Nick Smith

Mr. SMITH of Michigan

Mr. SMITH of Michigan. And the market system works. I think we have a responsibility at the Federal level to make sure as best we can that there is competition, and there is not the kind of gouging. But if last year, the crude oil prices got for a little while over $30 a barrel, I think now they are around $26, but still if we were to say, you cannot sell crude oil for over the $8 a barrel that was a low point several years ago, I mean there would not be exploration. They would not be coming into Pennsylvania and Michigan doing some wildcatting. They would not be acidizing some of the old wells to drain them dry of oil, and there would not be the kind of research that can make sure that we can be environmentally friendly in the smaller drilling in the fact that we can now sit on one site and go for 4 miles in all directions to capture some of the oil down below, rather than having the congestion that we saw back in the 1940s and 1950s maybe in Oklahoma and Texas. So technology is a huge change.

Mr. SMITH of Michigan. I think it is worth mentioning that over the last 8 years, we have been so conscientious or the administration was so conscientious on the environment that we ended up closing down about one-third of our refineries in this country with regulations and increased costs. We ended up stopping a lot of the clean coal mining in this country. Right now I think the estimate is something around 250 to 300 years' worth of energy from coal, if we move ahead on that kind of technology. Or if we use some of technology that we have now, the administration and President Bush is suggesting another $2 billion over the next 10 years to do research on clean coal technology to even do a much better job of the nitrates and sulfur dioxide emission, besides the particle pollution that is happening. We are able to do a lot of that now. With a little more effort, we can make this kind of a fuel a very efficient contribution to a continuing strong economy in this country.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, as a former president of the Key Club in my hometown of Addison, Michigan, it gives me great pleasure to rise today to honor the members of the Lakeview/Urbandale Kiwanis Club in Battle Creek, Michigan and the over 40 students from Lakeview High School who will gather on May 22, 2001 to celebrate the chartering of the community's first Key Club. Key Club is an international service club for high school students which operates under the sponsorship of a local Kiwanis Club, and is designed to aid students in developing leadership skills, initiative and good citizenship through interaction with business and professional leaders in the community. The Key Club constitution promotes daily living of the Golden Rule in all human relationships; the adoption and application of higher standards in scholarship, sportsmanship, and social contacts and providing a practical means to form enduring friendships, to render unselfish service, and to build better communities. The history of Key Club dates to May of 1925 with the chartering of the first chapter at Sacramento High School in California by the Kiwanis Club of Sacramento. The club was originally formed to provide vocational guidance to young, high school males and to serve as an alternative to high school fraternities and secret organizations. Today, Key Club is the largest high school service organization in the country, with more than 200,000 members in over 4,500 clubs throughout North America, Europe and the Caribbean. The impeccable reputation of Kiwanis International is well documented and well deserved. Countless individuals worldwide have been assisted through the organization's commitment to community service and helping those in need. I am honored to recognize the members of the Lakeview/ Urbandale Kiwanis Club for tireless efforts on behalf of the greater Battle Creek area and for their willingness to serve as mentors and role models to area youth. I congratulate the Lakeview High School Key Club on the receipt of its charter and wish the group much success in its inaugural year.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, tomorrow the President is going to announce this administration's energy policy. I say bravo. For the last 8 years, like the gentleman from Florida (Mr. Stearns) mentioned, we have not had an energy policy except close to the election, former President Clinton released some of the strategic oil reserves. Of course, that only made a short-term difference. Petroleum imports over the last 8 years have risen from 50 percent of our need to 58 percent. We are now faced with a dramatic and challenging future as we try to reduce our dependence on imported oil, especially from OPEC. So the opportunity to look at some of the other oil-producing countries in the world is something we must pursue. But even more than that, as chairman of the Subcommittee on Research, we must look at renewable and alternative sources of energy including clean coal technology. We must push for the kind of research necessary to increase efficiency and conservation in this country. I think also it is time to review President Clinton's increase of 4.3 cents on the gas tax that he implanted in 1993 to be a temporary measure for deficit reduction. The balanced budget is accomplished; let us discontinue that tax increase even if we maintain the Highway Trust Fund.