Nick Smith

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Reclaiming my time for just a moment, before the gentleman says it, I say if we cannot hold the line on spending, then we should not have a tax cut. And I yield to the gentleman.

Mr. SMITH of Michigan. Let us solve the Social Security problem. Let us solve the spending problem.

Mr. SMITH of Michigan. Well, Madam Speaker, the rumor is the gentleman might be going to the Senate before we get this worked out. I do not know if he wants to tell the 5 million listeners that we have tonight about that.

Mr. SMITH of Michigan. Madam Speaker, with this early session today it seemed like an appropriate time to talk about what I think are maybe three of the greatest problems that we are facing in the United States Congress in America outside of our economic security and our physical security with the wars going on in Iraq, with the challenge from the terrorists around the world. However, the financial problems that we are facing in Congress are also very serious, and I think we must reverse the rapid descent that we have been taking into extra deficits and overspending. So today I will talk about three areas: One, spending; two, the resulting debt; and, three, some of the financial challenges that face this Nation in the future. The first chart I have is the a chart representing the last 10 years of spending; and discretionary spending has increased an average of 6.3 percent, 6.3 percent each year since 1996, and 7.7 percent each year since 1999. So it is somewhat flat. It starts going up in 1996 and then it really takes off from 1998, 1999 averaging 7.7 percent a year. That is two, three, depending on the year, sometimes almost four times the rate of inflation. So you can imagine if you project that on in this kind of growths of costs, government is going to be eating up more of our income, more of our gross domestic product in the years ahead. Why is this? How can we control ourselves from the overzealousness and the attractiveness to spend more money? Of course, politicians in this Chamber get elected every 2 years. The politicians in the other Chamber get elected every 6 years, and the tendency has been when a Member of Congress takes home more pork barrel projects, when they are doing something to solve some of the problems that we face in this country, then they get on television. They get on the front page of the paper. They become popular, especially with those people that need those services, and there is a greater propensity that they are going to get reelected. So the tendency has been to spend more and more money, and we have changed our income tax system so that most of the people in the United States do not pay much of any income tax. It is the top 14 percent of taxpayers that pay something like 90 percent of the total income tax, and the bottom 50 percent of income taxpayers only pay about 1 percent of the income tax. So it is easy to understand that that bottom 50 percent is not outraged by increased taxes and increased spending and increased borrowing, and this is the next issue I wanted to talk about is borrowing. Three years ago, in the year 2000, we had a budget surplus of $236 billion. This year we are approaching a $500 billion deficit. So over $700 billion changed from surplus to deficit in a total Federal spending budget that we are looking at this year of $2.1 to $2.2 trillion. Huge points, and again, that is because of the overzealousness to spend. Let us look at what has happened as a result of that spending, and I think it is good to remind ourselves of the definitions. When we say ``deficit'' that means a year in which we are spending more money than the Federal Government has in revenues coming into the Federal Government, and ``debt'' is the accumulation of that annual overspending. So what does government do? We borrow more money. As a safeguard to try to hold the line on borrowing, what we did many, many years ago is said, look, we cannot borrow, in fact, the Constitution prescribes it, we cannot borrow any extra indebtedness for this country unless it is a law passed by the Senate, the House and signed by the President, to try to put some restraints on the temptation to simply borrow more and more money and spend more and more of that money, and of course, this chart is an explanation, as best as we could portray it, in a blue line, a green line and a purple line, if you will, on the gross Federal debt and its components. As we look at the bottom purple line, this is the debt held by government accounts. It is the money that we ask workers in this country to pay into the FICA tax, into the Social Security tax, designed in 1934, to be a forced saving so that while we are working, some of that money is taken out. FDR, Franklin Delano Roosevelt, said instead of having to go over the hill to the poor house, we are going to have mandatory savings during those years when a person is working, and then when they retire they will have more security, more Social Security. They will not have to go over the hill to the poor house. So we came up with a Social Security system, and when we started, it was a situation where current workers paid in their taxes to pay for the benefit of current retirees. That is the same today. Also, the extra money that is paid in by all Federal workers for their retirement programs, the money for the pensions of the military, our armed service members who pay in part of their wages for their retirement, that is all accounts held by the government, and what we assume in this Chamber, in the Senate and the White House, is that it is okay simply to write out an IOU and spend that money for other government services, but it technically is part of the debt, and as we see over the years, this debt held by government services continues to go up, at least past into the future, as far as we can see almost. The green line in the middle is the debt held by the public, the Treasury auctions that we have, the so-called Wall Street debt, the debt that is held by retirement funds, insurance companies, banks, anybody that wants to buy those Treasury bills. That is the debt that is held by the public. We saw a period in 2001 and 2002 and 1999 where we were having a little surplus in terms of paying down some of that debt held by the public, and so, to me, I think it was a little bit misleading, maybe a little bit of hoodwinking in terms of telling people we were paying down the Federal debt at a time when actually the total debt of the country continued to go up. The total debt never went down during our brag sessions of having a lock box, that we are going to take and pay down the public debt of this country. Yet what was happening is we were to pay down that debt, we were taking extra money coming in from Social Security and the other trust funds and using that money to pay down some of the public debt. So, therefore, as my colleagues can see and as we have tried to portray by this chart, the debt has never really decreased. Why is this bad policy? Why is it unfair to our kids and our grandkids and future generations to keep piling up this debt? If we will, sort of pretending that our debt and our problems today are greater than maybe the needs of our kids and our grandkids, probably not so. They are going to have to somehow come up with the extra tax effort to pay off this debt but absolutely to pay the cost of servicing this debt. Right now we have got a downturn and a sluggish economy, and so, therefore, there are less revenues coming in. The demand for extra money is not out there in the private sector, and so the effect of extra government borrowing does not hurt the economy so much, but when it is going to start to hurt is when we have this economic recovery. When individuals say it is time, I want to buy a new car, what is the interest rate; it is time I want to buy my house and my home for my family, how much is it going to cost me; and a business that decides to employ more and expand and buy the equipment and the facilities they need for expansion and business, and then they find out that who is at that marketplace, buying up available money, is the Federal Government. The Department of Treasury has auctions every week, and based on the total indebtedness and how much extra we are spending over and above what is being brought into the Federal Government, it is a situation where government says, well, look, whatever it costs we are going to have our money. If we have to bid up the interest rate to make sure that we get the money we need, we are going to do that, and of course that results in the potential for