is the debt on which interest is accumulating and the debt which we owe, is going up and ever up. There was not, as a matter of fact, a moment in time during those 4 or 5 years of our so-called surpluses that the gross Federal debt or the national debt actually came down. There were 14 months when the revenues exceeded the expenditures, but that is because of quarterly filings and April 15 and so forth. If the Federal Government were required to keep its books on the accrual basis, which is the way every American company that handles more than $1 million a year, and we handle a whole lot more than $1 million a year, then there never was a moment in time when in fact the national debt, here labeled the gross Federal debt, went down. Now, the fact that we were paying down the debt held by the public, the public debt, was good news for us here today. The low interest rates are at least partially due to the fact that we have paid down this debt somewhat. The Federal Government was not competing in the open market for dollars, and so interest rates dropped. So the low interest on your home, the low interest on your auto loan, which frequently is zero now, the low interest on your children's loan for tuition, all of that is due to the fact that we were paying down this public debt. But the flip side of that is that for every dollar of public debt that we paid down by taking money from the trust funds, we accumulated another dollar debt in the trust fund. So that the sum of those two, always the sum of these two, equals the gross Federal debt.

Mr. BARTLETT of Maryland. Madam Speaker, the average American has little idea of how much tax they pay. The last year for which I saw data, tax freedom day was May 10. Every American citizen works up through May 10 to pay Federal, State, and local taxes. On May 10, Americans will have paid all of their taxes; but May 11, do not count on working for yourself because for the next 7 weeks, up until July 6 last year, every American had to work full time to pay the cruelest tax of all, the most regressive tax we pay, it is the worst tax for our poorest people because the poorest of the poor have to pay this tax, just like the richest pay the tax. There is no exemption from this tax, there is no deduction for this tax, and it is the favorite tax of my liberal friends who do not understand how really regressive this tax is. And what this tax is, it is unfunded Federal mandates. It is all of the laws that we have passed here that require a State or a county or a city or a business to do something that costs them money which we do not pay for in the Federal budget. It is called an unfunded Federal mandate, and that consumes the working time of every American for about 7 weeks, that is, 52 percent of your time is spent working for the government.

Mr. BARTLETT of Maryland. Madam Speaker, our Founding Fathers were so concerned that someone might not understand that they really meant to have a limited Federal Government, that just 4 years later, in 1791, they wrote 12 amendments that started through the process of two-thirds of the House, two-thirds of the Senate, three-fourths of the State legislatures, 10 of those made it through, we know that there was a Bill of Rights, and the 10th amendment in the Bill of Rights, the most violated amendment in the Constitution, the least referred to amendment in the Constitution probably, says very simply, the powers not delegated to the United States by the Constitution nor prohibited by it to the States are reserved to the States respectively or to the people. That is old English and that is legalese. If we put that in modern everyday language what it says is if you can't find it in article 1, section 8, you can't do it. I brought this up because this is the reason that we have this problem, an ever increasing debt, because we have not recognized the limited Federal Government that our Founding Fathers envisioned for us. Were they to be resurrected today and come see what we have done to their country, they might have a heart attack and die very quickly again. But they could not have imagined that the Federal Government would be what it is today, doing all of the things, little of which, by the way, can be justified by article 1, section 8, which is supposed to define what we do. So one way of solving our problem is a return to truly constitutional government, to stop doing those things that in their wisdom they knew could be done better in the private sector. We need to keep asking that question over and over again. Where will this money do the most good? Spent by government or left in the private sector to provide jobs and resources for our people?

Mr. BARTLETT of Maryland. That is right. That is what happened in Russia today. So their senior citizens who worked a lifetime to earn a retirement, now have $5 to $6 a month for their retirement. We could monetize the debt. We could cause such inflation in this country by printing money that is not represented by goods and services, and that is what inflation is. We could do that so it would be easy to pay down this debt because we would be paying it down with cheap dollars, but the people who really get hurt are those people who have worked hard and are counting on retiring on interest. We have destroyed their retirement. We have no right to talk about doing this to people in the future.

