Steve Pearce

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I move to suspend the rules and agree to the concurrent resolution (H. Con. Res. 188) honoring the members of the United States Air Force who were killed in the June 25, 1996, terrorist bombing of the Khobar Towers United States military housing compound near Dhahran, Saudi Arabia.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I have no further requests for time, and I yield back the balance of my time.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 1084, the bill under consideration.

Mr. PEARCE. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, House Resolution 1084 introduced by the gentleman from New Hampshire (Mr. Bradley) would authorize the construction of a memorial at the Antietam National Battlefield to members of the New Hampshire Infantry that fought in the Battle of Antietam. The bill directs the Secretary of the Interior to select persons responsible for the establishment of the memorial and prohibits the use of Federal funds in the design, acquisition, preparation, and installation of the memorial. Additionally, the Secretary must approve the size, design, and inscriptions placed on the monument. Once the memorial is in place, the Secretary will accept responsibility for maintenance, but will be permitted to accept donations into a specific account for the New Hampshire memorial. I urge passage of the bill. Mr. Speaker, I reserve the balance of my time.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 38) to designate a portion of the White Salmon River as a component of the National Wild and Scenic Rivers System, as amended.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 1512.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I rise today to acknowledge the accomplishments of one of New Mexico's most devoted citizens, Rose Garcia. This morning at the Anthony Community Center in Anthony, New Mexico, Rose Garcia is receiving New Mexico's 2005 National Homeownership Month Hero Award. For more than 20 years, she has worked to provide housing for residents of rural and urban communities along the U.S.-Mexico border. In her tireless pursuit of creating opportunities for affordable housing, Rose Garcia has made the American dream of homeownership a reality for thousands of New Mexican families. With this award, the New Mexico Partners in Homeownership are recognizing Rose especially for her work on behalf of very low income, underserved and colonia populations. Colonias are rural border communities and neighborhoods that lack safe and sanitary housing, along with basic conveniences we take for granted, such as sanitary water and sewer systems, street lighting and roads. Tierra del Sol Housing Corporation, of which Rose is Executive Director, not only provides housing but also builds the infrastructure to support these neighborhoods. There are many obstacles one faces in the quest to own a home. Rose Garcia helps her clients through every step of the process and provides special assistance in one of the most important aspects--education. Tierra del Sol provides homeownership counseling and training, before and after the home purchase. Residents are given the tools to help themselves and begin a new tradition of ownership--and hope. Through her work for the last 23 years, Rose Garcia has helped countless otherwise neglected persons achieve the social and financial benefits of homeownership, despite economic and cultural challenges. Mr. Speaker, I would be remiss not to mention the only other recipient of this esteemed award--the Honorable Joe Skeen. Congressman Skeen was an ardent supporter of homeownership programs in New Mexico, and Rose Garcia worked with him in that endeavor. She continues this legacy, not only through her commitment to homeownership, but in her dedication, her creativity and her unfaltering spirit. Mr. Speaker, I am honored to congratulate Rose Garcia on this well- earned distinction and express my gratitude for the dedication and innovation she has demonstrated. I commend Rose for the hard work she continues to perform, and I am proud to recognize her--a true model of commitment to homeownership--today before my colleagues. ``The American Dream of Homeownership.'' For thousands of New Mexicans, Rose herself is a dream come true.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I rise in opposition to the Watt amendment and support H.J. Res. 10. It is interesting that we are hearing about freedom of speech right now. I was interested because yesterday in my district the ACLU, which holds itself as the arbiter of all freedom of speech in the Nation and in the world, actually shut down all comments from their own local chapter because one person was speaking out on an issue that they did not want him to speak on with their name hooked onto it. So the ACLU yesterday in the Second Congressional District of New Mexico actually said no freedom of speech is allowed if you are an ACLU officer. Freedom of speech, we have also seen it compromised in our schools. We can talk about certain religions in schools, but we cannot talk about Christian religions in school and we find that the American public is saying, Why? Why can we not defend this sacred symbol of our freedom? It is not a difficult issue. When I see these World War II veterans coming to me with tears in their eyes knowing they are in the last year or two of their lives and saying, Why can't we do this finally, it is not a complicated issue. They do not see things in the complex legal arguments on the floor of this House or in the Supreme Court. Mr. Speaker, we do recognize that symbols do mean more than what they actually stand for. Look at the debate right now in Guantanamo Bay. It is being said by the same people who want the freedom of speech to desecrate the symbol of our flag that we should not have the freedom to desecrate the Koran or even allege that it has been desecrated. Mr. Speaker, it is time that we recognize that a symbol is more important than the actual fabric that it is made of. It is time for us to pass this constitutional amendment, to reject the substitute amendment, and to bring clarity to this issue where 50 States have passed resolutions asking us to get clarity. It is time for the Congress to speak in the way that the majority of Americans would have them to speak. I support the amendment.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I would like to address the subject of the Base Realignment and Closure process that is currently ongoing. I speak as a former Air Force pilot and a member of Congress from New Mexico. Although the base that I would like to talk about does not lie in my district, I think the overall concern that I have is that the process of establishing military value has somehow been deeply flawed, at least with respect to this one base. I would like to mention a couple of things about it. According to the criteria set up by the BRAC Commission, encroachment was supposed to be one of the important issues that was discussed. In other words, if a town grows around a military base, it somehow loses its value because there are certain processes that are not as capable of being performed. So encroachment, that is the growing of the population around the base, is an extremely important measurement as we determine military value. But as we look at the population, the population is listed on this chart in red. In the white areas are low population density areas. Cannon Air Force base is right here about 4 or 5 miles from the Texas border on the east side of New Mexico. As you can see, there are almost no population centers anywhere around. What this means is that Air Force fighters can take off from Cannon Air Force base without flying over densely populated areas. They can carry live munitions, live bombs, and live armament over this sparsely populated area without much risk. Now this last week we saw the Harrier jet that actually had problems and fell into a housing area with those munitions on board, and that is the problem with encroachment. And yet when the BRAC Commission says that we should not have encroachment and that will be a high priority, we see that no encroachment has occurred here. And as we look across the rest of the country, we see deep encroachment occurring; and so one criteria appears to be completely ignored with respect to Cannon Air Force base in the eastern side of New Mexico. Another one of the criteria that was mentioned is training space unencumbered by the overflight of airlines and commercial traffic. Now, again, if people are not aware of the White Sands Missile Range that lies in the second district of New Mexico which I do respect, that is a completely restricted air space. No airliner ever flies through that air space. And so starting back across Dallas, one can see from this chart that almost no white exists, white would be the commercial air traffic. But those flights begin to divert north toward Albuquerque, or they divert south to El Paso and fly completely around New Mexico. Now, Cannon Air Force Base again lies about the midpoint in New Mexico along the New Mexico-Texas border, and it benefits because those airliners have already begun to divert far before they hit the New Mexico border, and so the air space that is available for training lies in this particular area. And, again, one of the extreme criteria of the BRAC Commission appears to have been either ignored or just disregarded. The problem of training space becomes even more important when it is considered with population density. Many times aircraft that take off from densely populated areas have to fly to areas of sparse population, and each flight in a military aircraft can run tens of thousands of dollars. It might be as much as $50,000 an hour to operate. So each hour to convey the aircraft simply to the training zone is extremely expensive both in dollars and also in the use of the hours on the military aircraft, each aircraft having a certain limited life in terms of flight hours. So, again, one of the criteria seems to be omitted. Another criterion that was judged to be important in evaluating which bases to keep open or closed were weather on the training days. Again, green indicates the days of cloudy weather. The white areas are generally clear skies. I can tell you, having flown in New Mexico most of my life, approximately 320 days a year are available for flight training in New Mexico, and it is significantly less. The next chart I show is simply a followup on that, and it shows precipitation. Again, one can see that the area around Cannon Air Force Base simply does not have the problem of precipitation. Again, precipitation is two problems. It is a problem of flying in bad and inclement weather, and it is also the problem of corrosion, and we do not have the problem on or in New Mexico. Again, it is a very significant thing. The final chart, Mr. Speaker, wraps it all up. New Mexico has the best, most accessible training space, the least encroachment, and the least overflight of commercial traffic. We are not able to understand exactly how the BRAC Commission came up with its report. And we would urge the House to take a stand to see that military value is considered as we approach the approval of the BRAC process.

Mr. PEARCE

Mr. PEARCE. Mr. Chairman, I yield myself the balance of my time to wrap up my comments by saying that we all know what corruption looks like, smells like, and acts like. We are seeing corruption at many different levels in the U.N., and I would request that all Members support this amendment, which would limit the unauthorized contact between the United Nation employees and the nations which have been sanctioned. Mr. Chairman, I yield back the balance of my time.

Mr. PEARCE. Mr. Chairman, I offer an amendment.