higher interest rates and that is what is going to happen. When the economy recovers, interest rates are going to go up. Interest rates right now are a little over 3 percent. So government can borrow money at about 3 percent, and yet even with that low interest rate, the servicing that debt, the interest that government pays on that borrowing represents 11.4 percent of our total Federal spending budget. What would happen if we hit interest rates that were in existence in the late seventies and early eighties when we saw interest rates go as high as 17 percent, sometimes higher than 17 percent? Then that 11.4 percent becomes five times greater, and 60 percent of our budget would be used paying interest, and that is just the situation with the current debt today. What if we project ourselves to the debt that is going to happen if we are not able to have the intestinal fortitude, if you will the guts, to stand up and say no, we are going to slow down spending, we are going to prioritize some of the Federal spending, government cannot be responsible to all of the problems of the country and we go back to the basics of our United States Constitution? When Republicans took the majority in this Chamber in 1994 and starting in 1995, Newt Gingrich, the then Speaker of the House, asked me if I would be chairman of the Debt Limit Task Force, and so we got what I considered some of the really good thinkers in terms of trying to come together to analyze how do we start having a balanced budget, how do we start living within our means, how do we start convincing Members of Congress and the country that government cannot solve all the problems and that it is unconscionable just to keep spending more and more money, and of course, politically it is not wise to increase taxes to cover those expenditures, because people reach in and they feel their billfold and they feel the money going out of that billfold to pay the income tax but not so with borrowing. So the tendency has been to increase more and more borrowing. What if interest rates, and they will, what if interest rates simply are forced up by 2 percent because of the extra demand that government has for borrowing? A person goes out and buys a $28,000 car and they amortize it over 5 years, pay it off in 5 years, it is going to cost them $3,000 more to buy that vehicle because government has pushed up interest rates in the marketplace. What if they want a home, what if they are going to go out and buy an $80,000 to $100,000 home, amortized, let us say, over 25 years? Then they are going to end up paying $13- or $14,000 more for that home because government is in the marketplace bidding for available funds and driving up the bid on what that interest rate is going to be. So it is going to affect each one of us individually eventually if we are not able to hold the line on spending. Our debt today amounts to about $24,000 per individual in this country. The total debt is $6.4 trillion. Let me tell my colleagues another safeguard that our task force on holding the line on debt did. We said that there was a rule in this House, it was called the Gephardt rule, and the Gephardt rule stated in the rules of this Chamber that every time we passed a budget, if that budget spent more money than what was coming in in revenues, then automatically, without another vote, the debt limit of this country would be raised in legislation that would automatically be passed and sent on to the Senate. Why was that? That was so this Chamber was not embarrassed by having to take a vote and a debate on should we increase the debt for our kids and our grandkids. I am a farmer from Michigan, and it has been our goal to pay off the mortgage, to give our kids a little better chance, but that is not what we are doing in this Chamber. That is not what we are doing across the hall at the Senate. It is not what we are doing at the White House. We are saying our problems must be so great that it justifies us making the wages and earnings of our kids and our grandkids and our great- grandkids to pay off that debt. That is sort of the spending part of the problem on debt. Another task force that I have been chairing is a bipartisan task force made up of Republicans that sit on this side of the aisle, Democrats that sit on that side. So it was a task force on Social Security, and after we studied the problem and challenge of Social Security, we pretty much all agreed, Democrats and Republicans, that something has to be done because Social Security is going broke, and just let me review a couple of charts that I have on why Social Security is going to grow. The coming Social Security crisis, and it is coming very quickly, our pay-as-you-go retirement system will not meet the challenge of demographic change. Pay-as-you-go is back to where it was. It is the same as when it started in 1934, existing workers pay in their Social Security tax. That money immediately goes out to current or existing retirees. So there is no savings account. Nothing is being saved up for your retirement. It is simply a situation where whenever there were not enough workers and enough revenue coming in for the Social Security to cover promised benefits, then what did government do? And I am sure you can guess what government did. They either raised the tax, Social Security tax, and/or they cut benefits. And most often, throughout the years since 1934, they have done both, raised taxes and cut benefits. That is why when we looked at the chart on how much debt held by the government accounts kept going up, it is because in 1983, on Social Security, the Greenspan Commission raised taxes so high that ever since that law was enacted, there has been more money coming in to Social Security than was needed to pay out Social Security benefits. And like I said, government said, this is a good deal. We are going to take this money, write an IOU, and we are going to use the Social Security money to pay for other government programs. That is why some of us said, look, we need something. We need private accounts. We need some way to get it out of the hands of spenders in Congress that would like to take that extra money and instead of saving it, somehow investing it. Every year, Congress has simply spent that money. So what is in the Social Security trust fund? It is a nice name, but it is a misnomer because there is no real trust fund. There is no money there. So young people are at risk of trying to figure out ways on how they are going to do maybe without Social Security, or with much less Social Security; but more importantly, during their working life, they are going to probably be asked to pay more towards current benefits of retirees. Look at this chart a minute with me. Demographics is the word. That is the problem. When we started this pay-as-you-go program, it worked very well. The working population was growing in relation to the number of retirees. In fact, back when we started the program, there were 36 workers working, paying in their taxes, for every one retiree. By 1940, it got down to 24 workers working, paying in their taxes, for every retiree. By the year 2000, three workers. Three workers paying in their taxes for every retiree. So their taxes, of course, had to go up. And what the actuaries at the Social Security Administration are predicting is that by 2025 there are only going to be two workers for every one retiree in this country. And why is that? That is the demographics. The baby boomers. The increase in the birthrate has always been sufficient to keep an increased number of workers in relation to retirees. But now, after the baby boomers, those born after World War II, and the big increase in workers in this country, we are seeing a reduced birthrate; and at the same time we are seeing older people living longer. So where the average age of death when we started this program was 62 years old, which meant most people never got to 65 and collected Social Security benefits, now the average age of death is 86 years old, and it is going up. Let me conclude by pointing out what we know about Social Security. Insolvency is certain. We know how many people there are, and we know when they are going to retire. We know that people will live longer in retirement. We know how much they will pay in and how much they will take out, and we know the results. The fact is payroll taxes will not cover benefits starting in 2015 and that the shortfalls will add up to, and listen to this, $120 trillion between 2015 and 2075. Our annual budget is only $2.1 trillion; but over those years, in excess of the tax money from Social Security coming in, we