Gil Gutknecht

Mr. GUTKNECHT

Mr. GUTKNECHT. As I have said before, and one of the things I really like about the budget plans that the gentleman and I have worked on, and frankly the gentleman from Wisconsin has done a lot more of the work than I have, but as a famous architect from Chicago said, ``Make no small plans.'' I think we need a big vision, and I think the vision should not be just to balance the budget by the year 2002. I think the real vision and the real goal ought to be to pay off that national debt. As the gentleman says, and I certainly agree, I can think of no better thing to leave our kids than a debt-free future. We have an opportunity to do that if we will exercise the discipline this year and every year. As we have said before, balancing the budget is not something you do next year. Balancing the budget is something you do this year. It is something you do every day. That is why as we look at this supplemental appropriation, I hope that the gentleman is successful in the Appropriations Committee to make certain that we set those priorities, that we rearrange some of the budget so that we can take care of those people who are hurting and needing in certain areas of our country and still stay on that glide path to balancing the budget.

Mr. GUTKNECHT. If the gentleman will yield, I would make this point as well. We heard a lot about when we won the cold war, and frankly, I think sometimes we are too timid to say, we won the cold war. The military buildup of the 1980's was perhaps, in my opinion, one of the greatest investments in the history of human beings because we literally won the Third World War, the cold war, if you will, without firing a shot. It was because of the buildup. Now, we are seeing some of that peace dividend. Real defense spending has dropped by over 30 percent in the last 5 years. A lot of people talked about the peace dividend. But I think most of us would agree that that peace dividend ought to go to our children rather than go into even higher domestic discretionary spending. Unfortunately the gentleman from Wisconsin is absolutely right. What we have seen is dramatic increases in domestic discretionary spending along with entitlements as defense spending has come down. But let me just say this, too, and I think this is an important point, and we should have a healthy debate about how many B-2 bombers we really need. The gentleman from Wisconsin may disagree with me and the gentleman from Florida may disagree with me, but I think we probably have enough B-2 bombers. But let us have that debate. Even within the Defense Department, whether or not we need to move ahead with some of the other new weapon systems or if they can be delayed. We live in a relatively safe world. I do not want to cut defense irrationally, but on the other hand I do not think any area of the budget should just be rubber- stamped by this Congress. As I say, we have got to set priorities and clearly at this point in time one of those priorities has to be people who are hurting in disaster areas such as northwest Minnesota.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I offer a resolution (H. Res. 130) and I ask unanimous consent for its immediate consideration.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, as my colleagues have said so far this morning, today the Medicare trustees' report will be unveiled. Unfortunately, we all know what it is going to say. It is going to say that bankruptcy is closing in. That is the bad news. For 2 years now Medicare part A, the trust fund, has been spending more than it takes in. Medicare is living beyond its means and is rapidly depleting any surplus that it may have built up. That is the bad news. The good news is that we have a plan to protect the trust fund. We can simplify the complicated billing and paperwork. We can offer seniors a choice and use the market system to give people a choice and let them decide what is best for them. We can aggressively fight waste and abuse, which cost billions of dollars to the Medicare fund every year. Mr. Speaker, such a plan was successfully passed in the last Congress. Unfortunately, the President chose to veto it. We have a unique opportunity in this Congress to produce such a solution again. Let us work together on a bipartisan basis, let us seize the day, let us save Medicare.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I ask unanimous consent that the business in order under the Calendar Wednesday rule be dispensed with on Wednesday next.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, we talk about the 104th Congress as being a historic Congress. Well, we have an opportunity in this Congress to do something historic as well: to present the American people with an honest and responsible balanced budget plan. The President and the Congress are having important budget negotiations right now. We have an opportunity. We can balance the budget by the year 2002. We can show decreasing deficits as we move toward that balanced budget. We can provide permanent tax relief for hard-working American families. We can solve the problem of the Social Security and the Medicare trust funds. And finally, and most importantly, we can lay the foundations for eliminating the national debt and leave our kids a debt-free future. Mr. Speaker, these are principles and issues that are worth fighting for, and I think they are principles we can all agree to. This is a chance for us to set a higher standard, to make good on our promises of actually changing the way Washington does business, and simply do the right thing for our seniors, for our children, for everyone. Let us seize the day.