Paul Ryan

Mr. RYAN of Wisconsin

Mr. RYAN of Wisconsin. Mr. Speaker, I yield 1\1/2\ minutes to the ranking member of the Education and Labor Committee, the gentleman from California (Mr. McKeon).

Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself 30 seconds simply to ask a rhetorical question, if the Democrats chose to extend some of the tax cuts in this budget and therefore not all of the others, how is this not a tax increase? If the Senate said that the Democrat House budget raised taxes and they didn't want to raise them as much and they forced the conference to negotiate to keep some of the tax cuts at bay, how is this not a tax increase? If they are saying they are preserving some of the tax cuts, then by definition they are raising the other taxes. You can't have it both ways. Mr. Speaker, I yield 2 minutes to a young, earnest, conscientious Republican leader, the gentleman from Florida (Mr. Putnam).

Mr. RYAN of Wisconsin. Well, I can go back into that, but I think we have belabored the point.

Mr. RYAN of Wisconsin. Mr. Speaker, just a point of clarification. I think the gentleman said that our budget did not extend the tax cuts. It did. In fact, it extended all the 2001 and 2003 tax cuts. I just wanted to state that for the record. That is all.

Mr. RYAN of Wisconsin. Mr. Speaker, will the gentleman yield?

Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself such time as I may consume. I would like to start off by congratulating Chairman Spratt and the majority staff on the Budget Committee for reaching this point in the budget process. This is not easy. And they are to be commended for getting the budget up to this point. I have long believed that the budget resolution is an important statement of congressional policy and a critical act of governing. So in a sense, I am glad to see this conference report here today. And the gentleman from South Carolina deserves credit for that. That said, the choices in this budget, or some would argue, the complete lack thereof, represents an enormous missed opportunity, an enormous missed bipartisan opportunity. The Democrats' fiscal year 2008 budget sets off a vicious cycle, Mr. Speaker. Higher taxes fuel higher spending and greater spending demand. In order to meet this appetite for greater spending, we are going to have to raise taxes again and again and again. Let's take a look at how this will work. First, the linchpin of this budget, and numbers do not lie, check with the Congressional Budget Office, its only one binding fiscal policy is the same one that Democrats have been bringing to the floor time and again, ``raise taxes.'' This budget will raise taxes on the American economy and American workers by at least $217 billion. That is the second largest tax increase in American history. And to be clear, their $217 billion tax increase is just an opening bid. It will last only until the majority can raise the ante. As you may recall, Mr. Speaker, the House Democrats wanted and included in their budget a $400 billion tax increase. That would have been the largest in history. But the Senate made it clear by a vote of 97-1 that they would not accept the House's number. So from this conference report, it would initially appear that the House Democrats receded to the Senate's smaller tax number, the smaller tax increase, that's according to the CBO, that is, until you take a closer look at some of the procedures and gimmicks included in this report. First let's look at the trigger. There is this so-called tax trigger. In short, this trigger will provide the majority with an immense loophole allowing them to renege on their promise to protect certain high-profile tax benefits, and they can do it without leaving any fingerprints because it would all be automatic. All the Democrats have to do, believe it or not, is spend too much money, and that will set off the trigger and raise those taxes. Mr. Speaker, they are saying in this budget they want to extend marriage penalty relief, the child tax credit and the 10 percent bracket. But if they spend too much money, guess what happens automatically? Those tax cuts go away. Then there is the $190 billion worth of unfunded spending increases promised in this budget's 23 reserve funds. If they actually deliver on these promised 23 wish list reserve funds, that's another tax hike. Mr. Speaker, even their version of PAYGO, which they touted as proof of their commitment to fiscal discipline, is just a means to make it easier to raise taxes. What happens if they raise mandatory spending, Mr. Speaker? You guessed it. They have to raise taxes to pay for it. So again, this $217 billion tax hike is just the starting bid. You can expect them to draw from that well again and again and again. Why is this a