Mr. PEARCE. Mr. Chairman, I yield myself such time as I may consume. I rise with this amendment today that would prohibit any employee of a United Nations entity, bureau, division, department, or specialized agency from having any unauthorized contact, particularly business contact, with a government that is subject to United Nations sanctions. The purpose and ideals of the United Nations are to maintain international peace and security and to engage in collective action to preserve both. It also is to promote friendly relations among nations founded upon the principles of human rights and self-determination. Finally, it is to achieve multilateral cooperation on the critical global crises of our age. I support these goals and ideals, but these purposes are being undermined and threatened by corruption and mismanagement within the U.N. today. That is why I am here today in support of this overall legislation and offering this particular amendment. One of the most blatant examples of fraud, corruption, and abuse in the United Nations is that of the United Nations employees enriching themselves through personal deals with rogue governments. In 1991, the United Nations placed sanctions on Iraq for Saddam Hussein's persistent noncompliance with the provisions of the cease- fire that ended the first Gulf War. In an effort to mitigate the sanctions impact on the Iraqi population, the Oil-for-Food program was created in 1996 to allow the Iraqis to sell oil in order to pay for humanitarian goods. Under the auspices of the United Nations, the oil was to be sold with the proceeds to be deposited with the Banque National de Paris. Humanitarian goods were then to be supplied to Iraq using those funds. However, Saddam Hussein was allowed to choose his own business partners for this program, those buyers for Iraq's oil, as well as the suppliers of humanitarian goods. For each 180-day phase of the program, Iraq developed a list of allocations identifying companies and individuals to whom it would be willing to sell oil. Saddam personally reviewed who would receive the oil. Mr. Hussein would then complete oil contracts based on the allocations list. As this process evolved, Saddam began to give special allocations for the benefit of particular individuals or entities that were perceived to support his brutal regime. It is abominable for U.S. taxpayers' funds to be used to pay U.N. employees who take advantage of international sanctions and make deals to receive kickbacks. That is exactly what happened with the U.N. Oil-for-Food program. While visiting Iraq in the course of his official duties, director of the Oil-for-Food program, Mr. Benon Sevan, requested special allocations from the Iraq oil ministry for African Middle East Petroleum Company to help a friend. That friend turned out to be former Secretary-General Boutros Boutros Gali's nephew. It was later found by the Independent Inquiry Committee into the U.N. Oil-for-Food program that what Mr. Sevan sought was more than just for his friend. Mr. Sevan was in a position of influence and could lift restrictions on various parts of the Oil-for-Food program. So the Saddam Hussein regime granted the oil allocations to AMEP and Mr. Sevan. AMEP purchased the oil from Iraq, but then sold it to oil companies for as much as $750,000 per transaction more than what they paid for it, all while giving the proceeds to Mr. Sevan for making the deal. Additional oil allocations granted through the years of the program as restrictions were lifted on aspects of the Oil-for-Food program. When the program came under scrutiny, Mr. Sevan blocked the proposed audit of his office. Because of these personal deals, Saddam was able to skirt around the restrictions of sanctions, siphoning off as much as $10 billion in the form of illicit revenue while the Iraqi people starved. Saddam Hussein used much of this money to purchase weapons, many of which are being used to kill Americans and Iraqis today as the Allied forces continue to fight terrorism in that country. Actions such as Mr. Sevan's personal dealings with the sanctioned Iraqi Government undermine the United Nations' purposes. I ask that my colleagues support this amendment that makes clear to the United Nations that the United States will not tolerate U.N. employees making deals with rogue governments subject to U.N. sanctions. Mr. Chairman, I reserve the balance of my time.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I address the body tonight about the future of this great country, and the previous speaker said we did just have a chance to celebrate Memorial Day. In the district that I was in, we recognized the anniversary of the D-Day landing, and we understand that it is with the sacrifices of brave young men and women throughout history that a nation is able to sustain itself, and it is only through those sacrifices in each generation. One generation cannot pay for the next generation. But, tonight, I would like to look a little bit at the economic future that faces us, both in the world and in this country, and would like to have a discussion about what it is that will allow America to offer its promise into the future so that our sons and daughters, our children and grandchildren, would have the opportunities that our generation has seen. I am the second-oldest year of the baby boom generation, and I will tell my colleagues that my mother and father grew up in very difficult circumstances in West Texas. When my father graduated from high school, he went to work for a cousin of his farming and actually in the role as a sharecropper. I recently had a chance to visit with my mom and dad in the place where I was born and lived the first 2 years of my life. They were in circumstances that not many Americans would look to these days and find satisfactory, and yet I had parents that were willing to work through all of the circumstances that faced them to raise six children, to give every one of them the opportunity to attend college and graduate from college. My mother went back to school when I was starting college. She graduated summa cum laude in 3 years, and I graduated somewhat below that in four and a half years, but their sacrifices in my parents' generation made possible the potentials in my generation. Now then we must look beyond our current circumstances into the future, and that is the discussion that I would like to have tonight. When I am discussing that, I would, first of all, like to keep track with numbers on the chart and do some recognition there. So we will continue the discussion here much like a chalkboard discussion. The first number I would put on the chalkboard is the number 2.55. That is the approximate size of our outlays, the approximate size of the budget that the United States has every year. It is the approximate size of the government spending. Now if we need a benchmark, and all numbers are relative, and so a benchmark that is very handy to the 2.55, that is trillion, is also then $11 trillion, and that is the approximate size of our economy. So 2.55 is our government size. Eleven is the size then of our economy. The important thing to understand about those two numbers is the relationship, and I simply divide the 11 into 2.55, and that equals about 23 percent. The 23 percent then is the most important number in the whole relationship. That is the percent of the 2.55 of our overall budget, and we, in fact, as people in our individual households are concerned about that same relationship. If we want to know how much money that we are saving, we simply take the amount of money that we earn, we subtract the amount of money that we spend, and then we would have the rest available either for discretionary spending or for savings. If the United States has one weakness going into the future, it is our savings rate, and that rate generally is about 1 percent. For instance, in comparing that, if one looked into mainland China, we would find that the people there, according to recent reports, save almost 60 percent of their total income. That tells us that there is much money available for reinvesting. There is much money available in times of economic downturns. There is much money there for education. There is much money there for the future. So as we consider the U.S., we are right now the world's leading economy. We are, in fact, one-quarter of the entire world's whole economy, and so we would say that, with that information, that the U.S. is poised for a good future, and I do not doubt that. As a business owner, as a person who made payroll checks, who looked into the future to ensure that I could write the payroll checks the next 2 weeks and the next month, I always liked to do forecasting. It is at this point, where we begin to examine some of the relationships that exist, some of the pressures in our economic system, that we begin to have deep understandings about things that we should be doing right now. Always, wisdom is the taking of a current situation, adding time to it, extending it as far into the future as possible and discerning those things, those outcomes from current situations or current activities. As we begin to take a look at the competitive pressures that we face in the world, all of us know and we recognize that our $11 trillion economy is under duress. Some would say a lot of duress, some would say less duress. But we would know that China, for instance, is causing great trade to occur between the U.S. and China. When any one of us go to the store, we find certain numbers of goods on the store shelves that actually only originate in China, and we know that with each $15 purchase or each $150 purchase that that money goes towards China. So we would say that China represents a downward pressure on our $11 trillion. Let us say that the 11 becomes 10. Then the important thing is to understand that we still must do the division. If we have a $10 trillion economy, then our relationship here is 2.55. That is, over 25 percent of our economy at that point would be government spending. So anything that drives our overall economic size, the $11 trillion of our economy, to a lower point are things that put us on an unstable ground. Anything that causes this top figure, the numerator, to increase also are things that push us in an unstable direction. As we consider the effects, we must understand the relationship of what happens when this number begins to increase and what happens when this number begins to decrease. As the 2.33 gets larger, then we can understand, and economists of all kinds agree, that we move toward stagnation if our relationship gets too large. We have stagnation if the number becomes larger, and if the number becomes smaller, then we have vitality and growth. So if this number is lesser on the scale of vitality, if this number begins to get larger and larger, then we would see stagnation occur. There are examples of that in the world right now. Our number is .25; and, of course, we must add State and local taxes, State and local governments. Because the effect is cumulative. That as we consider adding about 16 percent State and local, then our number is actually converted to about .40. Since those State and local taxes and spending are beyond the capabilities of the Federal Government to affect, we simply understand that as we approach .25 in this Nation, we move towards stagnation. As we make the number smaller, we move toward vitality and growth; and so .25, according to many economists, is an extremely important position for us. Now as we look around the globe, we might want to consider other countries, just to verify the example. Germany is an example, and Germany at this current point has a relationship not of .23 but of .52. If the relationship is actually .52, we would say, well, if this theory holds true, if this economic premise holds true, that we would think that Germany has a more stagnant economy, one that is less vital, one that has less potential to create jobs. The Germans themselves say that they have not created a job in 10 years. They have economic spending of the government that is too high a relationship to the overall economy, and what that does is it begins to soak out the reinvestment dollars. It soaks away the potential for companies to grow and reinvest in research and development. It soaks away the pay raises so that even the people are stagnant in their incomes, and there is not a growth potential. So we find that, in fact, this number got larger for the European countries, and Germany is just one of the many European countries that is stuck at a low growth rate and with very limited capability to produce jobs and new industries. If we look even closer, we would have to consider the former Soviet Union. What Ronald Reagan understood was that the Soviet Union had a number that was very high. It was almost a fully controlled state economy, and he understood that, with just a little bit of pressure, the Soviet Union's economic system would simply collapse. He began to arm us, watching them arm in return, watching them drive their government spending higher and higher, knowing that we could sustain it because we had low percentages and they could not sustain it because they had high percentages. In fact, during Ronald Reagan's tenure as President, the economy in the Soviet Union collapsed, the Wall fell down, and freedom moved to many people. While an astute observer would ask at this point, what about mainland China? Mainland China has got a state economy that has the Communist Party that runs that government exactly the same way as the Soviet Union. But, in fact, what has happened is that the Chinese have recognized, after the mistakes the Soviets have made, they have, in fact, privatized pieces of their economy. So the estimate for China is actually about .40. Estimates range as high .60, which is not much above Germany, and not everything is known about the Chinese economy, but the estimate is that where we are at .23 and, adding in our State and local economies, about .40, the estimation is that China is very similar to that .40. So one would ask, what about their economy? The Chinese economy is performing very well. There are pockets of poverty throughout China, but the Chinese economy is growing strongly. They are producing jobs. They are, in fact, showing that this relationship between government spending and the entire economic size is, in fact, a very important measure. It is not enough to simply know right now what the situation is. We must look forward into the future. We must forecast where we are going, and if we allow our economy to decrease down to 10 or 9 because of the competitive pressures of China, the competitive pressures of the European Union are also well-known, the competitive pressures of India, providing much software, those competitive pressures are all realized as taking pieces of our economy because they are providing as good a product as we are at a better price. Then we realize that the downward, the long-term trend is for this economy size to decrease, increasing the relationship of government spending to our economy, moving us towards stagnation, moving us toward a point where our children might not have the hopes and the dreams fulfilled that our generation has had. Now, if the economic size is sustained and we are able to continue our growth and continue to build our economy against this worldwide competition, we also have to worry about the size of our government spending. If we maintain this $11 trillion or even grow it, our number here could increase simply by increasing the size of our government spending. That is a very important function as we consider our relationships right now. We are fighting currently on the Republican side to hold spending back. We are somewhat hampered because of the mandatory spending programs which are allowed to escalate without us being able to give comment on those each year. In this year's budget process, though, those mandatory programs, welfare, Social Security, Medicaid, Medicare, those mandatory programs are actually coming to review to see if we cannot begin to dampen this down because there is great understanding we are facing increasing economic pressures. Also there is understanding if we can reduce spending, there is movement here toward a smaller relationship and toward a more vital economy, giving promise for the future. So we have to answer the questions, how are we spending the money and to what purpose, and are we actually achieving anything. One of the more distressing things as I look through many of the programs, we are spending lots of money but we are not coming out with outcomes. The outcomes desired maybe are never measured by the bureaucracy that puts the money in. There is not a relationship between money spent and outcomes, so we have to ask ourselves how can we convert to that sort of a system. There are considerations in this Congress that would allow us to measure benefit for dollars spent and not just talk about the dollars spent. Many times we in this body are simply urged to spend more money to cure the problem. The problem is not that we do not spend enough money, the problem is that we do not always get the outcomes that we would like. For instance, there are welfare-to-work programs that for $50 per person operate and there are programs that for $500 per person operate, and then we have some programs trying to put some people back to where the expenditure is $30,000 per person. At some point we can no longer just throw money at the $30,000-per-person program saying that it is worth any cost to put people back to work. Instead, we need to put the most people back to work the most effectively for the fewest number of dollars. Those are business decisions that anyone in business would have to make, and they are business decisions that we in this country are going to have to make. We are either going to make those decisions while we have a nice future looking at us, or we are going to wait until we move into stagnation and then try to correct it from a point of weakness. For myself as a former business owner, I wish we would go ahead as a Congress, both Democrats and Republicans, and recognize that Republicans and Democrats are not enemies of each other. The enemies of the country are those who would decrease our economic size; they are those who would force us into greater spending for no greater output; and they are those, as the terrorists say their ambition is, who would annihilate America. Those are the enemies of America. Republicans and Democrats have different philosophies and different points of view, but in my mind those are simply tensions on the system to pull us back and forth. But we are not enemies; we each want to see our kids and grandkids have a future that we ourselves have seen. That is my commitment in coming to Congress, to see what we can do to ensure that the future of this great country has the vitality and the vibrancy to continue to offer promise for new generations. If we are going to consider the spending, we have to understand the competitive models of government. We often are very familiar with competitive models in companies. Formerly, much of the retail buying in this country was done at Montgomery Wards, maybe Wacker's if we went back far enough. Today, the great amount of retailing is done by large chains like Wal-Mart and Target. They provide great avenues for shoppers to go and satisfy their daily needs; but those companies came about, replacing other companies that did not see the efficiencies of greater distribution points, the efficiencies of computerization. So each one of us in our own way is familiar with competition that occasionally will drive one company out of business while raising up a new replacement in its place. If we are familiar with competition among companies, we also to an extent have seen competition among States. One State will offer incentives so that a company would come in and provide jobs in that State. We find States that will simply bid away jobs from another State by offering greater incentives. So in our mind-set, we are very familiar with competition among companies. We are somewhat familiar with competition among States. What we must begin to be aware of is that there is competition among countries. Entire nations are beginning to compete the cost of government. They are saying we can regulate you in the same way except at a better price. Large international companies are beginning to move around. They have flexibility. The Internet allows the exchange of data freely; and if a company can find a nation that charges a lower tax rate, they are just as liable to go there to find their home as they are to go to a nation that provides higher tax rates. Now, that all needs to be considered in this entire economic discussion, and so we will flip the chart here. We will begin to look at one nation. Many of us are aware of the Irish miracle, that is the miracle of Ireland where they went from an economy of one size and grew it proportionally larger. What Ireland did was no miracle at all. What Ireland did was they just recognized that companies are looking for competitive governments. Their tax rate internally was very similar to ours, about 36 percent for domestic corporations. They were after the corporations that would come from outside Ireland, and so they offered a 10 percent rate of tax to foreign companies. Foreign companies saw where they could move from the United States, which has a 36 percent Federal tax rate, plus the local and State rates, so companies from many nations began to move to Ireland to take advantage of this low tax rate that was offered to foreign companies. The European Union saw this as messing up their economic model, and so they browbeat the Irish and said they needed to review that 10 percent tax rate; that 10 percent tax rate needs to be changed. That is, we do not want you competing with us, us European nations. You need to come up to match us, not us begin to figure out how to offer government cheaper. The Irish, being the Irish, looked at the proposition that they should reconsider their tax rate, and they did. They actually were very accommodating. They went up and said you are correct, the 36 percent is far too high, and they made that 12 percent, creating an economic boom on domestic corporations; and they went to 12 percent here. So we now have, again, the Irish miracle of domestic growth as well as still being extremely competitive with their foreign corporation rate. In fact, this past year, just 5 to 10 miles north of my district in New Mexico, the Irish have come in and are reinvesting in America by building a cheese plant in the area of Portales and Clovis, New Mexico. Now, the idea that government can and should operate cheaper, just like any company can, is one that is going to affect us. If we as a Nation do not realize that we cannot sustain the high 36 to 45 percent tax rates that we are charging, if we do not realize that and begin to lower this number here, we are going to face a future that moves us toward stagnation and away from economic vitality. That is extremely important for the next generation, but it is also important for our generation because as 40 million baby boomers move to retirement and we begin to retire in 4 years, 3\1/2\ years now, as we begin to move to retirement, we have to understand that Social Security is a pay-as-you-go system, that we do not actually have money in the bank. We simply have those bonds; but if we do not have workers in the system here providing the jobs locally, then we are going to see that pay-as-you-go system under great duress. If Social Security comes under duress, it is going to have to be bailed out with more government spending which is going to increase this number. It is going to increase this number, and we are going to move toward stagnation just as the Europeans have and just as the Soviet Union did. The stakes are extremely high for this country to begin to realize that it must know how its money is spent, and it must get the value for the dollars that we spend. No company can stay alive and afloat