Gil Gutknecht

Mr. GUTKNECHT

Mr. GUTKNECHT. I would like to thank the gentleman for yielding and especially thank him for requesting time for this special order tonight. I suspect there are an awful lot of Americans who may tune us in and certainly most of our colleagues who will be watching in their offices or are still here on the House floor who really do not understand this whole milk marketing order system. Frankly, having studied it now for about 5 years, I honestly cannot say that I completely understand it, either. But I would correct the gentleman on one fact, and that is, he said it is priced purely on how far you are from Eau Claire, Wisconsin. That is partially right. It is the only commodity I think in the United States, maybe in the world, that is priced not only based on where it comes from, it is also priced on what it will go into. Milk that goes into cheese is of lower value than milk that goes into a bottling plant and is sold for fluid milk for drinking. There are actually four classes of milk. Class one is milk that goes into liquid dairy products that are drinkable. Class two are spoonable; that would be things like yogurt. Class three is cheese, and class four is dry powdered milk. So we have four classes, and it is all priced based upon where it comes from. And the farther you are from Eau Claire, Wisconsin, the more the dairy farmer gets for their milk. The closer you are to Eau Claire, Wisconsin, the less you get. And then if you are at an area that has cheese plants and most of the milk goes into cheese, you get a lower price still. In my opinion, it is the most indefensible thing that the Federal Government ever created. It may have made sense back in 1934. In my opinion, it makes no economic sense today. Let me just show in this chart that I have next to me, and it sort of illustrates the differentials we are talking about. These are the producer class one blended price benefits per hundred weight. That is the way milk is priced. Milk to dairy farmers, and we have got a former dairy farmer sitting here in the second row and maybe he can talk a little bit about it, maybe he does not even understand how his cream checks were calculated. But if you lived, for example, in the northeastern part of the United States, your differential came to about $1.40. If you lived in the Appalachian region, that average price was $2.34. If you lived down in Florida, that worked out to $3.32. But if you live in the area that the gentleman from Wisconsin and myself come from, in the upper Midwest, you can see that over here it is only 27 cents. That is what we are talking about, ultimately. We are not asking for special privilege, for special benefits; we are not even asking to receive equal pay for equal milk; but we would like to equalize it much more than it is today. The second chart that I have I think illustrates it more geographically and what we are talking about. The country is divided up into all of these milk marketing order regions. For example, these are the average blended prices for current Federal milk marketing order areas. In the Pacific Northwest, that average price last month I believe was $14.75. If you are in the upper Midwest, that is, basically Wisconsin, Minnesota, parts of the Dakotas, you are talking $13.57. Now, on the other hand, if you lived in eastern Colorado and produced milk, your average blended price last month was $15.16. And if you lived down here in Florida, that price is $16.82. If you look at this, at one time it may have made some sense because the area around Eau Claire, Wisconsin, was considered the dairy capital of the United States and in many respects the dairy capital of the world, and we are still privileged that in this region we produce about 30 percent of the milk in the United States. But as I say, it may have made some sense back in 1934; that was before the days of refrigeration, that was before the days of the kind of transportation, the interstate highway system that we have, but today we can move milk 1,200 miles in 24 hours. So the whole idea that we need this regional balkanization of the United States as it relates to dairy production is just crazy. Again, back to the point that my colleague from Wisconsin made about the basic unfairness of this: How can you say to dairy farmers in Glenville, Minnesota, that you are only entitled to $13.57 for your milk, but the same quality, the exact same quality of milk in the Southeast is worth $16.13. That is a difference of over $2. When you are talking about hundreds of thousands of pounds of milk per month, you are starting to talk real differences. I see the chairman of the Committee on Rules is approaching the microphone and perhaps we should yield to him for a moment.