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, I am disappointed that there was not an amendment addressing the Kyoto Protocol language in the State Department reauthorization bill. This language that calls for implementary the protocol will potentially have far-reaching ramifications. An issue of such importance should have been debated before the House. Under the Kyoto Protocol, by 2008 to 2012 the U.S. would be required to slash emissions of greenhouse gases to seven percent below the 1990 level--a level last achieved in 1979. Based on projections of the future growth in U.S. energy use, this would require a real cut in emissions of over 30 percent. In the meantime, major greenhouse-gas emitters, such as China, India, Mexico, and Brazil, would be able to continue business as usual. But while the Protocol sets stringent targets and timetables for developed countries, it left the important details of implementation for later negotiations. After three years, these negotiations have gone nowhere, the developing countries have repeatedly refused to even discuss the possibility that targets and timetables might apply to them, as well. Furthermore, in the recent round of discussions that I attended at The Hague last November, the European Union obstructed any effort to establish a system to account for carbon sinks that take carbon gases out of the air. Some estimates suggest that U.S. carbon sinks--mainly forests and agricultural crop land--offset all of our carbon dioxide emissions in the U.S. As U.S. farmers know, corn, sorghum, wood lots, and other crops take up vast amounts of carbon dioxide. But instead of negotiating in good faith on this and other issues, European governments seemed more intent on using the treaty to weaken America's competitiveness. The United States Senate has already voted against the treaty. With no realistic hope that the treaty could be salvaged and eventually ratified by the Senate, the Bush Administration did the right thing and rejected the treaty. Although many European governments have expressed bitter disappointment about the U.S. decision, it should be pointed out that Romania is the only developed country to ratify the treaty so far. We need to reduce emissions of green house gases, and we are doing that but the simple fact is that for the U.S. to achieve the unfair U.S. responsibility set out in the Kyoto treaty, energy costs would have to rise sharply. Today's high cost of energy provides just a hint of the kinds of price increases we could expect if we agree to the Kyoto treaty. The Energy Information Administration projects that under Kyoto, by 2010 the average cost of a gallon of gasoline, in current dollars, would rise 32 cents. Diesel fuel prices to would rise to an average of $2.18 compared to $1.47 today. Home heating oil also would be expected to rise to $2.10 per gallon, well above last winter's price. Such price increases would have a devastating impact on the U.S. economy. Good-paying, high-skilled manufacturing jobs in many industries would be lost at investment in American plants dries up and industries relocate to developing countries not subject to the treaty's requirements. The losses suffered in these industries will be felt throughout the economy in lower incomes and fewer jobs. A study by the well-respected econometrics firm WEFA Inc. estimates that the treaty would lead to a drop in average household income of $2,700 per year. Further, an additional 2.4 million U.S. manufacturing jobs could be expected to move to developing countries where companies could take advantage of cheaper energy. Once these countries became sanctuaries for energy-intensive industries, they would be even less likely to agree to emissions limits in the future. The treaty also lacks a firm scientific basis. While there is not scientific disagreement that more carbon dioxide and other greenhouse gases are in our atmosphere than before the Industrial Revolution, scientists disagree about the extent man-made gases contribute to global warming, the amount of warming, or even if the planet is warming at all. Some research indicates even warmer global temperatures in the past then what we are experiencing today. Current computer models predicting warming over the next century may prove to be no more reliable than the five-day weather forecast. But even assuming that these models are right, achieving the emission goals in the treaty would reduce project warming by about two-tenths of a degree by 2050. But that does not mean we should ignore this potential problem. There are many things about the climate system we still do not understand. That is why I support continued research to increase our understanding of climate variability and the potential human impact of greenhouse gas emissions. Instead of Kyoto's command and control approach, the Administration and Congress must work to develop new technologies, market-based incentives, and other approaches to increase energy efficiency and reduce greenhouse emissions. I fully support these approaches and urge my colleagues to do so as well.