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I rise today to talk about a serious environmental issue that has been developing in communities all across America. This pressing environmental issue is the Federal Government's lack of responsible spent nuclear fuel policy. Despite past promises and contracts, the administration is ignoring their responsibility to ensure the safe and timely disposal of spent nuclear fuel. Let us talk a little bit about the background of this issue. Riding the crest of a new technology back in the 1950's, the Federal Government encouraged the Nation's utilities to use nuclear power as a generation source through the ``Atoms for Peace Initiative.'' In return, the Federal Government promised to make use of utility spent nuclear fuel by reprocessing it for other uses. In 1978, President Carter outlined the reprocessing of commercial spent nuclear fuel by the Federal Government due to concerns about proliferation. In 1982, Congress came up with a solution for the management of commercial spent fuel by enacting the Nuclear Waste Policy Act. Utilities operating nuclear power plants entered into contracts with the Department of Energy in which the agency promised to begin accepting spent fuel by January 31, 1998. In return, the Nation's customers for nuclear power would contribute to a trust fund to contribute to the disposal of that spent nuclear fuel. To finance this project, the Federal Government has collected over $11 billion in fees from nuclear power customers and has spent over $5 billion. Rate-paying customers from my State of Minnesota have paid more than $250 million to the Federal Government for the disposal of spent fuel. In 1987, Congress recognized that the Department of Energy was making slow progress toward a permanent repository, and amended the Nuclear Waste Policy Act to focus on studies for a single potential site. Here we are, 15 years from the enactment of the 1982 Nuclear Waste Policy Act and 10 years after the act was amended. We are 9 months from the Department of Energy's deadline to begin accepting nuclear waste, but the Department says it will not be able to keep its promise and fulfill its responsibility. The latest estimate by the Department of Energy is that it will not have a permanent repository available until at least the year 2010. This is not acceptable. In the meantime, nuclear waste is beginning to pile up at nuclear power plants across the Nation. In my own district, for example the Prairie Island nuclear plant has been forced to build and operate a temporary storage facility because of the Department of Energy's failure to fulfill its responsibilities. This is a serious concern to the local communities who rely on the plant for jobs and those who count on it for electricity as well. This is an enormous concern to the Prairie Island Indian community, who share their island with the plant. The tribe is very concerned that their island, at the confluence of both the Vermillion and Mississippi Rivers, will become a de facto permanent repository if the Federal Government does not live up to its responsibility. Similar concerns are shared by Americans all across the Nation. Seventy-three spent nuclear storage facilities will be built in 34 States unless the Department of Energy establishes a temporary facility. The Department of Energy has ignored the concerns of citizens across the country, and has continued to insist that it is unable to begin accepting and storing used nuclear fuel, as promised in the past. Even a recent ruling by the U.S. Court of Appeals that the Department of Energy is obligated by law to begin accepting spent fuel has not changed the Department's position. While the Department of Energy has been forced by the courts to recognize their obligation, they have refused to develop any solutions. As a matter of fact, the administration is threatening to veto the solution proposed by Congress. This avoidance of responsibility is outrageous and morally wrong. America's electricity consumers have faithfully funded this program, and they are right to expect the timely, safe, and centralized storage they have paid for. The continued refusal by the Department of Energy and the administration to keep their promises will result in unnecessary additional cost to the taxpayers. The Department of Energy has already lost one lawsuit and the damages from breaking their contract could cost the taxpayers an additional $20 to $40 billion, not to mention the loss of jobs and electricity as nuclear power plants are forced to turn out their lights. The jobs and the electricity may be lost, but the spent fuel will remain. Despite the lack of leadership by the administration, I am pleased to announce today that our colleague, the gentleman from Michigan, Fred Upton, has introduced a bipartisan piece of legislation which would restore the responsibility to the Federal Government's Waste Management Program. This legislation provides for a specific solution to protect our environment, protect our taxpayers, and restore the trust of electric consumers who have paid the Federal Government billions of dollars for this solution. Mr. Speaker, I would hope that all Members would join with me and the gentleman from Michigan [Mr. Upton] in supporting this very important legislation. The legislation simply states that as the Department of Energy works on a permanent site, a centralized temporary facility should be located at the Nevada test site. This site is an area the size of Connecticut that since the Truman administration has been the home to atmospheric and underground nuclear test blasts as well as countless active and abandoned nuclear labs. Its remote, arid location is ideally suited to store nuclear waste. By pursuing a policy that puts nuclear waste behind one fence, in one location, we can concentrate our resources on making sure it is safe. The Senate has under consideration a similar piece of legislation to ensure that the Department of Energy keeps its promises.

