Gil Gutknecht

Mr. GUTKNECHT

Mr. GUTKNECHT. And they demand less of the government. So this is an issue whose time has come. It seems to me that we have a responsibility as Members of Congress to go out and tell this story. And if we do our job of telling the story, as Jefferson said, give the people the truth and the republic will be saved. If we give the people the truth on this subject, then it seems to me that ultimately they will demand that Congress do something like this.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I rise with my friend from Texas tonight to pay a special tribute to some genuine American heroes and one in particular. Last week, I met with the mother, Maria, the mother of Sergeant Juan Calderon, Jr., and I must tell my colleagues, those were very, very difficult times. And they are very difficult times for her, and it was not easy for me. In the book of John, the good shepherd says, ``Greater love has no man than this, that he lay down his life for his friends.'' Sergeant Juan Calderon did exactly that on Monday, August 2. He died in a military hospital while fighting and doing operations in Iraq. Sergeant Calderon was a native of Weslaco, Texas, as the gentleman just preceding me said. He was a resident of Camp Pendleton, California. I had the opportunity to meet with his mother, Maria, who lives in Alden, Minnesota. He has many friends and relatives in the Alden and Albert Lee area. His father, Juan, Sr., still resides in Texas. Calderon's wife of 3 years lives at Camp Pendleton in California and, I regret to say, is expecting their first child. Calderon's awards include the Navy and Marine Corps Achievement Medal, Good Conduct Medal, National Defense Service Medal, the Humanitarian Service Medal and the Sea Service Deployment Ribbon. Juan Calderon's sister said recently in an interview with the Albert Lee Tribune, ``Juan, Jr., was a big comedian. He was full of life. He was excited to actually go to Iraq and serve his country. He was always proud to serve and proud of what he was doing.'' Calderon's father recently received a letter, and reported in the Associated Press was an account where his son had written to him where he said, ``Don't worry about me. You raised me for 19 years. Now it is time for me to do something to repay you.'' I would like to repeat a story, though, because I think sometimes we need to be reminded that what we are doing there is important. Recently, in a story about an Iraqi translator, a woman whose children were taken away from her more than 6 months ago, her husband beat her. Her brother threatened her life while holding a gun to her head, and her own father contracted for her death with a $500,000 reward. All of this because she was assisting the American coalition. She said, ``You, the soldiers and marines, come from America to help my country. I must help you help my people. I see these soldiers that lose their lives for Iraqis. They come into our country and die for us. We must appreciate these guys. I appreciate the Army and the Marines. I love them.'' Ronald Reagan used to say, those who say that we are in a time where there are no heroes, well, they just don't know where to look. On August 2, we lost several heroes. One of them, Sergeant Juan Calderon, Jr., will be mourned. He will be missed. He will not be forgotten. Sergeant Calderon did not die in vain. Freedom must prevail. May Almighty God have mercy on this good and faithful servant. May He continue to bless this country and all who defend her.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Chairman, I thank the gentleman for yielding me time. I want to agree in most part with what the chairman said about this issue. It probably is not the appropriate time to have a big debate about pension policy, but I come to a completely different conclusion. He said this amendment does not belong on this bill. It is a shame that we have to talk about this amendment on this bill, because it really is about pension policy, and it is about age discrimination, and it is about one company in particular. Now, I do disagree with the gentleman from Vermont (Mr. Sanders). I do not think all of these cash balance plans are inherently evil. And, frankly, there have been a number of companies that have converted their pension plans working with the collective bargaining units, working with their employees, giving employees their choice that have done things the right way. So these are not inherently evil things in terms of pension. As we go forward as a society, as people change jobs more often, the idea of a cash balance plan may make some sense; but it does not make sense when you have a system that works the way it did in the IBM employees' case, and that is where they were given no choice, they were given no say. These were people with vested benefits. Let me remind Members about what vested says about things. This is the quotation from Webster's Collegiate Dictionary. It says: ``Fully and unconditionally guaranteed as a legal right, benefit, or privilege.'' Now, these employees showed up for work one day, and they thought they had a pension benefit plan that was vested, that was theirs, that was fully and unconditionally guaranteed; and all of the sudden they found out that day that vested does not mean what they thought it meant. And they finally wound up getting this case before a Federal judge in a Federal court. And the Federal court, and I believe the Federal court in this case was absolutely right, said, wait a second. You cannot do this because the way pensions accrue value is you get most of the benefit. There is sort of an ascending curve in pension benefits, and it is toward the end of your working career when you get the most benefit. So people who had worked for IBM for 20 years and were going to retire in 5 or 6 years, and I will say that IBM under enormous pressure did rescind the original package that they put in front of the employees, they made it a little better for older workers. But it did not change the basic facts. First of all, the employees were given no choice even if they were vested. What it did and the reason why IBM and a lot of other employees wanted to convert to these cash balance plans is because they understood that it was a way to shave off those benefits for older workers in the last 5 or 6 years that they might be working for the company. The bottom line is this: what they were really trying to do is get their hands in the pension funds, because they realized and their actuaries realized that most of these pension funds were overfunded, and they could literally move that money from the pension fund to their bottom line by making these conversions. Companies are now coming and saying, gee whiz, this is going to cost us billions of dollars. Well, yes, it is going to cost billions of dollars because that was the employees' money. It did not belong to the employer. In fact, in some respects pension funds do not belong to the employee or employer. It is money being held in trust. And one company broke that trust, and the Federal courts have come down on them very heavily. I agree with the chairman, we should not have to be offering this amendment today because it is just outrageous for us to think that our own Federal Government would attempt to intervene in a case in which they are not a party to try and overturn a hard-won victory for the employees of IBM. This is an outrage. This is where we, whether Republicans or Democrats, ought to stand together and say it is wrong to steal from pension funds. Support the Gutknecht-Sanders amendment. I come to the floor as a cosponsor of this important amendment. IBM employs about 5000 people in my district and there are close to 5000 IBM retirees across the state of Minnesota. Their employees are also my constituents and I, therefore, have a vested interest in ensuring IBM employees are treated fairly. Fifty years ago a salary was the most important thing to workers. Times have changed. today pensions and other benefits are the main reasons workers choose a particular company. It is important we encourage employers to keep their promises to their employees and not change their pension plans in midstream. When an employee becomes vested in a pension plan he or she expects to receive those benefits. ``Vested'' according to my Webster's Collegiate Dictionary means ``fully and unconditionally guaranteed as a legal right, benefit, or privilege.'' These expected benefits should not be taken away. Unfortunately, IBM did just that. Perhaps IBM received bad business advice, but the method by which IBM went about switching to a cash balance pension plan was far from exemplary. Let me remind you we're not talking about a company in dire fiscal straits. We're talking about a very healthy company. Originally IBM offered only those employees within five years of retirement a choice between the old and new pensions plans. While I am pleased they expanded this choice to cover more employees after the employees rightly expressed their outrage, I believe the court case brought against IBM should proceed without intervention by the U.S. Treasury Department. I wish IBM had adopted models used by other companies when they switched to alternatives to traditional defined benefit pension plans. For example, Honeywell, another company with many employees in Minnesota, across America, and around the world, switched to a pension equity plan in 2000. Honeywell offered all their employees a choice between remaining in the old plan and switching to the new plan. This is the model of how I feel companies should proceed in this area. The Director of Benefits for Eaton Corporation, Ellen Collier, testified in front of the House Education and Workforce Committee this year that her company has given employees the choice between two retirement plans. Motorola, Deloitte & Touche, Northern States Power, Eastman Kodak and many other companies have all given their employees choice between old and new plans. I understand that cash balance plans are a reality of the modern world and we should not discourage companies from offering them. I, however, do feel there are right and wrong ways to go about converting from one plan to another. IBM handled this inappropriately and I believe the court case should proceed without federal government involvement. This amendment overwhelmingly passed the House last year by a vote of 258 to 160 with strong support from both sides of the aisle. It is supported by the AARP. I urge my colleagues to support the Sanders/ Gutknecht Amendment. Hon. Gil Gutknecht, House of Representatives, Washington, DC. Dear Representative Gutknecht: AARP supports the Gutknecht- Sanders amendment to the Transportation, Treasury and Independent Agencies Appropriations Act for Fiscal