Mr. GUTKNECHT. I thank the gentleman from Wisconsin for yielding, and again I thank him for having this special order. As my colleagues know, if this regional differentiation was not bad enough, and if the fact that we price milk to the producer based on not only how far they are from Eau Claire, Wisconsin, but what ultimately that milk is going to go into, if that were not bad enough, we have one other little wrinkle that has made things worse. It is called regional compacts. Now this is the only area, again, that I can think of where we have allowed States literally to go together and hold out imports of dairy products from other parts of the country. In other words, they have created their own little fiefdoms. As my colleagues know, at the very time, as was mentioned by the gentleman from Wisconsin, at the very time we are saying to Europe and we are saying to Asia and we are saying to our trading partners all around the world it is time to bring down those trade barriers, we need open markets and open trade, we have problems trading even with certain regions of the country. Right now there is a Northeast Dairy Compact, and unfortunately some of our colleagues, even as we speak, are trying to work out new compacts to try and create even worse regional differentiations between the regions and to keep out imports from other parts of the country. As my colleagues know, this seems, and the gentleman mentioned the word ``un-American''. At the very time that we are trying to break down trade barriers to China and to Asia, we are constructing trade barriers right here in the United States, and in my opinion it is just an outrage, and so the only thing we can do is come to the House floor, offer amendments, talk about this, talk about the fairness, and hopefully in the long light of history sooner or later these trade barriers are going to be knocked down. We are going to see open trade not only with Europe, but with the Northeast as well. The problem with compacts in my opinion is they do violate, if not the letter, certainly the spirit of the Commerce Clause in the Constitution, and frankly, had they not been legislatively approved, there is a very good chance that the Supreme Court would have thrown them out. That debate is going to get very heated because, as I say, not only does the Northeast want to expand its dairy compact, they are talking about a regional compact in the Southeast, perhaps extending as far west as into Kansas. And we joked with some of the supporters of those compacts. We would be happy to allow those compacts, if they would just allow the upper Midwest in. I mean, if we could be getting the same price, for example, that they are already getting in New York and New Jersey, and you see by this chart $13.57 for us, $15.40 in New York and New Jersey. The New England Compact States are getting $15.61. Now our dairy farmers would love to be in that compact if that meant that they got $15.61 for their milk. That is the difference. Again, it is unfair, and if the system is already convoluted and complicated, the terrible tragedy is there are people here in the Congress today, well-intentioned Members, but they are trying to make the situation even worse, even more complicated, even more unfair.

Mr. GUTKNECHT. Mr. Speaker, if the gentleman will yield, talking about what this really ultimately costs to consumers as well, the estimate that we have of the cost of the compact to New England consumers has been $47 million. Now some people will say that milk is not a price-sensitive item and that, as my colleagues know, people, consumers will continue to drink about the same amount of milk regardless of the price. I am not sure I really believe that, and in fact I have had some of my friends at the Dairy Association try to tell me that. It seems to me that if you over- price milk in certain regions of the country, the net practical effect is you are going to drive down consumption, and what we desperately, and one of the real problems with what I call the Balkanization, and we are having this war going on in the Balkans right now where that term came from, but basically what we have is Balkanization of the United States as it relates to milk. The real tragedy is the biggest war that is going on right now for the milk industry is this competition with the soft drink industry, and the soft drink industry is out there, and they are marketing and they are competing, and they are vicious on price and they are vicious on advertising, and they are constantly taking a bigger and bigger share of the beverage market, if my colleagues will, and at the very time, it seems to me, that the milk industry ought to be speaking with one voice and ought to be working together and figuring out how they can get a bigger market share relative to the soft drink industry, at that very time they should be working together. Unfortunately, we have all of these regions working against each other, and the net practical effect, of course, is that we continue to lose market share relative to CocaCola, Pepsi Cola, Mountain Dew and all of those other soft drinks that are out there competing particularly for the younger people's market. And so there are so many things that need to be said positively about the milk industry, the dairy industry, and unfortunately we spend so much of our time here in Washington fighting with each other over this regionalization of the way pricing is structured. It is a terrible mistake, and it has cost the consumers. Let me also add that, as my colleagues know, a lot of the argument for this system and even for the regional compacts has been that it will save small dairy farmers. Well, over the last 10 years we have lost something like 10,000 dairy farmers. As my colleagues know, if that is the definition of success, we cannot afford much more of that. What we really ultimately need to do is work together to find fairness, to find common ground, to work together to expand markets for our dairy products, and we are not just talking about fluid milk either. I think there is a tremendous market worldwide for cheese products and other dairy products which we can produce so well, so efficiently, with great quality here in the United States. But unfortunately, as I say, we spend too much of our time from a national perspective not looking for additional markets for our dairy farmers both here in the United States and around the world, but fighting amongst ourselves over this antiquated, Byzantine, unfair milk marketing order system.