Mr. GUTKNECHT

Mr. GUTKNECHT. You gentlemen are right on the money. I want to point out a couple of things, and I want to congratulate both of you. I do not know of any members of the Committee on the Budget who have worked harder to try to preserve the American dream and guaranteeing that we pass on to our kids a legacy of hope and opportunity rather than a legacy of debt and dependency. I want to point out something that I think is important, that Mr. Neumann suggested earlier. There was a famous architect from Chicago, and he once said ``Make no small plans.'' I think the beauty and the simplicity of what we are talking about tonight is that if we have the discipline as a Congress to embrace a plan which actually will allow Federal spending to increase at greater than what we project the inflation rate to be but less than what we think the total growth in revenues will be, if we have the courage to do that, say, all right, we will let government grow, slightly, but not as fast, not nearly as fast as it has grown over the last 40 years, we can literally create a system that will guarantee that our seniors are protected, that will guarantee stronger economic growth for people our age, but more important than that, we can give our kids a debt free future. I cannot think of anything more compelling, a bigger vision, something that is worth fighting for than what I call a generational fairness plan, that protects the seniors, that protects working people today, and protects our children's future. I think those are the kinds of things that, if we can work together and if we have the discipline here in Congress, it can clearly happen. Mr. Speaker, if I could just make one additional point. Sometimes when we start talking about the budget, we throw around terms and there are all kinds of CBO and OMB and a lot of things that I think most Americans really have a hard time staying with. I think we sometimes have to get back to the big picture. Ultimately in the end I think we have to say to ourselves and to the American people that balancing the budget and stopping this deficit spending really are moral issues, because I think we all know down in our bones that it is morally wrong to continue to borrow against our kids and our grandkids. And so I think we have got to stop that. We are making progress but, as you suggested, we are still using that Social Security trust fund to sort of mask the size of the deficit. I think in this process we have got to expose that, we have got to deal with that. Clearly the time to deal with it is now, before it turns around, before we have a situation where Social Security is actually paying out more than it is taking in.

Mr. GUTKNECHT. They could not believe it.

Mr. GUTKNECHT. If the gentleman would yield, the story of the Russian monkeys going into space, the real sad part of that story if you really boil it all down is that we had to borrow that money from our kids and every dollar we spend now in new programs or new items in the budget, we have got to borrow that money. The first time I came out here as a candidate for Congress I wore a little pin and it said carpe diem: seize the day. And the one message that came through loudly and clearly at most of my townhall meetings that I had when we were home for the Easter break was that the American people, the people of my district want us to regain the initiative, they want us to seize the day. They understand that good habits are hard to get a hold of, bad habits are easy to fall into, and they want us to get back in those good habits of forcing fiscal discipline, and I was proud to be a part of the 104th Congress in spite of some of the back sliding we did toward the end. I think we made some real progress, but there is a real fear that you have and that I have that it is easy to fall back into those old habits of saying yes to all the various special interest groups who come out here to Washington and want more of our children's money. If I could just say this too, and I want to say you know we do not want to paint too dark a picture because good things are happening. We have gone a long way in terms of reforming our entitlement system. The welfare system is a long way down the road to becoming much more what Wisconsin wants, what Minnesota wants, what the States want and encouraging personal responsibility and encouraging families to stay together. We are making progress on Medicare. The President's budget and our numbers now are not far a part. He has proposed a hundred billion dollars' worth of savings, and we think that is good. On Medicaid the President has recommended 32 billion dollars' worth of savings. But the real issue before us I think in this Congress, and I think as you said we can work with the welfare numbers, we can work with the Medicare numbers, we can work with the Medicaid numbers, we can work with the defense numbers, but the real problem is the discretionary spending.