Year (FY) 2005 to ensure that the Internal Revenue Service (IRS) does not use any funds in contravention of current law prohibitions on age discrimination in pension plan funds and to specifically prohibit the IRS from issuing regulations or implementing any other measure that would conflict with the July 31, 2003, federal court ruling in Kathi Cooper, et al. v. IBM Personal Pension Plan, et. al. AARP has long been concerned with the legal basis for the hybrid cash balance formula and the significant age discriminatory issues that arise when employees convert defined benefit pension plans to a cash balance formula. We believe that a careful review of the legal distinction between defined benefit and defined contribution plans such as was conducted by the federal court in Cooper makes clear that the most common designs for hybrid cash balance plans do not fit within the current legal framework of the Internal Revenue Code (IRC), the Age Discrimination in Employment Act (ADEA), and the Employee Retirement Income Security Act (ERISA). As the court concluded in Cooper, the cash balance plan formula discriminates against older workers, and older workers are particularly disadvantaged when an employer converts from a defined benefit pension plan to a cash balance plan. These longer-term employees have given up wages and accepted a lower pension in the early years of their employment in exchange for the larger future benefits from their employer's traditional defined benefit pension plan. Without adequate protection, older workers will now lose some of the benefits they were promised. Older workers generally have less time to accumulate benefits under a new cash balance formula, have a harder time leaving their current job if compensation and benefits are cut, will have fewer prospects of finding a new job, and are less able to adjust to the changes that may dramatically reduce their retirement security (for example, they have less time to adjust by increasing their savings for retirement). In September 1999, the IRS imposed a moratorium on corporate plans that convert traditional defined benefit plans to a cash balance formula so the agency could review the matter. The moratorium suspended consideration of approximately 300 pending applications submitted by corporations to convert an existing plan to a cash balance formula. The Treasury initially proposed regulations in December 2002 that would have lifted the moratorium and permitted corporations to establish cash balance plans. However, the IRS withdrew the proposed regulations in July of this year. In its FY 2005 budget, the Administration proposed legislation that would have addressed some of the concerns related to cash balance plan conversions. AARP was pleased that the legislative proposal recognized the problem with so called ``wear-away'' and recommended a ban on the wear-away of any benefits at any time after a cash balance plan conversion. In recognition of the transition problem faced by workers, the Administration's proposal also included a five- year ``hold harmless'' period after each cash balance plan conversion. While the proposal is a step in the right direction, it does not go far enough. More can be done to ensure that older workers are adequately protected from the impact of a ``pension pay cut'' in any conversion to a cash balance plan. In fact, many of the recent pension conversions--recognizing the harm to older workers--have provided older and longer- service workers with more generous transition relief, including a choice to remain in the old plan rather than move to the new cash balance plan. This is further confirmation that business can and should do the right thing for their older, longer-service employees. AARP believes that Treasury should not take any action that would encourage companies to change their pension plans in a manner that is contrary to the age discrimination laws and the federal court ruling. Rather, Congress should act to ensure that older workers are protected in any cash balance conversion. We urge adoption of this amendment. Thank you for your leadership and dedication to strengthening the private pension system and protecting the pension benefits of workers. Please let me know, or have your staff call Frank Toohey (202-434-3760) of our Federal Affairs office, if we can be of further assistance. Sincerely, Michael Naylor, Director of Advocacy.

Mr. GUTKNECHT. Mr. Chairman, I hate to rise and oppose two of my good friends, but I thank the gentleman from Texas (Mr. Sam Johnson), who has just given a speech; and I just want to contradict a couple of things he said. First of all, if the IBM company had given IBMers all they wanted, they would not be in court; and if there were not age discrimination, they would not have won; and if it were not for the IRS and the Department of Treasury wanting to get involved in this case, we would not have to offer this amendment. This is wrong. As my friend said, this is not a matter of right versus left. It is right versus wrong. It is wrong for employers to steal from pension funds. It is that simple. The reason we are here today is to try and keep this administration from doing something incredibly stupid, and that is, getting involved in this case which the workers have already won, and they are right, because it is the age discrimination. Cash balance plans are not intrinsically evil. I said that earlier; but when you do it in such a way so that you shave off the end where people really accrue benefits, the courts have correctly ruled.

Mr. GUTKNECHT. Mr. Chairman, I rise in opposition to the Norton amendment. Just a few minutes ago, I was here on the House floor arguing about a pension issue because employees were not given a choice. The essence of the Norton amendment is to not give Federal employees this choice. The idea that Federal employees and public employees in general do not want to have the choice of a health savings account is simply not true. It may not work as we think it will. I have heard of the study in Idaho, but I have also heard studies from private employers that these programs provide as good or better quality health care, and they do something we must do, they save money. But do not take my word for it. Public employees in the State of Minnesota have studied these, and they want access. I have letters, and I will submit them for the Record, from the Minnesota Teamsters Local 320, Minneapolis Police Relief Association, Minnesota Firefighters' Relief Association, Minnesota State Retirement System and from the Public Employees Retirement Association in the State of Minnesota representing over a quarter of a million people in Minnesota, public employees, who want to have access to health savings accounts. Will they work as well as some people think they will, we do not know. But putting this as part of the Federal Employees Health Benefits Program is one way to find out. The Norton amendment is one small step in chipping away at the option that Federal employees ought to have to find out whether health savings accounts work as well as many of us believe. Public employees from the State of Minnesota have studied this issue. They want to have that opportunity. We should not deny that opportunity for Federal employees. Minnesota Teamsters Public & Law Enforcement Employees' Union, Local No. 320, Minneapolis, MN, July 1, 2004. Congressman Gil Gutknecht, Washington, DC. Dear Congressman Gutknecht: We are writing to you seeking your continued leadership in addressing Health Savings Accounts (HSA's). As you are well aware, in the 2003 Medicare Act, individuals over the age of 65 were excluded from participating in the newly created HSA's. It is important that not only do the changes to the Medicare Reform Act of 2003 include participation for those over age 65 in the HSA's but the language which ties Medicare ineligibility to HSA participation must also be removed. HSA participation would provide a very modest way in which our over 65 retiree's could tax defer some of their financial resources. Our public safety retirees put in their time and duty and had planned on living out their retirement years with not having to face financial difficulties. However, health care costs for those over 65 years of age have increased dramatically over the last decade. Supplemental insurance to Medicare can cost a retired couple up to $8,000 per year. We strongly encourage you to work with other members of Congress and the Bush Administration to correct his discrimination against our retirees. Again, thank you for all your support and past leadership in the HSA's. Please continue to assist us in this battle for affordable health care. Sincerely, Sue Mauren, Secretary-Treasurer, Teamsters Local #320.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Chairman, the gentleman from Virginia, whose opinion I respect on many issues, I think is just wrong on this. He mentioned a few minutes ago that he knows of no other Federal employees who would like to have this option. I cannot speak for all of the Federal employees, but I can speak for over a quarter of a million Minnesota public employee union members who want to have access to health savings accounts. Will they all choose them? I do not know. But I have letters here from the Minneapolis Police Relief Association thanking me and encouraging me to make certain that they have access to health savings accounts. I have a letter here from Teamsters Local 320 that represents public and law enforcement employees in the State of Minnesota both at the State and local level. They are encouraging me to make certain that they have access to health savings accounts. I have a letter here from the Minneapolis Firefighters' Relief Association. They want access to health savings accounts. I have a letter here from the Public Employees Retirement Association of Minnesota representing over 150,000 Minnesotans who want access to health savings accounts. I have a letter here from the Minnesota State Retirement System. Mr. Chairman, what we have here is a conflict of visions. This is an important and very critical debate in where we go with health care reform. The question is whether or not we are smart enough to make all of these decisions on behalf of these folks or if we allow them to make more decisions on their own behalf. I can only say that we have gone out and visited with representatives of public employee unions in the State of Minnesota, we have shown them the facts, we have shown them how these programs work, we have allowed them to make the decision, and the answer is almost unanimous, they at least want to have access to this option. No one says that Federal employees or State employees have to choose this option. But if the Moran amendment passes, you will take that option away from them. Please do not do that. Please listen to the employees themselves. Minneapolis Police Relief Association, Minneapolis, MN, June 30, 2004. Congressman Gil Gutknecht, Cannon House Office Building, Washington, DC. Dear Congressman Gutknecht: We are writing to you seeking your continued leadership in addressing Health Savings Accounts (HSA's). As you are well aware, in the 2003 Medicare Act, individuals over the age of 65 were excluded from participating in the newly created HSA's. It is important that not only do the changes to the Medicare Reform Act of 2003 include participation for those over age 65 in the HSA's but the language which ties Medicare ineligibility to HSA participation must also be removed. HSA participation would provide a very modest way in which our over 65 retiree's could tax defer some of their financial resources. Our public safety retirees put in their time and duty and had planned on living out their retirement years with not having to face financial difficulties. However, health care costs for those over 65 years of age have increased dramatically over the last decade. Supplemental insurance to Medicare can cost a retired couple up to $8,000 per year. We strongly encourage you to work with other members of Congress and the Bush Administration to correct his discrimination against our retirees. Again, thank you for all your support and past leadership in the HSA's. Please continue to assist us in this battle for affordable health care. Sincerely, Richard M. Nelson, Vice President.