problem? Why do we have this huge difference of opinion, difference in philosophy of ideology of economic doctrines? Because the enormous tax increases will threaten the economic and fiscal progress our Nation has made these past several years. As I have said many times before, the tax decreases, the tax cuts we passed in 2001 and 2003 have turned this economy around, it brought us out of recession. It improved job growth, GDP growth. It lowered the unemployment rate. Business investment and the entire market rebounded. And all that growth has led to surging revenues coming into the Federal Treasury. Three years of double digit revenue growth at these lower tax rates. The tax hikes contained in this budget threaten to reverse all of this. And think of the impact this tax hike will have on the small businesses that it hits. Our small businesses, who are already paying the second highest tax burden in the industrialized world, will be told that they are just not paying enough. In this increasingly global economy, where these companies are struggling to compete with China and India, imposing an even larger tax burden will be crushing. It will severely threaten our ability to compete, and let alone lead, in the global economy. So what will taxpayers get in return for sending Congress ever higher cuts of their paychecks? Better working, more efficient, less wasteful spending? No. The majority doesn't even pretend they are going to control spending. There is no control on the existing trajectory of spending we have in this budget. We are only 5 months into this Congress, and at every opportunity the new majority has chosen the path of higher spending. They increased discretionary spending by $6 billion in the omnibus, another $20 billion or so of extraneous spending in the supplemental, and now they're increasing nondefense discretionary appropriations next year by another $23 billion. For all we've heard about how the Democrats had to clean up the mess the Republicans gave them, their only response to this seems to be spend more and tax more. This formula has never worked for getting control of the budget in the past, and it won't work now. It's also the reverse of what's going on in the rest of the world. Across Europe, governments are moving away from their welfare state, big government tax policies and toward more market-oriented policies. For instance, the latest, most clear example. But here in the States, where we should be leading the tide toward free markets, Democrats are taking us in the other direction. Finally, I think the biggest failure of this budget is not what it does do, it's what it doesn't do. This budget does nothing to reform entitlement programs, to extend their solvency. We had a parade of witnesses from the left and from the right, Democrat witnesses, Republican witnesses, the Chairman of the Federal Reserve, the OMB Director, the CBO Director, all come to us and say, you've got to get a handle on entitlements. You have to reform the entitlement programs to make them more solvent, to stop this enormous unfunded liability that is hitting American taxpayers. Even with the Democrats' $400 billion tax increase, they had in the House-passed version, that would quickly outpace revenues, entitlements would swamp us. So Mr. Speaker, even if we hit a temporary balanced budget, as this might achieve, it will be temporary because you can't raise taxes enough again and again to outpace the trajectory of entitlement spending growth. We will go back into deficits because this budget does nothing to control spending. So why have the Democrats failed to even address this dire situation? Because as Senate Budget Chairman Senator Conrad told 60 Minutes, ``It's always easier not to. It's always easier to defer, to kick the can down the road, to avoid making choices.'' ``You know, you get into trouble in politics when you make choices.'' I appreciate that sentiment, but we all know that is not what budgeting is about. Budgeting is about making choices even when they're tough, even when they are not politically popular because that is what we came here to do. In closing, I believe this budget fails to make any real choices, let alone the right ones. It will impose on American families and businesses at least the second largest tax increase in American history, if not the largest, add immense new government spending, and put off critical entitlement reforms for at least another 5 years. Our House Republican budget proved we can balance the budget without raising taxes and stop the rate on Social Security. It is my genuine hope that the House will vote today to change this dangerous course and send the Democrat budget back to the drawing board. With that, Mr. Speaker, I reserve the balance of my time.

