Gil Gutknecht

Mr. GUTKNECHT

Mr. GUTKNECHT. Well, I do want to talk a little bit about our accomplishments and what has been accomplished. I am happy all of us are freshmen. We come to this debate with clean hands. We did not help create the problem. We were not here when the previous Congresses ran up 4.9 trillion dollars' worth of debt. I have to tell you I am a little upset tonight, and I think the American people should be upset. Frankly, perhaps we have been too nice and too gentlemanly in this debate about the budget and what is happening, and what is happening especially from the administration relative to our efforts to balance this Federal budget. As I said, we did not help create the problem, but we are trying to clean it up and we are trying to solve it. But I, for one, am really frustrated with the half truths, the distortions, and the bald-faced lies which are coming out and have been coming out and are seemingly getting worse. I think it is time that we spend a little bit of time tonight clarifying the record and talking about the facts because, as the gentleman from Connecticut just mentioned a few minutes ago, we keep hearing this wornout expression that we are cutting Medicare, we are ending student loans, we have cut school lunch programs, and we are cutting other needed programs so that we can give our rich friends a tax cut. Frankly, I think it is time we spend a little bit of time tonight piercing through that very thin bubble and exposing the bare truth about what we are really doing with this budget and who the real benefactors will be. It is not the rich. It is working people who get up every day, work hard. They are the glue that holds this society together, and I, for one, happen to believe that they are smart enough to understand exactly what is happening in Washington and what has been going on for too long. What has been going on for too long is Congress would pass all of the appropriation bills and they would say, oh, gee whiz, once again we spent $250 billion more than we have taken in, and they would say, let us pass the bill on to our grandchildren. So at the last minute they would raise the debt ceiling. So the toughest vote any Congress had to take was to raise the debt ceiling. It is still a tough vote. But frankly, I think if we continue down that path and just allow us to every year raise the debt ceiling, and the President says he does not like our budget, but the truth of the matter is he has not offered one that really balances the budget, not within 10 years. As a matter of fact, the original plan wouldn't balance the budget in 10 years. We had $200 billion deficits for as far as the eye could see. He may not like the plan that we have put together, although frankly I think it is very defensible, but let us see his plan. I mean where is a real workable plan from the other side, and the truth of the matter is, there is none. Earlier we heard one of the speakers from the other side of the aisle say this is the Gingrich budget and the blackmail attempt may force this country into default. But we had a meeting with some of the big bond houses, people who represent the bond houses earlier today, and I came away with a very clear conclusion. It is not whether we are going to default, it is when are we going to default, unless we really change course, are willing to meet the deficit head-on, and deal with it this year and begin down the path toward a balanced budget. So, I am glad I had an opportunity to get some of this off my chest, but I really have become increasingly frustrated with the lies, the distortions, the half truths that are being foisted upon the American public, and I think it is up to us to help clear the record.

Mr. GUTKNECHT. Mr. Speaker, I think that is absolutely correct.

Mr. GUTKNECHT. Absolutely, and the system we have right now is in fact in sort of a system of perverse incentives which invites more waste, fraud, and abuse, and the system we are going to try and create, and I think we will create, and I agree with the gentleman from Georgia [Mr. Norwood], I think once seniors begin to understand exactly what we are talking about under our plan and the options that they will have, they are going to like it. First of all, let me just debunk this myth that somehow we are going to use the savings from Medicare to give this tax cut. That is absolutely not true, and everyone who has said that on the House floor knows that it is not true because we put into the bill itself a lockbox so that any savings that we get from these new competitive models, this new market we are going to create for Medicare, all of those savings have to go back in the Medicare trust fund. They cannot be used for the tax cut, and they know that is true, and it is in the law, and they know that. So, when they come to the House floor and say we are going to use these Medicare cuts to give tax cuts, it just is not true. As a matter of fact, with the rescission bill that we passed earlier this year and with the cuts, the targeted cuts that the gentleman from Connecticut [Mr. Shays] talked about, we will have cut almost $44 billion this year in spending. The tax cuts are about $35 billion. The tax cuts that we are talking about this year that will mostly benefit the middle class have been paid for out of other spending cuts, so the idea that we are using Medicare to do that is a bald-faced lie, and the people who say it know that it is a lie. But let us talk a little about some of the other provisions we were able to get. One of the things we talked about was fraud, waste, and abuse. In fact, every one of us had town meetings, and I would suspect, and I dare say, that every one of us at every one of our town meetings had some senior who stood up, raised their hand, talked about some of the things that have happened in their own lives. I had one sweet person in one of my town meetings stand up and say that she had been billed $235 for a toothbrush. Well, what we are proposing in this is a very aggressive method to attack some of that waste, fraud, and abuse. You used the term $30 billion a year. Some have said it is as much as $44 billion a year. Whatever the number is, we know it is out there, and it is partly because of the way the funding system works. But we are going to allow those senior citizens; in fact, we are going to encourage them; to study their own bills, and if there is a thousand dollars' worth of savings, they are going to get to keep some of those savings that they find in their bills. So the program that we are offering I think aggressively attacks waste, fraud, and abuse. Will any of the savings we get from the changes we are making be used to keep the fund solvent? Finally, I want to make one other point on behalf of some of us who come from low-cost areas, rural areas of the country. We were able to get the formula changed in the last few days in the discussion so that the floor has said, no matter where you live, your area is going to get at least $3,600 if they set up a service network or a managed-care network in that particular area. That will encourage more competition for those Medicare dollars, and the most important word is fairness. We are going to have a much more fair system. We are going to reverse some of those perverse incentives that are in the system today, we are going to aggressively attack waste, fraud, and abuse, and I think it is going to be a much better system for the seniors in this country, and we are not going to use the savings for a tax cut. The tax cuts are paid for out of other spending cuts that we made this year.