indefinitely by misspending its money, and now we are into a situation worldwide where governments will compete; and we in the United States have to be willing to compete also. Our government has to run more efficiently, more effectively, and with lower tax rates. Many of my friends have asked why in the world in a period of deficits did the Congress offer tax cuts. Again, it is very simple. The Democrat Governor of New Mexico said it best, tax cuts create jobs. As we cut the taxes, we were looking at the fact that we only had a couple of options. If we want to change this relationship and run a deficit, we either need to cut spending or increase the size of this economy. That 11 needs to become 12 or 13 or 14. Those are really the primary objectives. Anything else is simply window dressing. The hope is that in cutting taxes we make this relationship less, it moves us toward vitality growth and gives companies and individuals more income of their own to put back into ventures that are most promising and into ventures that can sustain research and development and growth; and so we gave the tax cuts with the anticipation that we would establish a rate of growth. The rate of growth that we intended to get was we had hoped for a sustained 4 percent. Now, if this were the target, it would be nice to know exactly what kind of growth rate we did get. It is almost 2\1/2\ years since the tax cuts, and the first quarter out after the tax cuts was about 8.25 to 8.5 percent rate of growth. There was understanding there was pent-up demand, so we thought this number would actually settle down; and over time it has settled down into the 4 percent range. As we face the elapsing, or the phasing out, while the tax cuts were temporary, they expire at the end of the year, as we face those expiring tax cuts, we realize that we are going to have pressure for this number to decrease back down. What we as a Congress need to do is be willing to go ahead and continue to extend the tax cuts in order to give our economy the vitality and the growth that we have seen with the tax cuts. Now, you would ask what is happening in some of the rest of the world. Again if we look at Europe, all of industrialized Europe is about at the 2 percent range. So we have been for the last year and a half almost double the rate of growth of the industrialized countries in Europe. Another factor would have to be the job creation. Initially, our recovery, there was concern that we were not producing enough jobs. That is a valid concern, and so you would have to look at a couple of things. Why did we not create jobs at the beginning of the recovery? Again, as a business owner, I would tell you that the last thing I wanted to do was hire permanent employees because permanent employees might have to be laid off. As we went through periods of expansion, the first thing we as a company would do was we began to extend overtime hours and asked people to just come in and work a couple of hours a day extra and we will be okay, we will be able to meet the increased demand with that sort of expansion of labor. When we could no longer ask our employees to work overtime, they all would like to spend time with their families, then the next step that we would do is to hire temporary people, hire people to come in on a part-time basis, people that if the economy began to slow back down, you really have not given them the full promise that they were going to be here for you. As we then would work our way through temporary employment and still find that we could not solve the demand with overtime and temporary employment, then my wife and I would go out looking for new employees; and then the third step that we would take would be to hire full-time employees. We were able to do that over a period of years. When we bought the company, we had four employees. We sold the company in late 2003 and we had almost 50 employees. So we had judiciously expanded ourselves through 14 years, one small increment at a time. One of the most critical times in our business life occurred in the 1999 to 2000 range. We were in the oil and gas business. We did down hole repairs in oil wells. We did not actually own any of the oil wells. We simply repaired them. In 1999 and 2000, the price of oil and gas dropped tremendously. The price of oil in our location had fallen from about $25 down to about $6. Our revenues as a company at one point fell 80 percent. We were working at 20 percent the income rate that previously we had. It was not just our company. Many companies that were competitors and friends of ours worked in the same industry, and they saw the same 70 and 80 percent declines in their revenues. We made a decision, my wife and I, that we could not lay off employees, that we would sacrifice the company, if need be, in order to keep the people who had made a promise with us. They had invested their lives with us. We had, in turn, invested our lives with them. So we said, we are not going to lay you off; we will give you 60 days' notice before we actually begin to lay people off or give pay cuts. We continued that line of thinking for almost 11 months. If companies will take care of their cash, if companies will live within their means, then you have got the capability to do that. But if you have expended every single dime all the way through, then you do not have the means to withstand these deep drains when they occasionally occur. A nation is exactly the same way. A nation must carefully guard its cash, its reserves. It must carefully, carefully spend its money and understand that it is getting value for every dollar spent, that we are building infrastructure, that we are making our Nation more competitive as a nation and as a government with other governments, because we will at some point in the near future be held to a standard of competing with nations. Our rate of growth at this point is good, but if we look into the future and see the threats to our economic size, to see the pushes to increase our government spending, then we will understand that there are some dynamics that we must be very aware of because they affect the outcomes of this Nation. Literally the military sacrifices, the sacrifices of our young men and women who are soldiers and who are fighting for freedom, who have fought for freedom in the past, their sacrifices will be somewhat less useful if government does not adequately spend its resources. We must understand that we have got to progress on all fronts and that we simply do not have a path into the future based on what we have done in the past. If we are to consider another one of the dynamics that is loose in the world today, one of the competitive measures that we have to be concerned with is governments who begin to review their entire government spending, who begin to make changes and make their government more effective. Again, those are competitive pressures from one nation to another. Because a nation that adapts itself to a more lean government, producing the same results with fewer dollars, is going to be a nation that has economic vitality; and a nation that does not carefully marshal its own spending, its own government spending, will be a nation that is moving toward stagnation and toward a noncompetitive situation into the future. As we consider that particular ramification, one must look at the example of New Zealand. The government in New Zealand several years ago decided to really carefully look at their own situation. As they reviewed industrial economies throughout the world, they said, our economic vitality is not so great. We would like to improve our lot. And they set about having deep discussions internally about what functions should be in government and what functions should not be in government. That is a discussion that this Nation needs to engage in heartily. I do not know exactly where the balance is. Government always has a function. There is always the need for regulation. There is always the need for oversight. But sometimes I think that our government is delving into things that are not inherently governmental, and other nations are beginning to sort through those pieces, and we will face the competition. So New Zealand began to look and in their own circumstance, at the time I forget, the numbers are maybe not exactly correct, but they are close enough. They had between 50 and 60,000 people in the Department of Labor. I often ask my audiences, and I did just this last week when I spoke about this in New Mexico, if you think of a government agency that began to trim away fat, began to push nongovernmental projects outside the government back into the private sector where they belonged, how deeply do you think they would cut? How deep do you think that New Zealand went? Mr. Speaker, that is a question that we must ask ourselves. I will tell you that the answer is New Zealand cut from between 50 and 60,000 employees in the Department of Labor to one. That, by the way, was the individual doing the study. I suspect if he were not getting his own paycheck he might have even eliminated that. When governments begin to get so efficient that they move from 50,000 down to one, I will tell you that the United States in the long term has to answer that same question. Because if we do not recognize that we are under competitive pressure from other nations, if we do not recognize that and begin to lower our government spending, keeping us in a position of vitality, then we are going to be moved by other nations into stagnation, and our children and grandchildren will find that they just do not have the opportunities that we in my generation have had. If New Zealand can offer those kinds of benefits, we have to ask ourselves what are we doing in the United States. I will tell you that, in my district, there are many national forests. New Mexico is not often identified as a State with water and forests, but we actually do have many national forests. As I go into the Forest Service and I look and I talk to people who are retired and I talk to current people, I think that we have got great people in the field, but we have adopted and adapted programs and philosophies in our Forest Service that make us not so lean as this. In fact, if we are to look at one particular office that operates in my district to see the relationship that is going on in the United States, and I have been told by a retired forest ranger, he says that I used to work this whole forest. I cut timber, I provided the restoration, I had projects that would clean up streams, clean up the forest, I had some economic enterprises that were going on in and around that I supervised, and I handled all the grazing. He said, it was myself and one person half time in addition to me. Now, that was maybe 30 years ago. To find out the benefit that we are reaping today from our efforts to control or not control the size of government, you would ask today what are we doing and how many people is it taking. I would tell you that that gentleman says in the area that he and one half-time person formerly operated that now then there are 142. So when New Zealand went from 50 to 60,000 down to one, in the U.S. we went from one up to 142, and that has occurred over and over and over again throughout many agencies. So that you can see that maybe we are not 142 times a larger government overall, but we are moving and trending in the wrong way. If we have gone from one to 142, you would think, well, we are running our forests much better, that our forests now are just the examples of forestry that we would like to have. But I will tell you that the exact opposite is true. That when this gentleman was in charge, we were not burning hundreds of thousands and millions of acres of forest land, but we are today. It is not because we are not spending enough money. It is because we have adopted a philosophy that says that we can no longer cut a tree. At one point in New Mexico 20 years ago, there were 22 lumber mills; and today there are two. Many of the forests in New Mexico have not had a timber sale in decades. If you have not had a timber sale, that means you have not cut timber. So you would think, well, those trees are out there growing and we are not cutting, so they are probably now becoming crowded and, in fact, that assumption is entirely accurate and valid. The historic function of New Mexico forests had fire cleaning out the forest every 8 years. If we look at the tree rings, you will see about every 8 years a very hot fire would come through and with our arid climate and the fires, we would find that New Mexico generally hosted between 30 and 50 trees per acre. If New Mexico's 142:1 relationship were to be looked at and you think if we are doing a better job or a worse job, you would want to know how our forests are growing, so historically our arid climate would relate to 30 to 50 trees per acre. And again I ask my constituents when I am in New Mexico, what do you think is the population of trees per acre now? We have got 142 people in this one circumstance to 1\1/2\. Are we doing a better job? Now, then, the average number of trees per acre, 1,500, whereas nature by itself kept that number around 30 to 50. We can look at pictures from 100 years ago and realize that nature had a size or had a population density of trees that its area and its climate would support. But we have now, because we have stopped putting out all forest fires and we have stopped cutting trees, 1,500 trees per acre average and some areas are up to 2,500. If you had people in the same circumstance crowding in like that, you would expect a couple of things. You would expect nutrition to be decreasing. If we had in the same place 30 people per acre used to live and now 1,500 to 2,500, you would expect that disease would be somewhat more prevalent and you would expect catastrophes to be always on the edge. The same is true with our forests. We have now the threat of disease. We have the threat of malnutrition. The trees are starved for light, so they stay small diameter and they grow toward the same height as the big mature trees; and as they get very tall and very small, they do not have enough nutrients to grow larger and they, in fact, are susceptible to insects, to disease. But the worst susceptibility that they have is to fire. Previously, a fire that would burn along in the grass underneath and char the trees and leave the tree rings, it showed us that every 8 years a hot fire would come, those trees now have enough kindling, they have enough small diameter trees that any fire becomes explosive. The fire spreads up those small diameters. It burns in the top of the trees now, not in the bottom. So that we have the cap fires that run across the top of the forest killing the green part while leaving the tree standing and we have burned millions of acres. We are succeeding in this example to make our forests less healthy with 142 workers where formerly we had one. Those kinds of inefficiencies must be dealt with in the long term because as we grow to this proportion and we are finding the New Zealand model that pushes away from 50,000 to one, the relationships back here are influenced and affected so that if we cannot control these costs, we have no economic future. It all begins to relate at some point. The discussion needs to be even far more complete than this. As we consider the effect of our economic size, we must take a look at the number of workers that we have available. Again, we have got about $11 trillion in our economic size right now. We must understand that 40 million workers, baby boomers, are on the verge of or beginning to retire. As we retire, we have to ask ourselves what about the replacements; do we have enough replacements. I will tell the Members, Mr. Speaker, that everywhere I go, I hear the same comment: we need workers. We need workers who will show up tomorrow. We need workers who can pass a drug screen. We need workers who can read and write, and we need workers who are productive. If we are not able to provide those workers or if the workers are not capable of doing the jobs and competing with other nations, our 11 becomes smaller, our relationship becomes larger, and stagnation and even economic collapse are all in the potential field of vision. So as I go around my district, we begin then to talk where are the workers coming from. Now, we have a great discussion right now about immigration, and I have got good conservative friends who say we need to stop the borders, we need to plug off the borders. For me, I am simply looking at our economic future and saying we have got to replace these 40 million workers. We are about 5 percent unemployment right now, and 5 percent unemployment leaves employers everywhere telling me, Please, Congressman, we need workers, we need people who can show up, people who can be productive, people who can reason and think. If we do not bring workers in, that is called immigration, I will tell the Members that we have one other choice, and we will do that if we do not bring workers in. The other choice is to send the jobs to where the workers are. Companies cannot work without employees. So we understand if we begin to export jobs to where the workers are, our 11 becomes 10, becomes nine, becomes eight; and again the economic promise of our future is limited because we have a budget right now that is providing very much inflexibility and decreasing. We have shown very little capability to decrease this number. In my freshman year, the first month we were here, Republicans suggested a 1 percent decrease in the discretionary spending, which would not have even been nearly 1 percent of this overall figure, and the outcry from the American public was tremendous: please cut someone else's program; do not cut mine. We have shown a very deep incapability, either Democrats or Republicans, of reducing the size of the budget. If we also begin to export our jobs to where our jobs go to where the employees are rather than bringing employees into this country and providing jobs, our economic life is equally very difficult. It is not just that we are needing the workers. We do desperately need them. But the new thoughts, the new ideas, the new inventions, that this Nation was built on immigrants and this Nation will continue to be built on fresh, innovative ideas that come in to us, it is that understanding that must drive us to the final conclusion: that for our economic vitality, for our economic future, this Nation must be open to immigration. Again, looking at the German models, the European models, immigration is not a word that is friendly there. We find that their societies are not replacing themselves any better than we are. Our birth rate is about .8 for every couple of two. We are not even getting the 50 percent replacement rate in our growth, and the European countries are doing somewhat worse, and they are affected with the problem even worse than we are so that their aging generations do not have the hope, unless they change their immigration policies, that they will actually be able to sustain the high cost of retirees, the high cost of the aging on a decreasing economic pie. As we then look into the future, we see the need for our economy to sustain or to grow. We need the vitality of new ideas and new workers coming into the system. We must explore the ways that we can restrain our spending. We must look at the ways to make departments more effective and efficient. We must realize the mistakes that we are currently making in our policies that move us toward stagnation, and we must differentiate those policies from the ones that would move us toward vitality. We need to recognize that nations begin to compete with nations. We need to realize the economic model of Ireland in lowering its tax rates to both domestic and external corporations, creating a tremendous boom there. We must understand that if we cut taxes, it helps us to create growth and jobs; and if we raise taxes, it actually decreases our capability to grow the economy and create jobs. We must look at the economic models of other nations who are beginning to see how they can run government more effectively than any other nation is operating government. Nations will compete just as States have competed, just as companies have competed. This Nation must understand that it will compete. We need to be able to move to that model of competition before we move into stagnation, before we run into the deep budget problems that come if we allow our jobs to continue to be taken away by high tax policies, by anti-growth policies. Finally, we must understand that the climate for businesses is one that is extremely critical. I met recently in this building with foreign economic chairmen, chairmen of boards, CEOs of nations from outside this country that are operating in this country. They said that the factors that affect them are overregulation, overtaxation; but one of the most important things they said and the most destructive thing they find is the overlitigation, that in this Nation they will find their litigation costs to be tremendously higher. So we as a Nation must look to the economic numbers. We must look to the relationship between the size of government and the size of our economy. But we must also be aware of those factors that would cause people to say, Even in the stable environment of the United States, I am going to operate somewhere else because of the fear of litigation. And not litigation to hold them responsible for things that they have done wrong. Many times the class action lawsuits are not intended to stop anything. Class action lawsuits have been in order to create a litigation solution. That is, they did not create a solution in operation, but they simply brought an economic solution, which then generally the trial lawyers have benefited from to the tremendous disadvantage of the people for whom they are suing. That is one reason this body did two things in the early part of this year that have helped the business climate tremendously: we reformed the class action task load. We have reformed the way that class action lawsuits are allowed to come to the courts. We have given people the capability to present their problems without allowing the abuse of the process. And the second thing that we did that is so pro-business is we began to reform bankruptcy. No longer can people hide assets inside their estates and preserve mansions while not paying their bills. These are two things that generally have great effect on the economic promise of this Nation, two changes that were made by this Republican Congress in this year, both of which have been signed by the President. We have got more work to do. We must deal with health costs, with both health insurance and with the cost of health care in the Nation. I think that we have committees that are working on that. We must deal with the question of extending the tax cuts if we are going to make the tax cuts permanent or if we are going to allow them to phase out and to realize that we are tampering with the future of the economic vitality of this Nation if we do not recognize the value of lower tax rates. We need to understand that we also should deal with the regulation. Every day I talk to business owners. They tell me that they are overwhelmed with the paperwork of simply meaningless documents that many times are filled out and sent in and sometimes no one ever looks at them. These are functions that we must review. We must review the cost of our government. We must review the effectiveness of our government. There are always things that we will do by government and we should do by government, but we must understand that we are going to be competing and that those functions must be done properly and with the best resources available, without waste in the governmental process. And at the end of the day I think all of us have the same ambition: to pass along a Nation that is just as vital as the Nation that we inherited. Mr. Speaker, I appreciate the opportunity to address this body tonight. I appreciate the indulgence in allowing me to speak on such important matters.