Mr. GUTKNECHT. Mr. Speaker, if the gentleman would yield, if you look at this purple section here, we are losing an average of three dairy farm families every single day, and as my colleagues know, as I said earlier, if the definition, if this program was designed to protect the small dairy farm, I mean by its very definition it has been an abysmal failure. We cannot afford to continue this policy much longer. And the gentleman is also exactly right that ultimately, unfortunately, unless we have some real reform of this system and at least have some fairness, and we cannot guarantee that some of these smaller dairy farmers are not going to go out of business. And I will be honest, some of them go out of business just because of quality of life. I mean there is nobody who works harder than that dairy farmer who gets up every morning at 5 o'clock to milk 60 cows and then has to repeat the process that afternoon. I mean it is one of the hardest lives that anybody can take on, but it should not be made unfair by a Federal milk marketing order system which penalizes someone just because they happen to be from the upper Midwest. Now in this great debate, and my colleague is going to learn the longer he is here in this business and in this city, when you talk about, and I do not even particularly like the term leveling the playing field. Actually I just like to talk about fairness. All we want is fairness. But many people will use the term ``leveling the playing field.'' The truth of the matter is, in any debate about leveling the playing field there is at least half of the people in that debate who do not want to level the playing field because they have an advantage, and they want to keep the status quo. But even in some of those areas where they currently have a huge advantage, like the Southeast and down in Florida, even into Texas and over into New Mexico, the further away you get from Eau Claire, Wisconsin, I think even those people have to acknowledge that at the end of the day milk ought to be treated like almost everything else, and it ought to be priced more or less based on what the market will yield. Now I am fully in favor of putting some kind of a minimum price under the floor of milk. In fact, I have introduced a bill this year to put a floor of at least 10.35. I think there is a need to create some kind of a job absorber in case there are market aberrations which would drive the price of milk too low, but at the other end of the spectrum, part of the thing that happens with this also is in some respects, it keeps milk from going up. If one cannot expand markets, if one limits oneself in their ability to get into Asian markets with cheese and other dairy exports, ultimately one limits their ability to increase net farm income, and particularly farm income as it relates to dairy producers. So this is a bad system, a bad system for dairy producers. It is bad because it causes conflict among the regions when we ought to be working together. It is a bad system because it ultimately costs consumers in some areas more than they should have to spend for the milk that they buy, and it really has done almost nothing to protect the small dairy farmer. So from every perspective I think this has been an abysmal failure. The time has come, even though, as I said earlier, the plan that Secretary Glickman came up with is certainly not perfect; and frankly, on a net basis, we still lose under this plan, but we lose less than we are losing today. So those of us in the upper Midwest, from Wisconsin, Minnesota, parts of the Dakotas, we are prepared to accept the Secretary's plan. We think it should be allowed to go into effect, and frankly, we think we should do what the Congress said 2 years ago and then again repeated last year, and that is to allow the compacts to expire. They were designed originally only as an experiment which would last a year, and part of that experiment was to find out if they could curb the number of small dairy farms that were going out of business. The evidence is in, the evidence is clear; they have not done that. They have cost consumers more money. They have increased the number of corporate farms on every front; in my opinion, the compacts have been an abysmal failure. We should allow them to do what the agreement originally was, which is just keep all ends of the bargain, move ahead with the dairy reform that Secretary Glickman has come out with, and end these crazy compacts and do not expand them to other States.

Mr. GUTKNECHT. We would like to thank the chairman and we hope that he will drink more milk. June is Dairy Month, so enjoy as much as you can.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Chairman, reclaiming my time, it is my understanding that, no, the subcommittee did not. The subcommittee overspent it by the smallest amount. Listen. According to what I have been told by my staff, this bill actually does overspend the budget allocation by two-tenths of 1 percent. Admittedly, the gentleman from New Mexico (Chairman Skeen) has done a fabulous job. I am not here to criticize the subcommittee. But when I hear people criticizing the gentleman from Oklahoma (Mr. Coburn) and criticizing his motives in this debate, I think that is wrong, and my colleagues have overstepped their bounds.

Mr. GUTKNECHT. I am happy to yield to the gentlewoman from Ohio.

Mr. GUTKNECHT. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, my colleagues, right over there is a dictionary; and if we look up the word ``efficient,'' here is what it says: ``ability to accomplish a job with a minimum expenditure of time and effort.'' My colleagues, there is a lot of discussion about this amendment, but I think we ought to get back to what it really does. In fact, let us use a little bit of analogy. Let us take a major corporation, and my colleagues fill in the blank. They can say AT&T. They can say Chrysler. They can say IBM, whatever. And let us say this company thinks that they have had a problem with efficiency. Now, this company has 107,000 employees. They have another 80,000 contract employees. In fact, it works out to about one employee or contract employee for every 10 customers. This is a mythical corporation. And we are the board of directors and we are sitting around saying what can we do to make this thing a little more efficient. Now, how many of my colleagues think they would raise their hands and say, you know what we ought to do? We ought to increase administration by 12 percent. That is crazy. That would not happen at Chrysler. That would not happen at AT&T. That would not happen at IBM. But, my colleagues, that is what is happening in this bill. We have one employee or contract employee for every 10 farmers in this USDA. Now, again, I come back, if we ask most farmers do they think that is an appropriate level, they would say that is ridiculous. And so would most voters. And so before we dismiss this amendment out of hand, this is not an anti-farmer amendment. This is about the board of directors saying we have a terribly inefficient administration right now in the USDA and throwing more money at it is not going to make it more efficient.