are going to need an additional $120 trillion. That is why it is so important that we deal with this; that we step up to the plate; that we deal with this problem now instead of putting it off. Because we have a surplus now coming in from Social Security. If we can use that surplus, it is going to help. The bipartisan task force on Social Security came to the conclusion that there has to be a better investment for that extra Social Security revenue coming in to the Federal Government. Private accounts are good, for a twofold reason. One, you take it out of the hands and you get it off the table in terms of having it available to be spent by Congress. So it is an assurance that that money is in the name of the American worker and they can depend on it. If they happen to die before age 65, then it goes into their estate. Now, some have argued, well, we cannot let the individual decide how to invest that money. I say if it is a compromise, fine, let us do it the same as the government's Thrift Savings Plan, where there is a government manager with indexed funds and that you have the choice of some of those safe index funds and you invest in that variety of funds as you might choose. But, still, it is government saying these are the safe funds where you are going to be least likely to lose any of that money. And so somehow it is a good idea. Because let me tell you, the Supreme Court, on two occasions now, has said that there is no entitlement to Social Security money. I mean, if you work all your life, you pay in all those Social Security taxes, the Supreme Court, on a couple of cases, has said, look, Social Security tax, the FICA tax, is simply a tax and your entitlement to get benefits is simply legislation that has been passed by Congress and signed by the President. In conclusion, let me say that the biggest risk is doing nothing at all; to do nothing to set aside the Social Security trust fund money and to not use it. And the lockbox that we heard about 3 years ago was a farce. It did not do anything to save Social Security. It was just sort of rhetoric that became politically popular. That money really needs to be invested in some fashion, in such a way to make sure that it is not available to the rest of government to spend as they might choose in other areas. Social Security has a total unfunded liability of over $9 trillion. Now, the $9 trillion is what we need to come up with today if we are going to keep Social Security solvent. The $120 trillion that I mentioned is future-years money with inflation, et cetera. So between the years 2015 and 2075 we are going to need that extra $120 trillion over and above the Social Security tax that is coming in from payroll. And I need to mention that right now 75 percent of American workers pay more in the FICA tax, the payroll tax, than they do in the income tax. And it would be, I think, extremely unfair to increase that tax again. Over the years, we have done it dozens of times. It started out at 1.5 percent tax on your income, and that included the employer's share; and now it is up to 12.4 percent. The Social Security trust funds contain nothing but IOUs. So if we do nothing, somehow government is going to have to raise taxes someplace or increase borrowing or cut down on other government expenses to accommodate what we promised in Social Security. To keep paying promised Social Security benefits, the payroll tax will have to be increased by nearly 50 percent or benefits will have to be cut by 30 percent. Too much. It would be bad. It would be terrible. With so many seniors that depend on Social Security for over 90 percent of their total income in their old age, it would be inconceivable to make those kinds of cuts. So I ask my colleagues, Madam Speaker, to stand up to this great challenge. Even in the midst of the tremendous challenges that we have with the terrorists, the challenge of what we do with Saddam Hussein in Iraq, we have to stand up and make some hard decisions to make sure that we save Social Security and we do not keep putting it off until it becomes a crisis. And that crisis is rapidly approaching, because sometime between the year 2015 and 2017 there is not going to be enough money coming in from the Social Security tax to pay benefits. So back to my three areas that I thought were very important. One is spending. We cannot continue to spend. And there will be a lot of criticism on this budget that came out, because we are cutting back on spending. For the first time since I have been here, and I came in in 1993, the budget resolution that we are going to be looking at over the next couple of weeks actually says in the discretionary part of spending, which represents less than half of the total spending, but in some discretionary spending, in some entitlement spending we are going to have to cut back because we want to hold the total spending of this Congress down. And you know what I think? I think even a lot of grandpas and grandmas, if they knew that it just meant extra borrowing to accommodate some of their needs, even to the extent of prescription drugs, they would say, look, if it is going to be borrowing that my grandkids have to pay back, hold off a little while. Try to hold the line on spending, because that is going to result in holding the line on the total debt that we are passing on to our grandkids.

Mr. SMITH of Michigan. I yield to the gentleman from Florida.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Imagine for a moment as a family or a business and you go into debt, nobody does that without some kind of plan to pay back that increase, maybe emergency money, that you are borrowing. But in every situation there is a plan to pay back what you borrowed. Not true with the Federal Government. There are no plans, no prospects of paying back this debt, except some time it is going to get so high and servicing this debt, the interest which is now 11.4 percent of our total budget, and we are borrowing money at a very, very low interest rate right now, 3 to 4 percent, that could easily go to a situation where we are paying twice that or even more than twice that. Like the gentleman from Maryland (Mr. Bartlett) said, servicing that debt, interest on the debt could be more than our military expenditures for this United States. Even at this time, right now we are approaching 17 percent for defense spending; and so it is easy to see if we do not control spending, if we are not conscious of the real truth in what the debt is doing and what it is doing to our future and our kids and the economy, then we are going to continue on that curve upward. Already at the top right-hand side of the curve, Members can see we are approaching a $10 trillion debt. In the first 180 years of this country's history, our total spending did not amount to as much as the spending for this next fiscal year that we are projecting, a little over $2 trillion. So government has grown much faster than the rest of the economy. What does this mean? We have not used the world ``socialism,'' but I think as government is bigger and does more things and does not empower people but empowers the Federal Government, we become more socialistic. And people are expected to pay in based on their ability to pay in, and take out based on their needs. I think what has made this country great is the fact that those that learn and apply, those that work hard and save, those that invest end up better off than those that do not. That has been part of the motivation of our Constitution, which has brought us to the best, the strongest economy in our world in our last 226 years. How do we keep people's eyes from glazing over when we talk about going deeper in debt, and we hear justifications, that debt is manageable as a percentage of GDP? But just on a commonsense, logical basis, should we be passing this burden on to our kids and grandchildren? How many grandmothers and grandfathers would be saying, if they understood the burden that they are putting on their grandchildren, we will do with a little less, but the Federal Government has to hold the line on spending?

Mr. SMITH of Michigan. Madam Speaker, if the gentleman were to put his pointer on the green line, even the bragging of paying down part of that public debt lasted such a short time because of the increase in total spending by this Congress and the Presidents.

Mr. SMITH of Michigan. Madam Speaker, let us talk about monetizing the debt because some economists have said all we need to do is monetize the debt. That means printing more money and having inflation making it easier for the government to pay down that debt.