Mr. PEARCE

Mr. PEARCE. Mr. Chairman, I rise to support the amendment. I made my living in the oil and gas business. And to correct an earlier statement, you can determine what you are going to drill for. You can determine that you are going to put oil at the surface or you are going to put gas at the surface. That is to correct the record. We are in a world economy, and we are losing our jobs. These jobs are 100,000 a year-plus jobs when we lose them out of the chemical industry and the fertilizer industry. I was in the industry when the price went from $2 to $50. We will drill this gas. We will simply do it before or after we lose our jobs. We will do it before or after people have to give up their homes to heat them.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, on March 14, China's unelected Parliament passed its Anti-Secession Law targeted at Taiwan. Later that month, Taiwanese citizens took to the streets protesting the law, while senior U.S. administration officials and U.S. Congress repeatedly and on many occasions expressed their grave concern regarding the passage of the Chinese legislation. The European Union has also decided not to lift its arms embargo against China at this time. Clearly, the Chinese anti-secession legislation has impeded cross- strait dialogue, threatened peace and stability in the Asia-Pacific region and, more importantly, allowed the world to see the true nature of the Chinese Communist Party. It is a party that hasn't changed much from the days of the Tiananmen massacre in 1989. Indeed, despite China's recent economic growth and prosperity, China remains authoritarian. The Chinese Communist Party is the supreme source of power. Human rights violations are widespread, stemming from the authorities' intolerance of dissent, fear of unrest, and the absence of laws protecting basic freedoms. Abuses include torture and mistreatment of prisoners, forced confessions, and arbitrary and lengthy incommunicado detention. Prison conditions are harsh. The government has placed severe restrictions on freedom of speech, the press, assembly, association, religion and privacy. In many cases, the judicial system denies criminal defendants basic legal safeguards and due process. Thousands of people are detained or serving sentences for ``counterrevolutionary crimes'' or ``crimes against the state,'' including those arrested for issuing petitions or open letters calling for reforms and greater democracy. For the sake of peace and stability in the Asian-Pacific region, especially in the Taiwan Strait, I therefore urge President Hu Jin-tao to rescind the Anti-Secession Law and improve China's dismal human rights record. As a start, China should censure its bloody Tiananmen crackdown, reverse its verdict on June 4th and release the more than 250 political prisoners jailed for their involvement in the 1989 pro- democracy movement. China's Anti-Secession Law and human rights abuses need to be recognized by the world for what they are: antiquated measures to impose China's rule on its neighbor and its own people. If China wants to be recognized as a world power, it must act responsibly in a peaceful solution to the Taiwan issue and correcting human rights at home.