Mr. GUTKNECHT. What previous Congresses took----

Mr. GUTKNECHT. Come at this with clean hands----

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, the gentleman talked about promises made, promises kept, and a Governor from Minnesota once observed that politics is a promising profession. In the last several years we have heard a lot of campaign promises. I want to remind the gentleman of some which were made by a gentleman who was elected to the Presidency several years ago. He was elected promising to downsize the Federal Government, to end welfare as we know it, to reform welfare, to save the Medicare system, and to give a tax break to the middle class while balancing the budget within 5 years. Those are the same kind of promises that we made, and the difference is that we kept our promises; he broke his. What makes me so angry is that now he is trying to keep us from keeping our promises to the American people. We are not going to stand for it, and neither are the American people.

Mr. GUTKNECHT

Mr. GUTKNECHT. Actually, the gentleman from Georgia [Mr. Kingston] controls the time.

Mr. GUTKNECHT. Oh, absolutely. The interesting thing is, when we look at the benefits long term of a balanced budget, and they accrue to everybody. It is not going to benefit just the rich or benefit just the old or the young. I think some of the biggest beneficiary factors, and we have heard a lot of complaints about what will happen to student loans. The truth of the matter is, the changes we have made in student loans, if someone borrows the maximum, work out to about $7 a month. But let us talk about that college student. They are better able to find a job because the economy will be stronger according to all the leading economists we have heard from. But if they borrow money to buy a car, a $15,000 car loan, annually, the difference in interest rates because we have a balanced budget, will work out to about $180. That is good, but what gets great is the difference on a $100,000 mortgage. If that college student goes out and gets a $100,000 mortgage, and if interest rates drop by 2 percentage points, that will save that college student $2,162 a year. On a 30-year mortgage we are talking lots and lots of money. So, Mr. Speaker, for what we are doing with college loans and some of the other targeted cuts we are making in this budget, it seems to me that long term those benefits to those college students are going to be absolutely astronomical. The people who should be leading the debate or leading the fight for this budget ought to be young people. They should be saying, ``this is the kind of thing we need to save our future.''

Mr. GUTKNECHT. Mr. Speaker, the interesting thing, and I use this example sometimes in my district, because my district borders the Mississippi River. We are just a little west of the Mississippi River. I tell people this, and this gets their attention. I say if they forget everything else that I say they should remember this. Every dollar in personal income taxes collected west of the Mississippi River now goes to pay the interest on the national debt. That is an amazing statistic. And when the gentleman used the other one, the one he just mentioned, $187,000 in interest for every baby born in America today, that is disgraceful, and I think we all know it is morally wrong.

Mr. GUTKNECHT. Mr. Speaker, I would tell the gentleman that is the total budget.

Mr. GUTKNECHT. Mr. Speaker, the annual budget for the State of Minnesota is about $10 billion.

Mr. GUTKNECHT. Mr. Speaker, if the gentleman would yield once more, the interesting thing is some people have turned this into an arithmetic exercise. It is not about arithmetic. It is not about a lot of the things that we are reading about. It really is about preserving the American dream for our children. President Kennedy said we all cherish our children's future. We all want our kids to have a little better life than we had. But if we stay on the path we are on now at the Federal level, if the Federal Government continues to mortgage our children's future, what we do is we guarantee that our kids will have a standard of living that will be less than ours. As a matter of fact, we promised them, or we are promising them under the current circumstances, if we do not make changes, that they will face sure bankruptcy for the Federal Government and our economy.