Mr. RYAN of Wisconsin

Mr. RYAN of Wisconsin. Mr. Speaker, I thank the gentleman for yielding. I'd like to get into this tax issue. I think we just heard this, there's no tax increase in this budget. You're going to hear that claim over and over and over. The last speaker just mentioned that they are preserving some tax relief for some people, marriage penalty, for child tax credit, the 10 percent bracket. What they mean, they're saying, they're acknowledging, I'll give them credit on the face of it, they are going to preserve some tax relief and prevent those tax increases from coming. What that means is they are going to let all these other tax cuts expire. More importantly, the fact is they are banking on the fact, they are requiring all those other tax cuts to expire and all those taxes to increase. Numbers don't lie, Mr. Speaker, and what a budget is is basically a page full of numbers, and the numbers don't lie. This chart shows you how it works. The lower line, the green line, is the line that our budget used, which assumes and requires the extension of all the tax cuts, the per child tax credit, the income tax rates, the abolishment of the death tax, cap gains, dividends, all tax cuts. The dotted red line is what the Democrats are using in their budget, and that line says they're going to raise all those taxes, marginal rates, across the board, except we hope not to raise the child tax credit tax or the marriage penalty tax or the 10 percent bracket. And we're putting a trigger in the law, and I call this the trigger tax, and that's the red line, the solid red line. And that is in the year 2010, if the Treasury Department says the surplus will be big enough in 2012 that we the government can afford tax cuts for some people, these three tax cuts, then they will have their tax cuts. But here's the vicious cycle that we're going into and the vicious cycle is this. Their budget starts with a new $24 billion spending spree just next year in domestic spending. Then they have a $217 billion tax increase in their budget. Then they have 23 promises, 23 wish lists, 23 reserve funds that amount to a call to spend another $190 billion. They are going to have to raise taxes to pay for all of that. That's going to have the fact that there is no entitlement reforms. What their budget says is, tax more, spend more; tax more, spend more. Then come 2010, when those surpluses don't materialize, because we have done all this spending, they won't even get those three tax cuts that they want to extend, and this budget will go from having the second largest tax increase in American history to having the largest tax increase in American history. Let's look at what the true intention of this budget was when it passed the House just a month ago. The budget that passed the House a month ago had a $392.5 billion tax increase in it. All the 2001 and 2003 tax cuts that got us out of recession, that created 7.6 million new jobs, that gave us 3 years of double digit revenue growth, they wanted to get rid of it. Then in conference with the other body, with the Senate, they agreed to the Senate to say, okay, we won't raise every one of these taxes, we would like to preserve three of those tax cuts, but raise all the rest. So they have a $217 billion tax increase in this budget. But that's not even enough, because their trigger tax will say, if they don't spend as much money now as they are saying now they want to spend, then maybe the taxpayer will get some of those tax benefits. But if they don't, then we are back to a $400 billion tax increase. The point is this, this is a vicious cycle of tax taxing and spending. The biggest problem with this budget is not what it includes, it's what it doesn't include. It doesn't include any spending control at all. There is no control on spending anywhere in the government, at all, anywhere, no control, no reform of our entitlement programs, even though witness after witness after witness, Democrats and Republicans, the left and right came to Congress and told us, you guys in Congress better get a handle on entitlements. You better get a handle on the fact that next year the baby boomers start retiring, and we are not ready for them. They say for 5 years let's do nothing, but let's just spend more money. The worst thing we could do is put this budget on a trajectory of more spending and more taxes. What they will do, they will compromise the economic growth we have had over the last 3 years. They will compromise the recipe for success that have given us 3 years of double- digit revenue growth, 7.6 million new jobs. To tie it all up, they came into the majority 5 months ago declaring new fiscal rules, more fiscal security, PAYGO, pay-as-you-go principle. So what are they doing in this budget? They are getting rid of PAYGO. In this budget, they are turning their PAYGO rules upside down. This budget actually revises and turns upside down their entire PAYGO principle. The idea that they came in the majority just 5 months ago saying well, we will pay as we go, well, they are violating with this budget, into itself. The last final point, which I think is really a shame, because 2 weeks ago we had a vote here in the House, 364 Members of Congress, Democrats and Republicans said, let's stop the raid of the Social Security trust fund once and for all. Let's stop that. That's what we said. We agreed that this budget should not raid Social Security. Both parties are responsible for this. I am not saying it's the Democrats' fault, it's the Republicans' also. But what does this budget do? It raises the Social Security trust fund. Every year that this budget has a proposal, they are raiding the Social Security trust fund every year, even though 2 weeks ago 364 out of 435 of us said let's stop doing that. They turned around and said, and they are brining us a budget that continues to raid the Social Security trust fund. That's wrong. Both parties have been responsible for it. Both parties should fix it. This budget should be defeated.