Mr. GUTKNECHT. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, I just want to admonish everybody, first of all, that it is a violation of House rules to question the motives of other Members. I just want to make it clear, whether one agrees with these amendments or one disagrees with the amendments, clearly the gentleman from Oklahoma (Mr. Coburn) has every right to offer these amendments. Also, I want to say something else. I have been listening to the debate and watching on C-SPAN back in my office. It bothers me a little bit right now. I represent a farm State, and my farmers are hurting, and that is the truth, and all of my colleagues should know that. But I will tell my colleagues something else, my farmers do not want to steal from the Social Security Trust Fund either. Frankly, they feel a bit abused sometimes when people say things like, well, we have to do this because of the farmers. They do not want this huge bureaucracy that we have here in Washington. I mean, this amendment, as far as I know, deals with $21 million for new buildings. I will tell my colleagues, on behalf of most of my farmers, if one asks them, ``Do you think we ought to build $21 million worth of new buildings for more bureaucracy in Washington, and at the end of the day be forced to take that money out of Social Security Trust Funds or to borrow it from our grandchildren for one more generation,'' the answer to that question is no. I mean, this idea that we have to patronize farmers, farmers are Americans, too, and they care about their future. They care about their kids' future. They care about the future of the Social Security Trust Fund. They care about these things, too. So I care about what is happening to farmers. But I think the gentleman from Oklahoma (Mr. Coburn) is raising some very, very good points. For too long in this Congress, every year, we did what I call ``manana'' budgeting. We will make the tough decisions ``manana''. We will make the tough decisions next year. Well next year is here and we have got to make some of those tough decisions. I supported that budget resolution. Frankly, a couple of weeks ago we had that vote on the emergency supplemental. I voted against it because I thought that was the first crack in the wall. We are going to see this happening on every single appropriation bill. Let me just remind Members, the people of this country did not send us here to do what was easy. This is tough. Balancing this budget is not going to be easy this year. In fact, in some respects it is harder now because we, quote, have a surplus, and everybody, every group that I can imagine has been in my office saying ``We just want a little bit of an increase here. If we could, just squeeze out a little more money for my program.'' Do my colleagues know what happens when we do that? We never balance the budget. We continue to steal from Social Security. I care about my farmers. Let me tell my colleagues something. My farmers care about this budget. They care about the future of this country. They care about Social Security. I admire the gentleman for bringing this amendment.

Mr. GUTKNECHT. I am happy to yield to the gentlewoman from Ohio.