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, the so-called transition cost for Social Security, if we do nothing, if we make no changes, is $120 trillion over the next 75 years. If we start now by developing the kind of bridge that will bridge the gap between expected revenues and expenditures that is necessary to increase the returns over what Social Security will otherwise be able to pay, we can do it. The average return that is paid in in Social Security taxes is now estimated by the Social Security actuaries to be 1.7 percent return on that so-called investment, or those taxes. In a perfect congressional world, we would not have a tax cut, we would stop the dramatic increase in spending of this Congress that jeopardizes not only the economy but leaves our kids with a huge debt and jeopardizes the future of Social Security and Medicare. Let us hold the line on increased spending.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I would like to join you in welcoming today's distinguished guest chaplain, Reverend Ira Combs, Jr., and thank him for leading the House in prayer. Reverend Combs is the founder and pastor of the Greater Bible Way Temple in Jackson, Michigan. He started that church and now the congregation numbers over 1,000. Reverend Combs has built up his church to serve a growing congregation. He has received the Outstanding Young Men's Award from the National Jaycees and was named in the Marquis Who's Who in America and the Who's Who from the International Business Association, among some of his many awards. Reverend Combs is distinguished by his love for people, desire to strengthen families and ability to motivate and cultivate those around him. His compassion for the less fortunate has led him to assist many needy families in and around Jackson while working tirelessly to serve his community and his State. Reverend Combs continues to be a community leader in Jackson. I am proud to welcome him here today as our guest chaplain.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, through the Speaker to everybody that might be listening, how does one make the best decision on how much to spend and how high taxes should be? It would seem reasonable that the first thing policymakers might do is say, look, how much, how high, should taxes be for the American people? Right now, the average American taxpayer pays about 41 cents out of every dollar they earn. Here at the Federal level, our budget, in terms of total income, is approaching 21 percent of GDP. So if we are going to have a reasonable budgeting process then we say, look, at what point are taxes so high that it discourages economic expansion in our free market economy? It is the system that has made this country great, rewarding those people that try, that start new businesses, that get a second job? But we have sort of evolved into a tax system of penalties and punishment for some of those people that really try and save and invest. That young couple that, maybe, goes out and gets a second job; we not only tax that person on the additional income, but we say, in effect, if you are going to earn more money, we are going to increase the rate of taxation. I would suggest to my colleagues to consider that we should not have Federal Government spending that exceeds 18 percent of total income or GDP in this country. We are now approaching 21 percent. I applaud the Committee on Rules. I congratulate the Committee on the Budget for moving ahead with the most reasonable budget we've had in years, even though this budget increases spending twice the rate of inflation. We have gone in past years as high as five times the rate of inflation as we expanded the Federal Government. Just imagine for a moment a graphic projection of what inflation is every year and the fact that the Federal Government is increasing the size of the Federal Government two to five times the rate of inflation. Someplace out there, it is going to catch up with us. So let us not talk and suggest that this program could use more money or that program could use more money. Let us decide what is reasonable and fair to those people that are working and decide how much money they should be allowed to keep in their pockets to decide how they want to spend it. The big spenders in Congress can always say we need more money for this program or that program or we need more programs. But the fact is that government spending through the appropriation process is not free. It is not magic. Somebody is working hard, getting up and going to work, whether they feel like it or not, to earn that money, to send part of it to Washington. I think as we review what has happened in taxes in this country and the fact that our taxes now are the highest they have ever been in the history of the United States except for 1 year during World War II, it should make us all very conscious of the importance of trying to be a little more efficient, trying to prioritize spending in government. Let us move ahead with supporting this rule and this budget and hope we have the intestinal fortitude to stick with this spending level through the appropriations process.