Mr. GUTKNECHT. New discretionary spending.

Mr. GUTKNECHT. On new Washington spending programs. And once you start a new program you create a new constituency and that is one thing that if we have the courage to stand up and say no to any new programs, if the President wants new programs then he is going to have to find other programs that he is going to have to eliminate, and we all know there is wasteful, duplicative programs that are not working.

Mr. GUTKNECHT. Mr. Speaker, we will continue to stand with the working families of middle America. I would close with just one reminder, because our time has about expired here. When I was growing up, when my colleague was growing up, most of us grew up in families where only one person had to work, and that was because the tax rate was something like 4 to 5 percent of my folks' gross income. Today, the average family spends more for taxes than they do for food, clothing, and shelter combined. If tax increases had been the answer to these growing deficits, we would have had a balanced budget years ago. The truth of the matter is, the real answer is we have to control our appetite for more spending. If we are willing to do that, if we are willing to face up to the special interest groups, if we are willing to say that if we want new programs we have to eliminate some of the old programs that are not working, if we are willing to do that, we can solve this budget problem, we can save Social Security without touching the CPI adjustment. We can do all of these things, but we have to have the courage and we have to seize the day.

Mr. GUTKNECHT. If the gentleman would yield, another point you made and I think it may have slipped by some of our colleagues, how much interest on the debt each family is required to pay every year. Now they may not pay it directly, they may not pay it in direct taxes, but they pay it one way or the other. They pay it in the price they pay for a loaf of bread, when they want to buy a car, when they want to buy something else for the family, when they want to take a vacation. Those taxes are there and they have to be paid. And I wonder if you can tell us--I know you do not have your chart on that, but that is an added burden on every family, and I want to come back to the burden on the family and what it means.

Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman. It was our privilege to host the gentleman in Winona. If I could just say that we want to do a special order tonight and talk about Social Security and balancing the budget. And my colleague from Minnesota and our fellow Committee on the Budget member [Mr. Minge] recently just alluded to the unbelievable problems being faced, especially in western Minnesota and the Dakotas. I would just like to say that on behalf of all Members of Congress, particularly this one from Minnesota, I want to make certain that we here at the Federal level are doing all that we possibly can for those people. It is really hard for some of us to imagine what it must have been like to wake up and find that much water on your streets and in your neighborhoods and then have 40- to 50-degree-below wind chill factors blowing ice and water and then on top of that many of the homes being without electrical power. So we really cannot imagine how tough it has been on some of the people in those communities. The only thing I guess we can say to them is that we are going to do everything we can here at the Federal level to make certain that we get things right. I might also mention though that when we talk about floods, what we want to talk about tonight is this flood of red ink which threatens not only to drown us but, worse than that, to drown our children. And I am going to yield back to the gentleman so we can have a discussion about really the size, dimensions, and ultimately what the implications are of this debt and of the deficit spending that has been going on in this body and in this Congress for most of the last 40 years.

Mr. GUTKNECHT. I think just once more for our colleagues who may be watching on C-SPAN in their offices, what was the total number of dollars being spent currently on education programs and how many various Federal programs are we currently operating?

Mr. GUTKNECHT. I think I know who said that, and I think he served in the Continental Congress, and I think he helped draft our Declaration of Independence. That was the ethic in those particular days. I believe his name was Thomas Jefferson.

