Peter DeFazio

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, I yield such time as he may consume to the gentleman from Michigan (Mr. Levin). (Mr. Levin asked and was given permission to revise and extend his remarks.)

Mr. DeFAZIO

Mr. DeFAZIO. Earlier, a gentleman from California rose to talk about how the economy was booming and how well the American people are doing with job creation and new prosperity. Unfortunately, it does not look like that for most people in my district. In fact, it really is not that way for most people in America. The combination of misplaced priorities and trade policies that export jobs and depress wages in this country have hurt Americans. In fact, last year, according to the IRS, 99 percent of Americans, all those who earn less than $350,000 a year, saw a decline in their real income. But I think the gentleman from California and the Republican leadership and the White House are looking at that 1 percent, who are doing phenomenally well. The tax cuts have been an incredible boon, over $120,000 per year in tax cuts for families who earn over $1.3 million a year. They are doing just great. Unfortunately, we are borrowing the money to give them the tax cuts and handing the bill to working families and their kids and their grandkids as we continue to reduce the tax burden on corporations and the wealthy. He said, ``Boy, the economy is booming.'' That is kind of interesting. Over the last 17 quarters, the GDP has grown at 2.8 percent, right around the rate of inflation, but in the last six business cycles, it grew at a rate of 40 percent more than that during recovery periods. He bragged about job growth. The United States only has 1.3 percent job growth, much of it in the public sector, under the watch of this administration, since March 2001, whereas in previous business cycles, job growth was closer to 9 percent over the same period, six times the rate of growth. Private sector job growth is only up 0.8 percent. Wage and salary income has also grown anemically. As I said earlier, 99 percent of families and working people in America saw their real incomes decline last year. One percent, $300,000 to $1.3 million, did pretty well. But the people over $1.3 million, they did phenomenally well. So what is the answer of the Republicans this week? Cut benefits that might flow to that 99 percent of the people. Student loans for kids trying to learn and do better and have a better ability to earn in their adult lives and become more productive Americans, $14.3 billion in cuts for student loans, double the origination fee for student loans. That is a cut that needs to be made according to the Republican majority. And then there are the cuts in long-term care, foster care. The family values side of the aisle over there wants to cut long-term care for struggling seniors and their families and foster care. That is extraordinary. And then, of course, they want to slash Medicaid. What they do not tell you is they are dumping that burden on our States who are already struggling. They are going to add to the 45 million people who are uninsured for health care in the United States of America through those cuts. But they say those cuts must be made. Why? Because they have become suddenly fiscally responsible after a 62 percent increase in the debt during the Bush administration and the Republican Congress over the last 5 years? No. Because they want to make room for more tax cuts because, as we heard earlier, trickledown is working great. Those people who earn $1.3 million with that extra 130,000 bucks a year in tax cuts, which are added to the deficit which all the rest of us will have to pay for, they are spending some of that money, some of it even in the United States of America. Sometimes they are hiring people to cut their lawns, or wash their boats. Yachts. They need that money. They need it more than the kid who wants to get a college education. They need it more than the family that is struggling to figure out how they are going to pay for long-term care for their seniors. They need it more than the kids who need foster care in this country. Those rich people need it more because they will trickle it down upon the rest of us. So that is the game they are playing this week. They are going to pretend they are making tough cuts that need to be made. They won't take on the tough cuts. You want to talk about tough cuts? Let's do away with the stupid idea of going back to the Moon by borrowing $100 billion. We have already been there. Why do we want to borrow $100 billion to go to the Moon? How about Star Wars? The general in charge says, hey, it has better than a zero percent chance of working if anybody ever shoots a missile at us. Better than a zero percent chance at a cost of $100 billion, $10 billion a year ongoing. Farm subsidies for farmers who earn over $100,000 a year on corporate farms, we could save billions there. Not to mention if we just reinstated the rate of taxation for people who earn over $300,000 a year that they paid during the booming nineties, we would save $300 billion over the next 5 years. There is a better way to run this country and we are not hearing it from them.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, well, next week the Republicans have discovered that we are awash in a sea of red ink, supposedly. Under the Bush watch, with the Republicans in charge of both Houses of Congress, the national debt has increased by 62 percent, to $8 trillion in 5 short years, quite an accomplishment. We are borrowing $1.3 billion a day to run the government. If we eliminated everything the government does except for homeland security and defense, we would still have a deficit. They say they are going to make some infinitesimal cuts and little phony baloney and that is fiscal responsibility. Let us talk about what they are proposing to cut. Well, the biggest whack they are taking is at students. They do not know any students who have to borrow money or get scholarships to go to school. Why, the children of the rich, they just write out a check and pay cash; they are legacy students at the best schools. $14.3 billion of additional costs on students who want to borrow a little money to get a better education and get ahead, doubling the origination fee, costing them as much as $6,000 over the life of their loans. Kids are graduating with mountains of debt. That is a responsible cut, according to the Republicans. Well then there are those little guys in the elementary and secondary schools who are eating too much. They are eating too much. They are going to cut back on the school nutrition program and the breakfast program and the eligibility of poor kids to eat. They are just eating too much. They do not know anybody who is hungry in this country. And then the phony baloney. I am on the Resources Committee. They are assuming over $3 billion for leasing the Alaska National Wildlife Refuge, 50 times as much per acre as the Naval Petroleum Reserve was just leased for, where there is known oil, in an area where there is no known oil. So we got phony baloney and mean spirited cuts. Now, why? Are they really fiscally responsible? Well, this would be a big, you know, almost one-tenth of 1 percent of the projected deficit over the next 5 years. I guess that is better than nothing. Except that there are ways to make much bigger cuts. We could roll back the 2001-2003 tax cuts for the wealthiest 1 percent, those who earn over $350,000 a year. That would bring in $327 billion, six times what they are pretending to save here. We could do away with some offshore tax shelters, $65 billion more than what they are talking about here. We could cancel the President's mission to Mars. That is $1 trillion over the next 20 years, $100 billion to go back to the Moon again. That would save twice as much money. No, those things go after the powerful special interests or the contributor class, and God forbid they should take them on. But they can get the little kids in the schools and take the food off their plates. They can go off the students struggling to rise up or stay in the middle class and double their origination fees for their loans. But they will not make these kinds of real cuts, ones that would hit at those who earn over $300,000 a year or hit at the powerful special interests who are, you know, who are involved in the Federal contracting with NASA. And then there is waste and abuse. What about the waste and abuse? Apparently, the Bush administration, Brownie is still writing, Brownie, you are doing a heck of a job. He is still on the Federal payroll for $150,000, and he is letting out contracts, such as a contract, put a blue tarp on a roof. A lot of people in Oregon do that when they find out they got a leak when it starts to rain, they go up, climb up on the roof, put up a tarp. The tarp costs $8. Well, the Federal Government is paying a contractor $2,500 to put blue tarps per roof down there in the Southeast, yet another great job by heck-of-a-job Brownie, who is still pulling down $150,000 a year from the Federal taxpayers. So there is a little waste, fraud, and abuse that they can go after. No. But these are the big contractors, Fluor and others, who are benefiting and profiting immensely from gouging the Federal taxpayer. So we should have real fiscal responsibility; but they have no sense of it, because the real money goes to the powerful and the special interests in this country. They are the ones looting the Federal Treasury, and they have the gall to come to the floor of the House and say it is the Democrats. You have been in charge for 5 years. Five years. The Presidency, the House, and the Senate for almost that whole time, and you have increased the debt by 62 percent. You have done nothing about the waste, fraud and abuse. In fact, it has gotten worse on your watch, and now you want to stick it to the kids who want to get an education and to hungry children and primary and secondary schools and pretend you are going to sell leases for a heck of a lot more than you will. You should be ashamed. The sea of red ink spreads, and it grows deeper. Most Americans are drowning, but the yachts of the wealthy are floating high.