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I rise today to offer this resolution H. Con. Res. 108 honoring the National Science Foundation for 50 years of service to our Nation. As chairman of the Committee on Science on Basic Research, which is responsible for oversight and authorization of the National Science Foundation, I wanted to take a few moments to mention some of the highlights of this highly successful and yet often unappreciated agency. Congress and President Harry S. Truman established the National Science Foundation on May 10, 1950 to fund research in the basic sciences, engineering, mathematics and technology. It is the Federal Government's only agency dedicated to the support of education and fundamental research in all scientific disciplines from physics and math to zoology and anthropology. For 50 years, NSF- sponsored research has developed the finest science and new technologies that have boosted our economic productivity, enhanced our national security, and preserved our citizens' health and well-being. Throughout its history, NSF provided support to thousands of researchers and students across the Nation in university labs and in our schools and our industry, support that has fostered innovation, technical achievement, and a greater understanding of our world and our universe. From the depths of space to the depths of the ocean, from the North Pole to the South Pole around the globe, NSF-funded research has helped explain our world and led to innovations that have forever changed it. The Internet, for example, and the technologies that enable it, began in part because of NSF support for networking technologies. NSF funded a network, linking computer science departments, then moved on to develop a high-speed backbone called the NSFNET that became the basis for what is now the Internet. NSF-supported research has also led to miracle drugs, vaccinations, cell phones, and even bar codes that readers in supermarkets now use. NSF supports potentially life-saving research in developing the Doppler, research in weather prediction using the Doppler radar, earthquake hazard, and identification of the cause of the spread of the deadly Hanta virus. Today's NSF-led research in nanotechnology, advanced materials, biotechnology and countless other areas are setting the foundation for the technologies of the future and in the process, training the scientists, engineers, and technology entrepreneurs of tomorrow. Today, we congratulate NSF on 50 years of service to the United States and for its many contributions to our current prosperity. But we also reaffirm our commitment as a Congress to support NSF in the future in its diverse research in educational activities. NSF's peer review system, where grants are reviewed by a panel of researchers in the field to judge the merits of research, is a model of how research should be evaluated at all other Federal agencies. We must also strive to ensure that NSF invests in a broad range of sciences in order to support the critical work of well-funded mission agencies like the Department of Defense and the National Institute of Health. It is important that we continue to support NSF as part of a balanced Federal research portfolio and recognize that the basic science supported by NSF forms the foundation for research at all other Federal research agencies and for applied innovations and productivity increases in the private sector. My colleagues and I on the subcommittee will keep this goal in mind as we work towards our reauthorization of NSF, and we will keep it in mind as we work with the administration and the appropriators to work and craft a balanced research budget. I would like to thank the gentlewoman from Texas (Ms. Eddie Bernice Johnson), the ranking member of the Subcommittee on Basic Research, a cosponsor of this resolution, and for all of her work and support of NSF. I would also like to thank the other cosponsors of this resolution and certainly my friend, Senator John McCain, and the 19 Senate cosponsors of S. Con. Res. 36, the companion resolution. Certainly I would like to thank both the Republican and Democratic staffs on our subcommittee and the full Committee on Science for their untiring work. Mr. Speaker, the NSF is completing its 50th year of service to our Nation. With this resolution, this House will recognize this important anniversary and express our hope for at least another 50 years of continued innovation and education. I urge my colleagues to support this resolution. Mr. Speaker, I reserve the balance of my time.

Mr. SMITH of Michigan. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on H. Con. Res. 108.

Mr. SMITH of Michigan. Mr. Speaker I yield 4 minutes to the gentleman from Minnesota (Mr. Gutknecht), vice chairman of our full Committee on Science.

Mr. SMITH of Michigan. Mr. Speaker, I yield myself such time as I may consume; Let me, in closing, say I think we would all like to also thank the management and staff at the National Science Foundation, certainly the director, the assistant director, those who run the eight directorates; the many program directors, and the support personnel, an estimated 50,000 scientists and engineers throughout the country that are making the research effort, that are offering their time and service on the peer review system, and certainly the hundreds of thousands of teachers that are making a difference in exciting young students about math and science and research. Last week we had a subcommittee hearing regarding education research, to try to improve K through 12 learning, especially in the areas of math and science. The Education and Human Resource division of the National Science Foundation has done great work. So again, thanks to our staffs on our full committee and subcommittee, all of the members of our committee, and my colleagues in Congress who are supporting the National Science Foundation and its continued efforts, I hope this resolution will pass with unanimous support.