Mr. GUTKNECHT. Mr. Chairman, reclaiming my time, if my colleagues ask the average American, whether they are a farmer or a machinist, whether they live in Ohio or Minnesota, if my colleagues ask them, ``Do you think the Federal Government can meet the legitimate needs of the people of this country, of the national defense, and of all the people who depend upon the Federal Government, do you believe that the Federal Government can live with spending only $1,700 billion, do my colleagues know what? If they ask that question, whether it is in Ohio or Minnesota or Oklahoma, if my colleagues ask people, ``Do you think we can meet the legitimate needs of the United States of America, spending only $1,700 billion?'' they will say, ``You betcha.'' Seventeen hundred billion dollars is a lot of money. That is what the spending cap is all about, saying that is all we are going to spend. We are going to have an argument and a fight about how much is going to go to defense, how much is going to go to agriculture, how much is going to go to transportation, all the other departments; but at the end of the day, we ought to live by these spending caps. I believe in the spending caps. In fact, I have heard leadership on the other side, I have heard leadership in the Senate, I have even heard the President of the United States say we are going to live by the spending caps. Well, this is the first installment to find out if we really mean it.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, shortly after the hammer and sickle came down for the last time over the Kremlin, a business publication ran a column entitled, ``Markets Are More Powerful Than Armies'' and the 75- year experiment with government-fixed prices came to an end. But, Mr. Speaker, for 60 years we have had a convoluted milk marketing order system whereby a farmer's milk is priced based on how far they are from Eau Claire, Wisconsin. The closer they are, the less they get. It makes no economic sense. Prices are fixed based on what the milk goes into and where it comes from. Mr. Speaker, if the Russians are willing to let the market set the price of milk in Moscow, maybe we should try it in Minnesota.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, very soon a great debate will begin to rage here in the halls of Congress. That debate will be about how we price milk. My friends from other regions of the country will complain that if the system is reformed and the playing field is leveled, their dairy farmers would receive less or they would lose relative to other parts of the country. But, Mr. Speaker, we should understand that dairy farmers in my region of the country have been losers under the current convoluted milk marketing order system for over 60 years. This makes no economic sense. Even Justice Anton Scalia has called the system ``Byzantine.'' All we are asking for is equal pay for equal milk, and we will not give up this fight until we get it.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Chairman, I move to strike the requisite number of words. Mr. Chairman, I suspect that alarms are going off all over down at Foggy Bottom right now, but I rise in support of this amendment. My colleague, the gentleman from Tennessee (Mr. Gordon) who just spoke said that this amendment has had no hearings in the Committee on Science. That is technically correct, but the whole issue of the number of times that the Russians have let us down has been debated, discussed, and talked about in the Committee on Science again and again and again. There is an old German expression that says, fool me once, shame on you; fool me twice, shame on me. The expression does not even go on beyond that, but the truth of the matter is we have been fooled again and again and again by the Russians. It is time for this Congress to send a clear statement that we are tired of this gamesmanship that is being played by the Russians and by NASA. I think this is a good amendment. I hope that colleagues on both sides of the aisle will join us in support of this, because this is the only way we are once and for all going to say to our Russian partners that either they play by the agreement that they made, or they do not play at all. And the Roemer amendment is even better than that because it allows us to continue to contract with those contractors who are willing to live up to their end of the bargain. This is a good amendment, it is a timely amendment. It may not have been formally discussed in our committee, but the whole issue of Russian participation has been debated, discussed, ad nauseum in the Committee on Science. It is a good amendment. I am happy to support it.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I believe it was Mark Twain who once observed that, of all of God's creations, man is the only one who can blush, or needs to. I raise that issue today as we talk about the emergency supplemental spending bill. In this bill, my colleagues, there are emergencies such as $70 million for livestock assistance, including reindeer research. Now, maybe that is appropriate underneath this Christmas tree. There is $26 million that is an emergency for Alaskan crab fishermen. There is $1.5 million to fill the San Carlos Lake in Arizona. Mr. Speaker, those are not emergencies, and worse, in that they are not offset with other spending in other parts of the budget. What it means is, unlike the budget resolution which we passed just a little over a month ago, we are going to start taking money out of the Social Security Trust Fund to fund some of these ``emergencies.'' Mr. Speaker, we are losing the battle on the spending caps. We are losing the battle on the Social Security Trust Fund. I hope that we are not going to lose our ability to blush.