Mr. SMITH of Michigan. It is interesting that the original framers of our Constitution put in the Constitution that there would not be a tax based on income. They were looking at ways to structure a United States that encouraged effort, that encouraged work. We eventually amended that so we started saying, well, we will start out with a 1 percent tax on what you earned, now it goes up to 39\1/2\ percent of what you earn. It says to a young couple that wants to do a little better for their kids, we are going to tax you so much if you go out and get a job, but if you work an extra half shift or a full shift and earn more money, we are not only going to tax that extra earning but we are going to tax it at a higher rate. It has tended to be in many cases a discouragement for the kind of productivity that has made us so great in the first place. As we look at our tax revision and how do we make our tax more fair, how do we have a tax that encourages savings, that encourages investment, it is something that has to be done to our very complicated Tax Code, where lobbyists and special interest groups have come in and got special favors for the sectors that they represent, often to the cost and expense of so many American taxpayers. I think the points that we want to stress as we conclude tonight's session are, I think everybody during the next election should ask every Member of Congress that is running for Congress why they are increasing the debt that our kids and our grandkids are going to have to pay off, what they are going to do about Social Security, what they are going to do about Medicare. As the workforce goes down, the demographics, if you will, as there are fewer people working to pay all of the benefits for seniors, I think we should be asking Members of Congress, what is the honest reality of increased spending, that increased debt, and what are the unfunded liabilities of government, and there are so many unfunded liabilities, what we are eventually going to have to pay that is not considered in this budget. In fact, Social Security is the only revenue that has been taken off-budget so that you can see it on a separate line. Most of the intergovernment expenses are still considered under the budget, under the general fund. Let me give you one example. All of the Members of Congress, all of the employees of the United States Government, there is no money that actually goes into the Social Security Administration. What happens is there is simply an IOU written for all of these Federal employees, Members of Congress, this is an IOU of how much we owe you for that 12.4 percent of the payroll of Federal Government workers and Members of Congress. There is a lot of pretense in the budget and honesty is going to be the basis and understanding how the debt is growing and the consequences of each annual deficit that adds into a larger and larger debt, understanding the consequences of how it affects our economic future and the future of our kids.

Mr. SMITH of Michigan. Let us make clear, left in the private sector means being left in the pockets of the people that earn it. I would like to finish up on I think somewhat of a little bit of a positive note. In spite of the dilemma and the projection for increased deficits, the Republican Conference met this morning. We talked about our determination to hold the line on spending. The Committee on the Budget that is still meeting, I think, at this hour of the night to pass out their final resolution does a couple of things. It says let us reduce spending, discretionary spending outside of defense and homeland security. Let us reduce that discretionary spending by 1 percent across the board. And then if this budget is passed by the House and the Senate, it will go to the appropriators and it will be up to the appropriators to decide how to move some of that discretionary funding around so that they end up actually reducing, for the first time in the gentleman from Maryland's career here in Congress, in my career in Congress, because we came together in 1993, it will be the first time that there has actually been some reduction in discretionary spending outside of defense, and in this case also outside of homeland security. So a little good news. Let us hope that we have the intestinal fortitude, the determination to do what is right and at least start a beginning of being honest of what the debt is and how much it is and slowing down spending.

Mr. SMITH of Michigan. Madam Speaker, in the last few days, a lot of local representatives of local government are coming into Washington complaining about these unfunded mandates. Here is the Federal Government, since we like to not spend the money maybe and not have the debt look so bad, we simply pass a law that the State or a local unit of government has to do it. We have to watch and guard against that as we look at a new Department of Homeland Security and the tendency of this Department to put out regulations and rules and mandates of what local governments should do. If we put out a mandate, then the gentleman from Maryland and I both agreed that the Federal Government should pay for it if we are going to demand that a local municipality or State is going to provide those services. If the Federal Government is passing a law for local units of government or companies, then the Federal Government has a responsibility to pay for it.

Mr. SMITH of Michigan. Madam Speaker, I thank the Chair for this opportunity and if I could ask one of our pages to put a couple of charts up here. Right now in the United States House of Representatives, the Committee on the Budget is marking up, what we call it is marking up, the budget for the 2004 fiscal year. The 2004 fiscal year starts next September 30, and we are looking at a budget that is going to be a little more conservative on discretionary spending but still looking at spending that has been increasing almost 7.5 percent a year, and that has led us into a very serious problem. Probably at the present time, though overshadowed by national security and the conflict in Iraq, this year's budget is very important to the future of our kids and certainly to the future of our economy in this country. We must reverse the tendency to spend more and more money. If my colleagues can imagine a chart that projects the increase in spending, and we do not have to imagine, this shows where we are going on the increase in debt and so it is going to represent the increase of this House Chamber to spend more and more money; and of course, what happens politically, if we bring home pork barrel projects, then we get on television, we cut the ribbon and probably we are more likely to get re-elected. So the tendency of Members of Congress, both in the House and Senate, is to make more promises of things they are going to bring home and end up spending more money, and that is what has led us to a very serious dilemma. It seems reasonable that the increase in spending for the Federal Government should not be any more than the increase experienced by the average family in the United States; and yet, what is happening in government is we are spending three and four times the rate of inflation as far as the increase in spending over the last several years; and that is, of course, leading us into a very serious deficit, and let me just give my colleagues my thoughts on why this deficit and the larger debt is not good for our future. Deficit, by the way, just to get our terminology straight, deficit spending means how much we overspend in any 1 year, how much spending is greater than the revenues coming into government, and then we add up that deficit for that year, and it adds to the total debt. The total debt of this country right now is $6.4 trillion. When I came to Congress just 10 years ago, it was just a little over $4 trillion. So a dramatic increase. So about $2 trillion increase in the 10 years I have been in Congress, but here is the prognosis for what we expect to happen in this 2-year session of Congress, and that is another $1 trillion increase, $1 trillion or more. The projected deficit this fiscal year is $436 billion. For next year, it is $435 billion, and I say projected and emphasize that word because it does not include the supplemental that is coming in. It does not include the additional tens of billions of dollars that will be required as we continue in Afghanistan, if we go to war in Iraq. So we are approaching a half a trillion dollars overspending. This is a swing of more than $7 billion in just this 3-year period between the year 2000 when we had a $236 billion surplus to this kind of deficit spending in just that 3-year period out of a $2.1 trillion budget. Huge differences. I mean, the economy certainly is part of it. So as the economy is sluggish and goes down, earnings are less from both individuals and businesses, so tax revenues are less. Expenses are more and so we are facing a war-type situation on whatever happens in Iraq, what we do in the war on terrorism; and so it is reasonable to some extent to go ahead and borrow a little more for those purposes, but we should be very conscious of the fact that we are continuing to spend in other discretionary spending 7.5 percent a year, much faster than inflation, of course, anyplace. This shift in the budget certainly represents unrestrained spending, and that is what many of us are suggesting to the Committee on the Budget as they meet now, where some of the Democrats are suggesting, look, we should spend more for education, we should spend more for health care. There are hundreds of problems that need to be solved in the United States today, especially when individual States are hitting their budget crunch, but to ask government to increase borrowing to solve our problems is in a way saying to our kids and our grandkids that our problems today are so important and we do not think your problems, when you grow up and start paying your taxes, are going to be that important. So we are saying we want you to pay for today's spending that this Congress is suggesting in terms of all of the important programs that we might spend money for. What greatly concerns me is that government spending grew explosively even as revenues have declined. Discretionary spending increases have been at least 6 percent each year since 1965 and at least 7.4 percent. Each year since 1998, there is four times the rate of inflation. The President's proposed budget is 3.5 percent increase for 2004 which is still as conservative as it is, still close to twice the rate of inflation. Now, the gentleman from Maryland (Mr. Bartlett) came and looked at this gross Federal debt and its components bar graph. So if he would like to come down and go over the bar graph to help describe the predicament, and I hesitate to say lies, but certainly hood winking of a lot of American people that at one time when we start bragging that the debt is going down, when actually the top blue line, it has never gone down, a little slow-down during 1998, 1999; but the total debt of this Federal Government has never gone down and the projection of ever bringing into balance the gross Federal debt is a long ways off, even though if we pretend that we do not owe the Social Security trust fund, when extra moneys come in, if we pretend that, if we pretend that it is not something that we owe the trust fund to Federal employees or the military as they pay in for their retirement funds, then we might have a balanced budget by 2007. But that is not honest. Madam Speaker, I yield to the gentleman from Maryland, and I even brought him a pointer.