Mr. SMITH of Michigan. Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Mr. SMITH of Michigan. Mr. Speaker, I move to suspend the rules and agree to the concurrent resolution (H. Con. Res. 108) honoring the National Science Foundation for 50 years of service to the Nation.

Mr. SMITH of Michigan. Mr. Speaker, I yield back the balance of my time.

Mr. SMITH of Michigan. Mr. Speaker, I yield myself such time as I may consume. Mr. Speaker, I agree with my friend from Texas, there needs to be a balanced effort in where we go on research. Certainly all of the other agencies and Departments that do research depend, to a certain extent, on what happens with basic research and primary research mainly conducted through our university systems through the National Science Foundation. However, I would urge my colleagues, including the gentleman from Texas (Mr. Bentsen), to make the suggestions to the appropriators. As he well knows, the 302(a) overall spending is incorporated in the budget resolution that we will be taking up in the next 2 days. The 302(b), how to divide up that money and where we go with the 250 function, is going to be decided through the appropriation process. And again, I would urge all of my colleagues to consider the importance of having a balanced research budget.

Mr. SMITH of Michigan. Mr. Speaker, I yield 3 minutes to the gentlewoman from Maryland (Mrs. Morella), former chairman of our Subcommittee on Technology of the Committee on Science.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, through you to the President's Commission on Social Security, I would suggest many of us are very concerned that we are going to review a proposal that might not keep Social Security solvent for the next 75 to 100 years. I think it is important that we urge the President, that we urge this Commission, to come back to this legislative body with a proposal that is going to at least keep Social Security solvent for the next 75 years. Social Security is a pay-as-you-go program. It is going broke as we experience demographics that represent a decline in the birth rate and an increase in life expectancy. It is a good program for America. It is a serious problem. We need to protect Social Security.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I am going to talk about Social Security, a little bit about the problems, a little bit about the commission that was appointed today by the President of the United States, George Bush, to try to come to a conclusion that is going to keep Social Security solvent. We have been looking and acknowledging for almost 6 years now the serious problem of Social Security solvency. It has been a problem because when we developed Social Security in 1934, it was set up as a pay-as-you go program, where current workers pay in their Social Security tax and it is immediately sent out to current retirees. What we have been experiencing over the last 65 years is a dwindling number in the birth rate and an increasing lifespan of seniors. So, for example, in 1942, we had almost 40 people working paying in their Social Security tax for every one retiree. Today, yes, Mr. Speaker, there are three people working paying a much higher Social Security tax to accommodate every one retiree. The guess is that within 20 years, it is going to be two workers paying their tax for one retiree, so the challenge is increasing the return on that money that is being paid in by employees and employers in the United States. Right now, the average employee is going to get a 1.7 percent return on the money they have paid in to Social Security in Social Security taxes. Today the President appointed a commission. It was my recommendation that we do not use a commission to further delay the implementation of a solution for this, because the fact is that the longer we put off this decision, the more drastic the changes are going to have to be. There are only two ways to solve the Social Security dilemma: We either increase the revenues, or we decrease the benefits and the amount of money going out. And what some of us have been suggesting for several years is that we increase revenue by getting a better real return on some of that money rather than simply lending it to the Government. We have heard a lot of bragging that we are paying down the public debt. Actually, we are borrowing the money from Social Security and writing an IOU and then using that money to pay down the so-called debt held by the public, or I call it the Wall Street debt. I urge the President to urge this commission to move quickly. I urge the commission to look at the legislation that many of us have been introducing over the last 6 or 7 years to make sure we keep Social Security solvent. I think it is very important for the American people to know, Mr. Speaker, that we should not accept any recommendation from the White House that does not keep Social Security solvent for at least the next 75 years. It is too easy to say let us put Social Security first and then do nothing except add rhetoric and maybe pay down the debt a little bit. But what we have done with the so-called lockbox, with the so-called paying down the debt held by the public, does not help solve the long-term Social Security problem. So I appreciate this time, Mr. Speaker; and I urge the commission to act as quickly as possible. I do see members of that commission that are going to be on the bottom end of the learning curve. That means that if they are going to understand the complexity and seriousness of the Social Security problem, that they need to do a lot of burning of the midnight oil.