Mr. DeFAZIO

Mr. DeFAZIO. Well, we have the newfound foe, fiscal conservatives on that side of the aisle. They control everything, the House, the White House, the Senate. They have increased the debt of the United States 62 percent in the last 5 years to $8 trillion, and now they want to cut spending. Now, what spending are they targeting? Is it the big wasteful spending? No. It is duplicative programs like school lunch and breakfast. I guess those kids are taking two meals. Or student loans. I guess those kids are taking a double load of classes and paying too much. So they will cut $50 billion, and the next week they are going to cut taxes for those who earn over $300,000 a year by $70 billion. Now, in their world, even though that is a $20 billion increase in the real deficit, they say, no, that is not an increase in the deficit, because those rich people, why, they are just going to trickle down on the rest of America. They are going to put the rest of us to work, and they are going to increase productivity, and some day that will increase Federal revenues because working people pay taxes, not rich people, in their world. This is a bizarre turn of events here in Washington, D.C., and their cuts and their tax cuts should be rejected.

Mr. DeFAZIO

Mr. DeFAZIO. Well, the government is in a fiscal crisis. We are borrowing $1.2 billion a day to run the government under the Bush administration and the Republican leadership. They have raised the national debt to $8 trillion in 5 short years, but now they are newly born as fiscal conservatives, and they want to cut $50 billion. From where? Student loans, the school lunch and breakfast programs, those kids are eating too much, foster care and child support enforcement to help the deadbeat dads. They will, unfortunately, more than overspend their cuts to those struggling people and those good programs. They want $70 billion of tax cuts, $20 billion more added to the sea of red ink that is drowning America in tax cuts for, guess who, the wealthy because trickle-down is the highest form of achievement in Washington, D.C. these days. They want to bleed struggling Americans to float the yachts of the wealthy on a sea of red ink one more time while lying about what they are doing.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, the Republicans have attempted to remake themselves as fiscal conservatives despite the fact that, with George Bush in the White House and the Republicans in charge of the House and the Senate, that the debt of the United States of America has increased by 62 percent, over $8 trillion. They are borrowing $1.4 billion a day to run the government. They are borrowing every penny of the Social Security surplus and spending it on other things, including tax cuts for the wealthy. Now they want to cut. What do they want to cut? Students loans, Medicare, Medicaid, foster care, and other programs that are important to struggling American families, under the guise of fiscal responsibility. Now they want to do $50 billion of cuts, but they also want to do $70 billion of tax cuts for the wealthiest among us. They want to make permanent the cuts in capital gains taxes. They want to reward wealth, not work; and they want to make permanent the cuts in dividend taxes. In order to facilitate that, they want to cut these other programs. They want to benefit approximately 1 percent of the society, those who earn over $300,000 a year and have estates worth more than $6 million. But one thing we have got to give them is they are relentless and consistent and they are successful. Last year, the IRS says that 99 percent of the people in America saw their real incomes decline. Everybody who earned less than $300,000 after inflation saw a decline. Up to $1.3 million, they did okay. Over $1.3 million, they did phenomenonally well. Now the President's Tax Commission says that is exactly what the future should be. That is trickle down. We want more for the wealth, not for those who work. Their proposals are extraordinary. They would say that dividends should be free of tax. So if one is someone who is lucky enough to be born into a wealthy family, they inherit millions of dollars and they invest it in dividend-paying stocks, they would never pay a penny in Federal taxes because they are a wealth creator, they are a job generator, they are trickling down on the rest of America. Is that not nice of them? But they would not contribute to the society. And then we have stocks. Well, on stocks they want to say 75 percent of the gain should be tax-free, again benefiting, for the most part, the same people. But the funny thing they are doing here is they want to talk about wealth creators and entrepreneurs, but they stick it to the small business people. If one has a small business, they build it up and they sell it for a million bucks, guess what? Their tax rate is 33 percent under the President's new proposal. But if they have been speculating in the stock market, they would only have to pay at 8 percent. If they had been happy enough or lucky enough to inherit money and clip dividend coupons, they would have paid 0 percent. But, no, if they built up their small business, they are going to pay 33 percent; and those suckers who work for a living, they will pay on every penny of income. Somebody who earns $25,000 a year will pay a tax rate at about three times the person who invests in stocks and realizes capital gains. This is their vision of the world: trickle down economics, trickling on the majority of America and last year trickling on 99 percent of the people in America. It is working well, they say, and we should do more of the same. And, ironically, they want to borrow money to perpetuate this. They are going to take all the Social Security surplus and spend it in part to finance these long-term tax cuts for the wealthiest among us. They should be ashamed, and trickle-down economics does not work.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, the President has finally discovered that there is a threat of an avian bird flu pandemic despite the fact that it was discovered about 8 years ago. Experts have been talking about the threat of the pandemic for a number of years. Last year the President in his budget spent $182 million on chastity education and $100 million on preparation for a pandemic. That is for all investment in flus, vaccines, and antivirals and research. I am glad that he has had a change of heart now. Now he is going to begin to adequately fund the threat, but it is getting pretty late. The U.S. does not make the vaccines. In fact, there is not a very good vaccine available. And we do not make the antivirals. And we are going to have to get in line behind every other country in the world that had better foresight than this administration.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, Chief of Staff Scooter Libby, the chief architect of the lies and deceptions about weapons of mass destruction in the rush to an unnecessary war to Vice President Dick Cheney, is indicted for obstruction of justice and perjury in an attempt to cover up the plot to lie about weapons of mass destruction and smear those who told the truth. The Republican spin machine is in high gear. It is not a big deal: Obstruction of justice, perjury, deceiving the Nation into an unnecessary war, not a big deal, not like a President lying about sex with an intern.