Mr. SMITH of Michigan. If the gentleman would yield, I think it is good to put a footnote in terms of what historically government has done to have extra money coming in to these trust funds so that government can go ahead and spend that money. I think the gentleman has made it clear that when there is extra money coming into these trust funds an IOU is written and government spends that money for regular government spending. It is not put into any account. Social Security, for example. We started Social Security in 1934. Every time that the trust fund started going down and there was not enough surplus, what did government do? It increased the tax rate on workers in this country. So we went from a 1.5 percent tax rate and now we are paying a 12.4 percent tax rate into the Federal Government. In 1993, the taxes were raised so much on workers that we are experiencing more money coming in from the Social Security FICA tax than is needed. And so that money, the $161 billion that the gentleman suggested we are having this year, is now spent for other government expenditures. But it is still owed. Sometime, someplace, somewhere we are going to have to come up with that money, and it is going to start just a few years from now, in 2015 or 2016. So I wanted to make the point that government, when they get in trouble, and usually the tendency is that we do not deal with difficult problems such as overspending, such as Social Security, such as Medicare, until a catastrophe hits, and the longer we put off these decisions the more drastic those solutions are going to be. So let us not force government into again raising the FICA tax, where 75 percent of the American workers pay more in the FICA tax than they do in the income tax. If the gentleman, just for a minute, and I think we will want to put that chart back up, but if the gentleman would take that chart off, we will see a chart that represents spending over the last 10 years, where spending has gone up every year by an average of 7.5 percent. Now, discretionary spending, and discretionary means that Congress decides every year through our budget process, through our appropriation process how much we are going to spend, and the tendency has been to just spend more. And we should not forget it is taxpayer money. And increasing taxes are not wise politically, because people have to reach into their pockets and pay those taxes. More and more people are looking at their biweekly paychecks or their monthly paychecks and saying, my gosh, look at the taxes that I am paying to the Federal Government. But that is only part of it, because now we have a hidden tax or a future tax by increased borrowing and increasing debt and the deficit spending. Madam Speaker, I would yield back to the gentleman.

Mr. SMITH of Michigan. If the gentleman will yield on this point. I was made chairman of a bipartisan Social Security task force. And it was interesting that after all of the Members learned the facts and learned the serious situation of Social Security running out of money; in other words, less money coming in than we were going to have to pay out in promised benefits, all, everybody, Republicans and Democrats, said, look, we have got to reform Social Security. But I think part of the sadness of this story is the temptation and what we have seen Washington do so often is to maybe be not totally truthful with the American people in terms of whether you call it a lockbox and we are not going to spend the surplus from Social Security, or whether we are paying down the debt when actually the total debt of this country is increasing. I think it behooves every voter, every concerned citizen, every young person who this tremendous load is going to fall on to pay the increased costs of servicing this huge debt, and mostly likely it is going to result in higher taxes. Retirees should be concerned because the temptation of government is to reduce benefits and increase taxes.

Mr. SMITH of Michigan. If the gentleman will yield for a moment, just a little more to emphasize the servicing of this debt as it grows bigger and bigger. Last year, it took 11.4 percent of our total budget to pay the interest on this kind of debt, the $6.4 trillion. But what if the economy recovers; and what if then the Federal Government is out there in the marketplace bidding against business and whoever else, the homeowners or potential homeowners, whoever wants to borrow some money? Here is government at the auction saying, we are just going to be the highest bidder because we need this much money to service the huge debt load that we have now obligated ourselves to. Interest rates are going to go up. As government goes deeper in debt, they are going to be competitive in the marketplace and drive up interest rates. And if we go up with interest rates where we were several years ago, that 11.4 percent of the total Federal budget could easily double and it could be depriving potential homeowners, potential car buyers, potential business expanders from borrowing the money they need. So if the gentleman would excuse the interruption, I think it is so important that we look at the downside to the economy of accumulating this kind of debt as well as the unconscionable burden it places on our kids and our grandkids.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Madam Speaker, I move that the House do now adjourn.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, this afternoon the Committee on the Budget is planning to mark up our budget resolution. That budget resolution is important to our future and our economy. What I am particularly concerned with is the increase in deficit spending. The deficit as projected by the CBO is now approaching $435 billion for this next fiscal year. That does not include supplementals. It does not include any possible war. If we are concerned at all about the negative impact of increased spending, if we are concerned at all about the debt obligation that we are passing on to our kids and our grandkids then we need to cut. We pretend that our problems today are more important than problems are 20, 30 years from now and asking them to pay back the debt of our overspending. I think it is unconscionable and I think it is bad for the economy, because we are going to end up bidding in the marketplace for available money and, therefore, drive up interest rates, which is bad for the economy.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, tonight I am going to talk about two very serious issues for this Congress, for this President, certainly its effect on future generations and current and future retirees. First, I am going to talk about defense spending, the overzealousness of Washington to continue to increase spending two, three and four times the rate of inflation, and what that means is increasing debt that we are going to leave to our children. So what I have titled the first part is ``The Forgotten Deficit,'' and though, right now overshadowed maybe by national security and the conflict in Iraq, this year's budget is very important. We must reverse the rapid descent into deficit spending that we have seen in the recent years. Let me give my colleagues an example. From the $236 billion surplus that we had in the year 2000, the budget situation has deteriorated to a projected $436 billion deficit. From a $236 billion surplus 3 years ago now we are looking at $436 billion Federal funds deficit for this fiscal year and the same for next year. This is a swing of more than $600 billion in a $2.1 trillion budget, and this deficit is going to be much larger because this deficit from CBO does not include any money for the defense supplemental that is coming. It does not include any money for the extra cost of whatever we might do in Iraq, and it certainly does not include the effects of any tax cuts. It should greatly concern us all that government spending is growing explosively as revenues decline. Discretionary spending has been at least 6 percent each year. The increase in discretionary spending has been at least 6 percent each year since 1995 at about 7.5 percent each year since 1998. The chart I have on my left shows the projected increases on out after 2003, starting in 1993. So fairly flat from 1993 to 1997 and then a dramatic growth in spending, and we are looking at a situation where the discretionary spending growth will average at least 7.5 percent each year since budget balance was reached in 1998, about this level. This spending increase, compared to what families are doing, how they are dealing with their possible increases in their budgets, is too dramatic to sustain, and it is leaving us huge challenges and huge problems for the future. The President proposed a budget increase for 2004 of 3.5 percent, but even so, even though this is a smaller increase than we have seen