Mr. PEARCE

Mr. PEARCE. Mr. Chairman, I would like to thank the gentleman from California (Chairman Cox) and the gentleman from Mississippi (Mr. Thompson), the ranking member, for bringing this legislation to the floor. All of us are engaged in trying to make America safer during these times of turmoil and terrorism. Currently, what we are doing is distributing money based simply on formulation, where the only variable is based on population. We are recognizing that terrorists are going to work one step ahead of us. We are recognizing that the threats will be imminent, and we must have a better way to assess our funding process. In this bill, H.R. 1544, the Faster and Smarter Funding for Our First Responders, we begin to recognize that funding should be risk-based, where we assess the threats, and we are accomplishing that. It is the first time since 9/11 that we have wrestled with the complex formulation of how to distribute funds out and to achieve better and safer Homeland Security. In this bill, for the first time, risk and threat assessments are being included. And for myself, representing a rural district where we have 180 miles of Mexico border, with only 150 miles of that simply with no fence, we are interested in threat assessment and risk assessment. New Mexico also has agriculture, food, energy, dams and health care facilities, as well as energy, oil and gas, and we must consider those, the risk of those facilities and to those industries, as well as simply population-based risks. So for the first time, rural America is being able to define the capability with which they should have to prepare for terrorist attacks. The Task Force on Terrorism Preparedness will assist the Secretary of Homeland Security in updating, revising and replacing essential capability for terrorism preparedness, and will consist of members from both rural and urban areas. Mr. Chairman, I again thank the ranking member and the chairman for bringing this bill forward. I think America will be better served.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I rise today to acknowledge the accomplishments of an extraordinary New Mexico school. Gadsden High School in Anthony, New Mexico is the recipient of the College Board 2005 Inspiration Award. In its tireless pursuit of student success, Gadsden High School has seen a remarkable increase in Advanced Placement course enrollment and those taking the SAT, and record numbers of students are enrolling in and attending college. Gadsden High School has helped students achieve equitable access to higher education despite social, economic and cultural challenges. It has made significant strides in exposing its students to higher education options and opportunities. One example of the school's ingenuity in this endeavor is a pre-college program called MESA that focuses on math, engineering and science. Students who achieve core requirements may earn up to $1,000 in college tuition, which some admitting colleges and universities elect to match. In addition to the progress Gadsden High School has made in helping its seniors search and apply for scholarship opportunities, the school supports a summer camp for grades 9-12 to address college questions and planning. The staff also plans to develop an Applying to College Handbook to promote greater parental involvement. These efforts have resulted in an exceptional 57 percent matriculation rate, 98 percent of whom are first-generation college attendees. Mr. Speaker, I am honored to congratulate Gadsden High School on this well-earned distinction and express my gratitude for the leadership and innovation they have demonstrated. I commend Gadsden High School for the hard work they continue to perform, and I am proud to recognize Gadsden High School--a true model of commitment to higher education-- today before my colleagues. Gadsden High School's motto puts it best by saying ``Believe, hope and look for miracles.'' With an unwavering will to overcome adversity and find creative solutions, Gadsden High School is working to create its own ``miracles.''