Mr. GUTKNECHT. It is interesting that some of our colleagues, who like to quote our Founding Fathers when it fits their purposes, tend to forget that when Jefferson said that, he did not just mean it for those people in those times. He meant it for all people and for all times. I think he understood the corrosive effect that the debt would have. I think your chart is instructive. The unfortunate thing is, particularly when we add in what is going to happen with the demographic change, and I have told people this story. I was born in 1951. When I graduated from college, the speaker at our commencement address was the Director of the U.S. Census. Most people do not remember their college commencement addresses and I do not remember all of it, either, but I do remember some of the points that were made that day. He said that there were more kids born in 1951 than any other single year. I represent the peak of the baby boomers. What is going to happen when we start to retire makes that chart look like a day at the park, because as the baby boomers start to retire, all of a sudden Medicare expenses go up dramatically, Social Security goes from a significant surplus to huge deficits, and what it is saying, this should be a siren song for all of us, that we have got to do something now. If we take modest action now, if we take responsible action now, we can save the budget, we can save our children, we can save Social Security, we can save Medicare, and yet unfortunately there are people in this town who would prefer to put their head in the sand and pretend that it is not real, that those numbers are not real and that somehow there is a tooth fairy out there that is going to save us. The only thing that will save us is responsible action. Jefferson was correct. This is a moral issue, and the public debt is the greatest of evils to be feared. What we are trying to do is awaken some of our colleagues here and awaken the American people to say, this has got to stop. All it takes is some moral courage to say this is wrong. And we are going to have to say no. I was so delighted that the gentleman from Michigan [Mr. Hoekstra] was with us and talked a little about the Education Department, but as the gentleman from Wisconsin has indicated, it is not just education, it is all programs. In some of my town meetings, I use this little story. If I could, I would like to share it. What I ask people to do sometimes is to close their eyes and pretend for a minute that they go home from work or they go home from school and they open their mailbox and there is a letter there from a law office from far away and they open up the letter and all of a sudden they realize that they have been named an heir to an enormous fortune, from somebody they did not even know was related to them and they have left them this enormous fortune. And so I ask them to think about that and what it would be like and then think about the fact that this is a windfall, and you would like to do something to help children or you would like to do something to help your fellow human beings and you would like to give a significant portion of this windfall to help your fellow human beings or to help children. Think about that, envision that. Think about this happening to you. And then think about where you would give that money. And after you have thought a minute, I ask the people, now, how many of you honestly, liberals, conservatives, Republicans, Democrats, independents, whatever, how many of you, the first thing that you thought of was, I know, I'll give the money to the Federal Government? The answer to that in every town meeting is laughter. No one would give the money to the Federal Government. Why? Because I think we all instinctively know what the gentleman from Michigan [Mr. Hoekstra] told us a few minutes ago, that the Federal Government is a poor bargain and that the Government is one of the most inefficient ways to spend money or to help people. In fact when we had this great welfare debate over the last year and a half, and it is still going on, as you indicated Wisconsin has been far ahead of the pack in terms of reforming welfare. What I have said, I said then, I say now, the real debate was not about saving money. In the end it was really about saving people, saving families, saving children from one more generation of dependency and despair. What we are really saying is, let us break that cycle, let us slow the rate of growth in Government and let us preserve Social Security and let us pay down and pay off ultimately that national debt so that we can leave our kids a debt-free future. That is what Thomas Jefferson believed in, I think that is what most Americans believe in, and hopefully we can get more of the Members of Congress to believe in that as well.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I demand a recorded vote.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I want to compliment the gentleman from New Hampshire [Mr. Sununu] and the other freshmen who have put this together because far from being a senseless debate, as we have heard from some of our colleagues on the other side, this is a very important debate. Let me explain the consequences. Who is right and who is wrong is not as important as what happens if we are wrong. As we have seen, we believe the President's budget is not in balance. That is important. That is significant. The deficit actually goes up and at the end of the budget cycle, according to the Congressional Budget Office, which is our official scorekeeper, the budget is still out of balance by $69 billion come the year 2002. What does that mean? What are the consequences? The gentleman from New Hampshire [Mr. Sununu] tried to explain, and I think Members need to understand that if the Congressional Budget Office is correct, here is what is going to happen in the year 2002. I daresay no Republicans nor no Democrats want to vote for this, because it means that Head Start will be cut $422 million, special education will be cut $369 million, education to the disadvantaged will be cut $707 million, Pell grants for college students will have to be cut $680 million, the National Institutes of Health will have to be cut over $1 billion. Veterans hospitals, does anybody want to have to vote in the year 2002 to cut veterans hospitals by $1.4 billion? Or the women, infants and children program, the WIC Program, by $353 million? The FBI would have to be cut by $230 million; the Immigration and Naturalization Service, $147 million; the Federal Aviation Administration, they are the people who keep our airways safe, by $783 million; Federal highways by $1.4 billion; the National Science Foundation, $269 million worth of cuts if the President's triggers go into effect. Finally let me say, and we all care about national parks, do my colleagues really want to vote for a budget that could cause national parks to be cut by $105 million? I say the answer to that question is no. That is not the budget that we want. The debate that we are having today is an important debate for this reason, and I am still wearing my name tag from Hershey because I think we need a bipartisan budget. I think we have to work together. I think we have to have an honest debate. But how can we have an honest debate about the most important issue this Congress will deal with, the budget, if one side is speaking Greek and the other side is speaking Latin? What this debate is about today, what this vote is about today is let us all speak the same language, because if we are right and the President is wrong, it is going to have dramatic consequences for lots of our constituents. That is not what we want, that is not what you want, and frankly I do not think that is what the President wants. What we want is an honest and fair debate using honest and fair numbers. Let us agree on the assumptions, let us agree on the language, then let us have an honest debate.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I have been a Member of this Congress now for 2 years, and too often I have seen Members come to the well of this House and demonize, trivialize, and personalize the debate. I was happy to have participated in the conference up in Hershey, PA, because I think it is time that we stop this poisoning of the well of this great Chamber. I told a story that happened back in the Continental Congress. Benjamin Franklin one time, at the end of a couple of days of very, very bitter debate in the Continental Congress, rose slowly at the back of the Chamber one morning and he said, ``Let us for a moment, Mr. Speaker, contemplate our own fallibility.'' Mr. Speaker, let us commit ourselves to vigorous but fair debate. Let us do it with humility. Let us do it with humor. If we do, I think both this body and the body politic will be well served.