over the past years, is still an increase in Federal Government spending, about twice the rate of inflation. This includes some needed spending on defense after September 11, I admit that, but we cannot excuse unrestrained nondefense spending which should not be increased during the challenge in the war situation that we are now in on terrorism. Tomorrow, our House Committee on the Budget is going to mark up a budget resolution. I just stress, as strongly as I can, that it is important to the future of our economy and to the future of this country to start having the intestinal fortitude to hold down spending, to prioritize some of the spending we do. Some of the spending we do is much less necessary. Probably much of it is unnecessary. As we ask the American people to do with less, as States all over the country are cutting back their budgets and suggesting that people are going to have to do more for themselves during these tight times, the Federal Government goes merrily along spending, and I will not give any comparisons to sailors or anybody else because I think we exceed almost anybody else's level of increased spending. Government, at the Federal level, does not have the constraints of most States that have constitutional language that says that they cannot spend more than what is coming in to their government. In Washington, we can simply increase the deficit. And that is what we are doing. We are going to be increasing the deficit with this budget, after we pass this budget. Because of supplementals coming in, we are going to increase the Federal limit on the Federal debt. Every time we increase the Federal debt, Congress has to pass a law saying we are going to increase the Federal debt, and the President has to sign that law. And that is what we are doing. In fact, we have tried to make it easier for ourselves by saying when we pass a budget that spends more money than the existing Federal debt, automatically we are going to consider a bill passed that increases the Federal debt to the level needed to accommodate that particular budget. I think this is a mistake for a couple of reasons, but one is that it makes it too easy to not face up to what we are doing with the increase in debt for this country and the challenge that that puts on future generations. I mean, what we are doing, in effect, is suggesting that our problems today are so great that it deserves us taking the money from the earnings of our kids and our grandkids to pay for today's spending. It is sort of pretending that they are not going to have their own problems 20 and 30 years from now. The debt problem is soon to come to the fore as Congress is forced to increase the debt limit. The debt limit today is about $6.4 trillion, and we are going to dramatically increase that because we are dramatically increasing spending. If we cannot have an average of zero increase in nondefense discretionary spending, we should not have a tax cut. The enormity of Federal spending is almost inconceivable. Even as States and families cut their budgets, the Federal Government is squandering tax dollars faster than ever before. The $2.1 trillion proposed budget is more than the Federal Government spent in the 178 years between 1789 and 1966. Let me say that again. The budget that is being proposed for this next year, that we are working on and the budget resolution is going to accommodate in markup tomorrow in the Committee on the Budget, is more than government has spent in the 178 years between 1789 and 1966. It amounts to over $7,500 for every man, woman, and child in the United States. It is neither fair nor realistic to assume that our problems today are so great that we should be putting this burden on our kids and our grandkids and future generations. Debt and deficit spending is an obligation to increase taxes sometime in the future. Let me move to the problem of Social Security, which is a huge financial problem for this country. Social Security is one of the best retirement programs that we have. And as many of the people in America, Mr. Speaker, have heard, Social Security is facing a very dire financial situation, and that is because we have a coming Social Security crisis. Our pay-as-you-go retirement system will not meet the challenge of demographic change. This chart represents the number of workers that are working. And what happens in this pay-as-you-go system that we started in 1934 with Social Security, current workers pay in their FICA tax, their Social Security tax, and immediately that money is not saved in some account for workers today, but it is immediately spent on paying the benefits of current retirees. So when I talk about demographic change, I am talking about a situation where 26 people in 1940 were working and paying in their tax for each retiree. By 2000, it got down to three workers; three workers now paying a much-increased percentage of what they earn to accommodate the retirement of every one retiree. By 2025, we are looking at people living longer, a decline in the birthrate, so there will only be two people working and paying in their taxes to cover the benefits of every one retiree. A huge burden. A huge challenge. As we borrow all this extra Social Security money that is coming in now, and that is going to run out very rapidly, currently we are looking at $199 billion more coming in every year, if you include the interest that is coming into Social Security over and above what is required to pay out, by 2016 we are looking at a situation where there is no longer going to be enough tax revenues coming in by current workers to pay for the benefits of current retirees. Look at this next chart with me. Insolvency is certain. We know how many people there are, and we know when they are going to retire. We know that people will live longer in retirement. We know how much they will pay in and how much they are going to take out in benefits, and payroll taxes will not cover benefits starting in 2015 or 2016; and the shortfalls will add up to $120 trillion between 2015 and 2075. Now, compare those huge numbers of trillions with our current budget that we are spending in 1 year. So the next-year budget that we are looking at is $2.1 trillion. But over this time period, we are looking at some way that we are going to have to increase borrowing or increase taxes or cut benefits to accommodate that unfunded liability of $120 trillion. The biggest risk is doing nothing at all, and that is what we have been doing. I first came to Congress in 1993; but actually, I wrote my first Social Security bill when I was chairman of the Senate Committee on Finance in the State of Michigan, because it was one of those areas that looked like the greatest challenge for the Federal Government, how we were going to accommodate the situation where the number of workers is decreasing in relation to the number of retirees. And in a pay-as- you-go system, it just does not work out. It just is going to mean that Social Security is going bankrupt unless we make some changes. The longer we put off the solution, the longer that it is demagogued in elections, the longer that Members of Congress and the President and the Members of the Senate are unwilling to sit down and talk about solutions, the more drastic those solutions are going to have to be. And that is because we have a temporary surplus coming into Social Security now, after the huge tax increase of 1983. The tax increase was so great that we have temporarily ended up with more money coming in. Every dollar that has been coming in, government takes and spends and writes the Social Security trust fund an IOU. So the question is: Where is government going to come up with this extra money in 2016 or 2017 when funds coming in from the FICA tax, from the payroll tax no longer are large enough to pay the promised benefits? And to keep paying promised Social Security benefits, the payroll tax will have to be increased by nearly 50 percent, or benefits will have to be cut by 30 percent. It is unfair. It is unreasonable. It is unconscionable not to face up to this problem and to move ahead with this problem. And of course in most of my elections, because I have introduced the Social Security reform bill that has been scored to keep Social Security solvent every session since I have been in Congress since 1993, my opponents have demagogued this. They have said, look, Nick Smith is trying to ruin Social Security and, therefore, do not elect him. But I think more and more Americans, Mr. Speaker, are now starting to face up and realize that Social Security is becoming insolvent; and if we do not deal with it, the problem is going to be much worse. Let me just give a little bit of history on what has happened since we started Social Security in 1934. Every time there was a problem of the money coming in on taxes being