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, I am particularly disappointed that none of the proposed budgets offered today address the serious problems facing Social Security. Setting aside the surplus coming in to Social Security actually does nothing to avert Social Security's insolvency. I think there is a greater understanding in this body in the last few years about the serious problems that Social Security faces in the future. Because of that increased understanding, I am even more disappointed in the unwillingness of Members to address Social Securities unsolvency. Suggesting the budget provides for paying down all the available ``public debt'' is actually a negative for me. It means we won't be using the surplus for fixing Social Security. Social Security today has an unfunded liability of $9 trillion and we need to solve the problem now. That $9 trillion unfunded liability translates in terms of future dollars to an astounding shortage of a $120 trillion over the next 75 years. This means that there will be $120 trillion additional funding needed over and above the revenues coming in from the Social Security tax, if we are to maintain promised benefits over the next 75 years. The shortfalls are real. We know the number of people that are working now and will be entitled to benefits. We know the number of future workers and future retirees and therefore, the funding needed to fund benefits. So, again Mr. Chairman, it should concern us all that we are not addressing this serious problem within the context of this budget--or any of the substitutes offered today.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Madam Speaker, I rise today to add my voice to the chorus of voices from this House expressing our condolences to the people of El Salvador. Our thoughts and prayers are with the families, those who died, were injured, displaced by the earthquake and aftershocks last January and February. Our thoughts are also with those worldwide who have committed to lend relief and assistance to those affected by this disaster. We in the United States appreciate the support of other countries when such disasters happen here, and I am proud that Americans are among those who are helping El Salvador, both by providing immediate relief but also by studying what happened during and after the quakes. By increasing our understanding of the mechanics of earthquakes, we increase our chances of mitigating the damage of future quakes worldwide. Inevitably, there will be lessons learned from these disasters, as there are with others, including our own. It is important for us in the United States to continue to study these quakes to help mitigate the risks they pose. Let us not forget, earthquakes are a threat to nearly 75 million people in 39 States in the U.S. Institutions and Federal programs, like the National Earthquake Hazard Reduction Program, do a credible job of contributing to our store of knowledge about the causes and effects of earthquakes and can reduce vulnerability to them through engineering research and new building design. Technology also holds the promise of providing additional real-time warning of an earthquake to countries around the world. Indeed, countries working together have the potential of improving earthquake advance warnings. Additional seconds of advanced warning can mean the mitigation of destruction and can mean the difference between life and death. Our Subcommittee on Research, in the Committee on Science, will address some of these issues at a hearing tomorrow in room 2318 at 2 p.m. The point I make, Madam Speaker, is we must not only help now but develop and share new technology with the rest of the world. The people of El Salvador have shown great courage and strength in dealing with the effects of this disaster. They deserve our deep sympathy and support, and I join my colleagues in supporting this resolution.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman from California (Mr. Thomas), chairman of the Committee on Ways and Means, for yielding the time to me. Mr. Speaker, the most important reason to have a tax cut is to get some of this money out of town. It has been mentioned that spending is the danger. There are a lot of problems in this country. There are a lot of problems in the world, and it is easy for politicians to say let us spend a little more of that available money. Let me just give my colleagues a quick example, Mr. Speaker, in the last one, if we would have stuck to the caps that we set on ourselves for 1997, the baseline for the next 10 years would be $1.7 trillion less spending than the baseline that exists because of our expanded spending. The danger is more and more spending from this body, and it has been said many times how many people believe that if you leave it on this political counter in Washington most of it is going to be spent for an expanded government; that is the worst thing we can do for the future of the economy. It is the worst thing we can do for the liability that our kids are going to have to bail us out of. Let us get some of the money out of town. Let us be fiscally responsible and start setting priorities.