Mr. GUTKNECHT

Mr. GUTKNECHT. This chart is labeled Tax Freedom Day, 1980 through 1999. Just look at the chart. Look at how we are moving. In 1994, Tax Freedom Day was May 2. In 1995, it was May 3. In 1996, it was May 5. In 1997, it was May 7. Last year, it was May 10; and this year, today, May 11 is Tax Freedom Day. Finally, Americans get to start working for themselves. This is not the right road to the 21st century. Ronald Reagan was able to actually push back Tax Freedom Day from May 4 to April 27, but since then we have lost ground. Many people say we should meet the President halfway, but we should never meet the President halfway on the road going in the wrong direction.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, in 1990 Congress enacted the Fastener Quality Act to protect Americans from foreign manufacturers who were dumping substandard fasteners in the U.S. market. The Fastener Quality Act required all threaded, metallic, through-hardened fasteners of one- quarter inch in diameter or greater to be tested or documented by a laboratory certified by the National Institute of Standards and Technology, otherwise known as NIST. In short, Mr. Speaker, this was a $20 solution to a $5 problem. Earlier this year, the Department of Commerce submitted a report to Congress recommending that the Fastener Quality Act be amended to, number one, limit coverage under the act to only high-strength fasteners; number two, deem fasteners compliant if they are manufactured by a NIST-approved facility; number three, reduce paperwork burdens; and finally, address fraud in commercial transactions involving fasteners. NIST even testified in front of our committee that the agency did not want to enforce the Fastener Quality Act as it was written because it was ``overly burdensome.'' H.R. 1183 amends the Fastener Quality Act of 1990 to strengthen protections against the sale of mismarked, misrepresented, or counterfeit fasteners. Let me make it very clear, Mr. Speaker, fraudulent marketing of fasteners is still a fraud. H.R. 1183 reduces the paperwork burdens of the Fastener Quality Act by allowing documents to be stored and transmitted by an electronic format. Mr. Speaker, H.R. 1183 is the right solution to the real problem. I hope my colleagues will join me in supporting this important legislation.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, later this week we are going to be asked to take a very, very difficult vote, and it will involve how much should the Congress authorize to spend for this war in the Balkans, and as a previous speaker, my colleague from Indiana, just said, there are many of us, not only here in Congress but around the country, that have serious concerns about this war. What my colleague from Indiana did not mention is history, and there is an old expression, and I think it is from Montezuma, who said that those who refuse to learn from history are doomed to repeat it. Mr. Speaker, let me give the Members a very important history lesson that the Germans learned in the 1940s, in World War II. In World War II the Germans sent 400,000 troops into the Balkans, they suffered 70,000 casualties, and at the end of the war they controlled less ground than the day that they marched in. Mr. Speaker, this is a war that I think we need to think long and hard before we get even more deeply involved, but we had the debate last week on that, and we had our votes, we had a chance to vote. This week, though, we are going to get a chance to vote on whether or not we should fund the war; and then secondly, if the Republican leadership is successful in the Committee on Rules, whether or not we should vote for even more funding than the President requested. I want to talk a little bit about history as well because we are continually told that we have spread our military too thin, and I agree with that. The truth of the matter is we have spread our military too thin, but I think the best analogy is an analogy of peanut butter and jelly. We have spread our peanut butter and jelly entirely too thin, but it is not because we are not giving our military enough money. I want to talk a little bit about what is happening. We have been told, for example, in the last several weeks that we are about 14,000 sailors short in terms of our Navy, but do my colleagues know what? We are not short a single admiral, we are not short any generals. In fact, as this chart indicates, in 1945 when we had 12.1 million Americans in uniform, we had 31 generals above the rank of four star. Today we have 1.3 million Americans in uniform, and we have 33 generals. So, we may be short on Army personnel, we may be short on people in the Navy, but we are certainly not short on generals. Let me point out another chart, and this is really for the benefit of my Republican colleagues. As my colleagues know, just 4 years ago we passed a 7-year balanced budget plan, and in that balanced budget plan we said that in Fiscal Year 1999, the year that we are in right now, we said that we would spend $267 billion on defense. That is what we said we would spend this year. Well, according to the Congressional Budget Office, we actually will spend this year $273 billion. So, in other words, we are already spending $6 billion more on defense than we said we were going to be spending. Now despite that we are being asked this week to fund an additional $13 billion. Now I go back to my analogy of the peanut butter and jelly. It is not that we are not giving the military enough money or enough peanut butter and jelly, the problem is that we are spreading it far too thin. We currently have troops in 135 different countries. We are prepared to fight a war in Korea, we are prepared to fight a war in the desert, and now we are apparently going to have to fight a war in Kosovo. The problem is, Mr. Speaker, we are spreading ourselves too thin, and at some point we in the Congress have to say the problem is not that we do not give enough money to the Pentagon, the problem is that the administration wants to spread that money too thinly. I simply want to ask my colleagues and the Members of the House a couple of very simple and straightforward questions, and frankly as it relates to defense policy, as it relates to foreign policy and ultimately as it relates to budget policy. We ought to get clear and simple answers to tough questions, and I would like to propose two questions to my colleagues in the House: First of all, should we borrow from Social Security to pay for a war in Kosovo? My answer is no. The second question is: Should defense spending get preferential treatment in the appropriations process, or should we give them a special appropriation now? And again my answer is no, and I think the numbers speak for themselves. Ultimately, Mr. Speaker, we are going to be asked, Republicans and Democrats alike: Is this such an important policy, is this such an important war, that we are going to take money out of the Social Security Trust Fund? I hope we will say no. Now my proposal will be that we give the President exactly what he asked for. He is asking for $6.05 billion in emergency supplemental appropriations, but I believe we ought to offset that with spending cuts in other parts of the government, and that can be done. In fact, if we do that, it means that every other department will have to cut its appropriations in the next several months by about 1 percent. Now that is a big cut, but we are talking about a $6 billion cut out of a $1,700 billion budget. I think we can tighten those belts, and that will mean that we will not be stealing money from Social Security. It was only a couple of weeks ago that we here on the House floor said we are going to pass a budget for the first time in American history or for the first time in recent history that actually balances the budget, and for the first time saying that every penny of Social Security taxes will go only for Social Security. That was just a few weeks ago. Well, I meant it when I said it then, and I think most of my colleagues meant it, and I think we ought to make the tough choice when we have to vote on this emergency supplemental where we will already be spending more money than we said we were going spend just a few years ago in defense. I am willing to give defense the extra money the President has requested, but I think it ought to come out of other parts of the budget.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, for the benefit of Members like myself who were not listening carefully at the beginning of your presentation, it sounded as if you were quoting from some magazine or document. Where did the gentleman get the quotes he was talking about?