Mr. DeFAZIO

Mr. DeFAZIO. We have got to stop the trade policies, tax policies, the fiscal bankruptcy policies that we are doing. I don't mean by the bankruptcy bill, that was bad enough, written by the credit card companies, but the bankrupting, the looting of America that is going on with this administration. It is just laughable when the Republicans parade down here and talk about the spending of the Democrats when they control everything and they have increased the debt by 62 percent in 5 years. How do you blame the Democrats for that when they are in charge of every branch of government?

Mr. DeFAZIO. The new CEO of Delphi said that very plainly. He said 10 bucks an hour. That is the future for manufacturing workers in America. As you mentioned, it will not be very long until they try to put the same squeeze on knowledge-based workers. They have done it to other skilled workers. Just yesterday Northwest Airlines announced, or was it Continental, whichever one of those is currently in bankruptcy, they are both in bankruptcy. Anyway, one of those two airlines announced that they were going to outsource their flight attendant jobs because they can get cheaper jobs overseas. They want to do the same thing with pilots. We are outsourcing the maintenance of our airplanes. More than half the heavy maintenance on our airplanes is now done overseas with very little supervision from the FAA. We are losing those jobs, too, because they can get a mechanic for $2 an hour in El Salvador, where they would have to pay a skilled mechanic in the United States of America maybe $25, $30 an hour. They do not want to pay those wages. The race to the bottom is going to end very, very poorly for most Americans. We have got to stop it.

Mr. DeFAZIO. Let me tell you, I had a container board company in my district, major corporation. They closed it down. They had one candid executive who told the truth. He said, why would anybody make container board in the United States of America any more? The container board is made to package products. The products are all made in China. The container board industry is moving to China so they can make the container board in China for the products made in China to ship back to the United States of America, even basic industries like that. I mean, it is extraordinary the breadth and the depth of the undermining that is going on here. When you ask them what is your long- term vision, Alan Greenspan, the chief economist hack of the country, likes to say, oh, this shows how much people have faith in us. They will lend us all this money. But then when you say is it sustainable to borrow $600 or $700 billion a year forever. Well, no, no, no. This is a temporary situation that will be corrected. How is it going to be corrected? If the dollar went to Arrupe, how would it be corrected? It is not going to be corrected through the typical currencies. We are buying everything overseas. The Chinese have basically pegged their currency to ours. No matter how much the dollar goes down the products cost the same. Oil costs more because we are paying for it, and they are raising the price. The old models of trade do not work any more. But this administration, because it is working well for a very few, for the corporate CEOs and for a few investors, are perpetuating the model to the point where they push America over the final edge. You talked about the CEO of General Electric. The former CEO of Boeing gave a speech where he said he could not wait until Boeing was not referred to as an American company anymore. Think about it. If our Republican colleagues do not care about the middle class and small business, which they pretty clearly do not by perpetuating these policies, they at least ought to care about their number one thing they are supposedly tough on, national security. So, in 30 years, when we are in confrontation with China, we have no manufacturing base at all left in this country, we do not make airplanes any more. Like the year before, we predicted we would get into a potential conflict with China, say, over Taiwan. We will call them up and ask them to sell us weapons so we can defend ourselves against them. How is this going to work? They won't need weapons. They have so many of our assets in their bank as of now. When George Bush took the presidency they had $60 billion in U.S. assets. As of the end of last year they had $242 billion of Treasury bonds. They are headed from being number 2 toward being number 1. They will eclipse Japan in a few years as the largest holder of our debt. All they have to do is threaten to dump our debt on the market and crash the dollar, and they can control the United States of America. They are putting us so much at jeopardy. If they do not care so much about the middle class, if they do not care about small business, they have to care about the national security implications of this, and the economic security implications of this. But they do not seem to. A few people are doing really well, and they consider themselves sort of stateless people, like the guy who owns a cruise line, who gave up his U.S. citizenship, lives in the U.S. but he took Bahamian citizenship so he would not have to pay taxes any more. He just lives here and all his customers are here. I mean, that is great. What a great model for the American people.

Mr. DeFAZIO. Just to make a link there, remember, during the discussions here on this floor, and during the formulation of the China trade policy here, there were the special Wal-Mart provisions that were added to that legislation, China being the largest producer of products for Wal-Mart. Wal-Mart has been driving manufacturers out of America. There was a fan company driven out of Ohio. Finally, they did not want to go. They wanted to keep making them here, but Wal-Mart said we can get them cheaper. You make them cheaper. The guy said, I can't make them any cheaper. This is really efficient. We are making great products here in the United States of America. I am paying these people a decent wage. They said, no, we know you can do it better. No more contract unless you go cheaper. We know where you can go, China. They are doing that to business after business after business, driving them out of America, driving them to China. Yes, you can say short run, that is good. The products are cheaper. Well, the profit margins are a lot cheaper. The products are maybe a little cheaper, but people do not have jobs any more. People are buying things on credit. Not only are we borrowing $675 billion this year, projected, to buy products made overseas, Americans are borrowing money to buy the products that we borrowed money to import from overseas that we used to make here, because they have lost their jobs, and they are living off the equity in their homes or other things. We have record levels of debt in this country. So there are a host of cascading problems that are falling out of this unsustainable rush toward the bottom.