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I would like to congratulate Mr. Upton for crafting this legislation in such a way that it protects the rights of consumers, without obstructing legitimate business endeavors. I bring a unique perspective to this debate. I am a real estate auctioneer by trade. And for those auctioneers, it is common practice to notify people who have bid at previous auctions about upcoming auction sales. This is particularly the case if the person is interested in a certain type of item that will be sold at a subsequent auction. Let me provide a real world example. A person registers to bid at an auction of 18th century antique furniture. A few months after that auction, another sale is scheduled that includes 18th century antique furniture. It is common practice for auctioneers to notify those individuals again that there is an upcoming auction, and sending such notices by fax is a very cost effective means of doing this. H.R. 4600, the ``Junk Fax Prevention Act of 2004,'' restores the Federal Communication Commission's (FCC) interpretation of the EBR or ``established business relationship'' as it existed prior to January 1, 2003. Under that FCC interpretation, incorporated by reference in the bill, the term ``established business relationship'' means ``a prior or existing relationship formed by a voluntary two-way communication between a person or entity and a residential subscriber--and the bill expands that to also include business subscribers--with or without consideration, on the basis of an inquiry, application, purchase or transaction by the residential subscriber regarding products or services offered by such person or entity, which relationship has not been previously terminated by either party.'' As such, with respect to the example I referenced above, H.R. 4600 would permit an auctioneer to send a notice of an upcoming auction by fax to a person who had registered for and/or bid at a prior auction run by that auctioneer. I support this outcome, and I also agree that if a party wishes to stop receiving such notifications they should be allowed to do so. I am pleased that this legislation contains such ``opt-out'' language. I support this legislation and believe that such measures which aim to reduce the onslaught of faxes, e-mails, etc., are good policy for consumers. In addition, it is important that the record highlights the unique nature of the auction business and its importance to a variety of industries and especially rural communities.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I certainly appreciate that the U.S. Trade Representative has addressed the important concerns related to agriculture in this free trade agreement. Agriculture is important to my district and the State of Minnesota. However, I cannot support the United States-Australia Free Trade Implementation Act due to the provisions related to pharmaceuticals that were included in this agreement. On July 25, 2003, 242 of my colleagues joined me in supporting my legislation to implement a true, market-based system whereby consumers could access safe and affordable prescription drugs. I find it interesting that a free trade agreement would blatantly run counter to legislation that would, in effect, establish a market-based arena for prescription drugs. Proponents of this language have said that it is practically meaningless because Australian law already bans the export of subsidized prescription drugs. Why then, do we feel the need to include such a meaningless provision in the trade agreement? Let me illustrate why this language is not meaningless. In fact, it attempts to hamstring efforts to provide affordable prescription drugs for seniors, the uninsured and consumers who continue to pay 30 to 300 percent more for prescription drugs than anyone else. In 2000, the MEDS Act included a provision that prohibited pharmaceutical manufacturers from entering into a contract or agreement if they included any language that would prevent the sale or distribution of prescription drugs. I have attached this language to be included in the Record, because it no longer exists in U.S. law. I discovered recently that the Medicare bill included a hidden provision which stripped this important language. This is outrageous. So while proponents of this agreement claim that this language simply restates current law, current law is the result of hidden maneuvers without the knowledge of the 242 Members who support open markets for prescription drugs. And who exactly provided the counsel to USTR while they drafted this supposedly innocuous language? Twenty-five members of the advisory committee advised the USTR on intellectual property rights regarding prescription drugs. Of those 25 members, at least 15 have interests in the pharmaceutical industry. There was not one senior, consumer or market access advocate on the panel. With this language, when prescription drug market access legislation becomes law, and I believe it will, we will be in breach of the free trade agreement. The Australian government can enter into a dispute settlement case contending the law. Many have argued that this is not a likely scenario. It seems equally unlikely that American taxpayers would be forced to subsidize the research and development of prescription drugs for consumers around the world and still pay the world's highest prices, but we do. I sat down with USTR representatives to give them a chance to tell their side of the story. When I asked who requested the prescription drug language, they had no answer. No one but the two negotiators were in the room and no one was taking notes. That seems a poor way to negotiate a free, fair and open agreement for trade. And it doesn't pass the smell test to me. The free trade agreement could set a dangerous precedent that FDA--or other opponents of open markets for prescription drugs--will use to prevent American consumers access to affordable prescription drugs. I have always supported free and fair trade--this agreement is neither free nor fair concerning prescription drugs.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, high performance computing has become very important to the competitiveness of this country. Supercomputers help us solve some of the most critical scientific, business, and homeland security problems in this nation. I would like to highlight what the citizens in my district working at IBM are doing to advance high performance computing. I recently visited the Rochester, MN facility of IBM in my district. There I learned about IBM's newest supercomputer, Blue Gene/L. Blue Gene is an IBM project to build a new family of supercomputers optimized for bandwidth, scalability, and the ability to handle large amounts of data while consuming a fraction of the power and floor space required by today's fastest systems. IBMers in my district are exploring how to harness Blue Gene's massive computing power to model the folding of human proteins. This technique is expected to give medical researchers better understanding of diseases and potential cures. Two prototypes of IBM's Blue Gene/L now rank #4 and #8 on the latest list of the Top 500 fastest supercomputers. When Blue Gene/L is finished, it is expected to rank #1 on the Top 500 list next year, overtaking the Japan's Earth Simulator. The citizens of my district and IBM take their commitment to innovation, competitiveness, and the advancement of high performance computing in this nation very seriously. The most advanced supercomputing skills in the world are right here in the United States--and in my district. With the leadership of IBM and the Minnesotans it employs, the innovative advances keeping our county competitive will remain firmly rooted in the U.S.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Chairman, as the House passes the FY2005 Energy and Water Development appropriations bill today, I would like to draw attention to the Lewis & Clark Rural Water project. While Minnesota has thousands of lakes, southwest Minnesota, in my district, is described as the place the glaciers missed. In fact, Rock County the southwestern most county in Minnesota, it the only county in my home state that does not have a single lake. To deal with this problem, sixteen communities and five rural water systems joined together in 1990 to create the non-profit Lewis & Clark Rural Water System. This water system project, when completed, will cover an area of 5,000 square miles in southwest Minnesota, northwest Iowa, and southeast South Dakota. The twenty-one members of the Lewis & Clark Rural Water System serve a population of over 200,000 people. Construction on the Lewis & Clark Rural Water Project is underway and moving ahead. The groundbreaking and first official construction took place in August 2003. A large diameter casing and two wells have been installed and the first segment of pipe was installed on June 14, 2004. Another contract, for roughly $15 million, will be awarded in July. This contract, using funds appropriated in FY2004, will complete the Raw Water Pipeline, which will take the untreated water from the well fields to the water treatment plant. This important project will greatly improve quality of life and enhance economic opportunity in my district. Over 100 rural families in southwest Minnesota are on a waiting list to receive water from Lincoln-Pipestone Rural Water (L-PRWS), one of the members of Lewis & Clark. Until the Lewis & Clark project in this area is completed, there will not be enough water for these families. Economic development will be enhanced by allowing communities to provide additional water to expanding industries and value-added agriculture, thereby preserving jobs, as well as attracting new industries. One community in my district, Worthington, has actually had to turn away inquiries from companies considering locating their because of the lack of water. This is a serious problem and I applaud the dedication of those individuals who have worked long and hard to get this project going. In the 108th Congress I have made the Lewis & Clark project a priority of mine and submitted a request for $35 million dollars. Included in this appropriations bill is $17.5 million for the Lewis & Clark project. While this funding is less than the amount for which we had hoped, it is a good start, and I applaud the President for making this a priority in his budget request. Rural Minnesota, South Dakota, and Iowa need the Lewis & Clark Rural Water Project and I am excited construction has begun. For the sake of these communities I urge Congress to continue to make this project a priority.