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I appreciate the opportunity to address this body this evening. I would like to visit just a little about the economy and the ways that I see it, the ways that I think we have to evaluate it, and the things we have to be concerned about if we are to really consider those options that lie before us over the next 10 to 20 years. What lies at stake for our children? What kind of a future are we going to leave for them? Right now, we are in the period where decisions are going to change the history of the American economy, and we simply need to be educated and need to be aware of that. Usually, I like to draw on an easel and discuss with numbers where we can put things into context, and so I will do that, Mr. Speaker. The first number that I would like to put up on the board is the 2.5. That is approximately the size of the government's spending, the size of the American budget. All the things we know about are included in that number. And it begins to be a focal point, because if we are to consider the relative state of our economy, we do the same thing that Americans do in their personal finances. We simply talk about how much we are spending, and 2.5 is a good approximation for what this economy spends, what this government spends to sustain all of its operations. But just as anyone else would, if you were considering whether or not the expenditures that you make are satisfactory, whether they are too low or too high, you also have to consider the revenues that compare to that. So now we have the revenue figure, and that is about $11 trillion. Our economy total is about $11 trillion, and we in the government spend about $2.5 trillion. Now, that is an extremely important relationship, and it is the relationship that tells us more than the actual numbers. There are people who say that our budget is too large. There are some who say it is too small. But the truth is that to really accurately assess, we have to understand the relationship between them. And simply by doing the division, we are able to then establish that right now our government spending is about 23 percent. That would be .23 of our overall economy. Now, then, this .23 is an awfully important number in the relationship. People want to know what does it mean. It means the same thing as if you were to consider your personal spending. If your spending is too high a percent of your annual income, then you are not able to meet all your needs. If we are considering in your personal budget that your rent maybe is 25 or 30 percent of your annual income, then that would tell you that you are satisfied with the size of the rent in that relationship. But this particular relationship, the .23, has to be put into a global perspective but also into a historical perspective. What we find as economists is that as the number, the .23, grows and gets larger, then the economy tends to want to stagnate. If that number is smaller, then the economy has vitality. It has the capability to grow. And that tells us the next piece of what we need to understand, which is that relationship between government spending and our overall economy. Is it growing, is it getting larger, or is it getting smaller? And that tells us what we can forecast for the future. So we will simply put arrows up here, and we will write the words. We will put an up arrow if it increases, it stagnates. And so if it then decreases, we have the capability to grow. Now, as we understand that relationship, up as a percent, if our government spending increases as a percent of our gross economy, we tend towards stagnation and nonproduction of jobs. If it becomes smaller, we tend to have growth and vitality. Now, there are many good people who asked me in my district a couple of years ago why we would pass tax cuts at a point when we are running deficits. And that is a very good question. The truth lies exactly in that number. At the point we gave the tax cuts, the number was about .25. We gave the tax cuts, and it shrunk to about .21; and we saw that the economy, in the very first quarter after we gave the tax cuts, jumped to about an 8.25 percent rate of growth. Now, we knew that was not going to sustain itself. There was pent-up demand with the expectation we would pass the tax cuts. But what we did expect when we passed it was to get to 3.5 or 4 percent. And we saw that rate of growth initially jump up to 8.25, maybe a little higher; and then it came back down, and it sustains itself now at about the 3 to 4 percent range, which we really expected that we would be able to achieve. Now, it is not magic, it is simply the fact that if you are taking more money from taxpayers and giving it to government, they have less money to invest in plant and equipment, less money to spend on disposal retail items, and so your economy has that dampening effect than if you collect more in taxes. It is a simple theme. If you think about world examples, we could go to Europe and look at Germany. If America is in the 0.23 range right now, which it is, we ask, What about Germany? Where is Germany? Germany's relationship is 0.52. If the theory holds correct, you would say the German economy is probably more stagnant at 0.52 than the U.S. economy at 0.23, and the truth is Germany has not produced a job in about 10 years. Their growth is stagnant. They have an economy where companies are trying to figure a way to go somewhere else and find the growth and the vitality that they are looking for. And in truth, about 2 weeks ago in this great Capitol we met with about 50 or 60 foreign business owners, CEOs of corporations that are operating here in America because they choose the economic climate here. It does not mean that everything is good and rosy with us because we have budget pressures. As we look today, we have budget pressures that are trying to force our budget up. And we have the long-term effects that would tell us if we do not control our spending, we are actually going to slip over into a stagnant economy that cannot be remedied easily. If we consider the relationship there of again the 0.25 to 11, consider that relationship again over in Germany the factor is about 0.52, if you want to consider another example, you look at the Soviet Union and the Soviet Union's economy collapsed. It just fell in on itself because the relationship was very high. One would immediately ask what about China. China has got a communist state and a controlled economy, much like the Soviet Union. I visited China in January of this year, and the Chinese themselves tell you that they do not want to make the mistake that the Soviet Union made, and so they have begun to privatize pieces of their economy in order to lower this relationship down to where the economy has the vitality in order to produce new jobs and produce the growth and sustain a continued economic improving picture. They were very cautious about telling us exact figures. The estimates range as low as 40 percent, so probably less than the Germans. The highest estimates were about 60 percent. In the relationship we are considering here for America, it is 0.23. So for the United States, just under a quarter of our economy being government spending, we have to be aware that the economists differ somewhat on where the stagnation begins to occur, but generally in the 0.25 to the 0.30 range there is consensus that you start to dampen down your economy significantly. So anything in the future which tries to make our budget go up without growing our economy, if the 11 does not increase to a larger size, if we increase our budget, we will find that our economy will not grow, will not produce new jobs and we simply have to be aware of the relationship. It is neither a Democrat nor a Republican idea, it is simply an economic relationship that we must be aware of as we consider programs that we would want to continue, programs that we might like to cut back or to work more properly. Now one of the most significant discussions that we have going on right now in the country is what to do about Social Security. There are those who say it is not really a problem until 2042, so we should not do anything. There are others that say we should absolutely do what we can right now. But let us take a look at some of the suggestions. There are different opinions, and so I will simply use a range because I am not really concerned with which opinion to believe, but you have to relate it to this economic relationship in our economy. The estimates are $1 trillion to $3 trillion, if you want to begin. If we attack the problem now, between 1 and 3 trillion. So we put them on the board, and then we begin to look at the solutions and how they affect our relationship. Generally we talk in terms of 10-year payouts here, and so as we talk about solving a $1 trillion or $3 trillion problem, again extending that over a 10-year period, and we come up with either 0.1 or 0.3. If we divide that by 10, that would be $100 billion a year or $300 billion. It is not so critical what you assume, but you have to take it to the next step to adequately discuss the issue. So again, I will put the 0.1 and the 0.3 in parentheses, but those need to be related up here to the top of the equation. If we are going to consider can we do something now, I do not know. But if we had a budget and your budget were 2.5, whether it is $25, $2,500, $25,000, the mathematical relationship will stay exactly the same no matter what. We have a 0.1 or 0.3 problem that needs to be fit into 2.5. I think any Members listening would understand that it might not be comfortable, but we just might be able to come up with the 0.1 or 0.3 out of a 2.5 budget. We might be able to find those savings here and there to ring the dollars out to cure the Social Security problem up front. Now what the President is saying when he says it is better medicine to take it now than to wait is that the estimates again are pretty wide ranging, but the estimates are that in 2042, instead of $1 trillion, it is $10 trillion to $30 trillion, something in that range. Again if you were to do the math, divide by 10 years, the 10-year payout now, that would be 1.0. None would expect that you could take 1.0 of 2.5 and squeeze it into your current budget. It is not mathematically possible, but that is what we are doing if we wait into the future. So again, this body will decide if we are going to do something or not do something, but as we do, whatever we do, realize if we had it on top of the 2.5, if we do not find the savings, then our relationship 0.23 is going to increase, and you yourself would see the possibility that we are moving toward stagnation, and we might be moving toward stagnation at an alarming rate. Now there are a couple of other relationships, and I am going to flip the chart because I would like to draw approximately the cost curve of Social Security, and realize that as we talk about Social Security costs, Medicare costs are going to parallel it. As the baby boomers go into retirement, we are going to see a tremendous escalation of our cost structure for Social Security, but right along with it are going to be Medicare costs that escalate because people who live to advancing years are more expensive than younger people. We see that daily in the escalating cost of Medicare. People are living longer, better lives. And during that time, it just takes more to repair them. My own parents are an example. My father has had a couple of knee replacement surgeries. Mom has had a hip surgery and back surgery. I think that any one of you with your parents in their 80s, it is about the same. We can expect our parents to live into their 80s and even into their 90s. And in truth, demographers tell us the fastest growing population age group is over 100. That is stunning, acceptable, and it is nice; but we have to realize the budget pressures are going to increase. So when I look at things I am concerned about for our future, my only concern does not just lie in Social Security, but it is a piece of the equation that I think as we are talking about the economic future of our country that we would like to discuss. If you would bear with me, I will simply draw an approximation of the cost chart for Social Security over the next 50 years or so, and we will also draw a revenue line and discuss that, and then we will flip back to this chart and use this 0.23 relationship on the next chart because almost every issue that is in front of us today that involves dollars should eventually come back to an analysis of what it does for our economy long term. We can no longer just take short-term views of what we are up against. So now then with permission, I will draw the approximate chart. One thing that we have seen since 1935 is that the number of retirees and then the cost, and the retirees and costs are almost equivalent, but they have been kind of meandering around and up and down and up and down like this. But about 4 years from now, when baby boomers start to retire, and this is a chart that the Social Security trustees have given me, the number begins to escalate tremendously high, and then it plateaus out and continues out. Now the people who say that we should be very cautious and not do any Social Security reforms now point to times in the past when we have made corrections. The mid-1980s we did a significant change in the program. About 1983 we increased taxes, pushed out retirement, and increased the cap. Those are good suggestions we have to consider the effect of, but the truth is they all worked out in a spectrum like this. So our revenues, they would find problems and they would increase them, and the revenues actually have been running surpluses, but they have become very stable and they do not increase. This being the revenue line here, and this being the cost line. So right now we are in a period where these are surpluses, and when the President said there is no trust fund, what he says is we in the Congress have been spending this money. And we have been loaning it from the trust fund to Congress, both Republicans and Democrats have done this for the entire period of the Social Security bill. Since the 1930s, both parties have joined equally in feeding off this excess cash. Now the period where they intersect, this is 2018. The President talks about that frequently, that we begin to use up our cash surpluses in 2018. So we see the cost curve escalates through the revenue curve at that point. What the President says about 2042 when we are out of money is that this period right in here, that is assuming we are cashing in all of the IOUs that are in the trust fund. By the way, those IOUs are in one filing cabinet in Parkersburg, West Virginia. I asked for a picture to be sent, and so I show everyone in my district that the entire Social Security trust fund is in one four-drawer filing cabinet in Parkersburg, West Virginia. And it is a heavy-duty filing cabinet with individual locks, and they look to be sturdy combination locks, but the truth is there is not money there, it is simply IOUs. It is not dissimilar if we began at an early age to think about our child's education when they are born, for instance, and we began to put money into the cookie jar. And we put money faithfully every week into the cookie jar, except maybe when our son or daughter was about 10 and maybe the car broke down. We looked at the cookie jar and said, ``It is awhile before they are going to college. I believe I will take the money out to buy a new car, and I will put some IOUs in the cookie jar.'' And then the washing machine goes out and then the roof needs repairing on the house and pretty soon our son or daughter gets to college age, we look at the cookie jar and it is full of IOUs. That is exactly what we have done in Congress. We have spent all the surplus, but in 2018 we have to start redeeming that surplus for everything above this revenue line that extends out, and at 2042, all of the trust fund has been expended out of the filing cabinet. There is some disagreement and for purposes of discussion, the disagreement is, well, maybe it is 2044, maybe 2046, maybe 2040; but the concept is irrevocably true that we run out of even IOUs. Past 2042, we have got this much revenue, but we will see that we have almost as much uncovered cost period here, once we get past the hatched area, is costs that are not being paid by cash that is coming in. Social Security is a pay-as-you-go plan. There is actually no money that was ever designed to be put into a lockbox. I am sorry, but it just was never designed, even in 1935, to be put into a lockbox. In fact, the framers of the bill understood one fact and that was that the retirement age was 62 and the framers understood that they were going to let people retire at 62, but the average life expectancy of the male was 60. The truth is the original writers of the bill probably did not expect very many people to ever live to get and collect Social Security if you were a man. Women had about a 5-year longer life expectancy, much as they do now. The thought was that they will not collect much. So the retirement age was 62. I will just put that over here in the corner, 62; and yet life expectancy for the male was 60. Again, I have already mentioned that the fastest growing demographic age group in America is over 100. And in case you think that is an anomaly, the second fastest growing group is 85 to 100. The average life expectancy then was 60. Today it is 77. So we are collecting benefits for 17 years longer than what the framers of the bill expected us to do. But still we have to wrestle with the fact, do we take care of the problem now or do we put it off? You can see that the costs are tremendous. Realize that as this cost curve slopes up dramatically and it is this much of a dramatic look, if you go online and look at the Social Security trustees' report, you will see almost this exact graph right here. A Social Security trustee, a former trustee came to the office and answered the questions that I had about it. I wanted to know, kind of away from the political discussion, away from both parties. The trustees are pretty well nondenominational. He came to the office and he is the one who provided me with the charts and the explanations that I place before you now. But if we have the problem with Social Security, all these baby boomers going into retirement are going to be considerably more expensive, so we can expect that Medicare costs are going to escalate. Let us flip back to the previous chart. If Medicare costs are going up, if we have got to solve Social Security, then we have got pressures that want to increase this 2.5. That is not saying that we would increase the budget, but the pressure is there to increase the budget. The discussion would exist, do we increase it or do we not? We simply can do either one we want, but we must realize that as we increase the budget, if our economy is not growing, this relationship then becomes larger and we begin to move toward a stagnant, nongrowing economy that I do not think any of us want to give to our children. If, on the other hand, we find solutions now, if we get budget discipline now, then it is just possible that we could wiggle out of this mess because I think all of us would like to pass along to our children and our grandchildren a country that has the same hope and the same promise that each one of us has lived with. I feel extremely fortunate. I came from a very modest family. My father worked hard and my mom worked hard all of their lives. Mom was a schoolteacher. My father work in the oil field as a roustabout. They earned a good living, but with six children it was tough to make ends meet. From that background, I was able to attend college. My parents were able to work it out. After I attended college, I was able to go into the Air Force, served in Vietnam, and when I got back from Vietnam I was able to buy my own business, pay that business off, and grow it from about four employees to about 50 employees. That is from a family that did not have any political capital to spend. It did not have any economic capital to spend. My parents did the absolute best they could and God blessed them for that. But from humble beginnings almost anyone in this country can become almost anything that they would like. I did not grow up expecting to be in Congress. I grew up just wanting to graduate from high school. And then Mom was always pushing us, You're going to go to college. All six of us attended college and graduated. Several of us have master's degrees. But we were able to do this in a country where we have the hope of growth in our economy, the hope that new jobs will replace old jobs that phase out and always some jobs are becoming obsolete, some jobs pass away from us. It is normal and we can worry and fret about it, but if you think back 100 years to when the automobile was developed, you can imagine the discussion going on among the people who made wagons and wagon wheels and maybe the iron rings that fit around the wagon wheels to hold those wooden wheels together and they had to be discussing how this newfangled thing, the automobile, was wrecking their economy. The truth was the economy was simply changing. It did not wreck anything at all. It changed and it evolved. There is great consternation about the economic well-being of the United States today. My take right now, looking at every nation, the United States by itself has about .33, about one-third of the world's economy, just the U.S. alone. There are approximately 180 countries. With 180 countries, the average economic size, if they were all equal, would be .06. We are at 33 percent and 6 percent would be the average size, so everybody that is smaller than the United States has proportionately less of the economic size because we have got a greater percent of the world's economy. That tells us one thing about this number here. Countries are beginning to compete much as companies have competed in the past. All of us grew up with the understanding, in my era, that we could go to Wackers Department Store, maybe we would go to Montgomery Wards, maybe get a catalogue and shop through JCPenney or Sears, but some of those people that we used to buy from are simply no longer in existence today. Wal-Mart did not exist in my early childhood. Yet today Wal-Mart is the premier retailer. They have competed well enough to drive other companies out of business. And so we understand. All of us know products that have simply ceased to exist. A lot of automobiles, they no longer make them. The Packard is not made any longer. The Studebaker again was a car that existed when I was young, but the company no longer makes automobiles. We have seen Oldsmobile with a phaseout. So we are very familiar with the fact that companies compete with other companies and the weak do not survive; and the ones with better marketing, better capability, not only survive but they thrive. But what we are seeing now in the world is that countries compete, so the United States at $11 trillion, there are nations that want to take part of our economy and move it to them. Like I said, in January I went to China because I feel like China is one of the large emerging threats to our economy and also militarily in the world. I wanted to see them firsthand. I wanted to talk to their leaders and find out their intentions, to find out exactly what their view of the future was. I came back with a firm understanding that they literally intend to take as many of our jobs as possible and when they take those jobs, this 11 becomes 10. As this number becomes smaller, again this number becomes bigger. So we have now countries that are competing for economic well- being. Several years ago, Ireland looked at its situation, they evaluated that as a developed country, they did not have a lot of economic strength, no prosperity, no hope