Mr. DeFAZIO. To be totally fair, the last administration was pathetic on this issue, too. I first uncovered this issue during the Clinton administration. I thought they would be happy to hear it. They could help American consumers. They were big rules-based trade guys. They said, no, no, they didn't believe it. I had further legal analysis done and the legal analysis said, Yes, you can clearly file a claim. They are clearly violating the rules of OPEC. You can't constrain supply of a commodity in international trade if you are in the World Trade Organization to drive up the price, only for conservation purposes. They certainly can't make that case. But the Clinton administration would not do it. I have heard, well, maybe the Bush people, he understands oil, the Vice President understands oil, they will get tough and take on OPEC. They are tough guys. And so I contacted them. I have gotten a form response from the Trade Representative and the Commerce Department. I have introduced legislation here in the House which the Republican leaders refuse to schedule which would mandate the President file a complaint against OPEC. Free trade, you have got to realize, only works one way. It only works to stick it to American workers. It doesn't work for American consumers. They are not going to use free trade rules to go after OPEC. They are not going to use free trade rules to go after the company in China that cloned my furniture company. They are make a little feint at it. They are saying, Oh, we're going to go to the WTO and ask them to look at whether the Chinese are pirating things. All they have to do is pick up the Trade Representative's report or Pat Choate's book and they can read page after page after page of documentation of the Chinese stealing American products and goods and jobs. But they have only filed one complaint. This administration, 5 years in office, has filed one trade complaint against China, to be totally fair, on behalf of a pharmaceutical company. That is the only one they have filed. The thousands of small businesses and big businesses are being ripped off, OPEC who is ripping off everybody and driving businesses out of the United States of America, they won't take them on, but they did file a complaint on behalf of the pharmaceutical industry in China.

Mr. DeFAZIO. I have got to correct the gentleman. He exaggerated. Their profit was only $9.8 billion for the quarter because they had some markdowns. That is the largest corporate quarterly profit in the history of the world, not just the United States of America. Some would say, well, you know, it has to do with supply and demand and all that. The biggest increase in profits for ExxonMobil, whose profits are up 75 percent on the quarter, BP's profits up 34 percent on the quarter. I think their stockholders should be talking to them. How come they only went up 34 percent on the quarter? ConocoPhillips 89 percent on the quarter--that CEO is going to be getting a nice little bonus--is in their refining areas. The Republican chairman, from Texas, stood up on the floor of the House and said, ``We have closed 300 refineries in America in the last 10 years.'' If he is talking about ``we,'' that is, if he identifies himself as an oil company executive, that is true. If he is talking about the government of the United States of America, the laws of the United States of America, environmental laws, tax laws, other things, no. The 300 refineries that were closed were closed because of hundreds of oil company acquisitions and mergers and a deliberate policy. There has been uncovered a memo from Conoco to other major oil companies back in the mid nineties that said: We have a great idea. We're all only getting 27, 22 cents a gallon on refining. If we close down a bunch of refineries, we can drive up those margins. They have succeeded beyond their wildest dreams. Oregonians were paying three bucks a gallon on Labor Day weekend. We are not in the east coast supply train so it is a little hard to say it had something to do with Katrina. But we were paying three bucks, $3.05 a gallon for regular, I remember paying. That was because the refiners cut went from 22.7 cents a gallon to $1.11 a gallon, a 500 percent increase in profits for the refiners. In fact, there is a new company, a new kid on the block, the largest refiner in America now called Valero whose CEO when George Bush offered to let him build new refineries on closed military bases with no environmental restrictions, he basically said, why would I want to do that? It's working just great the way it is. They are making unbelievable profits price gouging. It is exactly the same thing that Enron did in California. Enron in California got ahold of a bunch of generating plants and then they would shut them down and they would say, oh my god, we've got to charge you 10 times as much for your electricity today because there's a shortage. They are doing the same thing with refineries. They shut them down and they say, Oh, there's a refinery shortage. Americans are just going to have to pay more. Those darn environmentalists. None of them were closed because of environmental reasons, and they haven't applied to build any new ones. Yesterday the Republican leaders of Congress held a press conference, which was kind of pathetic, where they said, Pretty please. We don't care about your really high profits, but we've heard there might be some gouging going on and you better stop that. And pretty please use some of your profits to build refineries. No. It doesn't fit their business model. They are making money hand over fist. Their production end where they pump the stuff out of the ground, their profits are only up a measly 50 percent. On the distribution end they are only up 5 percent. The retailers are up 2 percent. The Republicans the week before last did adopt some price gouging legislation. Who did they target? The refiners, whose profits are up 500 percent? No. The companies who are pulling it out of the ground, whose profits are up 50 percent? No. Even the distributors who are up 5 percent, not a big deal? No, they targeted the retailers whose profits are up 2 percent because it's those mom-and-pops who are responsible for those high prices, let me tell you. But the friends of small business target the retailers and let the price gougers, the refiners, off the hook. Then they say, oh, we need to open up more land, we have to do this, we have to do that. No. Plain and simple this business model is immensely profitable in the industry and until we go after them has no incentive to change that business model. The gentleman is right. The target is now fixed on your people. They have turned it from price gouging my people on gasoline to price gouging your people on home heating oil. But next spring they will turn their sights back to gasoline. They cannot extort as high, economists call it rent or price for their excess products in gasoline in the wintertime because people don't drive as much. In the summer they can do that.

Mr. DeFAZIO. Yes, Machiadora.

Mr. DeFAZIO. Remember how they have sold this, how they sold CAFTA, NAFTA? It was, we are opening up markets for U.S. workers and U.S. products. We want to put Americans to work. We want to create wealth in this country. NAFTA, Bill Clinton said, was going to bring 400,000 jobs to America. He was off by a few. It actually exported 1.2 million jobs from America to Mexico, so he was off by a little bit there. Bill Clinton talked about how all the Mexicans were going to buy our goods. The total buying power of Mexico is less than the purchasing power of the people of New Jersey. If they spent every peso they earned on U.S. goods, which, of course, they have to eat and provide housing, they could not do that. The same thing with CAFTA and the same thing with China. These workers who work in the plants that are producing these products, they cannot afford to buy them.