less than what was needed to pay benefits, taxes were increased and/or benefits were reduced. Let us not let that happen this time. Let us face up to the problem. Let us deal with it. Let us have both sides work together, without demagoguery, with not playing politics and trying to criticize either side. And both sides have been at fault in some of these situations. Social Security has a total unfunded liability of over $9 trillion today. If you take that $9 trillion that we need today and spread it out over the time period of 2015 to 2075, then it means $120 trillion in those future inflated dollars that we are going to have to come up with sometime through that time period to pay benefits. The Social Security trust fund contains nothing but IOUs. So in 2016, 2017 how are we going to come up with the money? Do we increase the income tax? Do we increase the payroll tax? Already 75 percent of American workers in this country pay more in the payroll tax than they do in the income tax. So I say, no, we cannot increase the payroll tax. Will Members of Congress be brave enough to say, look, we are going to have to cut back on some of this other spending? I certainly hope they will. Our increase in spending at two and three and four times the rate of inflation has maybe been politically wise in a reelection sense, because as you come up with new programs and make more promises to people and say we are going to take care of more of the problems with the Federal Government, that means the Federal Government gets bigger. But since it is unpopular to increase taxes, what we have done is increase borrowing. And again, increased borrowing is nothing more than a promise that taxes are going to have to go up sometime in the future. Mr. Speaker, let me make one last comment as I conclude tonight's colloquy on some of the problems that we are facing, and that is that we are dealing with Social Security and spending and it has been politically wise for politicians to put off coming up with a solution on spending. So the tendency of Congress is we wait until it is almost a crisis before we deal with that crisis. In terms of coming up with new programs, Members of Congress have found that it is easier to get elected because they go on television cutting the ribbon and on the front pages of their newspapers when they come up with new programs to help people in solving some problem. Look, there are lots of problems across the United States. We have a system of government in the United States that has served us very well, but government cannot solve all those problems, and government should not solve problems that States and individuals can solve for themselves. We have a system not because we are stronger than people in other countries, not because we are smarter, but because our system encourages hard work; it encourages productivity. So we have said in our constitution those individuals that study and use that knowledge, those that work and save and invest end up better off than those that do not. That is a system that other countries around the world are now trying to copy. Let us get back to that system. Let us hold the line on spending, and let us stand up and deal with the Social Security problem.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise today to honor Dr. Velma Laws-Clay as Scene Magazine's Woman of the Year. I am pleased to pay tribute to a woman whose vision, intellect and commitment to community service has made her one of Battle Creek, Michigan's best known and most respected citizens. Whether working quietly behind the scenes or out front leading the charge, Velma's positive attitude and strength of conviction serve as an inspiration to all who know her. Velma has been described as the consummate community volunteer; giving generously of her time, talent and resources. She serves on numerous boards and committees including NorthPointe Woods, the Art Center of Battle creek, and the Battle Creek Community Foundation, where she became the first African-American to serve as Board Chairman. One of her more prominent roles was serving as chairman of the year- long sojourner Truth 200th Anniversary Celebration and the Sojourner Truth Monument dedication, events which paid tribute to the historic legacy of one of Battle Creek's most famous citizens. As her affiliation with the Art Center might suggest, Velma has a passion for the arts. It is this passion, along with her knowledge and admiration of her cultural heritage that led her, along with her sister Vivian, to assemble a vast private collection of African American art and artifacts. The collection, known as the ``Journey to Freedom'', encompasses over 300 pieces, ranging from prints and drawings to mixed media and sculptures. It provides individuals the opportunity to experience and learn about the history of African Americans through the eyes and works of the artists. Velma has been the recipient of many well-deserved accolades. In 2001 she was named Alumnus of the Year by Kellogg Community College and received an Alumni Achievement Award from Western Michigan University. She was also recognized as a George Award winner for her outstanding service to the community, and most recently, was presented with the prestigious Athena Award by the Battle Creek Area Chamber of Commerce. Those who know and have worked with Velma state that her energy is contagious. She is a positive, motivating force that inspires the best in others. Through her actions and deeds, Velma serves not only as a strong community leader and visionary, but also as a tremendous role model for others in the community. I am honored to recognize Dr. Velma Laws-Clay for her passionate devotion to promoting and improving the community in which she lives and for truly exemplifying service above self. I join with the citizens of Battle Creek in congratulating her on being named Scene Magazine's Woman of the Year.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise today to recognize Michigan's Federal Credit Unions for their efforts to improve financial services for their members. I would like to especially commend CP Federal Credit Union for their efforts to improve literacy among young people in Jackson, MI. Today they will receive the 2002 National Desjardins Youth Financial Education Award for their good work. The award is named for the founder of the North American credit union movement, a man who promoted the idea of educating youth and providing them with in-school savings accounts. For the last 10 years the CP Federal Credit Union, under the leadership of President and CEO John Crist, put Desjardins' words into action and worked with schools throughout Jackson County to help our youth understand how to spend, save, and budget money. Each week presenters travel to area schools to teach students from Kindergarten to High School about money. In addition to their informative and entertaining presentations they also connect schools with local business people who talk to the students about finances. Their education did not stop there. The CP Federal Credit Union also operates 31 student-run credit unions. Students have an opportunity to volunteer and learn to post transactions and balance a cash drawer. Currently, 320 student volunteers participate in the program. In addition, the program employs five youth representatives who give presentations and meet with teachers and principals to discuss youth financial literacy. Thanks to their efforts 31 schools will include personal finance as part of their curriculums next year. Finally, the CP Federal Credit Union offers the ``Great Expectations'' savings account for students. They encourage students to save for college, their first car, or their first house. Students are required to make a deposit of at least $10 per month into their savings account to be eligible for savings incentives such as cash bonuses or loan discounts. Rather than just educate students about saving money, the CP Federal Credit Union takes it a step further and provides students the means to do so. The impact of this program on the lives of young people in Jackson is immeasurable. More schools have committed to teaching personal finance in their classrooms than ever before; 674 presentations were given during the 2001-2002 school year and 15,000 students were reached. Due to the efforts of these good people and others around the state, Michigan rates No. 1 out of all the States where credit unions are working with youth. Michigan also tops the list in the number of presentations given nearly half of which were given by the CP Federal Credit Union. I commend John Crist and all the employees of the CP Federal Credit Union for their commitment to youth and their efforts to prepare our students for the future. I hope that you will all join me in congratulating them for earning the 2002 National Desjardins Youth Financial Education Award.