for their kids. And, in fact, they were exporting the most precious product, their children. So they began to think what to do with it. I am going to flip the chart. We will be coming back to the Social Security chart because it all plays into the full economic discussion of things that we must be considering if we are to really view the future economically for the Nation. Ireland was sitting there. These numbers are not exact, they are close enough for us to know, but they had a marginal tax rate of about 36 percent, it might have been 32 percent, 36, something in that range. They thought, what can we do to invite new companies to come into Ireland? How can we compete with other countries? The most competitive part of any country is its tax rate, so they kept this tax rate for internal corporations, but they had a split tax rate and they charged foreign corporations 10 percent. Some would be surprised, but it was no surprise at all. It created the Irish miracle, the economic Irish miracle that caused capital and production to flood into that country. The European Union became disgruntled. They were trying to establish the European Union much as the United States and the European Union officials began to really chafe and tell them that those are not right, you are taking unfair advantage, you need to adjust your tax rates. They became very insistent on it. The Irish, God bless them, said, well, we agree with you. So they simply did away with both rates and they had a flat 12 percent for all internal and external companies. Twelve percent is still extremely good. In the U.S. we are about 36 percent, more or less. So 12 percent versus 36 is fairly competitive. They did not lose any foreign firms, but what they did is began to strengthen up their domestic firms. And so the Irish miracle continues today, so that today just north of my district, about 15 or 20 miles, the Irish are here in New Mexico, here in the United States building a $200 million plant simply to make cheese in the Second District of New Mexico. It is creating prosperity and jobs, but the Irish now have strengthened enough to where they can begin to go out and incorporate and build in other nations and they were able to establish that tremendous strength because this low tax rate gave them a low relationship right here that allowed them to have the financial and the economic vitality to grow their economy, and now they are exporting their economy out and investing in the United States. You can run but you cannot hide from the economic facts that are going on in the world today. This is Ireland, and it would be worthy of note to also consider New Zealand. New Zealand also, if I drive about 25 miles north of my district in New Mexico, New Zealand has come in and they are building another $200 million plant, $220 million plant, they have already got it operational, it makes MPCs. Those are milk protein concentrates. New Zealand is the only country in the world with the technology to make MPCs, and so it is no small accident that they have moved into America. Again, they have improved their economic well-being. Let us take a look at what caused the New Zealand economy to be able to grow to a point that they now can move over and invest in the United States, creating jobs here in this climate, this economic climate. Several years ago, New Zealand looked at itself and said much the same thing that Ireland said, for a developed economy, we are way down the list. We are not very prosperous, we do not have a good future for our kids, and what can we do? They approached it a little bit differently than Ireland, but it still begins to put economic pressure on all the governments of the world. Again, my facts will not be exactly right, but they are close enough. They give a perception of what occurred in New Zealand, and if we get the perception, then we have the right concept to understand what we must be about in this country. New Zealand took a look at their government, and they began to think and assess which functions should typically be government and which should not be government, and they committed to take nongovernmental functions out of the government. That caused a tremendous shrinking of their government spending. Again, just to relate it back to our original discussion, they shrunk this figure because they weeded out things that did not belong. As they shrunk this figure, they shrunk the relationship figure, and it fell to a level that their economy began to develop growth, and as it grew, then this number began to enlarge, again driving this relationship figure, this key measurement here in New Zealand, began to fall rapidly, and they today have enough capital built up in their own Nation to begin to export and build in our country at this particular point. Now, what did New Zealand do? How effective was it? What were the dimensions of it? Because if we do not understand what New Zealand did and other nations will follow suit, if we do not understand those things, our country will have a government model that is not economically competitive and, again, the future out 10, 15, 20 and 30 years begins to look bleak if we do not respond to the competitive pressures. But what New Zealand did is in assessing those functions that typically would be government but maybe should not be, they began to shrink the government down, move the functions outside. The outside functions processed and then performed at a much better rate. But, for instance, they had about 50,000, and it may have been as high as 70,000, it may have been as low as 30,000, but I figure it was about 50,000 workers in the Labor Department. Now I generally ask at town hall meetings, because I have discussed this in town hall meetings frequently in the Second District of New Mexico, I asked them if they were to envision a shrinkage of a department, how much do they think they could shrink and still perform the functions that should be governmental functions from the Department of Labor in New Zealand? I get estimates, maybe they shrunk from 50,000 to 25,000. Some bold ones will say maybe they shrunk to 10,000. But they do not really believe they did. They are just throwing out the numbers for the debate. The truth is, and we had one of the designers of the system actually come into the office because, again I wanted to visit, I wanted to get firsthand this information, they decreased down to one individual, and the gentleman who came into my office, I think he was head of the Department of Labor and he was the last employee. Now that creates a tremendous savings on the part of government. They are able to lower tax rates. They are able then to go get the economic vitality that creates jobs, opportunity, and hope for the future, and that is what we all want for our children and our grandchildren. Again, these numbers are easily available on the Web site, but maybe there were 15,000 people working in their forestry department and they might have gone down to 50, but we can see that what they did is they did the same thing Wal-Mart does. They create a competitive atmosphere among governments that we are going to have to respond to. We will not be able to simply act like this does not exist because as we act like it does not exist, our cost structure for government remains higher, it remains more inefficient, and capital will leave this country looking for the best tax rate, the best government, for the least cost. It is the same thing that we do. We shop at Wal-Mart because our dollars go further. There are those people who curse Wal- Mart and they say ``not in my hometown,'' but I will tell the Members that Americans are voting with their pocketbooks saying ``Wal-Mart is extending my buying power.'' I am not here to advertise for Wal-Mart. There are good competitors with them. It is just that they are the ones who are kind of out leading the economic change in this country and they have given much more buying power to the middle class, and we see that frequently. Each one of us, we will stand here in on this floor and we will tell the people that they should buy American, but when faced with the opportunity ourselves to make the choice, I suspect that we do differently than what we say. I was in China, and North Face is a jacket here that is well respected and is a high-value jacket. Those sell for about $150. We saw the same jackets on the street corners in China, and they sold for $13; $150 or $13. We could talk to our neighbors and we could implore our neighbors to shop local, do their duty, keep Americans working, but the truth is when we go to the store and look around and none of our neighbors are watching, I suspect that not many of us are going to plunk down $150 for the jacket when we could buy the one for $13. Maybe I am not right, but I think I am and I think the American economy shows it. So we have tremendous threats. We have got China. We have got New Zealand. We have got the European Union. We have got the old Soviet Union trying to rehabilitate itself. All of those nations are trying to take a piece of our economy. They want our jobs and our well-being to transmit to their country so that they have jobs and well-being. They are working hard. They are working smart, and they are working cheaply. My generation grew up with Japanese imports, and we used to talk about those cheap Japanese imports because they were. We had these little bitty radios, these portable radios. We would listen to them. They were about this big. That was the best they had. The Japanese were beginning to compress and make things, and we all remember those days of that little radio that we would hold up to our ear and the sound would be very scratchy. Cheap Japanese imports. Now today the Japanese are talking about those cheap high-quality Chinese imports. The Japanese themselves are being affected. The Chinese intend to take as much of the world's economy and put jobs from all around the world into China. We can complain. We can say it should not be. We can try to build barriers around the nation. But the truth is we cannot turn back the clock. It is indeed a global economy, and it must be reckoned with. To do other than reckon with it, to do other than to look at the effects of on our economy as we slowly lose jobs is to be faint-hearted and is to be living a lie. We must be accurate in how we assess the current threats on our economy, or we will not be able to sustain the American way of life. I do not know about my colleagues, but I for one am looking for those things that will cause our economy to grow. I am looking for ways that we could save money and still provide the same services. I am looking for ways that we waste money. I often use the example: People want to know just how bad is the waste that I see? The most extreme example that I see, and there are more extremes available, but it is just one I quote a lot, is the VA. We hear constantly from our veterans, ``You are not spending enough. You are not spending enough. You should increase this figure and give us more money as veterans.'' And would that I could. But first we have to look at the ways the Veterans' Department spends money foolishly. There is one hospital in New York, actually I think it is even a clinic, but that hospital or clinic has 800 employees and it has got 50 patients. Let me say that again because it always draws a gasp. Eight hundred employees and 50 patients. We can wonder why it is open, but, frankly, it is open because of political pressure, political pressure from New York to keep those 800 jobs there. If I am in New York, we would just as soon this number not improve because I want to have a short-range view of keeping those jobs in my district, even if it is bad for the economy, even if it is bad for veterans. No matter the long-range effect on our Nation, no matter the fact that New Zealand has begun to work smarter and they are going to work cheaper, I am going to politically try to maintain that position, and I will be frank. It is to the long-term detriment of this Nation when we make such decisions because we always come back to the same beginning point. We have got to do things that tighten up our budget. We have got to do things that create growth. We are going to have to manage our government to where it is competitive with other nations; otherwise, we do not have hope for the future. If we are to consider fully this Social Security concept, again, we find the meandering nature of maybe this is 1935 and this is 1950, and we go through the 1970s, and over here is about 2008 when we begin to retire, we as baby boomers, and at 57, I am the second oldest year of baby boomers, and we can see then when baby boomers start. No more soft costs. No more question. We have got 40 million people that are baby boomers going into retirement in this period of time between now and 2042. If we are cognizant of that fact, we have to take this chart and begin to relate it now to those workers that follow us. If I am looking at the replacement for Social Security, the replacement dollars, I must be knowledgeable about the population of the country and the population, if we start at age zero and we go to 100, over here, again, very approximately, the younger population is small and it increases. The baby boomers are here, and the retired population out here. Again, one of the problems is it was assumed our retired population would be here, but we are living longer, better lives. So at about 57, I would be out here, moving toward retirement. But see here when baby boomers, if these are all the baby boomers on that curve where the curve is going up on the previous page, when these baby boomers are retired, we have got all of these jobs right here and we do not have enough people to fill the jobs. Social Security is a pay-as-you-go plan. I pay for someone who is retired. My daughter will pay for me. Hopefully she pays for me and she needs to split it between my wife and myself. But when Social Security started, there were 42 workers per retiree, and today there are three to one, and by the time that my daughter starts retiring, it would be two to one. So my daughter and her husband are going to have to work for either my wife or me, and one of us is going to be out in the cold, I suspect, and knowing my wife, I suspect I know who will be out there. We will wrestle that problem over, but it just tells us that we have got a significant relationship here. Right now we are running at about 5 percent unemployment. We can say it is 6 or we can say it is 4. Again, conceptually, we have got to choose a point and consider what it means. We have got about 5 percent unemployment, but when that 5 percent unemployment comes knocking at the door, I as an employer will tell people that we cannot, at 5 percent unemployment, find someone to fill the jobs because they cannot, number one, pass the drug screen, or if they can pass the drug screen, they will not show up to work tomorrow or next week. These 5 percent are very difficult to hire, frankly. It is not that they do not have a desire to work; it is that maybe they lack training, maybe they lack discipline, maybe they have developed habits that make them pretty unproductive. But the truth is that already, right now with the labor population the way it looks in America, with all baby boomers still working, we are in desperate need of workers. Now, if we are in desperate need of workers, when those 40 million begin to retire that we show on the previous graph, the Nation will be dying for workers, and dying for workers with a Social Security plan that is a pay-as- you-go plan is not going to pay. It is only going to go. We must deal with the shortage of workers. So I have good conservative friends of mine discussing immigration, telling me, you should lock the border down. I say, I am sorry, I look at this curve. When I talk about immigration, I look at this curve because I have self-interests. I want someone to have a job that pays for me. Now, if we do not have enough workers, we have two options, and they are simply two options. We can say it in any way, and we can be mad or we can be contentious about it, but we have two options if we do not have enough workers. Number one, we bring in enough workers to fill the jobs, that is called immigration; or, number two, if we do not bring workers in, we will send jobs to where the workers are, because employers must have employees. As we consider now this relationship of the population, if we begin to say we do not want immigration, that we will send the jobs to where the workers are, this $11 trillion begins to get smaller, this relationship begins to get bigger, and we move to stagnation, and we move to stagnation for the next, through 2042 and beyond. We have a relationship that is developing, and this relationship, once it is established, once our economic model is set, it is going to be very difficult to turn it around. So prudence would suggest that we consider deeply if there is a problem: if there is a problem in Social Security, if there is a problem in our budget, if foreign countries are really beginning to peck away at our job base. And we have to deal with those. Now, there are many things that create the economic climate of the country. These are the economic relationships, but the economic climate must be discussed also. We hear frequently on the floor of this House about the outsourcing of jobs. Why would jobs go to another country? And generally, the accusation is made that it is simply because Republicans want it to happen. I think that is thin. I think that it is lacking in coherence. The real truth is that jobs leave because countries are providing better climates. I will tell my colleagues that when companies can pay 12 percent tax versus 36 percent that they pay here, over time they will migrate. We have other costs. We have energy costs. It was said that we were simply supporting Big Oil when we passed the energy bill. Now, my own perception is that right now, natural gas is selling for about $7 in the United States. It is selling for 70 cents in Africa, 50 cents in Russia, or just vice versa. Now, we have been shipping chemical jobs over to Africa and Russia because chemicals use a lot of natural gas. Companies cannot continue making chemicals here with natural gas that is 10 times the cost in other nations. So the chemical council came to me in January of 2003 and said, at that time the price of natural gas was $4.50, and they said, we cannot sustain this. Please, please, we have to have an energy policy, get renewables, start opening up plants, whatever we can do, because we are beginning to ship good $100,000-a-year jobs overseas. Now, many of our friends on the other side of the aisle are concerned about the environment, and well they should. But they are concerned to the point that they will not consider the things that need to be done that both keep the environment clean and affect the cost of energy. If we do not begin to come together as both parties and represent our common viewpoints at a table to find the solutions, we are going to wrestle each other to a standstill, which we have been doing for years, while Africa and the Soviet Union are quietly pulling our $100,000-a- year jobs away from us. Now, it is not by design. Neither party, neither Republicans or Democrats, would want those jobs to go away; but, sometimes, we are unaware of the consequences of our daily actions. The cost of taxes is one thing that will drive jobs away. The cost of energy is another thing that will drive jobs away. The cost of lawsuits is another factor that will drive jobs away. Earlier in this presentation I mentioned that we had discussed downstairs in this Capitol with about 70 or 80 foreign CEOs, CEOs from German companies, English, French, they began to tell us the factors that will drive them out of this country. Simply stated, they actually had a chart showing just dots on a chart showing the factors as they polled their own companies about, those companies that were in the room, which things were the highest importance. They will tell us that lawsuits, energy, taxes, and, quite frankly, another one was education, many of the workers coming through the doors; as you recall on the 5 percent unemployment, the workers that show up are not prepared. If we do not begin to deal with education so that indeed no child is left behind, we can wrestle over the concept all we want, but if we do not cure it, these factors, taxes that are not competitive, energy that is not competitive, lawsuits that are 100 times greater, the chance of lawsuits in this Nation, than others nations, and a poor education so that the kids going into work are not able to do complex tasks. Those are the things that will absolutely take away the future of our country. So my appeal is constantly that we as Republicans and we as Democrats, we can continue to represent the viewpoints that we hold dear, but we must begin to work together. I do not care if it is quietly in rooms behind closed doors to wrestle with those things; but we must begin to deal with those elements that would drive companies out of this Nation, because as companies leave this Nation, our $11 trillion economy becomes smaller, our relationship between government spending and the economy becomes larger, and it moves us towards stagnation. For myself, I will do everything I can to protect the environment, to create jobs, to create an environment in this country that will offer growth so that my children and my grandchildren will have the same opportunities that my wife and I had: to grow up fairly poor, to buy our own business, to pay it off, to run for Congress, and from a family without much political capital, serve in a Nation like this with a democracy like this and a Republic like this. For me, that is the hope of America, that is the hope for future generations, and my own perspective is that it is the hope for the world.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I rise today to salute Lowell Stout, a good friend who recently passed away in Hobbs, New Mexico. Lowell was an attorney there. He moved to the area from Oklahoma after the Dust Bowl days in the 1930s. He always called himself a proud son of a sharecropper from Blaine Bottom, Oklahoma. Lowell worked his way through school as a roughneck on drilling rigs. He also worked as an oil field roustabout. During the Korean War, he served in the Army. After his time in the service, he returned to Hobbs to practice law defending a variety of civil litigation matters. Later he began to specialize, representing the small guy in personal injury, plaintiff-related matters. Lowell became a fellow of the American College of Trial Lawyers in 1981. He was selected to be included among the ``Best Lawyers in America.'' He was an early inductee into the Joe Roehl Circle of Honor which honors the finest trial lawyers in New Mexico. I never asked Lowell if he was a Democrat or Republican. I suspect he was a Democrat. We never talked much about politics because we shared a common belief that the family was paramount. Lowell was the parent of Mark and Georgiann. Georgiann and I went to school together and graduated. She went on to San Francisco and lives there today. Son Mark stays in Hobbs. He and his wife Cindy have raised their family there. The abiding memory of Mr. Stout is that he was always with his wife Liliane. They raised their family in Hobbs. He was a dedicated family man. In these days of partisan politics, I know that many times Mr. Stout disagreed with my opinions, but he frankly encouraged me to do the best that I could. He did the best that he could. I think that we ought to learn by his example: dedication and commitment to family, dedication and commitment to a wife. Again, I salute Lowell Stout, a great lawyer, a fine human being, a friend and the father of friends of mine and the husband of a friend of mine.