Mr. DeFAZIO. Madam Speaker, I guess this is a little bit of a digression, but it is a case in point. I mean, there is this whole bizarre concept of free trade based on an economist who has been dead over 200 years that only the United States Government, under the tutelage of these multinational corporations is following, much to our detriment. Our trade deficit this year is headed towards $700 billion. That means we are borrowing almost $2 billion a day from overseas, 40 percent of that from the Chinese, to buy things made in China and other countries that used to be made here. That is not a sustainable model. That ultimately undermines our standard of living. We are piling up huge overseas debts. But even worse than that, and that is just all under these bizarre theories of free trade, the race to the bottom and all things are a result from that; we are not even really practicing what President Clinton and President Bush are so fond of calling rules-based trade. We are going to have rules. Well, there are rules. The rules say that the Chinese cannot pirate things. Guess what? The Chinese pirate millions of dollars a year worth of U.S. dollars. The gentleman mentioned furniture. I have a little furniture manufacturer, a high-end furniture manufacturer, in my district. He called me up and said, I have a little trade problem. I thought, that is a little weird, but okay, and I went to visit. Well, it turns out the Chinese delegation came over to look at his plant, they liked his stuff, they offered him more money than he could ever imagine he would ever have to buy his company. The only condition was he had to unbolt all the machines and all the production lines, send 3 managers to China for 6 months, and then they would send him a 20 percent cut for the future. Of course, he would not have workers or a company anymore. He agonized, and he said no. Well, the Chinese said, okay, fine. They went to Seattle and, from a furniture store there, bought a copy of everything he made, and the next year a Chinese Communist Government-subsidized company produced a clone of everything this company in Oregon makes and were selling it for 40 percent less at the furniture show. That has also happened to a high-tech company in my district. My staff was in an extraordinary phone call with the Bush administration, the Commerce Department, saying, will you not help these companies fight the piracy? And they said, no, we will not do that. We are not interested. These are the people who cloak themselves with small business, except if the Chinese want to steal the small businesses, that is okay with us. We are not going to do anything about it, because it might upset some of the big deals going on between GM to move all of their manufacturing to China, or Boeing to move all of their manufacturing to China, or IBM; you know, the big companies. So small business gets written off. So not only are we losing the big manufacturing firms; our small firms, our innovators, are being pirated by the Chinese. The administration will do nothing about it. We are borrowing almost $2 billion a day. This is a crazy thing we are doing to the future of our Nation, and they want to tell us how great it is. Remember, it was the President's own economic advisor who, in the President's economic report a year ago January, said that outsourcing, that is, exporting U.S. jobs overseas like Delphi or GM or others, is yet just the latest and greatest new manifestation of the advantages of free trade.

Mr. DeFAZIO. Madam Speaker, the gentleman raises an excellent point. The other technique that Delphi and other major corporations are employing is they are also sticking it to the U.S. taxpayer, because Delphi also is going to walk away from its pension obligations. Now, we have a pension insurance fund backed by the Federal Government called the PBGC. Under George Bush's watch, it has gone from having an $8 billion surplus to an estimated $200 billion deficit in 5 short years of George Bush's watch. That is the future obligations of pension plans they have assumed. United Airlines pension plan and now Delphi is going to try to dump theirs on them, and other airlines. So these major U.S. corporations declare bankruptcy and dump the pension plans on the taxpayers. Workers see a major reduction in pension, because they will not give you your promised pension; depending upon your age and what you were promised, you might get 30, 40 percent of what your pension was going to be. Ultimately the taxpayers are going to pick up the bill for this little maneuver as they take this company through. Now, there are no future claims. This company goes through bankruptcy, reemerges and is sold for a huge profit, but the Federal taxpayers have no recourse. They cannot reclaim any of that money. I asked a fellow from the PBGC about this, about the airlines. I said, so, you have taken an equity position in United Airlines as part of this deal of assuming their pensions. Could you not have a claim against future profitability of the airline or against future stock value to make the taxpayers and the PBGC whole? And he got really puzzled for a moment and he looked and said, well, I guess we could do that. Never thought of doing that. So this has become the new technique: dump the obligations, dump the health care plans, dump the pension plans, the health care plans of people who either fall into the cracks; or, if they are old enough, they can get into Medicare, which this administration is also driving toward bankruptcy. And I do not know if we will have a chance to get to that tonight, but that is another topic of extraordinary concern. And then they become, you know, recovery champions when they turn Delphi around and when the company becomes worth a whole heck of a lot more money, and some turnover specialists capitalize it to come out of bankruptcy and make a fortune on the company. That is the way it works now. That is not a long-term, sustainable plan for this country. I think now, if we could, we might move a little bit into trade now. Tax policies are a huge portion of this. We already talked about that to some extent. The other thing that is driving down wages and benefits and the working standards, the living standards in this country, is trade. As the gentleman said, it is a race to the bottom. We are saying to the American workers, well, you have to live at the standard of a Chinese worker. Well, I do not think that that is going to work real well in the system. I mean, we are a consumer-based society. Housing is pretty expensive, cars, fuel, all of these sorts of things. How are you going to live on 3 bucks an hour or a buck an hour, raise a family, have a home, have a place to live and do those sorts of things? It will not work. This model will not work. But we are also losing our entire manufacturing base. The first automobiles manufactured in China are going to be reimported next January. So goodbye, auto industry, it is gone. And they were pretty honest about that. There was actually an article, 1 day before we voted on special trade status for China, on the front page of the Wall Street Journal which said, this is the end of the manufacturing in America. It is all going to China. And Boeing, of course, wants to go, too. Then we will not make anything anymore. We will try and borrow money to buy things we used to make, but at some point they will probably stop lending us the money, or they will start demanding something in return that we are not going to want to pay.