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman for yielding me this time. This is an important debate, Mr. Speaker, so I hope that Members are paying attention. The real power of the purse rests with us here, in the people's House. I am proud of what we did through most of the 1990s. When we came here, when I was elected in 1994 and came here in the spring of 1995, I remember we had some meetings with some of the economists and people from the Congressional Budget Office. And we have to go back and remember what was happening in America. We were running deficits every year of $250 billion and more, and we can all point fingers and blame this and blame that; but at the end of the day, we were spending more than the taxpayers were sending in, and America wanted us to do something about this. At one of the meetings we were at, we had some economists saying, if Congress does not get serious about balancing the Federal budget, that by the time my children got to be my age they would be paying an effective tax rate to the Federal Government of over 80 percent, just to pay the interest on the national debt. Now, I come from a rural district, and I think most folks from rural communities understand this, because it really has been part of the rural ethic, particularly those who are farm families, to pay off the mortgage and leave the kids the farm. What we have been doing is we were literally selling the farm and leaving our kids the mortgage. We knew that it was not just bad public policy; it was fundamentally immoral. So what we did is we began to limit the growth in Federal spending, and I am proud to report that from 1995 until the year 2000, the Federal budget was growing at a slower rate than the average family budget. That, combined with a fairly strong economy, we literally went from a $250 billion shortfall every year to a $250 billion surplus. In fact, just 3 years ago, the Congressional Budget Office told us that we could look forward to surpluses in the Federal Treasury over the next 10 years of $5.4 trillion. Now, that same Congressional Budget Office today is telling us that we can look forward to deficits of $1.6 trillion over the next 10 years. The only thing we can really say about the Congressional Budget Office's forecasts is that they are both wrong. What we do know that is right is that over the last several years we have allowed Federal spending to grow at a rate double what it grew through most of the 1990s. And part of the reason that happened is we allowed some of the budgetary rules to expire, the things that control the growth in Federal spending. There was a farmer who told me several years ago, we were talking about the deficit, and he said, you know, the problem with you guys in Washington is you do not quite get it. The problem is not that we are not sending enough money to Washington. The problem is you spend it faster than we send it in. He probably expressed it more accurately and more simply than any of us would like to admit. What we want to do today, and this is an important event and these are important votes, we want to bring back some of the rules that controlled Congress with regard to spending. One of them is PAYGO. That means if you want to have a new program, you have to figure out a way to pay for it. And I do not think that is too much to ask. The other is setting up some spending caps. Let me give some ideas why I think that is important. Over the last several years, we have passed some pretty good budgets, some very tough budgets here in the House of Representatives. Back in fiscal year 2002, for example, our budget resolution which we passed here in the House called for spending $661 billion in what we call discretionary spending. But by the time we were done negotiating with the Senate, we ended up spending $734.6 billion. Well, in the next year we said in the House budget resolution that we would agree to spend $759 billion in discretionary spending. But before the year was over, we actually spent $849 billion. Last year, our budget resolution called for spending $784.5 billion. But when all the numbers were in and the spending was done and the conference committees at last had concluded, the number actually was $873 billion. Pogo was right. We have met the enemy, and he is us. I think there was a certain amount of hubris that, well, we have done a pretty good job of balancing the budget over the 5- or 6-year period. We had actually paid down over a half trillion dollars of publicly held debt, and I think we began to think we did not need these budget rules any more. I am here to say that I think we were wrong, and we have to get back to some of those rules. This is a very important debate. I support this rule. I know there will be people who will say, well, we did not get to offer our amendment, or this amendment was not made in order. But I think we are going to have a very vigorous debate over the next several hours on the rule and the bill. Mr. Speaker, I hope later I will have a chance to visit more about the rule and the bill.

Mr. GUTKNECHT. Mr. Speaker, I want to respond to some of the things that our colleague the gentleman from South Carolina has just said. Much of what he said, I do not disagree with. But there is something I think we need to clarify for all of the Members. Even if we had a balanced budget last year and this year, we would have to raise the debt ceiling. That is something I think it is hard for many Members and frankly I think most Americans. They wonder how in the world can that be. It is kind of a complicated thing to explain but even in a very strong economy with surpluses, we would probably have to raise the debt ceiling. The reason is this. When money comes into the Social Security trust fund, there are only two things they can do. They can either pay benefits or they can buy government bonds. When they buy government bonds they in effect drive up the debt. I know that is hard for people to understand, so yes, we are going to have to raise the debt ceiling, but even if we were balancing the budget we would have to do that. I would also like to at least remind Members that things did change a lot in this country on September 11, 2001. I think we all know that. We all have to be cognizant of that and it has changed the priorities of how we spend money. Is that an excuse to allow other Federal spending to be going up? No. And have we been a little too profligate with the Defense Department and homeland security? My opinion would be yes. We have allowed our emotions to get the better of us and we have just said, we will spend more money and maybe we will be safer. I am not sure that is the answer. I am not sure that having 50 guards at every airport entrance makes us all that much safer and that is an argument and a debate we should have. The debate today is how much are we going to allow Federal spending to go up, and is there really a good reason to allow the Federal budget to grow at a rate twice the rate of the average family budget? The numbers we were talking about, from 1995 until 2000, the Federal budget went up at an average rate of about 3.2 percent. Since that time, we have allowed the Federal budget to grow at a rate of 6.4 percent. That assumes that we will enforce the numbers that we passed in this year's House budget resolution and that is really what we are debating today; that is, it is one thing to pass a budget, it is another thing to make certain that we enforce the budget. There will be two great issues we are going to discuss today that I think are important. First of all, are we going to enforce the budgets that we pass here in the House of Representatives? We are the keepers of the public purse. I think we ought to enforce that budget. The second thing we are going to debate today is changing the process by which we derive a budget. The process today all leans towards more spending. In fact, I think the Wall Street Journal did a beautiful editorial last week which really underscored that point. Everything we do here, and frankly that is what we do, is we spend the public's money, but all of the rules today tend to make it easier to spend more money. What we want to do is level the rules so that at least we have a counterbalance to all of that pressure to spend more money. I might just say this. We all have different reasons, and some say it is the tax cuts, but I would remind people that we cut taxes in almost every year during the 1990s, and we did it under PAYGO and spending cap rules. It can be done. We just have to find offsets for those. And we did. In fact, most of the supplemental spending bills that we passed we found offsets for those. It can be done. It means making some tough choices, but I always remind my colleagues, our constituents did not send us here just to make the easy choices. They sent us here to make tough choices. We are going to make some tough choices today in terms of whether we really mean what we say about holding the line on Federal spending and whether or not we are going to level the playing field in terms of the rules by which we make our budgets. This is an important debate. The debate about raising the debt ceiling is clearly an important debate, but I think we have to be clear. Even if we had a balanced budget, because of the surpluses coming in in the Social Security trust fund, we would still have to raise the debt ceiling.