Mr. PEARCE

Mr. PEARCE. Mr. Chairman, I thank the gentleman for yielding me time. I would support the amendment. As an oil and gas service company, we did not actually own oil and gas wells, but we owned a company that repaired the wells. My wife and I faced the problem daily of where to find employees and how to retain those employees. In the 1999-2000 period, the price of oil fell to $6 for New Mexico type of oil. Revenues in service companies like ours fell to 20 percent of the original values. Although my wife and I were able to keep every employee for the duration of that period of time, about 11 months, many, many of the firms laid off 68 to 70 percent of their employees and gave pay cuts in the industry. That is the sort of cyclical thing that we face in the oil and gas industry, and now that the price has come back up, literally there are no workers to be had because they do not wanted to come back to a cyclical industry. We face limitations on production based on the lack of availability of labor. So I think that this important study should be done to find out where we can get labor, where we can get solutions to simply keep our oil fields working. The viability of our oil fields really is going to determine the price of natural gas and petroleum in this economy. I think the gentleman's amendment is well placed, and again, I would heartily endorse it and request Members to vote for it.

Mr. PEARCE. Mr. Chairman, I rise in support of the Abercrombie amendment. What we are engaged in today is just trying to find commonsense suggestions to really sustain the American way of life. Affordable energy, affordable agriculture are two things that sustain the American way of life. This accomplishes good work toward both. I will submit more comments for the Record. But I do want to support the amendment. Mr. Chairman, I rise today in support of the Abercrombie Amendment. This amendment will authorize a modest program to develop ethanol from sugar cane, which would be added to fuel in Hawaii to meet the EPA Clean Air Act requirements for oxygenated fuels. The State of Hawaii also mandated a 10 percent ethanol blend for gasoline in the state in order to improve the state's air quality. Hawaii must meet Federal standards for clean air by mandating clean burning fuel. Ethanol is currently the only acceptable ingredient to blend with gasoline to meet Clean Air Act requirements. Unfortunately for Hawaii the dominant crop is sugar instead of corn. If Hawaii grew corn, they would already be receiving tax credits for ethanol production like almost every other state in the nation. According to the Congressional Research Service the tax credits for ethanol production will total more than $1.4 billion. Congress annually provides tax credits, research funding and grants to turn rice straw, biomass, agriculture waste, woody debris and corn into ethanol. Congress is spending billions to increase our nation's production and consumption of ethanol from every source imaginable. Congress has decided ethanol production is worthwhile, and has provided at least $10 billion in incentives and tax credits since 1978 when an alcohol tax exemption was made law. Congress should pass this amendment in order to have a consistent ethanol policy. Mr. Chairman, I urge passage of this amendment.

Mr. PEARCE

Mr. PEARCE. Madam Chairman, I rise today in support of the energy bill that we are discussing on the floor. Madam Chairman, the absolute truth is that Americans are paying more at the pump today than ever before. Home heating costs have escalated dramatically. These things are both reflections of the lack of an energy policy. All we are suggesting in this energy bill is that we need to recognize the dynamic forces that are at play in today's economy, and that we need to take steps to correct it. For instance, natural gas in this Nation is hovering in the $7 range, but if we look over in the Asian areas and in Russia, it is 95 cents and 70 cents. What is happening is that we are outsourcing jobs to those other nations because they are paying one-tenth the price for natural gas that we are paying here, and yet our friends on the other side of the aisle some days want to talk about outsourcing jobs and the horrific effect that it has on the economy; and today we are doing something factual about it, and yet they want to turn an eye and say, That is okay, send those jobs; we probably did not need them to start with. They would have us believe that what we are facing and what we are giving is simply a handout to the oil companies, and what we are doing is simply trying to develop new sources of oil that is extremely expensive to reach. We are drilling on some offshore platforms that cost billions of dollars to set in place. We are drilling on those with great risk that we will lose money, and what we are simply saying is that deep well incentives should be in place. Now, the incentives that are in place for onshore production are either very difficult areas to drill in or the incentives only kick in after the price falls to a certain level. Madam Chairman, it is time for us to pass an energy bill. The consumers in this Nation depend on it, and they are depending on Republicans because our friends on the other side of the aisle refuse to help.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I rise in support of H.R. 486 and would like to thank the gentleman from California (Chairman Pombo) and the gentleman from West Virginia (Ranking Member Rahall) for working with me on this important legislation. I appreciate the bipartisan support from the Committee on Resources members and the ranking member of the subcommittee, the gentlewoman from the Virgin Islands (Mrs. Christensen), in reaching a compromise that is reflected in this legislation. The need for Congress to pass H.R. 486 arose when a munitions storage bunker was built at Holloman Air Force Base in 1997 and 1998. Holloman Air Force Base serves both the United States' and German Air Force's training and readiness functions. The Holloman air to ground training ranges consist of 1,385,262 acres, almost exclusively Federal land, and air to air training ranges providing 8,352,878 acres of air space for national security and training. The total military training routes at Holloman Air Force Base is 8,657,964. That is DOD, DOI, USDA and private lands. Without an explosive clear zone, Holloman Air Force Base is unable to fully utilize the designed capacity of the bunker, and it adversely impacts the storage capacity of munitions required for training and operations. This directly impacts the ability of Holloman Air Force Base to fully meet its mission of training, readiness and national security as well as training our NATO partner, Germany. The cost to replace the munitions storage area is estimated by the Air Force to be a minimum of $40 million today, and more if this bill is delayed. The proposed explosive clear zone encroaches on private property. The Federal Government originally sought to take the private property through condemnation, leaving little choice but for the property owners to vigorously defend their property rights. This bill resolves the issue and protects both private property and the investment made by the Air Force and would simply exchange Federal lands in close proximity to ranch boundaries. This bill protects our national security, saves the taxpayers a minimum of $40 million and protects private property and is fair to all parties concerned. I urge my colleagues to join me in passing H.R. 486.

Mr. PEARCE

Mr. PEARCE. Mr. Speaker, I rise in support of S. 437. Mr. Speaker, I want to thank the gentleman from California (Mr. Pombo) and the ranking member, the gentleman from West Virginia (Mr. Rahall), along with the subcommittee chairman, the gentleman from California (Mr. Calvert), and the ranking member, the gentlewoman from California (Mrs. Napolitano), for their hard work in getting an agreement that allows us to vote on this important water settlement bill today. I would also like to pay tribute to the gentleman from Arizona (Mr. Hayworth) and the Arizona delegation in anticipation of receiving the same from them in this bill. In the 1968 Colorado River Basin Project Act, New Mexico was apportioned 18,000 acre feet of Gila River water. The Gila River's headwaters are in New Mexico and, therefore, New Mexicans always felt like they had claim to some of this water. However, we had not been able to use any of it, and it has simply been paper water. New Mexicans have long sought to develop this water and because of their willingness to negotiate in good faith and compromise with the State of Arizona and downstream water users, we have now reached an agreement. That agreement is a bipartisan solution which I feel represents the best interests of both States. This historic water bill will not only provide a settlement to long- standing Indian water rights in Arizona, but it will also ensure Southwestern New Mexico gets the water it was apportioned in the 1968 Act. New Mexico was not able to develop this water because the 1968 Act required New Mexico to keep whole senior water uses in Arizona. After many long months of negotiation, all the necessary agreements between Arizona and New Mexico are in place to allow this bill to move forward. It is Congress's role to codify agreed-upon settlements, especially where almost every part has been negotiated in good faith for a number of years on very difficult and contentious issues. Without the agreements negotiated between the two States and which are reflected in the amendments to the 2004 Arizona Water Settlements Act, the New Mexico unit could not be developed. However, with this agreement, after nearly 40 years New Mexico water users will be able to develop water that they were promised in 1968. Mr. Speaker, I urge all of my colleagues to support S. 437.

Mr. PEARCE

Mr. PEARCE. Mr. Chairman, I rise in support of H.R. 10, the 9/11 Recommendations Implementation Act. I appreciate the Judiciary Subcommittee on Immigration, Border Security and Claims' efforts to include additional full-time border patrol agents in this legislation. I also appreciate the fine work of your staff to create awareness about the significant need for additional resources to the Mexico-New Mexico border. As Customs and Border Protection augments its efforts through additional money, agents and technology to the more high-profiled southern Border States such as California, Arizona and Texas, New Mexico's border law enforcement agencies are left understaffed and unprepared for the increased drug trafficking and human smuggling resulting from the crackdown in neighboring states. Today, after $19 billion spent for border security and technology in the last 2 years, DHS has increased its emphasis on Arizona border security through its Arizona Border Control Initiative. This Initiative invests $10 million in the Tucson Customs and Border Protection region to hire more border agents, improve technology and provide unmanned aerial vehicles (UAVs). As a result, more than 2,000 border patrol agents will be assigned to the region. This makes an average of six agents for each mile of border in Arizona. However, with only 425 border patrol agents in New Mexico, there are fewer than 2 agents per mile of border. Yet, increasing pressure against illegal activity on the Arizona border has resulted in increasing drug and human trafficking spilling over into New Mexico. For example, in FY 2004, agents in Lordsburg, New Mexico made 141 percent more apprehensions than all of last year. I strongly encourage my colleagues to consider providing New Mexico with additional resources to make our border more secure. I look forward to working with the Committee to ensure the necessary resources are provided to protect our border. Mr. Chairman, I urge passage of H.R. 10.