Mr. DeFAZIO. Madam Speaker, I thank the gentleman for yielding and appreciate being here tonight to talk about this important topic. It was interesting, I watched a little bit of the hour before with the gentleman from Texas and others, and they were prattling on about the reckless spending of the Democrats. What they forget is that the last time the budget was balanced, there was a Democrat sitting in the White House. The last time we began to tax the rich fairly, to bring about a balanced budget, there was a Democrat in the White House and the Democrats controlled Congress. Yet they talk about the reckless spending of the Democrats. The debt when George Bush took office was about $18,000 per American, the tiniest baby, oldest senior citizen, $5.6 trillion. In 5 short years, he has run the debt up to over $8 trillion, almost $27,000 per person on the President's watch. Yet they prattled on about the Democrats' reckless spending. But what they are really trying to cover up here is their favoritism for a very small percentage of society, and the gentleman from Vermont was just talking about it. This is IRS data. Under the Bush administration, the IRS being steadily politicized by this President, still, the data shows that one-tenth of 1 percent of the people in this country, those who earn over $1.3 million a year, got an average income increase last year of $130,000, a dream to most of my constituents, to earn $130,000, principally due to tax cuts. Here is what we are doing: collecting from working people, only people who earn salaries and wages who earn less than $94,000 a year paying Social Security taxes. They are paying on every dollar they earn, up to $94,000. Social Security will have a $180 billion surplus this year. The Republicans and the Republican President are borrowing every penny of that $180 billion surplus that is supposed to go to fund future retirement benefits for those Americans. They are borrowing it and they are spending it and they are replacing it with IOUs. In part, and this is the ironic thing, in part, as the gentleman knows, that is going to finance tax cuts for the wealthiest among us, people who do not pay Social Security taxes, or pay at a tiny fraction of the rate. A person who earns, let us say $940,000 a year, their Social Security tax rate is one-tenth of that of someone who earns $30,000 a year. And many of them, since this administration values wealth over work, many people do not pay any Social Security tax, because they just live off their investments. Yet this administration says they need relief from taxes. When they talk about the working people, they are not talking about giving tax relief to working families or help to working families. They today, and for the last week, have been talking about cutting student loans by $15 billion, cutting Medicare for senior citizens, Medicaid for senior citizens and the poorest of Americans, cutting food security, cutting foster care from the Federal Government, cutting all those programs under the guise of new-found fiscal responsibility on the part of the Congress, which is spending us into bankruptcy. And what are they going to do with it? They are going to finance more tax cuts for the wealthy, because they think what America needs is more trickle-down economics: give the money to the wealthiest among us and they will spend it in ways that will put other Americans to work. Well, what if they spend it overseas? What if they invest it overseas, as more and more companies flee overseas? That does not put any Americans to work. The guy who runs Delphi auto parts has an answer for that. People are just going to have to take a little pay cut. He says Americans who work in these industries who are earning now good family wages should work for $10 an hour. I do not know what Mr. CEO of Delphi earnings; I bet it is a little more. The average CEO earns in the first 12 hours of the year what working people under their tutelage and in their industries earn in 365 days of hard labor. But this administration values wealth over work, trickle-down economics over investments in our future, in education, in our kids, in health care and infrastructure above all. They are hollowing out America, and we should get to trade policy a little later to talk about that, they are hollowing out America, looting the Treasury, and they are getting ready to hand our kids and our grandkids the bill, a bill that they will have to pay on $10 an hour in wages. Now, this is not all going to hold together.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, I have taken the floor previously to talk about the shortcomings of the administration's efforts in the area of homeland security. As an expert in aviation security, I have criticized the fact that the Republican majority and the White House have seen fit to arbitrarily cut the number of screeners, which not only causes obvious inconvenience for passengers, but it creates the potential for security threats as the smaller number of screeners are under tremendous pressure to process a large number of people in a short period of time. And they are being asked to do it with 1980s equipment. Now, you can do it one of two ways. You can have a lot of people with crummy equipment or a few people with state-of-the-art equipment. This administration is trying to do it on the cheap without enough people and with obsolete equipment that cannot detect plastic explosives at passenger checkpoints and often in carry-on bags or checked baggage or cargo. Our ports, I have talked about that, a tremendous vulnerability, not doing radiological detection. Nobody is going to shoot a missile at us, the failed Stars Wars system notwithstanding, but they may well try and smuggle in a nuclear device in a container. Our ports and our borders are wide open to such smuggling with just a very few deployed radiological devices. But Katrina brought home another lesson, which is we need to be ready both for unnatural disasters, terrorist attacks and natural disasters. And there is a looming natural disaster that this administration has ignored, and that is the potential of H5N1 flu, the bird flu, so- called, should it become easily transmissible between bird species and humans, and then human-to-human contact could perhaps spread the disease widely. The numbers are absolutely shocking regarding the potential for loss of life because of this. The administration, the President apparently read a book, that is great, and the book was about the great pandemic, and suddenly he got excited about it. Except experts in his administration and worldwide have known since before he became President that there was a potential for species crossover with this flu, and a tremendous loss of life is potential from this. This administration last year in preparation for this looming disaster, and it already infected and killed a number of humans at a rate of better than 50 percent in Asia last year, so last year in preparation for this they took some steps. They put more money in the budget for vaccines, antiviral drugs and basic research. Woo, yea for them. But guess what? The total spending was $110 million, approximately half of what they spent on chastity education in America. That is how high this ideological administration put on the idea of protecting America against an influenza outbreak. They could spend almost as much money as they put together for abstinence-only education. Now, that seems to be kind of a misplaced priority. Belatedly now they are talking about billions and accelerated research and stockpiling antiviral drugs. I gave a floor speech last summer calling upon the administration to begin to stockpile the drugs. Unfortunately, virtually every other country in the world is in line ahead of the United States of America, and the drugs are not manufactured here to buy those drugs, because those other countries have chosen to stockpile them to protect their people. Even though they do not work very well, they are the only thing we have now. Now the administration is talking belatedly about a crash program to try to develop vaccines 2 or 3 or 4 years down the road in the hope that this crossover will not take place before then. This is yet another example of poor planning by this administration; the fact that they created this huge new bureaucracy, the Department of Homeland Security, that failed so miserably when Katrina occurred. And, oh, by the way, Brownie, you did a heck of a job. That hack who failed so miserably is still on the Federal payroll. Can you believe that? The guy is pulling down over $100,000 a year sitting over there having failed so miserably. The President cannot even get rid of him, let alone other political cronies in this administration. And they are failing us in other areas of security that I referenced earlier, and they are failing the American people in this critical health care component. Much more robust steps must be taken quickly. The clock is ticking. It is already perhaps very, very late. We can only hope that this virus does not evolve too quickly through nature, and I know this administration does not believe in evolution, but that is how viruses happen. They do evolve. All it needs is a couple of small changes, and it will be transmissible. It will be a pandemic. We need to do more to protect the American people.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, that was an interesting speech, but it defies reality. If the government eliminated every general fund program, everything the government does except the Department of Defense, guess what? We would still have a deficit. We would still be borrowing money. The Republicans are borrowing $1.2 billion a day to run the government, and now they are the party of fiscal responsibility, and, oh, it is those poor working people they are concerned about. Except what they do not talk about is the tax cuts they are talking about, the ones that would cost $70 billion and increase the deficit, flow predominantly to people who earn over $300,000 a year, mostly over $1 million a year, and to estates worth more than $6 million. That is the hard-working families they are worried about, one-tenth of 1 percent of the people in America. Well, I am worried about the rest of America who are getting screwed by these kinds of priorities.