Mr. BARTLETT of Maryland. You mentioned our Founding Fathers. It might be instructive to seek their counsel and to look back at how we got here and their dreams for this country. Our Founding Fathers came mostly from the British Isles and the European continent. If you think back in your history, almost all of them came from a country that was ruled by a king or an emperor who claimed and, incredibly from our perspective, was granted divine rights. What that says is that the rights came from God to the king or the emperor. They were divine rights. He would give what rights he wished to his people. When our Founding Fathers came here, in that Declaration of Independence, they made a very radical statement and we read it and seldom reflect on how radical it was. They said there that all men are created equal. The country they came from did not believe that because they thought the king and the emperor was created more equal, if we can use the term from Animal Farm. And that we are endowed by our Creator with certain unalienable rights. Among these are life, liberty and the pursuit of happiness. And what our Founding Fathers wanted to establish was a very limited government. They did that by writing into the Constitution, and I always carry a copy of it, in article 1, section 8, and these are just the words between my two thumbs. That is not much. This describes all of the powers that they granted to the Federal Government. Just after I came here, about 10 years ago, I was given 3\1/2\ minutes in debate. That is a long time in debate. It was about a land grab that I thought was unconstitutional. So I took out my Constitution and I went down it. I am not going to read every word in this, it is not much if I read it all, but I just hit the highlights of each of these little paragraphs. You can see that they are little paragraphs. That Congress shall have power to lay and collect taxes. We learned how to do that, did we not? To borrow money. We are doing that big time. To regulate commerce. To establish a uniform rule of naturalization. To coin money and regulate the value thereof. Somehow we gave that away to the Federal Reserve without amending the Constitution. I do not quite know how we did that. Provide for the punishment of counterfeiting. Establish post offices and post roads. Promote the progress of science. These are copyrights and patents. Constitute tribunals inferior to the Supreme Court. This is our lower courts. Define and punish piracies and felonies. And then about a third of all of these words deal with our control of the military. To declare war. We do that. The President does not do that. Raise and support armies. Provide and maintain a Navy. Make rules for the government and regulation of the land and naval forces. Provide for calling forth the militia. Provide for organizing, arming and disciplining the militia. And then a big paragraph on the District of Columbia, to exercise exclusive legislation in all cases whatsoever. I am really supportive of home rule, but I do not know how we gave Washington home rule without amending the Constitution, which I think we should have done. When I finished doing this, I went to leave and the recording clerk that sits just behind me came up the aisle behind me and tapped on my shoulder and said, What was that you were reading from? Oh, I said, that is the Constitution. Can I see it? I hand it to them. Can I copy it? They took it back and copied it. Announcement by the Speaker Pro Tempore

Mr. BARTLETT of Maryland. Projecting this out, we will buy and buy, and have a lesser appetite for borrowing from the public. Pigs may fly, too, but I think that is about as likely as the Federal Government paying this debt.

Mr. BARTLETT of Maryland

Mr. BARTLETT of Maryland. Mr. Speaker, I am introducing legislation today that will honor America's greatest presidents, George Washington and Abraham Lincoln. The Washington-Lincoln Recognition Act of 2003 will require Federal Government agencies to call the Federal holiday we will observe this coming Monday by its proper legal name, Washington's Birthday, not President's day. Second, the bill calls on the President to issue a proclamation each year on the anniversary of the birth of President Abraham Lincoln on February 12. Without this bill there will be no commemoration of Abraham Lincoln's birthday or his accomplishments in preserving the Union and issuing the Emancipation Proclamation. The big lie of Presidents' Day stems from the 1968 law which shifted the observance of most Federal holidays to Mondays. There would be no United States, no presidency at all without George Washington. What is everybody's business is nobody's business. A generic Presidents' Day diminishes the accomplishments of America's greatest presidents, George Washington and Abraham Lincoln, while rewarding the mediocrity of others. Mr. Speaker, I urge my colleagues and the American people to support passage of the Washington-Lincoln Recognition Act of 2003.