Mr. GUTKNECHT. Mr. Speaker, I would like to respond to some of the things that were just said. First of all, I happen to believe that PAYGO rules ought to apply to tax cuts, too. But this is all about the politics of the possible, and we cannot get that done this year. So we can take this step this year, this day to begin to constrain Federal spending. Let me also respond to something else. Our friends on the left cannot have it both ways. They cannot say, well, we need to invest in this program and that program and this program for people, and if we put more money into education, the argument is we will get it back ten- fold, but we do not want to pay any interest on that money. We cannot have it both ways. Fifty-five percent of what we will spend this year will be for what are called entitlement programs, and many of those entitlement programs were sold as investments in people. Now we are being told, but we get no return on that investment. This is just an expenditure, and it is lost forever. So as we debate this, I know that people are going to come at this from different perspectives, but let us try to at least be honest with ourselves. We have a system right now, and the rules and the way the system works encourages more and more spending. The debate today simply is about this: are we going to enforce the budgets that we pass here in the House and are we going to change the rules to give the taxpayers an even break? That is what the debate is about today. We can debate all of those other issues some other day. But we need support on both sides of the aisle to make certain that the American people understand that we are going to enforce the budgets we pass in the House. We are the keepers of the public purse. We are going to enforce those budgets, and we are going to begin to amend the rules to make it more difficult to spend more than we take in.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Chairman, Members, I have been listening to this debate, and I would like to distill as best I can the arguments against this bill that we are debating today. The first one seems to be that it is not tough enough, that it does not include the ability for immediate tax increases. And if that is your reason, that is fine. Go ahead and vote against this. The other one I think is much more complicated. I want to talk about that for a moment, and that is the separation-of-powers argument in the Constitution. Members, nothing in this bill today changes the constitutional powers that we in the Congress and the executive branch have. The President of the United States would still have the power to veto any appropriation bill or the budget bill. It simply brings the President and the Congress, both bodies in the Congress, together earlier so that we work on a common blueprint. Imagine, if you will, just for a moment in this great structure, if we had the masons using one blueprint, and we had the carpenters using another blueprint, and the iron workers using a third blueprint. We would not wind up with this building. What we are saying is we think everybody ought to be in there making the same blueprint from the beginning. That makes sense to every one of our constituents. Members, look at what has happened over the last several years. From 1995 to 2000, Federal spending grew at an average rate of 3.2 percent. Since we let spending caps and PAYGO expire, that number has doubled to 6.4 percent. This is a modest attempt to get this Congress and this Federal Government back on an even keel. I think this makes a lot of sense. It makes sense to me. It makes sense to the people that we represent. It makes sense to Alan Greenspan. But, Members, if you are going to vote against this today, please understand you will be asked about it. Because this vote is going to be scored by the American Conservative Union, the Americans for Tax Reform, Citizens for a Sound Economy, Council for the Citizens Against Government Waste, and the National Taxpayers' Union. People are paying attention to this vote. They want us to have a solid budget. They want us to enforce it. They want us to get back to fiscal sanity, and that begins today.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Chairman, one of my favorite Rodney Dangerfield routines is when he comes home one night and his wife is packing, and he asked her, ``Are you leaving?'' She said, ``Yes.'' He looked at her and said, ``Is there another man?'' She said, ``There must be.'' When you look at the system we have today, and I have listened to the debate so far, people are in a sense saying the system is broken, but we cannot fix it. The system is broken, and if you look at the way the system works, it guarantees that we will overspend. Now, earlier today I went through the numbers, and I have done this several times, what we passed in our budget resolution and what we ended up spending. And a lot of people are walking around saying, gee, I do not know how that happened. Well, here is how it happens. Here is the dirty little secret. What happens is, we over here in the House might low-ball certain things and high-ball other things, and the folks over in the Senate will low-ball certain things and high-ball other things, and what we wind up doing with a lot of these things, and we all know this happens, is we go to conference at one level and the Senate is at another level and we end up compromising at another level beyond the other 2, and the reason is we are all working off different blueprints. We have what the President proposes and what he ultimately will agree to, and then what the House proposes and what the Senate proposes. What we are saying with this amendment is, and I think it is pretty simple: let us get all of the players on the same page early in the process. Some people say, well, that will take away the constitutional powers of the House. If you stop and think about it, I say to my colleagues, that is ludicrous. The House will still maintain the power of the purse, and the President will still have that one arrow in his quiver called the veto. But we are going to try to bring everybody to the table early so that we are all using the same blueprint, so that at the end of the day, we build a house we can all be proud of. Is there a better way? There must be. Now, maybe this is not perfect, but I think this would be a giant step in the right direction. Let me remind my colleagues, I think most of our constituents think that that is the way the system is today. When we explain to them that the budget resolution does not have the power of law, they look at us with a blank look. We ought to pass this amendment 300 to nothing. Let me begin with an analogy that might explain the purpose of this amendment--If you're constructing a building and the steel workers, architects and masons are all working with a different blueprint, you're bound to build one ugly building. But, that's exactly what's happening with the budget process. The House, Senate and Administration are all using a different blueprint, and the result is a pretty ugly budget. The Joint Budget Resolution is very basic but does one extremely important thing--forces both Congress and President to stay within the budget resolution levels. The budget would be signed by the President into law. Another vital aspect of this amendment is that Congress and the Administration would be engaged and working on the same priorities from day one. This amendment would go a long way to eliminating the practice of waiving budget points of order and large omnibus spending bills. A law cannot be waived or broken. When Congress allowed our spending caps and PAYGO expire, spending rose. Numbers are stubborn things and let me provide some history . . . Discretionary Spending in FY 2002 Budget Resolution was $661.3 billion. Congress spent $734.6 billion. Discretionary Spending in FY 2003 Budget Resolution was $759 billion. Congress spent $849.1 billion. Discretionary Spending FY 2004 Budget Resolution was $784.5 billion. Congress spent $873.1 billion. The Joint Budget Resolution is not a radical idea--it's common sense. That is why grassroots organizations like Americans for Tax Reform, American Conservative Union, Citizens Against Government Waste, Citizens for a Sound Economy and the National Taxpayers Union have endorsed this amendment. We need a budget that will be enforced and that is why I have offered this amendment to restore fiscal sanity back to the federal budget process. We need to protect the taxpayers from Congress' bad spending habits. If you believe that we need to control spending and put common sense back into the budget process--I urge your support on the Ryan/ Gutknecht Amendment. From 1995--2000, overall spending has increased by an average of 3.2% (House Budget Committee). Since 2001, overall spending has increased by an average of 6.4% (House Budget Committee). Since 2001, discretionary spending has increased on average of 9.7% (House Budget Committee). Sine 9-11 the weak economy has been the #1 factor contributing to our deficits. As our economy recovered, spending increased substantially, becoming the #2 factor contributing to our deficits (Joint Economic Committee). Post 9-11, spending grew by 11% (2001-2003), which represents the largest two-year increase in nearly a decade. This does not include defense and 9-11 costs (Heritage Foundation). Mandatory spending now represents 55% of the entire federal budget-- this does not include the recently enacted medicare bill (House Budget Committee). The federal budget now totals more than $20,000 per household--the first time since WWII (Heritage Foundation). ``The progress in the 1990s in reducing budget deficits might have been elusive were it not for the budget rules that worked far better than many skeptics, myself included, had expected.'' (Alan Greenspan, House Budget Committee, September 2002). ``Now is not the time to abandon the discipline and structure that worked so well for so long. The framework enacted in the Budget Enforcement Act of 1990 . . . must be preserved.'' (Alan Greenspan, House Budget Committee, September 2002). ``I would like to see the restoration of PAYGO and discretionary caps which essentially will restrain the expansion of the deficit and indeed, ultimately contain it. It did that back in the early '90s and I thought it was quite and surprisingly successful in restraining what had been a budget which had gotten out of kilter.'' (Alan Greenspan, House Budget Committee, July 2003). ``I do believe that tax cuts, if properly constructed, can be a significant factor in long-term economic growth, but it obviously requires that if you cut taxes and maintain a viable long-term budget deficit, or surplus policy, you have to address spending as well.'' (Alan Greenspan, House Budget Committee, July 2003). ``We don't have a trillion-dollar debt because we haven't taxed enough--we have a trillion dollar debt because we spend too much.'' (President Ronald Reagan, 1982).