Mr. GUTKNECHT. Mr. Speaker, if the gentleman would continue to yield, he is absolutely correct. Then on the entitlement side, and this is where there is so much fear mongering going on out there with the senior citizens and other groups, for the most part whether we are talking about school lunches or talking about Medicare or the other entitlements, what we are really talking about is slowing the growth rate to approximately the inflation rate. The good news is if we do that, if we make targeted cuts in domestic discretionary spending, put a flexible freeze on defense and allow the entitlements to grow, but at a slower rate than they have in the past, the good news is we get to a balanced budget, under the plan that we have, scored by the CBO, in 7 years. My own sense is it is going to be about 5\1/2\ years, because we will see economic growth at a higher rate than is currently expected and we will see interest rates at a much lower rate than is currently expected. The net of that is we will get to a balanced budget in about 5\1/2\ years, not 7 years. But the even better news, for those of us with children, is that we will have an opportunity, if we can stick to that discipline, which I do not think is a bitter pill to swallow. It is not tough medicine we are talking about. But if we can stick to the basic budget plan, not only will we balance the budget in 5\1/2\ years, the great news is if we stay on that path we will pay off the national debt in about 25 years.

Mr. GUTKNECHT. Mr. Speaker, I said to the people of my district that it was a very historic day when we passed that reconciliation bill. It really is what an awful lot of us came here to do. This is what we promised we were going to do when we ran for election, and I am so delighted that we finally got the opportunity to keep that promise. My sense is that if the President hears from the American people, once they understand what really is in this bill and how the bill was put together and they begin to tell the President and the administration how they feel about it, my sense is that the President will reconsider, and he will actually sign this bill or one that looks almost like it. If I could say to the gentleman from Georgia, I want to just talk a little bit about what we are really doing, because we have heard so much demagoguery and so much rhetoric about these draconian cuts and how this is going to hurt this group or that group. But the truth of the matter is, what we have taken is a fairly simple approach to how we are going to balance this budget. It breaks down into, in my opinion, three categories. First of all, with defense spending, we have adopted essentially a flexible freeze on defense spending. On domestic discretionary spending we have made targeted cuts. We have eliminated 300 programs, which I think most people would agree were not very effective anyway.

Mr. GUTKNECHT. I would just say the byword of the welfare reform, and perhaps the byword or the expression of this whole Congress, is how do we convert this welfare State that has been created over the last number of years into an opportunity society? I think that is what we really trying to do. The real issue is how do we get away from government responsibility for everything, where everybody is blaming the government and everybody is going to the government for more funding and more programs and so forth, and how do we get more personal responsibility? At the end of the day I think we all know that we cannot have a system that relies on the government for all of the answers. The government has done such a poor job. When we look at the welfare system, and the welfare State if you will, the war on poverty has spent something like $5.3 trillion over the last 30 years. And the real tragedy of our welfare system and the tragedy of the failure of the welfare State is not that its cost $5.3 trillion. The real tragedy is that it has denied so many human beings of the dignity of work and responsibility. What we are really trying to do is convert the welfare State into an opportunity society and rebuild those basic values and those basic principles of faith, family, work, and personal responsibility. That is what we have got to have. That is what we want. That is what the American people want.

Mr. GUTKNECHT. No, what I said is we are going to change the way student loans are administered, and the absolute maximum that it will cost the average college student is $7 a month.

Mr. GUTKNECHT. Mr. Speaker, we are delighted to be joined by some of our colleagues.

Mr. GUTKNECHT

Mr. GUTKNECHT. I was just going to get to that, that the amendment that you offered would exempt 96 percent of those groups. What we are really talking about is a handful of people that have abused this system. But frankly, the abuse could amount to $200 million a year. It is time for it to stop. We cannot afford a subsidy for special interests. I think most people agree that it is wrong, and we will have an opportunity in the next several weeks to end subsidies for special interests. Mr. Speaker, I see my time has expired. I yield back the balance of my time.

Mr. GUTKNECHT. Yes, I do.