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Madam Speaker, I would like to spend just a couple minutes talking about some of the issues that this Congress, both the House and the Senate, are really struggling with, and that is the debt that has been mounting up, the total Federal public debt, of this country. I would like to comment about the legitimacy of a tax reduction and would like to comment on the challenge that is facing this body and the President in terms of keeping Social Security solvent. First of all, on the debt: if my colleagues will bear with me, let me break down the current Federal national debt of now $5.7 trillion. Of that $5.7 trillion, I break it down into three segments: The treasury debt. When we issue Treasury paper, Treasury bills, Treasury bonds, the so-called debt held by the public, that now represents $3.4 trillion out of the $5.7 trillion. The debt that has been borrowed from Social Security represents $1.2 trillion, $1.2 trillion out of the $5.7 trillion. That is what we have been borrowing pretty much ever since we dramatically have increased the Social Security taxes, the FICA taxes, over the last 20 years. There has been much more money coming in than has been needed, and that is especially true since the 1983 increase in Social Security taxes. So we have accumulated $1 trillion worth of IOUs that this government owes Social Security when it comes time for Social Security needing that money. So we have $3.4 trillion that is Treasury debt, debt held by the public; we have $1.1 trillion that is owed the Social Security Trust Fund, and then the other 117 trust funds that the Federal Government has represents additional IOUs of another $1.2 trillion. So we divide it in three different levels. Most of the surplus is coming from the Social Security surplus, the excess of Social Security taxes over what is needed to pay Social Security benefits. And I think we should remind ourselves, Madam Speaker, that Social Security is a pay-as-you-go program; that when Social Security taxes come in, by the end of the week, that money is sent out in benefits. So there is no reserve. There are no accounts with individuals' names on it. And that has left us with the problem of how we are going to pay back that money when the baby boomers start retiring in 2008. So we have a huge increase in the number of retirees, recipients, as we are looking at a relatively fewer number of workers that are paying in those taxes to pay the benefits for those retirees. We have been talking in both the White House and in both Chambers of Congress about paying down the debt held by the public. Some people refer to it as the public debt. Technically, that is not correct. It is the debt held by the public. The dollars that we are using to pay down that debt held by the public are the extra dollars mostly coming in from the Social Security Trust Fund. So we write out an IOU, and we use those dollars to pay down the debt held by the public. To assume this has anything to do with helping to keep Social Security solvent is incorrect. The only thing that might be worse than using this money to pay down the debt and writing out an IOU is possibly using it for increased spending and starting new entitlement programs. If we do this, and then we have a problem with Social Security in the next 8 to 15 years, it is even more difficult because we have expanded the size of the Federal Government. Let me mention the tax cuts that will be coming up in this Chamber in the next couple or 3 days as we talk about a tax reduction. If things were perfect, we should not have a tax reduction, but that money should be used to make sure Social Security stays solvent. I think one way to do this is to put it in privately held and owned accounts where the flexibility, where the alternatives of an individual to invest that money are limited, such as in a 401(k). So they would be limited to safe investments. They would be limited to only a certain percentage that could go into equity, stocks, and the remainder would have to go into interest-bearing accounts. If we were to accomplish that and use this money now, it would simplify and help us solve the long-term problems of Social Security. And I just mentioned, we are looking at surpluses coming in in the next several years of $5.6 trillion. We are looking at an unfunded liability for Social Security of $9 trillion.