Mr. GUTKNECHT. This is a nonpartisan group in the State Department?

Mr. GUTKNECHT. Mr. Speaker, if the gentleman will yield, I wonder if the gentleman from South Carolina (Mr. Sanford) would put that chart up again. The gentleman from Michigan (Mr. Hoekstra) did not come in in the class of 1994, but the rest of the three of us did. I might just say that I almost wish that the gentleman from Oklahoma (Mr. Coburn) had not promised to limit himself to three terms, and I believe the gentleman from South Carolina (Mr. Sanford) did the same. We desperately need people like them in the Congress because they have been valuable Members and people who have been willing to take the tough votes to make the progress. I want to point out I think whenever we are talking about the budget or making any kind of long-term plans, we have sort of got to look at where we are and where we are going. I think the important thing about this chart, it really points out two things. First of all, we still have got a problem. But I think it also points out that we have made significant progress. I think the voters back in 1994 said enough is enough and they said let us send a whole new team to Washington that really is committed to balancing the budget, fiscal responsibility, and what I call generational fairness, because at the end of the day what we are talking about is being fair to the next generation. But I want to point out, though, that at least we are moving in the right direction as it relates to the deficits, no matter how we measure them, because in 1994 we were looking at deficits of over $200 billion, and actually we were talking over $300 billion if we included the Social Security Trust Fund money. In fact, the Congressional Budget Office told us in the spring of 1995, based on the President's budget recommendations, that that deficit was going to grow from about $225 billion to about $690 billion. Some of us said that that is not the direction that the American people want to us go. We got busy. We eliminated 400 programs. We have cut the rate of growth in Federal spending by more than half. As a result, at least we are headed in the right direction. But I think the point of this discussion today is there is so much more to be done. I do want to say at least a good thing about the budget that we recently passed, I think there are four important points that need to be made about the budget resolution that just passed this House, and in fact passed the House and the Senate in the form of a joint budget resolution. But first and foremost, every penny of Social Security taxes for the first time is going to be reserved for Social Security. Secondly, we preserve the spirit of the balanced budget agreement of 1997 in saying that we do intend to keep those spending caps. Third, we actually begin to pay down some of the debt that is owed to the public. We are not talking about the overall debt because we have got this big problem with Social Security. Frankly, the only thing that Social Security surpluses can go to is buying government bonds. That may be something that we want to look at as we go forward. But, finally, and I think this is important as well, we make room for some tax relief for working families. Americans today are paying the highest total tax rate that Americans have paid since World War II. So we do believe that if we can exercise the fiscal discipline that we need to exercise over the next several years, we can actually begin to strengthen Social Security, have honest budget surpluses, and provide tax relief for the American families if we are willing to continue to apply the kind of fiscal responsibility that we have had for the last 4 years.