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, Secretary of State Colin Powell today made a presentation to the United Nations Security Council. Mr. Speaker, I would just urge all Americans that are interested and concerned about this particular issue of Iraq to review that presentation. One item after another to me presented a compelling argument that there is no question that Saddam Hussein, number one, is a bad guy; number two, has been developing these weapons of mass destruction. For two reasons, I think it is important that we just not let this slide. One, if Saddam Hussein starts thinking that we are not going to have military force to insist on his compliance with the United Nations' Resolution 1441, there is a greater likelihood that he is not going to destroy those weapons. If he thinks it is going to happen, that war is inevitable if he does not do something, if he does not start showing and destroying these weapons, then I think there is a good chance that he is either going to vacate and take his roughly $1.5 billion with him to another country, or he is going to give up those weapons in order to continue as the leader of that country that has great economic potential. Nobody should doubt, Mr. Speaker, that if there was not, in effect, a gun to Saddam Hussein's head, and the President being tough on this issue, there would not be inspectors in there and there would not be a United Nations Security Council debating where we go to insist that Iraq give up those weapons.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I ask unanimous consent to have my name removed as a cosponsor of H.R. 497.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise today to honor and remember educator, legislator, community leader and friend, Dr. Gerald Kratz, Dr. Kratz died at his home in Grass Lake, Michigan on January 28, 2003, only 29 days into his first term as a State Representative. His constituents and the State of Michigan have lost a man of integrity who was a true champion of education and community service. Graduating in 1955 from Wayne State University with Bachelor of Science degrees in Social Studies and Art, Jerry began his career as an art teacher. He advanced to administration after completing a Master's degree in Education and a Doctorate of Education in curriculum development. His career in education administration spanned three decades, starting in 1972 as superintendent of the Novi Community School District for 8 years, and then serving as Superintendent for Curriculum and Personnel Relations for Southfield Public Schools. In 1973, Dr. Kratz became an adjunct professor at Eastern Michigan University. In 1980, he became the Superintendent of the Jackson County Intermediate School District where he was a tireless supporter of education, and championed the needs of special education students throughout Jackson County. Enthusiastic about his new role as a legislator, Dr. Kratz had already crafted legislation to benefit education and the students of the State of Michigan. His passion for education will forever be memorialized by the Dr. Gerald B. Kratz Education Center on the campus of the Jackson Intermediate School District, and through the Jerry Kratz Scholarship Fund at Jackson Community College. Jerry's commitment to public service was evident in the many community organizations he tirelessly supported. He volunteered countless hours with the Jackson-Hillsdale branch of the American Red Cross, many of which were spent raising money for local disaster relief projects as part of the Star Search Committee. He was dedicated to serving those who are all too often overlooked, providing transportation for disabled veterans, driving them to the VA hospital in Ann Arbor, and serving on the Board of Directors of the Dove Counseling Clinic, which provides mental health care to the needy, and was a supporter of the pro-life movement. A positive role model for our youth, he volunteered his time with the Great Sauk Trail Boy Scout Council, serving as Vice President of Finance. Jerry was also active with the Rotary, Jaycees, Kiwanis, and served as an Extraordinary Minister of his Church. Committed to business and economic development, he served on the Economic Opportunity Commission, the Private Industry Council, and the local Chamber of Commerce. Most important to Jerry was his family. With his wife of 44 years, Eleanor, Jerry had four children: Kevin, a veterinarian; Kurt, a doctor; Kim, a health care administrator; and Kent, a teacher. Jerry also took great pride in his seven grandchildren. Jerry will be missed by the countless individuals whose lives he touched with his boundless enthusiasm and passion for helping others.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise today to pay tribute to Mr. Stephen Vear, who has honorably served his community as a State of Michigan Representative from 1998 to 2002. As Representative of Michigan's 58th district, Steve served as Assistant Majority Whip, Vice Chair of the Tax Policy Committee, and Chair of the Tax Simplification Subcommittee, and the State Auditor Generals Oversight and Commerce Committee. During his tenure in the House of Representatives, the Small Business Association of Michigan, the Michigan Coalition for Responsible Gun Owners, and the Dads of Michigan and Moms for Dads organizations named Steve Legislator of the Year in 2001. Steve's dedication to reducing taxes and encouraging business and economic development were aptly demonstrated when he drafted legislation to eliminate the Single Business Tax in Michigan. While representing the 58th District, Steve introduced and had 10 bills signed into law by Governor John Engler, and co- sponsored more than 100 bills that were signed into law. Steve prides himself on his advocacy, which helped preserve program funding for the Nursing Homes for Quality Initiative Grants, which were to improve the quality of life for senior citizens. Steve has worked tirelessly in the local community as well. His willingness to contribute his time and energy to the community is evident through his many activities past and present. He served as an Assistant Scout Master for the Boy Scouts, as President and is a current member of the Jonesville Rotary Club, a founding member of the Chief Baw Beese Chapter of the North County Trail Association, and as a Hillsdale County Deputy Volunteer for 10 years. He has been an active member of many other organizations, including Right to Life, Sons of the American Legion, the National Rifle Association, and the Conservation Club. His commitment to furthering the interests of small business owners like himself is evidenced by his service on the Board of Directors of the Small Business Association of Michigan from 1993 to 1999, as a member of Small Business United, and as a delegate to the White House Conference on Small Business in 1995. From working his way through his bachelor's degree in Accounting at Hillsdale College to representing 92,000 people in Branch and Hillsdale counties, Steve Vear has proven himself to be a dedicated community leader. It is for these reasons that I am honored to recognize Steve Vear for his selfless commitment to his family, his friends, and his community.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I'd like to bring to the attention of my colleagues the Fall 2002 issue of ``Destination Detroit,'' which is edited by a friend with much wisdon, Diane Edgecomb. Diane was the editor in chief of this issue, which focuses on water quality and water availability and the challenges that we will face in coming decades. One of the themes of this publication that I'd like to touch on briefly is the idea that we need to work worldwide, if we are to help ensure that everyone has access to a sustainable supply of fresh water. The importance that water has in our lives and the complications that arise when there are shortages dictates that we find a solution that transcends borders. I believe that if there is additional action that we as Americans can take to help educate and make this goal a reality it will better serve us in the long run. Also included in the magazine is an interesting article about how Geographic Information Systems (GIS) have improved our ability to manage water resources. GIS is a comprehensive mapping tool that allows us, among other things, to assess the volume of a region's water supply and locate the source(s) of that water. Using this tool we can anticipate problems and develop innovative solutions before there is a crisis. I would encourage every member of Congress to take the time to review the Fall 2002 issue of ``Destination Detroit'' for themselves. I have sent copies to the relevant committees and there are copies available in both the Republican and Democratic Cloakrooms.