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, first I would like to submit a statement for the Record concerning a tremendous accomplishment announced today by the Department of Agriculture. For the first time now in 20 years, all paper food stamps are being replaced with electronic benefits. Mr. Speaker, today, I joined Secretary Veneman at a ceremony to announce the completion of a decades-old project. Thanks to the commitment of Congress, the U.S. Department of Agriculture's Food and Nutrition Service, financial institutions, retail outlets, and State and local agencies, our Nation's Food Stamp Program now issues benefits completely electronically. Through Electronic Benefits Transfer (EBT), the program moves into the 21st century, allowing over 20 million food stamp recipients to shop at over 145,000 businesses more efficiently than ever. The Food Stamp Program now runs completely on an electronic-based system. Using the same technology as most debit card systems, recipients carry a plastic card secured with a Personal Identification Number. Service is improved for clients and accountability for purchases is ensured. In addition, it reduces administrative costs allowing more funds to be channeled into food purchases rather than printing, shipping, counting, endorsing, and destroying coupons. EBT began as a demonstration project in 1984 in Reading, PA. However, it wasn't until the early 90s that the project expanded into Maryland, Ohio, New Mexico, and my home State of Minnesota. Due to high demand by the States, an EBT Task Force was established in 1993 and published an article in 1994 demonstrating the cost-effectiveness of the program modification. This article proved pivotal, and in 1996 Congress passed the Personal Responsibility Work Opportunity Reconciliation Act, which mandated that all States implement EBT by October of 2002. This month marks a tremendous achievement. As of June 15, every State in the Nation has finally implemented EBT. It took the work of thousands of Federal, State, and local staff along with numerous contractors, financial institutions, retailers, and the advocacy community. Thanks to the new electronic system, the Food Stamp Program error rate is the lowest in the history of the program. It has already helped to eliminate much of the theft, fraud and abuse related to paper coupons. EBT brings the program into the 21st century with new mainstream technology. Now, eligible recipients can readily patronize authorized stores for nutritional purposes. None of this could have been done without teamwork and the genuine care of so many individual and organizations. Today our Nation's hungry can more efficiently receive the nutrition assistance. I am proud to recognize and congratulate not only the USDA and Food and Nutrition Service, but all of the people, agencies, and businesses as well that have brought the Food Stamp Program into a new era. Mr. Speaker, I rise tonight to talk about the Federal budget and what has happened over the last several years in terms of Federal spending. I know that there are others of my colleagues that are here tonight that came in the election of 1994. When we first came here, we were told by the Congressional Budget Office and others that if we did not get serious about balancing this Federal budget that by the time my children got to be my age, my children could be facing a Federal tax rate of over 80 percent just to pay the interest on the national debt. I am happy to report that during the first 5 years of the Republican- led Congress, we dramatically reduced the rate of growth of spending here in Washington. From 1995 until the year 2000, overall spending here at the Federal level increased at an average rate of only 3.2 percent. That is at a time when the average family budget was going up about 3.5 percent. So the good news is we literally controlled the Federal budget so it was growing at a slower rate than the average family budget. The net result is we went from roughly $250 billion deficits to $250 billion surpluses. That is the good news. Starting in about the year 2000, and certainly accelerating in 2001, for a whole lot of reasons, and I will talk about those in a minute, Federal spending began to explode. We started to return to some of the old bad habits. I think in some respects it happened in part because we had the surpluses. It is much easier to say ``no'' to new spending when you have a deficit. When you have extra money in the bank, everybody comes in and says, now we can finally afford to pay for this program or to fully fund that program. So spending began to increase. As I mentioned, from 1995 until 2000, Federal spending grew at a rate of about 3.2 percent. Since 2001, as you can see in this chart, things began to accelerate. Assuming that we can live with the budget numbers that we have passed here in the House with our blueprint, Federal spending between 2001 and today will grow at a rate of 6.4 percent: 3.2 percent, 6.4 percent. I do not want to bore people with statistics; but in simple terms, we have allowed Federal spending to grow at double the rate it grew through much of the 1990s, and it really is time for us to get serious; to get back on a plan not only to balance the budget, but ultimately to pay down additional parts of that huge Federal debt. Back in the Midwest, we know that, generally speaking, there is almost an ethic among farmers that you pay off the mortgage and you leave the kids the farm. Well, unfortunately, we are back to the business of selling the farm and leaving our kids the mortgage. One of the answers is to go back to what we did back in the 1990s, and that is something we call PAYGO and spending caps. A lot of people were skeptical in terms of whether they would work. Even Chairman Alan Greenspan was skeptical in terms of whether or not long-term spending caps and PAYGO would work. But I would like to read some quotes from Chairman Greenspan, the first of which was from the House Committee on the Budget testimony, September of 2002. He said, ``Restoring fiscal discipline must be a high priority. The progress of the 1990s in reducing budget deficits might have been elusive were it not for the budget rules that worked far better than many skeptics, myself included, had expected. ``Now is not the time to abandon the discipline and the structure that worked so well for so long. The framework enacted in the Budget Enforcement Act of 1990 must be preserved.'' Those are pretty strong words for Chairman Greenspan. He went on to say even more. In fact, in response to a question that I made in the House Committee on the Budget about spending caps and PAYGO, he said, specifically in July of 2003, ``I would like to see the restoration of PAYGO and the discretionary caps which essentially will restrain the expansion of the deficit and, indeed, ultimately contain it. It did that back in the early 1990s, and I thought it was quite surprisingly successful in restraining what had been a budget which had gotten out of kilter. I would like to see those restraints reimposed; and by their very nature, they will bring back fiscal balance.'' Mr. Speaker, it is time that we bring back fiscal balance. Chairman Greenspan is exactly right. We thought that we could allow spending caps and PAYGO to expire, and it would have no consequence. We were wrong. We will get a chance later this week to vote on spending caps and PAYGO. I hope all Members on both sides of the aisle will join me in supporting that measure.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker and Members, I rise tonight to talk about our budget, the Federal budget and enforcing that budget. Now, I came here with Mr. Jones and others with a fairly large class back in 1995 we were elected to Congress. And I will never forget one of the first meetings we were invited to was held by some of the top economics folks here in Washington and folks from the Congressional Budget Office. And they told us at that meeting that if we did not get serious about balancing the budget, we forget now that back throughout most of the 1980s, we were running deficits exceeding $200 billion, in fact, by today's accounting standards it would have probably approached $300 billion, but, nonetheless, we had this meeting and at the meeting they told us that if we in Congress did not get serious about balancing the Federal books, that by the time my children got to be my age, they could be facing a tax rate at the Federal level of over 80 percent just to pay the interest on the national debt. Well, the good news is we got serious about balancing the Federal budget. We limited the growth in Federal spending. We allowed the Federal budget to grow at a slower rate than the average family budget. And the net result is we went from $275 billion deficits to $250 billion surpluses. And that happened largely because we controlled Federal spending. From 1995 until 2000, total Federal spending only grew at an average rate of about 3.2 percent. Now, since 2001, I have to say, Federal spending has grown at more than double that rate, at an average rate of 6.4 percent. You can see that from this chart. In fact, this chart and the 6.4 percent growth in Federal spending assumes that we will actually abide by and live with the very tough budget that this House has passed. Now, unfortunately, the other body