Mr. GUTKNECHT. Mr. Speaker, this House has performed some groundbreaking work by ranging in on the Nation's out-of-control budget. Before we passed a reconciliation bill last week, Americans had been weighed down by the annual deficits that exceeded $200 billion a year. Their children were saddled with a national debt of almost $5 trillion. On its way to that historical reconciliation bill which balances the Federal budget in less than 7 years, Members of this House made some difficult decisions to lift that weight from Americans' shoulders and to free future generations of a lifetime of government servitude. However, Mr. Speaker, the House's work is not finished. There is one more tough decision left on the table, the decision to lift and end subsidies for special interests. This welfare program is actually a Federal grant system. Under this system, Federal agencies award money to private organizations to perform various services. Unfortunately, these services and the agencies that are paid to perform them, are not always the wisest use of taxpayers' dollars. Expense amounts, and this expense, and this is important, this expense amounts to $40 billion a year. Fortunately, just as Americans called on Congress to balance the Federal budget, so they have called on Congress to end this unofficial entitlement for special interests. The interests I speak of are those who represent advocacy groups that, because they are classified by the Internal Revenue Service as tax exempt, see themselves as charities. But some of these organizations do not practice charity. Charity is generosity, helpfulness, relief given to needy or suffering people. What some of these advocacy groups practice, however, is really greed and influence. These organizations do not extend a helping hand to the poor and the needy, they extend their open hand, palm up, to the taxpayers for a handout. Many times, this money goes directly into the organization's coffers to hire more lobbyists who, in turn, ask Congress and Federal agencies for even more money and more legislation and regulations sympathetic to their organization's political agenda. Americans cannot afford to have special interest charities double- dipping from the public trough, using the net gain from this tax-exempt status to pay lobbyists to hit Congress up for additional money and power. Americans are no longer interested in funding this profane grant system. A national study performed just last month showed that a strong majority of Americans do not believe that special interest groups who receive funding from the Federal Government should be using these funds, either directly or indirectly, to lobby the Federal Government. By a margin of 70 to 26 percent, Americans agree that tax dollars should not be used to fund political activities. Of course, many of these nonprofit advocates claim that they are not using Federal money to lobby Congress. They maintain that there is a law against such a practice, and that they follow this law. But there is no way to verify this, because no group is required to open their books to Federal inspection. What is wrong here, and what is wrong with this picture? If an organization is going to use a taxpayer dollar, especially at a time when the dollar is spread so thin, then the organization should account for every penny and prove that the money is being spent appropriately and as it was supposed to be spent. Mr. Speaker, there is legislation pending in this House that would bring integrity to the Federal grant system and end this unofficial entitlement for lobbyists. Members will soon have an opportunity to vote on the Istook amendment to the Treasury-Postal conference report. If passed, any portion that receives more than one-third of its revenue in Federal funds, could spend no more than $100,000 on advocacy activities. Any nonprofit group with able activities of 300 million or more that engages in political activities will be prohibited from receiving Federal grants.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, we do want to give them an incentive to say, wait a second. We had a lady who said she had been billed $232 for a tooth brush. Those are the kinds of things that are just outrageous.

Mr. GUTKNECHT. In fact, and I think we need to be honest, because under our plan, the total cost to the average senior citizen may go up by as much as $7 more than under the President's proposal. That is $7 a year. When I have had a chance, and I do not know if you have had a chance to talk to some of the seniors in your district, when I explain what they are going to get for their $7, with all the options, with all the choices, with better managed care and hopefully better services available to them, when I explain that to them, and that the real benefit is we not only save the system, we do not just patch it up to get through the next election, we are trying to save it to get to the next generation. This is really about generational equity. When I explain that to my senior citizens and they hear all the facts, they say ``What are these people grousing about? This is a great deal. This is what you should be doing. We are delighted you have the courage to finally step up to the plate and do what needs to be done with Medicare.''

Mr. GUTKNECHT. In fact, what we are really trying to do is convert the seniors from being consumers of medical care into being buyers of medical care. We are trying to use market forces, give them more choices, do some of the things that are working in terms of the private sector right now. We know on a national basis right now health care inflation in the private sector is running about 1.1 percent. That is what it is running in the State of Minnesota, about 1.1 percent in the private sector, but then on the government-run side of the health care expenditures, it is running 10.4 percent. You do not have to be an MBA from Wharton in the State of Pennsylvania to understand that if we can take some of those ideas and use market forces, give people more choices, offer the option of managed care, medical savings accounts, preferred provider networks and some of the things that are working so well in the private sector, if we give them those choices, we can dramatically reduce the overall cost of health care, give people more options, give people more choices, and I think in the long run give them more services than they currently get, and control the cost so we eliminate some of the waste, fraud, and abuse that is currently in the system and everybody wins except some of those providers that have been gouging the system.