Mr. RYAN of Wisconsin

Mr. RYAN of Wisconsin. Mr. Speaker, today the Democrat majority is going to bring the House budget resolution to the floor. Last month when they passed the budget resolution, it was the largest tax increase in American history. Today they are bringing a budget resolution to the floor that is slightly an improvement: It is the second largest tax increase in American history. And the only thing that is separating this budget from being the largest tax increase in American history is what they call the ``tax trigger,'' and under their tax trigger, if they actually get to spend all of the money they are hoping to spend, then the surpluses will not materialize and no taxes will be spared and it will yet again become the largest tax increase in American history. This budget is unprecedented in its scope of its ability to tax and spend. The highest levels of taxes we have ever seen in this country and the highest levels of spending. That is not a way to balance the budget and set our fiscal house in order. We should vote against this budget, which raises taxes and raises spending at unprecedented levels.

Mr. RYAN of Wisconsin

Mr. RYAN of Wisconsin. Mr. Speaker, I thank the distinguished ranking member for yielding. Mr. Speaker, typically I would talk about all the spending problems in this bill. I want to talk about that for a moment. This bill includes $16 billion in non-war, non-emergency spending. It blows through the $6.45 billion reserve fund that the incumbent budget resolution has for emergencies. It completely puts aside the rules that govern whether or not and how we fund emergency spending. We put in these rules last year, which to the majority's credit continued this year, that said you can't just tuck anything in an emergency spending bill. It actually has to really be an emergency. Well, they have put those rules aside. We have got $16 billion of this stuff in here. But the real problem I have with this bill, Mr. Speaker, the real concern I have is the signals it sends. We are telling our troops, we are telling our men and women in uniform in harm's way in Iraq, you have got 2 months, 2 months of funding, but we are letting any Member of Congress open up the bidding war and put $16 billion of stuff in here to fund them for a lot longer than 2 months. We are giving NASA more money than they need. We are putting LIHEAP money in here even after the winter has passed. We are putting money for the Architect of the Capitol for tunnel maintenance. We are putting the minimum wage in here. We are saying yes to every other constituency, yes to every other spending request, whether it has anything to do with Iraq or not, whether it is a true emergency or not. Some of these things may have merit, but why are they in this bill? And, more importantly, why are we telling our troops 2 months and you're up? Mr. Speaker, our troops need better than that. They need to know we are going to be there for them. The Iraqi people need to know we are going to be there for them. I was there just a couple months ago. Millions of Iraqis are sitting on the fence, trying to determine whether they join us or join the insurgency. If we tell them we are leaving in 2 months, we are cutting off the funding in 2 months, guess what. Those millions of Iraqis aren't going to join us. They aren't going to democracy. They are going to be pressured for fear to join the insurgency. This sends the wrong message to the Iraqis. It sends the wrong message to our enemies. And it sure sends the wrong message to our troops. I urge defeat of this bill.

Mr. RYAN of Wisconsin

Mr. RYAN of Wisconsin. Mr. Speaker, if the gentleman will yield, the $96 billion unified surplus reflects the cash surplus, meaning the amount of overpayments on FICA taxes, payroll taxes for Social Security, that gets spent on other government programs that ought to go to Social Security. The interest on top of that is the number that the gentleman from South Carolina is talking about. That reflects past borrowing, past raiding of the Social Security surplus. We would like to fix that, too. We think that is a good start. Let's say from now on if you pay FICA taxes to Social Security, let's not spend it on all these other government programs. So the cash surplus that occurs in 2012, that is what we are talking about with that $96 billion, not the interest on top that reflects all of the past borrowing and raiding of the Social Security trust fund.