Mr. GUTKNECHT

Mr. GUTKNECHT. And that affects families. That affects their ability to buy, their ability to buy new homes, remodel homes. I want to point out one other thing, I want to get Mr. Pappas back involved in this discussion a bit, too, but this chart sort of shows some of the bad news that we are, according to the Congressional Budget Office, we are still about $69 billion short under the President's plan in the year 2002. That is sort of the bad news. But it gets worse. Because if this chart were extended, and we are going to have to get this chart extended, if you just leave everything else the same, when people my age begin to retire in about the year 2011, 2012, when we begin to really make demands upon the Social Security system, the Medicare system, and other things, and as our income levels begin to go into retirement mode, this chart begins to go right straight up. It is almost like an F-16 taking off in a completely vertical takeoff. While I think this chart is kind of bad news, it gets a lot worse if we do not get serious about solving Medicare, solving Social Security, a lot of those underlying problems and begin to make some modest changes today so we can save the fund for the future. I yield to the gentleman from New Jersey [Mr. Pappas].

Mr. GUTKNECHT. I thank the gentleman for his comments. I would just share, just to follow up with some of those comments, that what the gentleman was talking about, I think if the voters had been told last fall that part of the plan would be to increase the deficit by $24 billion this year, and ultimately wind up with a 5-year plan, and that according to our official scorekeepers, the Congressional Budget Office, that would actually leave us with a $69 billion deficit in the year 2002, my sense is that the voters would have been incensed. They would have said no way. I want to point out, this is one more chart that describes what we are talking about. In some respects it is like a person who says I am going to go on a diet. I am going to lose 50 pounds. But first I am going to gain 10 pounds. I will actually do most of the weight loss program in the last week of this plan of the diet. That is crazy. That is not the way the world works. That is not the way human beings work. Frankly, we know that is probably not going to happen. At least we have a start. I want to point out some other things. I want to get the gentleman from New Jersey [Mr. Saxton] back involved in the discussion as well. Today the Secretary of the Treasury, Mr. Rubin, came and testified before the Committee on the Budget. I wrote down some quotes of things that he said. I agreed with much of what he said today. I did not agree with his analysis, I did not agree with his final budget plan, but at least there were a number of points that he did say that I really agree with. One of them, he said, was that we have an historic opportunity. I think that is absolutely true. One of the unfortunate things, and the gentleman from New Jersey used the term ``disappointing,'' and I think disappointment is the right term. For the first time in a very long time we have an electorate who wants us to make those tough decisions, we have a body politic who has said we want to balance the budget, we have a President who says that he wants to balance the budget, and we have a Congress that is prepared to make the tough choices. Unfortunately, when we start with this kind of a plan, it makes the job even tougher. That is why I think it is disappointing. He also said, and this is a quote: Financial markets will punish bad behavior and they will reward good fiscal behavior. It was interesting, because the Secretary previously had been, I believe, the CEO of Goldman Sachs, and they recently put out a newsletter, an economic analysis of what was happening in Washington. The headline on this newsletter was ``No Meaningful Fiscal Restraint Before the Millenium.'' They go on to say, ``The prospects for a balanced budget agreement remain excellent. Republicans plan to use the Clinton plan as a starting point in the construction of their own proposal,'' which I think is accurate. Then they say, ``The bad news is that it appears increasingly likely that a deal will not result in meaningful fiscal restraint until the next millenium. In the Clinton budget plan the fiscal restraint is extremely backloaded,'' which we have pointed out. Here is the point: ``This suggests