has not passed a budget this year and so we will have to negotiate with some of the folks over there and so the 6.4 percent assumes that we will wind up with the House's very tight numbers in which we freeze large chunks of the Federal budget. Let me give for the benefit of some of the members and others who may be tuning in, some of the other numbers about the budget. Since 2001, according to the House Committee on the Budget, discretionary spending, that is a way of saying things beyond the entitlements, has gone up an average of 9.7 percent per year. So it is not just about 9/11 and it is not just about the war, it is about a lot of other things we have been spending money on. Mandatory spending has now increased to a point where mandatory spending, and these are the things which we sometimes call entitlements, Medicare, Social Security, welfare-type benefits, there are a lot of benefits inside the Federal Government that if you qualify for them, you automatically receive them. Mandatory spending or entitlement spending today represents 55 percent of the Federal budget. And this does not include the new entitlement that was created this year under Medicare for prescription drugs which, according to one study, will add over $16\1/2\ trillion of unfunded liabilities to the Federal budget long term. Finally, let me say and that I think this is important in recognizing how big the budget has become. For the first time since World War II, total Federal spending has reached more than $20,000 per household in the United States. Well, what can we do about all of this? Well, what we need to do is get back to basics. What we did for most of the 1990s we had here in Washington the House and Senate had agreed to what are call spending caps and PAYGO rules. And we need to bring them back. I am not the only one who believes that. Later this week the house is going to vote on some spending caps and PAYGO provisions that I think are long overdue. Mr. Speaker, I am not the only one who feels that. Let me read what Chairman Alan Greenspan said about PAYGO and spending caps and house Committee on the Budget in July of 2003. I will quote, ``I would like to see the restoration of PAYGO and discretionary caps, which essentially will restrain the expansion of the deficit and indeed ultimately contain it.'' He went on to say, ``It did that back in the early 1990s. I thought it was quite surprisingly successful in restraining what had been a budget which had gotten out of kilter. I would like to see those restraints reimposed and, by their very nature, they will bring fiscal responsibility back.'' Let me just read what he also said in a Committee on the Budget in 2002 about spending caps and PAYGO. ``Restoring fiscal discipline must be a high priority. The progress in the 1990s in reducing budget deficits might have been elusive were it not for the budget rules that had worked far better than many skeptics, myself included,'' and this is Mr. Greenspan speaking, ``myself included had expected.'' ``Now is not the time to abandon the discipline of the structure that worked so well for so long. The framework enacted in the Budget Enforcement Act of 1990 must be preserved. Well, we allowed those spending caps to expire a few years ago; and it is no coincidence that when we allowed the spending caps to expire, Federal spending began to go up at double the rate it went up for most of the 1990s. We will have an opportunity on Thursday to deal with this. Hopefully, we will have a vote on this thing; and we need to return to some form of spending caps and PAYGO. We have got a tough budget here in the House. We have got to make certain that it gets enforced. I am not the only one who believes that. Dr. Alan Greenspan was saying this a couple of years ago.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Chairman, I move to strike the last word. Mr. Chairman, I rise to engage my friend from North Carolina in a colloquy regarding the Bureau of Indian Affairs. I was planning to offer an amendment today which would limit the increased funding for the BIA in this appropriations bill totaling more than $46 million. However, I am hoping that the chairman can help me get some real answers from the BIA in connection with some local tribal issues. There are native Americans who appear to be fully qualified for membership in the Shakopee Mdewakanton Sioux Community. Yet they are being denied rights of membership so a very small handful of members can control a very lucrative casino. Originally, the BIA rejected their membership application on two occasions. However, it was approved in 1997 although the application was ``substantially the same.'' In 2000, I requested a congressional investigation into the membership practices of the tribe. Native Americans are being denied their birthright, and the BIA acts as if it were none of their business. This is an outrage. I have followed up with correspondence with the BIA, but their response has been slow at best. I am frustrated by their lack of involvement in this issue. I am hoping that the chairman can help me navigate the BIA waters so that we can get some answers to some of my questions.

Mr. GUTKNECHT. I yield to the gentleman from North Carolina.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I join my colleagues today in paying tribute to a man who influenced my life personally, and I think I speak for many of my colleagues when I say that we would not be in politics, I indeed would not be in Congress, if it were not for Ronald Reagan. President Reagan embodied the values that made America the shining city on the Hill: faith, family, freedom, and personal responsibility. Born to humble beginnings, he never lost the common touch. Few public officials had more empathy for the common people. He could make us laugh or cry, depending on what the situation called for. Most of all, he made us proud, proud to be Americans. Ronald Reagan came into office during a great malaise. He made us believe again in ourselves, in our capacity to achieve great things. He ignored his critics and the cynics. He shouldered on with unstoppable optimism. He consigned Communism to the ash heap of history. As Margaret Thatcher said, he won the Cold War without firing a shot. He changed our party. He changed the way Americans see themselves; and in the end, he changed the world. Borrowing from the song, I said to my wife, Mary, when he left office, he was a long time coming. He will be a long time gone. I thank God for giving us such men.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I am not certain I can do this Special Order without my charts. It is different for me to be down here without charts, but I am going to talk about prescription drugs. And for those of us who believe that Americans ought to have access to world-class drugs at world-market prices, last week was a very good week. In fact, let me just review some of the things that have happened just since May 4. On May 4, Health and Human Services Secretary Tommy Thompson said, ``I think it is coming,'' referring to the legislation to legalize the importation of prescription drugs. On May 5, the CEO of CVS Pharmacies, one of the largest in America, Tom Ryan, said, and I quote, ``Millions of Americans have already opted to import drugs because they cannot afford not to. To do otherwise,'' referring to the importation legislation, ``would be to ignore the millions of Americans who, as we speak, are forced to go outside our existing system, which is intended to ensure drug safety, in order to preserve their pocketbook.'' That is what Tom Ryan said, who as I say, is president and CEO of CVS Pharmacies. On May 6, Walgreen's, their CEO, came out and said essentially the same thing. Through a written statement, they said, ``If importation is legalized, we will actively participate in filling prescriptions for patients. It is a way to provide some relief to those we see every day in our pharmacies.'' On May 9, the Chicago Tribune editorialized and said in their headline: ``The Drug Import Juggernaut,'' and they highlighted the growing momentum for drug importation. They said in that editorial, and I quote, ``Simply relying on the American consumers to pick up the slack is indefensible.'' And on May 10, a Minnesota District Court judge granted our State Attorney General's request to compel GlaxoSmithKline to produce documents related to the company's efforts to cut off Canadian drug imports to the U.S. This is a landmark decision, and it is the first time a judge has stated, and I quote, ``Not only drug importation is illegal.'' Mr. Speaker, the momentum continues to grow to allow Americans to have access to world-class drugs at world-market prices. As I have said here many times with my charts, I think we as Americans live in a blessed country. We should be willing to pay our fair share for the prescription drugs which help save our lives. But it is really unfortunate that we are forced to subsidize countries around the world. I think we ought to pay our fair share, but we should not be forced to subsidize the starving Swiss. And there are several other solutions people have proposed; but ultimately, I, like Ronald Reagan, believe markets are more powerful than armies. The time has come to open up those markets, allow Americans to have access to those drugs at world-market prices.