Mr. RYAN of Wisconsin. Mr. Speaker, on that I demand the yeas and nays.

Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself the balance of my time. Mr. Speaker, let me concur that the resolution does say what the chairman says it does. The reason it points to the words in the House budget resolution, which say that the policy of the House is to keep these tax cuts, but we refer to the deeds of the Senate is because the House didn't pay for those tax cuts, didn't extend those tax cuts. The Senate extended those tax cuts. The House used the words that said, we hope, we wish, we would like to extend these tax cuts, but they didn't do that. They raised the taxes. It is the Senate. The mere fact that the Senate passed the Baucus amendment in the first place is a repudiation of the claim by the House that they are actually not raising taxes. The Senate looked at the House budget resolution and said, you know what, this thing is the largest tax increase in American history. We don't want to raise taxes on middle-income earners, child tax credit, marriage penalty, 10 percent bracket; and therefore, they passed the Baucus amendment. What we are saying is we wish we could extend all of the tax cuts. Since the scope is limited, we are saying, let's stick with the Senate and actually put numbers where the words are in the House by actually lowering the revenue number. Now, the chairman is right. He is saying it is a reach to reach these surpluses. It is too tough to do it to reach these surpluses if you accept his premise. And the premise of the chairman's budget is do nothing to control spending. Mr. Speaker, we don't have a revenue problem in Washington. Just the last 7 months alone we had 11 percent revenue growth. That is 3 straight years of double-digit revenue growth at these lower tax rates. We have plenty of money coming in from taxpayers. The problem is we are spending it too fast. That is the problem in Washington, not a revenue problem, a spending problem. If you accept the premise of the chairman, the esteemed gentleman from South Carolina (Mr. Spratt), that there is no spending problem in Washington, which I don't accept, then he is correct, you can't balance the budget. You can't stopped the raid on Social Security and you can't extend tax relief. We disagree. How tough is it to do it? Let me tell you what our budget accomplished, the Republican substitute. We simply said in order to stop the raid of the Social Security surplus and make all these tax cuts permanent, spend $14.977 trillion over the next 7 years instead of the current projection, $15.286 trillion. That is what we are saying. We are saying instead of spending over the next 5 years $15.286 trillion, spend $14.977 trillion. Instead of growing mandatory spending by 5.2 percent, grow it at 4.3 percent. Is this Draconian, is this crazy, is this hard core? No. It's what families do around a kitchen table every day. We are simply saying put taxpayers first. Don't make people wait for 3 years to see if they're going to have their per-child tax credit, if they're going to have the marriage penalty, if the estate taxes are going to be higher, lower or somewhere in between. Tell them now. Let's tell taxpayers, first you get to keep your money; then we're going to tighten our belt here in Washington by controlling spending. Mr. Speaker, the taxpayers deserve this respect. They don't deserve to be jerked around. We should control spending, and by golly, we need to prepare for the retirement of these baby boomers. We need to reform these entitlement programs so we can extend their solvency, extend their reliability, and that is the biggest shame of all. Not only does this budget have the largest tax increase in American history; it proposes that we do nothing for the next 5 years to control and reform entitlements to do anything to control spending. That's a shame. That's why we should pass this motion to instruct. Mr. Speaker, I yield back the balance of my time.

Mr. RYAN of Wisconsin. Mr. Speaker, I yield 2 minutes to the gentleman from Nebraska (Mr. Smith).

Mr. RYAN of Wisconsin. Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Campbell), a member of the House Budget Committee.

Mr. RYAN of Wisconsin. I wish we were talking about all of the tax cuts. Unfortunately, what we have in the Baucus amendment, that is only $132 billion in 2012 because the Baucus amendment only extends some of the tax cuts. The point we are making is, if we want to stop raising taxes and raiding Social Security, we are going to have to control spending. That is what we propose to do; and sadly, that is not what the majority budget does.