Mr. BARTLETT of Maryland

Mr. BARTLETT of Maryland. Mr. Speaker, I want my colleagues to imagine two brothers. They are twin brothers, they joined the military at the same time, they go to war, they are both wounded, they are 60 percent disabled. One of them chooses to stay in the military and serve his country; the other leaves the military and gets a job in the private sector. The inequity begins right now, because the person who leaves the military starts drawing disability pay, and it continues until he retires in the private sector. When he retires in the private sector, the private sector retirement is not cut by his disability pay. But that brother, that twin brother who chose to stay in the military does not collect any disability until he retires, and even when he retires and after the disability pay, they tell him that it has to be deducted from his retirement. Mr. Speaker, it is obvious how inequitable this is and how wrong it is; and the fact that it is going to cost money to fix it is just more testimony of how egregious this treatment has been of our disabled veterans. We should have fixed this a long time ago. We do not need to do it tomorrow. We need to do it today.

Mr. BARTLETT of Maryland

Mr. BARTLETT of Maryland. Mr. Speaker, America and the world must overcome the threat posed by Saddam Hussein's continuing effort to control or disrupt supplies of Arab oil. Successful completion of the House-Senate conference on a national energy bill is imperative to ensure America's national security and economic security. Americans are 5 percent of the world's population, we use 25 percent of the world's oil production, and we produce 30 percent of the world's goods and services. We are the most energy-efficient and productive nation on Earth. However, America has only 2 percent of the world's known reserves of oil. America imports almost 60 percent of our oil, up from 32 percent in 1992 and 34 percent during the last Arab oil embargo. In 2002, Americans have already paid Saddam Hussein $2.3 billion for oil we need to run our economy and our military. Since 1970, oil production in the United States has declined, with only a tiny blip up from Alaska's Prudhoe Bay. Many experts agree that U.S. oil production will continue to decline, no matter what we do in terms of drilling. A comprehensive energy bill with advances in conservation, efficiency and alternative and renewable forms of energy will strengthen America's economy and national security and lessen our dependence upon oil from Saddam Hussein.

Mr. BARTLETT of Maryland

Mr. BARTLETT of Maryland. Mr. Speaker, every year that we fail to balance the budget and the debt goes up and the interest goes up makes it that much more difficult to balance the budget the next year because now we have got bigger interest payments. By and by, it will be impossible to really balance the budget if this keeps on going forever, and it cannot. At some point we have to draw a line and say enough is enough. Government spending cannot continue to increase two or three times faster than the rate of inflation. Ultimately that will bury our economy, and now we are taking from the average American worker 52 percent of all the money they make. I have not seen it this year but a year ago tax freedom day was May 10. That was the day we finish paying all our State, Federal and local taxes but do not rest easy that on May 11 we can work to make some money for our families because for the next 7 weeks last year, it will be a little different this year, every American worked full time to pay the cruelest tax of all. It is the most regressive tax, the favorite of my liberal friends, by the way. It is the tax for which the poorest of the poor get no exemption or no deduction. They have to pay just as certainly as the richest of the rich, and this is unfunded Federal mandates. What that is is laws that the Federal Government passes that require a State or a school district or a city or a business to do something that costs money but the Federal Government does not provide the money for it. Last year, July 6 was Government Freedom Day. Fifty-two percent of the working time of every American goes to support the Federal Government. I do not think it is unconscionable to talk about raising taxes.