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, yesterday, we saw an extraordinary event: The Republican leadership of Congress asking, pretty please, if the oil industry would build more refineries. Now, of course, this flies in the face of the strategy of the oil industry and everything that has been done in the so-called energy bills we have passed so far, which is providing incentives, tax subsidies, and status quo to the oil and gas industry. In fact, in the last 10 years, the oil industry, through mergers, has managed to close half of the refineries in America. And now today, when we see extortion in prices for gas at the pump, and we say, why is that? And they say, we do not have enough refineries. And then they say, those darn environmentalists. But they do not put it in the same sentence, because they know it is not true. Not a single refinery was closed for environmental reasons. They have not applied to build new refineries. They, in fact, have consciously closed refineries and squeezed down refinery capacity, so like Enron in California, when they shut down their generating plants, they can say, oh, the price has got to go up. We do not have enough of the product out there. In fact, if you look at where consumers' money is going, if you take gas at $2.50 a gallon, about 95 cents of that is going to the refiners. That is up from the historic average of 27 cents, a 400 percent increase in profits to refiners, which is adding up to a wonderful bottom line for the oil companies. Today Conoco-Phillips announced that their profits are up 89 percent over this quarter last year, $3.8 billion in the third quarter. Not bad. BP, kind of a piker here, probably their stock will go down; their profits only went up 34 percent. What Americans' wages went up 34 percent, except maybe some of the CEOs of these companies, $6.53 billion? But Exxon Mobil, the big one, will announce tomorrow, and it is widely expected among analysts, that they will report third quarter profits, one quarter, that is 3 months, of nearly $9 billion, which will be the largest quarterly profit for any corporation in the history of the world, and there is no price gouging going on. Now, one part of that sentence was true, and the other part was a lie. The first part was true: The largest ever quarterly profit in the history of the world will go to Exxon Mobil, who has closed dozens of refineries, and then they say, well, we do not have enough capacity. The Republican leadership says, pretty please, might you build more refineries? Now, the oil industry is getting a little worried because the American people are kind of onto this game. We saw over three bucks a gallon on the west coast on Labor Day weekend, but guess what? We are not in the east coast supply chain. Now, what justified that, except for price gouging and profit-taking, which did contribute to the largest ever quarterly profit for a corporation in the history of the world? Oregonians and other Westerners contributed to that, or were extorted to contribute to that? And the industry is starting to get a little worried that maybe some meaningful action might happen, but they do not have to worry, because we have two oilmen in the White House, and we have a Republican leadership in Congress that says, pretty please, would you please do something about this, and you better not price gouge anybody. In fact, the so-called energy bill we passed just about 10 days ago, energy bill II, all the bad ideas that did not fit into energy bill I, actually would have penalties for price gouging. But they could not be applied to refiners whose profits are up 400 percent, or to producers, crude oil producers, whose profits are up 50 percent, or even to distributors, but to retailers whose profits are up 2 percent. Now, it is not the Mom and Pop gas station that is gouging the consumers. They are at the end of the chain. They get the gas; they get a tiny little markup. They are not the ones manipulating the system. It is time to break up these energy cartels, no more mergers, break up some of these megacompanies that have been created, apply a windfall profits tax to take the incentive out of price gouging, adopt meaningful price gouging legislation like 23 States in the Union have; do that nationally to reign this in, go after OPEC and their restriction of supply in violation of WTO. The President is a great free trader until it comes to OPEC, because he could file a free trade complaint about them, but he will not. I have written to him. I have asked him. I have introduced legislation. They will not hear it; they will not let us vote on it. Nobody wants to take on OPEC, because they are working hand in glove with Exxon Mobil and the big oil companies. They are all getting really rich together, and the American consumers are getting taken to the cleaners. Short term we could save tens of billions of dollars for American industry, business, consumers, and others, and then long term we need an energy policy in America, something that has not happened in 5 years, even with Dick Cheney's secret meetings at the beginning of his term as Vice President. What we have is more subsidies for the oil, coal, and gas industry instead of a visionary energy policy that will get us new fuels, new technologies for the future, and make us energy- independent and efficient.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, we heard some earlier interesting statements from the Republican side of the aisle, and one gentleman talked about a once-proud party. I guess he was referring to the Republicans and the fact that they used to have a commitment to protecting Federal taxpayers and for fiscal responsibility, but no longer. Now, they keep talking about the Democrats taxing and spending. Excuse me? Who runs the White House, the United States House of Representatives with an iron hand, and the United States Senate? The Republicans. They are in charge of everything. It is the President who is submitting budgets that are being approved by Republicans that are running up huge and growing deficits. They are trying to say, oh, this year was great; it was only $312 billion, only the third largest deficit in history. Except they forget to tell people they borrowed the whole $180 billion surplus out of Social Security and spent that, too; and, in fact, some of it went to tax cuts for rich people that was paid for by working people with their Social Security money that is supposed to pay for the future of that program. They say, well, it is the darn Democrats. No, it is not the darn Democrats. It is the Republicans who control everything who have brought up $8 trillion of debt, a 60 percent increase in the 5 years George Bush has been in the White House; and, no, it was not all spent on the war in Iraq and homeland security. A lot of it came from huge tax cuts to the wealthiest among us, immensely expensive tax cuts that go predominantly to people who earn over $311,000 a year; and they want to give permanent exemption of estate tax to estates over $6 million. They consider $100 million, $200 million, that is a small family farm or small business in Republicanland over here. Unfortunately, those tax cuts are immensely expensive, and they are borrowing the money to finance them and the government. The entire general fund of government of the United States, everything that government does outside of the military is paid for with borrowed money, $1.2 billion a day, some of it from Social Security. Yeah, we are borrowing some of it from ourselves. We are borrowing a heck of a lot of it from China, Japan, and other foreign interests; and we are adding this mountain of debt and we are pushing it forward to our kids and our grandkids. In their vision, the wealthy would not share in the burden. They will not help pay that debt because they will be the beneficiary of massive tax cuts. What they were going to bring to the floor today was so embarrassing they could not quite do it. They were actually going to increase the deficit. Under the guise of paying for Katrina, they were going to cut programs like student loans, $9 billion; Medicare for seniors; Medicaid for needy people and seniors and other essential programs. But they were actually going to cut those programs to pay for more, guess what, tax cuts for the wealthiest among us. Are the wealthy really hurting that much? Well, actually no. IRS data that came out last week say that 99 percent of the people in America saw their real incomes decline last year; but 1 percent, those who earned over $311,000, saw a real increase. But that is not even the real thing. The real thing was one-tenth of 1 percent, those who earned over $1.3 million a year, saw a phenomenal increase in their incomes, mostly due to tax cuts that are being paid for by borrowing on the backs of working people and Social Security. They have the gall to come to the floor and say it is the Democrats who want to tax working people. The only working people they are concerned about are people who earn over $311,000 a year, the investor class; but the investor class also happens to be the contributor class, the people who can write out those $2,100 checks twice a year to their campaign accounts or the even bigger checks to their party accounts or to the Presidential campaigns. That is who they are taking care of. They are borrowing money from working people. They are bankrupting the country. They are undermining the future of Social Security; and now they want to pull the rug out from under kids who want to get a higher education and from seniors who need a little bit of help with medical care in their old age. They are going to pretend that they are fiscally responsible. April Fools has come early to Congress if anybody believes that malarkey. It is just extraordinary to me, and the boys keep turning the volume up and keep listening to a little too much Rush Limbaugh over there. We are going to counter them with the facts. The facts are they have run $8 trillion of debt, $27,000 for every American. They are borrowing $1.2 billion a day to run the government; and now they want to cut essential programs, student loans, Medicare, Medicaid and other programs, to finance more tax cuts for the wealthy, more trickle down. Our people have been trickled down on long enough, and more than enough. It is time to change the priorities around here, and that is what we are fighting to do.