that a budget deal will not have near term implications for the conduct of monetary policy.'' What does that mean to the average family who wants to buy a new home and a new car? What it means is that interest rates probably will not come down. As a matter of fact, they may go up. That goes back to the point that the Secretary made: Financial markets punish bad behavior. They reward good fiscal behavior. What does this mean to families? We need to talk a little bit about that, and I want to get the gentleman from New Jersey involved in this discussion, because he probably understands this better than I do, but it is a chart I want to show of what happens to interest rates. They mean a lot because it affects what people can buy. It affects how many new homes are built and how many new cars are purchased. That affects how many new jobs are available, and good-paying jobs to the people who need them. In the end, this is really about how is it going to affect the American family. This is an interesting chart. I think it tells some interesting things. This was November 1994, when I and 72 of my colleagues became part of the Republican majority, and we called ourselves the majority makers. You can see interest rates were trending up until the election day. Then they trended down all through 1995, until we got to where the budget negotiations broke down. Then, guess what? Interest rates started to trend back up. After the elections of 1996 and conservative majorities were kept in the House and Senate, interest rates started trending back down. The President introduced his budget, interest rates have trended up slightly since then. Maybe it is just coincidence, but I think it is too great a coincidence. I think money markets do watch what we do here in Washington. They do reward good behavior and they do punish bad behavior. Ultimately what this means--we want to talk a little bit about what a balanced budget ultimately means to the families. If we can balance the budget without raising taxes, a number of the leading economists in this country have said we can expect significantly lower interest rates. As a matter of fact, we can expect somewhere between 1.5 to 2 percent lower interest rates. That means a savings of $1,230 per year on the average home mortgage for a small home. For a larger home it can mean as much as $2,100, $2,160. On an average car loan, we are talking about a difference of $180 a year; on a student loan, $216 a year. That is real money. What that means is if American families have to spend less for interest, if the Federal Government has to spend less for interest, it means that we have more money to spend on other things. It means we can afford more homes and cars. It means that families can afford to send their kids to college. In the end, that is what this debate is all about. It really is about improving the quality of life for American families. I wonder if Congressman Saxton would want to jump back in here and talk a little bit about the impact. You have probably studied the correlation between taxes and between spending and budget balancing and interest rates and how it is going to affect families more than anybody else in the Congress.

Mr. GUTKNECHT. More important even than that, Congressman Pappas, is it will help those people. We passed very important welfare reform last year and it is already beginning to show some benefits. We are seeing welfare rolls going down. I have been doing some research in my home State, and we have seen a dramatic drop in welfare rolls just since we passed that legislation last year. The real answer is we need more jobs in the private sector. We need more people on payrolls. When we talk about economic growth, that can become almost a nebulous term that people do not understand, but they do understand good-paying jobs and more of them. That is really what we are talking about, is making it possible so that more folks who need good-paying jobs can find those good-paying jobs in the communities and in the neighborhoods where they live.

Mr. GUTKNECHT

Mr. GUTKNECHT. If the gentleman would yield back, that is one of the debates that we have had, and over the last couple of years Congresses have used what we called a manana budget. It is real easy to cut the budget after we leave office. So what we are really concentrating on is what can we do in fiscal year 1998 to put us on a path toward a balanced budget.