Mr. BARTLETT of Maryland. Mr. Speaker, I thank the gentleman for yielding to me. In a former life I was a teacher for 24 years, Mr. Speaker. An old adage in teaching is that repetition is the soul of learning. So, at risk of repeating something that the gentleman said, I want to go through just a brief explanation of the debt as I understand it. The total debt owed by our country is called the national debt. That is made up of two parts. That is roughly $6 trillion. That is made up of two parts. One part is the public debt. We have heard a lot about the public debt, and I will come back to that in a couple of minutes. The other part of it is the trust fund debt. Lockboxes and paying down the debt, let us talk about that for a moment and see what really happened. We put a lockbox first on Social Security, and then we decided, since that was such a great idea, we would put one on Medicare. I have had people who ought to know better say that somehow we secured or protected Social Security and Medicare by putting a lockbox on them. Let me explain what that lockbox did. What the lockbox did was simply to say that if we have a surplus, and we do, for the moment, have a surplus, Mr. Speaker, in these two funds, if we have a surplus, we cannot use that surplus for ordinary spending; we must use it to pay down the public debt. Now, all of the trust funds are invested in nonnegotiable U.S. securities. We need to understand what happens when monies come into the trust fund. They come into the trust fund. In this day of big computers and instantaneous moving of information around, it probably stays there a nanosecond or two, and then the computer takes it out and replaces it with a nonnegotiable U.S. security. It is nonnegotiable because we cannot cash it in, and it just represents a debt that the collective taxpayers owe to the trust fund. Now, that is debt. It is going to have to be paid. That money is taken and paid down with the lockbox, and then pays down the public debt. So for every dollar that the public debt goes down, the trust fund debt goes up a dollar. So if we are looking at the total of these two debts, which is the national debt, it has not changed at all. But there are trust funds for which we have no lockbox. There are 50 or so trust funds. Two of them have a lockbox. Many of them do not have a lockbox, and we happily took that money and spent it, so the total debt, the national debt, kept going up. Way back a number of years ago, it started with Lyndon Johnson with his guns and butter. He was running such horrific deficits that he wanted to hide the magnitude of the deficits, so he put the trust funds on budget and then coined the perfectly silly statement that the Social Security surplus offsets the deficit. What that means is that when we were told what the deficit was, they did not include in that number the monies that were borrowed from the trust funds. That is about $200 billion a year.

Mr. BARTLETT of Maryland. That is correct. The budget that was balanced was the unified budget. That is all the money that comes into Washington and all the money that leaves Washington, but about 10 percent of the money that comes into Washington should not be Washington's money to spend because they have taken it from the citizens, presumably to put in trust fund for them, but they take and spend that money anyway, and make the silly statement that the Social Security surplus and the other surpluses offset the deficit. They did offset the advertised deficit, but they did not bother telling us that what this amounted to was a monumental intergenerational debt transfer. Our kids and our grandkids are going to have to pay this. Now, we cannot run the government today on current revenues; we cannot do it. For all the while, these last 3 or 4 years, that we were told that the budget was balanced, the budget which was balanced was the unified budget, but they were taking about $200 billion a year of trust fund monies that we owe to the trust funds, they are going to have to be paid back by our children and our grandchildren, and they were using those to run the government. I talked with OMB. If the government keeps its books on an accrual basis, and if a person is a businessperson and has more than $1 million a year going through his company, he has to keep his books on the accrual basis; and we handle more than $1 million in the Federal Government, so presumably we ought to keep our books that way; and if they kept the books on an accrual basis, there never was a moment in time when in fact the national debt went down. Now, it is true that the public debt went down, but for every dollar the public debt went down, the trust fund debt went up $1, so the collective debt, the national debt, went up. I kept telling people who would listen that surely their sin will find them out, because what will they tell the people when we have to raise the debt limit ceiling? See, all the while we were telling the American people that the budget was balanced and we were paying down the debt, and we were paying down the public debt; but all the while, the trust fund debt was going up even faster, which meant that there was an increase in the national debt. All the time we were telling them that, the debt was in fact getting bigger, and soon it reached the debt limit ceiling; so then the government, in order to borrow money to run the government, it would have to raise the debt limit ceiling. Then we had an interesting day and a half with that, and we were here all night, because we put language in one of the bills that said that they should protect the good faith and credit of the United States. That was a euphemism for ``please raise the debt limit ceiling.'' Those folks on the other side of the aisle, pretty bright people, found that out pretty quickly and they harangued for about a day and a half on that. We finally settled. I got home at 4:30 in the morning. The reason I am so concerned that the American people understand this is I do not think they want us to run a deficit. I think they want the budget balanced, and I do not think they want us to balance the budget by increasing taxes.