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, my amendment is a simple one. It would raise the aggregate debt level a family farmer could have and qualify for Chapter 12 bankruptcy. Currently, the limit is set at $1,500,000, which was the original limit set in 1986 when Chapter 12 was created. It has not been raised since then although CPI-U has increased approximately 43 percent. With the increase in land and equipment values the debt level needs to be increased to accommodate family farmers. It's important for farmers to be able to qualify for Chapter 12. Chapter 11 is for larger corporations and is very costly and requires that all creditors be paid off, which is typically impossible for a farmer. Chapter 13, on the other hand, can't be used by corporate entities, has low debt levels and doesn't provide for rewrites of debt, which is typical in a farm bankruptcy. H.R. 333 does provide that Chapter 12's aggregate debt limit will be indexed starting this year. But this ignores the deterioration of the debt level's value from 1986 through 2001. My amendment takes into account this change in the CPI since then and adjusts the debt limit accordingly. The Senate has included this provisions in their bill and I am assured the increase will be in the final version we send to the President.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I thank the chairman for yielding me this time. I thank the gentlewoman from Wisconsin (Ms. Baldwin) for joining with me in introducing this bill. I thank the chairman especially for expediting the bill, bringing it to the floor, along with the full bankruptcy bill tomorrow. This is so very important. The first thing I would urge is for the United States Senate to try to immediately move this bill into effect. Let me tell my colleagues the predicament. Since last July, farmers have not had the availability of chapter 12 which was originally designed and specifically written to accommodate their needs in a bankruptcy situation. We are now facing an environment in United States agriculture where commodity prices are at record lows. Many farmers that had become highly leveraged are now facing bankruptcy or the potential for bankruptcy. Chapter 11 and chapter 13 do not accommodate the needs of a family farmer. In too many cases they simply have to sell out their equipment or other property. To tell a farmer to reorganize, but at the same time urging, insisting that that farmer sell their means of production, their livelihood, the way they can work themselves out of debt means often that those farmers are put out of business. Congress I think has long recognized, Mr. Speaker, that farmers face special circumstances in bankruptcy not faced by other debtors. Congress provided special provisions for farmers in section 75 of the Bankruptcy Act in 1933. And certainly when Congress held hearings to determine whether the Bankruptcy Code adequately provided for family farmers, Congress concluded that it did not. The enactment of chapter 12 removed many barriers that family farmers face when filing for a bankruptcy. For example, it is more streamlined and less complex and expensive than chapter 11 which is more suitable for large corporations. A farmer, a dairy farmer, in fact, in Wisconsin has a herd of 65 cows and 60 heifers and is facing low commodity prices, depressed milk prices. He has part of his operation in a corporation designed to pass the farm on to his kids, and; therefore, he cannot even use chapter 13. Being forced to use chapter 11 may very well put that farmer out of business because chapter 12 is not available. Another dairy farmer that I am aware of struggles to make a go of it with a 100 head herd which, Mr. Speaker, was about the size of my own herd right before I decided to get out of the dairy business and come into Congress. Because this particular farmer has more debt relative to assets than a lender will tolerate, he needs to restructure. Under chapter 12, he could rewrite his notes. If chapter 12 is not there, again, this farmer may very well be forced to sell his property and go out of business. The enactment of chapter 12 has, according to testimony cited by the commission, reduced family farm failures. The commission concluded, and I would quote here, ``The test of time has revealed that chapter 12 generally provides financially distressed family farmers with an effective framework within which to reorganize their operations and restructure their debts.'' Now, although this provision was originally created as a temporary one, the commission recommended the Congress made it permanent. That is what our Committee on the Judiciary did in the full bankruptcy bill. I urge my colleagues to move this forward, to move it to the Senate. I would urge that the Senate immediately consider the importance of this. Farmers have been without this provision since last July. This legislation simply extends it 3 months until June, a temporary extension which is so important. Bankruptcy courts and bankruptcy judges are trying to hold in abeyance some of those farmers cases that need chapter 12 to survive. I hope we can move ahead quickly. I thank, again, the Committee on the Judiciary for moving this bill so quickly.