Mr. RYAN of Wisconsin. Mr. Speaker, will the gentleman yield?

Mr. RYAN of Wisconsin. Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Hensarling).

Mr. RYAN of Wisconsin. Well, you are violating it if you accept this amendment then.

Mr. RYAN of Wisconsin. If you are going to reduce taxes, you have to pay for it by either raising taxes or cutting spending. That is what your PAYGO is, correct?

Mr. RYAN of Wisconsin. Mr. Speaker, will the gentleman yield?

Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself 2 minutes. One additional point I wanted to make, Mr. Speaker, is the point about PAYGO that the gentleman from South Carolina mentioned. As it is well known, we have a problem with their version of PAYGO. When PAYGO is designed to raise taxes, we don't like it. When PAYGO is designed to control spending, we like it. That is why we are for PAYGO on spending, not on raising taxes. But if this amendment is accepted, if this motion to instruct is accepted, let's just be very clear, it does violate their PAYGO. Because the Baucus amendment, which is what we are referring to, which is the amendment that passed in the Senate, uses their surpluses, quote-unquote, to pay for these tax cuts. PAYGO says if you are going to reduce taxes, you have to offset them with either a tax increase or a spending cut, not with surpluses. So this amendment, we believe if you are going to have a surplus, it should either go back to the Social Security trust fund and pay down debt, or reduce taxes. That is what we are proposing. But just so we are very clear with ourselves here, this Baucus amendment, this acceptance of this policy of not raising all of these taxes, just some of them, which is the best choice we have between the two options as the minority, does violate their own PAYGO rule by dedicating their surpluses towards this tax relief, rather than having offsets, either coming from spending cuts or tax increases.

Mr. RYAN of Wisconsin. Mr. Speaker, I yield myself 1\1/2\ minutes to make a couple of comments before I yield to the gentleman from Texas. Mr. Speaker, I think I made the point on the Social Security cash surplus. We are talking about how much overpayments people pay in their payroll taxes in any given year. We don't want to keep spending that on other government programs. That is point number one. Point number two: The very fact that the gentleman from South Carolina is suggesting that they are going to accept this motion to instruct, that they are going to accept this, means they agree there are tax increases in this budget. They are saying right now, I just heard him say it, we don't want to raise taxes on the middle-class. We don't want to get rid of the child tax credit. We don't want to bring back the marriage penalty. We don't want to do away with the 10 percent bracket. So we will accept this motion to instruct. I.e., the other tax increases in this budget are just that, tax increases. Death tax, the marginal income tax rates across-the-board, capital gains, dividends. Let me just make the point more clearly, by not quoting a think tank that may be left of center, right of center, whatever of center. Let me quote the Washington Post, clearly no paragon of right-wing thinking. The Washington Post, right after the Democrat budget came out: ``And while House Democrats say they want to preserve key parts of Bush's signature tax cuts, they project a surplus in 2012 only by assuming that all of these tax cuts expire on schedule in 2010.'' They further go on to say about the Democratic budget plan, ``The budget plan expresses support for certain cuts, including the extended child tax credit, elimination of the marriage penalty, and the 10 percent bracket, that would require another reserve fund to be filled with hundreds of billions of dollars in tax increases to cover the cost.'' Mr. Speaker, I yield 2 minutes to the distinguished member of the House Budget Committee, the gentleman from Texas (Mr. Conaway).

Mr. RYAN of Wisconsin. We showed you with our budget substitute, we do not raise taxes on the American economy and family, and we can also stop raiding the cash surplus of Social Security. And the reason I can tell you we showed you is that is exactly what the Republican budget resolution substitute did, as scored by CBO.

Mr. RYAN of Wisconsin. We seem to have a difference of opinion. But let me make one point: We showed you how to do it.

Mr. RYAN of Wisconsin. Mr. Speaker, that is not all in the year 2012, I believe. There is a problem with the numbers here.