Mr. BARTLETT of Maryland. Mr. Speaker, when my colleague noted the unfunded liability for Social Security, that depends on when we put the money into the system. The earlier we put the money in, the longer it will collect interest and the less we have to put in; but I have seen some data which indicates that Social Security, if we put no money in, it will run in the red something like $100 trillion during the retirement of the baby boomers. These are big, big numbers. Neither Medicare nor Social Security are solvent for the long haul. We must address both of those. The encouraging thing is that today we can talk about Social Security. Five years ago to mention Social Security was interpreted by seniors as being a threat to Social Security and they would vote against you. So we could not even talk about it 6 years ago, but now we are talking about Social Security. We have not done anything about it, and I am sorry that some people believe that the lockbox had anything to do with Social Security. The only thing it could possibly have to do with it is we have paid down something of the public debt which might make us more debt worthy so that we could more easily borrow money, but I have not noticed we had any problem borrowing money. That is the only possible link we could make between the trust fund lockboxes and Social Security.

Mr. BARTLETT of Maryland. Mr. Speaker, there never has been a time in history when a tax increase has stimulated the economy. If that were true, we have got to believe that a tax decrease does stimulate the economy. It is called dynamic scoring and we cannot do that by law. We really need to change that law. For instance, capital gains tax, every time we have reduced the rate on capital gains tax, the revenues from capital gains taxes have gone up, but we cannot score it dynamically. We have always got to score it as a loser, and the same thing is true of a general tax cut. We have always got to score it as revenue loss, when in reality what my colleague said is exactly true. Tax cuts stimulate the economy and there could be a larger revenue stream as a result of the tax cut and we cannot roll back the hands of time to prove to those who think otherwise; we cannot do history two times, but history tells us that tax increases depress the economy. If we had a 100 percent tax, how much tax does my colleague think we would collect? Of course, it would be zero because nobody would work. If we have a zero percent tax, we also are going to collect no taxes. Somewhere between zero and 100 percent is the optimum level of taxation where the level of taxation is not going to so suppress the economy, discourage people from working, that they are just going to say I would rather play golf than work because the government is going to take 80 percent of my money. A man the other day told me that 79.8 percent of all the estate that he has accumulated is going to be taken and he cannot pass it to his grandchildren. This concerns him very much, and I know we have had jobs lost in this country because people have looked at where they are, looked at the enormous tax burdens, looked at how little of their estate they are going to be able to pass on to their children and grandchildren, and they just quit. They are tired of working, they are tired of the responsibility and there is no reward for it and so they quit, and so lots of good jobs have been lost because of that. The American people do not need more taxation. The gentleman from Michigan (Mr. Smith) talked about the possibility of raising the FICA tax. On many pay stubs that is now the biggest tax item. It is going to be really tough to convince the American people we need to raise that tax.

Mr. BARTLETT of Maryland. Mr. Speaker, I would like to make two observations. One is that about the time of the Reagan administration, there were a lot of bumper stickers I saw out there that said ``no trillion dollar debt.'' Now it is more than six times that big, and we have not had any six-fold inflation since that time, and where is the outrage? Where is the outrage that we are passing this heritage on to our children and our grandchildren? I thought I had remembered that during the Eisenhower years that our government first reached a $100 billion budget, I thought, gee, $100 billion is a lot of money. So I had the staff go back and check, and it was a couple of years after Eisenhower actually before we spent $100 billion. Look at America then and America now; and we are spending what now, over $2 trillion.

Mr. BARTLETT of Maryland. More than 20 times as much. And our country is not 20 times bigger. Our needs are not 20 times bigger. What has happened to us since those Eisenhower years when we were spending less than $100 billion and we are now spending 20 times that amount of money? We really need to stop and take a long look at where we are and where we are going, and we cannot continue to have this kind of a debt increase. We cannot continue to have this kind of an increasing debt that we are passing on to our children and our grandchildren. We are a rich country, but there is a limit to what we can do; and I really would like to see tax day moved to the day before election. There was an interesting little song several years ago, ``We'll remember in November, when I go in that booth, I'm going to vote for anyone but you,'' and the gentleman from Michigan (Mr. Smith) may have noted that tax day is about as far on the other side of the calendar as they can get it from election day, is it not? Not very many people remember from April 15 clear around to November, but if it was the day before election, almost everybody has a memory that long; and I think a lot more people would vote and they would vote very differently, and I think we would quickly come to grips with this budgetary problem in our country.