Mr. GUTKNECHT

Mr. GUTKNECHT. Mr. Speaker, I rise and I hope to be joined by some of my colleagues tonight to talk about an issue that I have been coming down to the floor of this House for more than 5 years to talk about. That is the price that Americans pay for prescription drugs relative to the rest of the industrialized world, and I have often said that we as Americans are blessed and we should be prepared and willing to subsidize people in developing parts of the world, like sub-Saharan Africa. I do not believe, however, that we should be required to subsidize the starving Swiss, the Germans, the French and other industrialized powers. In the last 5 years, I remember when we first started doing these Special Orders, and I would come down here, and it was basically just me and my charts and the chorus has been growing around the country and we have been joined by Republicans, by Democrats, by Independents and others. Another point I always try to make is that this is not an issue of right versus left. It is not conservatives versus liberals. As I say, it is not right versus left. It is right versus wrong, and the issue really is that Americans are being held captive here in the United States; and the net result, very predictable result, is that whenever you have a captive market, particularly for a life-saving product like prescription drugs, it is inevitable that we, the world's best customers, would wind up paying the world's highest price. I know there are some who believe that the answer is for the United States to have some kind of price controls. I am not one that shares that view. About 4 years ago or 5 years ago now I guess, and one of the reasons I became very involved in this issue was something that happened that was totally unrelated to the price of prescription drugs. The price of live hogs in the United States dropped from about $37 per hundred weight to about $7, and these were the lowest prices for our hog farmers in 50 years. Many of my pork producers started calling me saying, Congressman, can you not do something about these incredibly low prices for these pigs? I said I do not know what I can do, and they said, well, could you at least stop all these Canadian hogs from coming across our borders, making our supply demand situation worse? So, as their Congressman, I called the Secretary of Commerce, I called the Secretary of Agriculture, explained the situation that thousands of Canadian hogs were coming into our markets making the price of pigs in the United States even lower and can we not do something to at least stop all of these pigs from coming into American markets. The answer I got from both the Secretary of Agriculture and the Secretary of Commerce was essentially the same answer. They said that is called NAFTA. It is called free trade, and all of the sudden a light bulb went on over my head, and I said is it not ironic that we have open markets when it comes to pork bellies, not when it comes to Prilosec. Literally, at that point, I moved from what Winston Churchill said the difference between a fan and a fanatic is, that a fanatic cannot change their mind and will not change the subject. I have become almost a fanatic on the issue of opening up markets to allow Americans to have world-class access to world-class drugs at world market prices. I am joined by my friend from Illinois, and I would be happy to yield him some time; but I have a couple of charts.

Mr. GUTKNECHT. Reclaiming my time for a moment, Mr. Speaker, when people talk about safety, we need to understand, and I am confident they do everything they can to make certain as they ship these drugs around the countries, from one country to the next, they are as safety conscience as they can be, but do understand they are not shipped in armored cars. These are going in big containers, generally in big barrels with a plastic bag on the inside. And the idea that they cannot sit on a loading dock in New Jersey or in Illinois or Oregon or wherever and somehow that is completely safe, but if a consumer in the northern suburbs of Chicago or in southern Minnesota decides they want to order their drugs from a reputable pharmacy in Canada and the package is delivered by FedEx or UPS, that somehow that is not safe, is laughable. We have talked about this enough, but it just boggles my mind. And I think the gentleman's point is a good one, that here we are spending lots of money encouraging people to believe that the pharmaceutical drug plan that was passed by the Congress and signed by the President, this is a democracy, it is the law of the land. And I am not here tonight to be overly critical, but the point is, for all the money we are spending promoting this, we could have put in place a system that would be safe for American consumers. Frankly, if they could buy their Glucophage for 300 percent less or if their pharmacist could buy it for 300 percent less and pass some of the savings along to them, they may not need a benefit from the Federal Government. They may not need our grandchildren to pay for those drugs. If the drug companies can figure out a way to safely import and export drugs around the countries, then we ought to be able to. More importantly, if we can have parallel trading between Germany and France and England and Ireland and Spain, in other words, if a pharmacist in Germany can order their Coumadin from a pharmaceutical supply house in Spain and save his consumers or her consumers 75 percent, they do that. Here is the thing about the Europeans. They are not intrinsically smarter than we are. If they can figure out how to do this safely, I have every confidence our pharmacists and our FDA can do this safely. It is a bogus argument. It gets thrown in our face, but here is the interesting thing. No one believes it. Consumers do not believe it, and we have some evidence that there have not even been complaints filed. There is another article, and I am sending this out to all my colleagues in the next couple of days, again from last week's paper. It says, ``Pharmacy complaints slow none on Canadian imports.'' In fact, in the State of Minnesota over the last 5 years, there have been 473 complaints to State regulators about pharmacies and/or pharmacists. In the last 5 years. Not one alleged an error by a foreign pharmacy, according to a review conducted by the Associated Press. In other words, if there is a huge problem, and literally in some areas of my home State half of the seniors are now getting their prescription drugs from Canada, so if this was a huge safety hazard, you would think that we would be getting lots of calls, lots of complaints, and yet the answer is zero. Mr. Speaker, I yield to my colleague.

Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman. As my colleague knows, people are voting with their feet; and the gentleman alluded to how much we are really talking about, ultimately. Now I am not saying this is a panacea. I do not think this is the silver bullet that will solve all of our problems with seniors being able to afford their medications. Clearly, there will still be seniors that fall through the cracks, and I think there legitimately is a role for government to play to help those people who cannot otherwise afford the health saving products they need. But the bottom line is, if we could at least guarantee them they had fairer prices, fewer and fewer of our seniors would need this. Let me also say this is not just about seniors. There are a whole lot of working families in my colleague's district and my district that have children that have very serious medical conditions that are now paying thousands of dollars per month for some of these medications where these companies are willing to sell those same drugs for a lot less in some of these other countries. Let me put a pencil on this, because an estimate done by Dr. Steve Schondelmeir, a professor of pharmacology at the University of Minnesota, his estimate is Americans will spend about $200 billion on prescription drugs this year. That is not just seniors, that is all Americans. Now I am not saying we are going to be able to take advantage of all of the differences that we see on some of these charts. I think, as time goes forward, we will see if we do open the markets we will see prices come down in the United States, and we will see prices in other industrialized countries start to level off. At least we will not have to subsidize it. But my estimate is that we will save at least 30 percent, and no one has challenged me on that number. I have had some of the pharmaceutical folks say, oh, no, no, no, it is not nearly that. I have said, okay, what is the number? Well, we do know, and some of it has to do with currency and some of it has to do with other problems. But, my colleagues, 30 percent of $200 billion is $60 billion. Now that is $60 billion that American consumers could spend on a lot of other things. They could be buying things that might improve our manufacturing sector. They could be taking their kids to baseball games. They could be paying for violin lessons for their grandchildren. $60 billion would amount to the largest single tax cut in the history of the world. I, as a supply-sider, think that is a good thing. That is money that could be spent on other things. They say, well, if we do that, there will be no more research. I do have to give the pharmaceutical industry credit. They are turning out new products, a lot of them we see advertised every day, and there is some health advantage to all of these that help some of the older men in the United States still enjoy a more vigorous life. Let us say it that way for prime time here. But at the end of the day, many of the things that the drug companies are spending their research dollars on are not necessarily on the miracle cures that they sometimes talk about. They are on new products that are slight improvements over existing products. For example, they changed a couple of molecules in Prilosec which was going off patent and they call it Nexium. Prilosec can now be bought over the counter for about $15, but they wanted to convert all the Prilosec users to Nexium because that sells for about $130 a month. It is not exactly about improving the quality of people's lives as much as it might be about making certain that they can guarantee a profit stream. Let me just add one more point, because some people say, well, if this happens, it is going to really have a devastating impact on America and American industry and American companies. Let me just point out that some of the largest pharmaceutical companies in the world are not based in the United States. Bayer, the maker of Cipro, is a German company. Glaxo is actually a British company. Astro-Zeneca and Roche and Novartis, I believe, are all Swiss companies. So many of these pharmaceutical companies not only do business under the European model; they are based in Europe. And so the idea that somehow this is going to devastate America and American industry again is sort of a specious argument. So we talk about safety. We talk about research. I am proud of the fact that we as Americans, and this is a number that I try to share with people, as the vice chairman of the Committee on Science, this is a number we should all be proud of. Americans represent less than 6 percent of the world's population; but between what the taxpayers pay for, what foundations and voluntary contributions pay for, and what we pay for in the high prices for our prescription drugs in the United States, Americans pay for over half of the basic research that is done in the world. We are 6 percent of the world's population, and over half of the basic research is done by and paid for by Americans.

Mr. GUTKNECHT. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend and include extraneous material on the subject of my special order.