Mr. GUTKNECHT. I thank the gentleman for yielding. I was not listening as carefully as I should to our colleague's presentation about the magic of compound interest because I was visiting with our former colleague, also a classmate of 1994, Mr. Neumann from Wisconsin, who is here with us today. And we are delighted to have him back in Washington because he was one of the people who really was a trailblazer in terms of balancing the budget, paying down debt, and actually becoming honest with the way we account for Social Security. I want to come back to a couple of points that the gentleman from South Carolina (Mr. Sanford) raised, and I think they are very important points, the first of which is, and many Americans do not know this, that one of the most brilliant Americans, one of the most brilliant people of the 20th century, was, arguably, Albert Einstein. I think most people would agree with that. And he was the one who was once asked what the most powerful force in the universe was. And he said, somewhat in jest, the magic of compound interest. So when we have one of the most brilliant men of the 20th century talking about the magic of compound interest, it adds even more credibility. I have been giving this presentation on Social Security in my town hall meetings, and I talk about generational fairness. I have talked to seniors, and I give the presentation to high school kids, and I give the presentation to baby boomers, rotary clubs, wherever I can get a chance to talk about this, because I do think people need to understand where we are, where we have been and where we need to go. I think in terms of generational fairness we need to talk to all those groups. But I always ask them, whatever age group I am speaking with, and it is particularly true of the younger people, how many of them would put 12.5 percent of their income, because that is, in effect, what people put into Social Security right now, how many of them would put 12.5 percent of their income into a retirement plan which, over the last 20 years, has had an average rate of real rate of return of 1.9 percent. None of them. Absolutely none of them. In fact, it is a tribute to our American educational system because our kids in high school and college today are smart enough to figure out that is not a very good rate of return 1.9 percent. And I must apologize to them, because I was not quite as familiar with the numbers. Actually, for those younger people, people who are in high school and college and younger workers perhaps under the age of 30, it is not a 1.9 percent rate of return on their money, it is actually a negative rate of return on their money. And at some point I think we have to be honest with all those generations, and I say it from this perspective. I was born in 1951. And, actually, there were more kids born in 1951 than any other year. I represent the peak of the baby boomers. My parents are both living. The last thing we are ever going to do is pull the rug out from under our parents. We cannot do that. Medicare, Social Security, my parents depend on it and lots of people's parents depend on Medicare and Social Security. As a baby boomer, though, I recognize that we represent such a huge glut that it is going to take some Herculean efforts on the part of our kids to keep this thing afloat. So we are going to have to make some adjustments. And I am one who says that baby boomers ought to be able and ought to be willing, in order to save the system for our kids, to take some modest changes. I do not know if any of my colleagues agree with this, but I think, on behalf of our generation, I would be willing to work another year, maybe another 2 years. I would be willing to adjust the way the cost of living adjustments works. I would be willing to make some rather significant adjustments, if only, and this is a big if, if I and younger generations could have an opportunity to at least take a portion of that 12.5 percent tax that we pay on Social Security and be able to put that into some kind of a personalized retirement account. Because I am nervous about letting the Federal Government invest in the stock market. And many seniors that I have talked to are very nervous about having the Federal Government invest directly in the stock market. Alan Greenspan has argued that. But I do think we ought to set up a system that allows individuals to invest a portion of that 12.5 percent in their own personalized retirement account. I hope that is the direction this group and this Congress is going to go.

Mr. GUTKNECHT. Mr. Speaker, one of the countries was Serbia and the other was China?

Mr. GUTKNECHT. It is hard to tell which was which from the comments?

Mr. GUTKNECHT. Mr. Speaker, I want to follow up on that because I think sometimes that does get lost in this whole debate. This budget we are talking about this year is $1,700 billion. Even $6 billion, which I think is a little bit pricey for what we hope to achieve in Kosovo, but that is a separate debate, even that, though, represents a relatively small percent and about one-half of 1 percent of the total Federal budget. So the idea that we cannot find the money with offsets somewhere else in the budget, I think outside of this Capitol and outside of the circle here in Washington, I think most people do not believe that. But I want to come back to another point, and really it does come back to in terms of our cost for defense in these special supplemental appropriations and I think it is an important one. I think the American people need to know that over the last 40 years, up until the last 8 years, the United States had deployed troops around the world 8 times, but in the last 8 years, we have deployed troops 33 times. And I think sometimes we have to ask, is all of this really that necessary? Is it worthwhile? I mean, this is an enormous expense to the taxpayers. I think there is another question that needs to be asked before we vote on the supplemental, and that is about burden sharing. When President Bush decided that we had to stand up to Saddam Hussein, he went to our allies and he got them to pony up. And the net was the war in the desert actually made money for us. We actually came out ahead on the Desert Storm operation. I think it is time for us to be brutally honest with our allies in Europe, that if they want us to help participate in a war that is really much more important to Europe than it is to people of the United States, then there ought to be a better cost sharing, a burden sharing. Because right now, basically, our obligation to NATO is to pick up between 22 and 25 percent of the cost. Some of us believe that is still a little bit steep. But right now we are flying 75 percent of the sorties, we are delivering 90 percent of the ordnance, and I suspect when the accounting is done, we are shouldering about 75 to 90 percent of the cost of this operation. And those are legitimate questions and I think we, as representatives of the people of the United States, have a right to ask those questions and demand honest answers.