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, I ask unanimous consent to take the time of the gentleman from California (Mr. Schiff).

Mr. DeFAZIO

Mr. DeFAZIO. Mr. Speaker, well, congratulations are yet again in order to the Bush administration. They hit another milestone just last week. They ran up the 8 trillionth, trillionth dollar of debt in the name of the American people. The U.S. debt is up 60 percent under the Bush-Cheney watch with the Republicans in charge of Congress, a 60 percent increase in the Federal debt in 5 years. That took some doing. That means every American, from the tiniest baby to the oldest senior citizen, today owes about $27,000. That is a heck of a burden to carry. And then this year, they are touting the fact that they only have the third largest deficit in history at $312 billion. They are saying, big progress. Of course, they forget to tell you that that does not include borrowing every penny of this year's Social Security surplus of $180 billion, which is only paid for by working people, not the rich who are favored by the tax cuts. Only people who earn less than $94,000 pay Social Security taxes. They are paying $180 billion more than is necessary for the program, with the idea it is being saved. It is not being saved. This administration is taking that money and spending it, part of it to finance tax cuts for rich people who do not pay Social Security taxes. A great noose on the taxpayers' money. But now they are born again, right here on the floor in front of us this week, as fiscal conservatives. They say they want to pay for the Katrina disaster, but there is only one way to do it. Cut the tax cuts for the rich people? Oh, no, no, no. Wasteful spending? No. How about, let us go to the programs that are important to average Americans. Health care for seniors: they want to cut Medicare and Medicaid for seniors. Education: kids are already struggling to go to school, but cut education. They would hit at food stamps so they will be more hungry, and maybe cut back on energy assistance in a time of huge price gouging by their friends in the oil, coal, and gas industries. Now, this is born again fiscal prudence on that side of the aisle. But what they are not telling people is not a penny of those cuts would go to pay for the Katrina disaster. No. In fact, they would, by implementing those cuts, still increase the deficit next year by a quarter of a billion dollars. Now, how can that be? I thought that money was going to pay for Katrina. No. They are going to borrow all the money to pay for Katrina. They are using those cuts to finance, guess what, more tax cuts for the richest among us. They want to make permanent the cuts in capital gains, dividends taxes, and a permanent exemption of all estates from all estate tax. That costs a lot of money. Now, why should we do this? Well, because they believe in trickle- down economics. The way to stimulate our economy, the way to rebuild our economy is more trickle-down economics. They even, one conservative over there had the gall to say poor people do not put people to work. No, that is right. Poor people and working people do the work. But they are saying we need to shower more money on the richest among us. During the last 2 years, 99 percent, this is from the Internal Revenue Service controlled by George Bush, their statistics, 99 percent of Americans saw real income reductions after inflation. One percent, those over $311,000, saw an increase; and one-tenth of 1 percent, those over $1.3 million, saw a huge increase in their income, mostly due to tax cuts paid for by working people and borrowing against our future. And now they have the gall to come to the floor of the House and say, if only the Republicans were in charge, this fiscal irresponsibility would stop. Excuse me. You control the White House, the House, the Senate, and the judiciary. You control everything. It is within your power. You want to pay for Katrina? Let us cut wasteful spending. The President wants to borrow $1 trillion to go to Mars. They are already beginning to borrow $100 billion to go back to the Moon. Hey, JFK took us to the Moon for a fraction of the cost. Why do we need to borrow $100 billion to go back? That would pay for half of the Katrina disaster. Then we can talk about, guess what? Tax cuts for the wealthy. If we just did not make those tax cuts permanent, we could pay for Katrina a number of times over. But oh, that would mean that rich people would pay income taxes at the same rate as working people, and that does not fit into their trickle-down theories. There is a few other things that we could cut, agriculture subsidies. Let us say any farmer who earns over $100,000 a year will not get a taxpayer-financed subsidy where the money was borrowed, sometimes from Social Security, to subsidize that farm. That is pretty simple. But no, they cannot go there. Or maybe we can get rid of the silly star wars fiasco. The general in charge of Star Wars has spent $100 billion on it so far, borrowed, taxpayer money, says it has a better than zero percent chance of working. Now is that not heartening? Let us have real fiscal responsibility, not more phony bologna.