Mr. GUTKNECHT. I would just close with a quote from Governors Weld, Engler, Thompson and Christine Todd Wittman, a letter they sent to Speaker Gingrich on March 31 of this year. ``As governor, we have all cut taxes. At the same time we have balanced our budget. We have not accepted the false dichotomy that claims governments at the State or Federal level can only balance their budgets or cut taxes but not both. There is no reason Washington cannot walk and chew gum at the same time, too.'' We can balance the budget, if we are willing to limit the growth in entitlements, if we are willing cut discretionary domestic spending, as we have, by $44 billion this year. We eliminate over 300 departments and programs. And if we are willing to have a flexible freeze in the Defense Department, we can give tax relief to families and we can balance the budget, and the real winners will not be the rich. The real winners will be those blue collar folks out there, who get up every day, who do the work, who pay the bills. They are the glue, they are the mortar that hold the bricks of this society together. And they are going to be the big winners, because there will be more jobs, more income, lower interest rates and less debt only to them and their kids. I think we can all be winners. I do agree, I hope more Members on the other side will join us in this historic vote for the first time where Congress is going to balance its budget and we are going to give tax relief to families and make it easier for businesses to grow and invest and create more jobs. I want to thank you all for joining me tonight. This has been a great special order. I think this is going to be a very historic week for the American people.

Mr. GUTKNECHT. We cannot afford that, we cannot afford to pay for cataract surgeries which were not performed. Those are the kinds of things we have to stop, and if we can do that, we can save the system. Mr. Speaker, let us talk a little bit about the bigger budget as well, because Medicare is certainly a part of it. One of the things that I have been proud of, and the gentleman from Pennsylvania [Mr. Fox] and I came together as freshmen as part of this historic 104th Congress. The great thing, it seems to me, about this Congress is we have not dodged the bullet, we have not ignored the big problems, we have stepped right up to the plate and started on day one, when we changed the way Congress does business, when we downsized the committee process. The very first bill that we voted on in this Congress was H.R. 1, the Shays Act, which says, Congress is going to abide by the same rules that we impose on everybody else. Mr. Speaker, on every step we have stepped up to the plate. Many times our critics have said, well, you did that, but you will not do this. Well, then it came to the budget and Medicare and changing the way that Congress does business, we have stepped up to the plate, and frankly, I think we as freshmen have to take at least some of the credit for that, because we forced our own leadership, and I feel good. We look at this budget reconciliation and I think if we take it item- by-item, because it is a big package, and it includes, frankly, several things in it that I do not particularly like and I wish I did not have to vote on. However, when you look at the big picture, if you wait until all the lights are on green, you are never going to leave the House. Mr. Speaker, for too long the Congress has basically taken an attitude that well, yes, we would balance the budget, but it would mean that we might have to cut back a little bit on military spending. It might mean that a military base in my district might have to close. I would really like to balance the budget, but I do not want to make any restrictions here. I really want to balance the budget, but I do not want to tackle Medicare head-on. I really want to balance the budget, but I do not want to deal with this problem of Medicaid. I really want to balance the budget, but. We have had all of these ``yes, buts'' for the last 30 years. The good news about this Congress is we are moving ahead despite some of our personal concerns about particular items that are in this budget. So we are stepping up to the plate, we are not allowing the perfect to become the enemy of the good. The bill that we are going to vote on here in the next couple of days, in my opinion, I have to say is not perfect. There are several things in this bill that I wish were not in the bill, but on the other hand, if we wait until all of the lights are on green, we are never going to leave the House, we are never going to get started down the part to a real balanced budget. Mr. Speaker, as the gentleman said earlier, the real benefactor of a balanced budget are not the rich, it is actually middle class and lower middle class people. It is children, it is families. Mr. Speaker, earlier, one of our colleagues, the gentlewoman from Texas [Ms. Jackson-Lee] said something about a family at $30,000 was not going to get this benefit. Well, I am sorry, but I think that is absolutely wrong. If they have three children, they earn $30,000 a year, they are going to get a $1,500 a year tax credit. Now, obviously you are rich, $1,500 may not seem like much. If you earn $30,000 a year, $1,500 is a lot money, and they are going to get that under our tax plan. Mr. Speaker, I want to yield to the gentleman from Pennsylvania in a minute, but I want to talk about that average family that earns $30,000 a year, because there are a heck of a lot of them, not only in my district but all across America. In 1950, that family was paying about 4 percent of their gross income to the Federal Government. This year, they will pay about 24 percent of their gross income; and I do not think anybody in this Congress or anybody in the United States can argue that that family is really better off because they are giving six times as much as they were giving in 1950 to the Federal Government. That is part of what this debate about reforming and downsizing the Federal Government and reducing a family's taxes is about. So when people talk about giving these big tax cuts to the rich, the truth is they are not being very honest with the American people. Because the broad base of this tax cut will go to families, in fact, 74 percent will go to families earning less than $75,000. This is not about a tax cut for the rich. This is about a tax cut for the middle class. It is about helping families. I think it is time we stand up for families here in the United States Congress.