Nick Smith

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, let it be known, that it is with great respect for the outstanding record of excellence he has compiled in academics, leadership and community service, that I am proud to salute Joseph Northrup, winner of the 2000 LeGrand Smith Scholarship. This award is made to young adults who have demonstrated that they are truly committed to playing important roles in our Nation's future. As a winner of the LeGrand Smith Scholarship, Joseph is being honored for demonstrating that same generosity of spirit, intelligence, responsible citizenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, Michigan. Joseph is an exceptional student at Tecumseh High School and possesses an impressive high school record. Joseph has received numerous awards for his excellence in academics as well as his involvement in band. Outside of school, he has been involved in Tecumseh Youth Theater and the community chorus and orchestra. Therefore, I am proud to join with his many admirers in extending my highest praise and congratulations to Joseph Northrup for his selection as a winner of a LeGrand Smith Scholarship. This honor is also a testament to the parents, teachers, and others whose personal interest, strong support and active participation contributed to his success. To this remarkable young man, I extend my most heartfelt good wishes for all his future endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, let it be known, that it is with great respect for the outstanding record of excellence she has compiled in academics, leadership and community service, that I am proud to salute Abby Walter, winner of the 2000 LeGrand Smith Scholarship. This award is made to young adults who have demonstrated that they are truly committed to playing important roles in our Nation's future. As a winner of the LeGrand Smith Scholarship, Abby is being honored for demonstrating that same generosity of spirit, intelligence, responsible citizenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, Michigan. Abby is an exceptional student at Grass Lake High School and possesses an impressive high school record. Abby has received numerous awards for her excellence in academics as well as her involvement in band. Outside of school, she has received many awards for her involvement in 4-H. Therefore, I am proud to join with her many admirers in extending my highest praise and congratulations to Abby Walter for her selection as a winner of a LeGrand Smith Scholarship. This honor is also a testament to the parents, teachers, and others whose personal interest, strong support and active participation contributed to her success. To this remarkable young woman, I extend my most heartfelt good wishes for all her future endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, let it be known, that it is with great respect for the outstanding record of excellence he has compiled in academics, leadership and community service, that I am proud to salute Andrew Poenicke, winner of the 2000 LeGrand Smith Scholarship. This award is made to young adults who have demonstrated that they are truly committed to playing important roles in our Nation's future. As a winner of the LeGrand Smith Scholarship, Andrew is being honored for demonstrating that same generosity of spirit, intelligence, responsible citizenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, Michigan. Andrew is an exceptional student at Lenawee Christian High school and possesses an impressive high school record. Andrew has received numerous awards for his excellence in academics as well as his involvement in soccer. Outside of school, he has been active in many volunteer programs such as Meals on Wheels for Lenawee County. Therefore, I am proud to join with his many admirers in extending my highest praise and congratulations to Andrew Poenicke for his selection as a winner of a LeGrand Smith Scholarship. This honor is also a testament to the parents, teachers, and others whose personal interest, strong support and active participation contributed to his success. To this remarkable young man, I extend my most heartfelt good wishes for all his future endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, let it be known, that it is with great respect for the outstanding record of excellence she has compiled in academics, leadership and community service, that I am proud to salute Courtnay McFeters, winner of the 2000 LeGrand Smith Scholarship. This award is made to young adults who have demonstrated that they are truly committed to playing important roles in our Nation's future. As a winner of the LeGrand Smith Scholarship, Courtnay is being honored for demonstrating that same generosity of spirit, intelligence, responsible citizenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, Michigan. Courtnay is an exceptional student at Hanover-Horton High School and possesses an impressive high school record. Courtnay has received numerous awards for her excellence in academics as well as her involvement in band. Outside of school, she is an active member of her church community. Therefore, I am proud to join with her many admirers in extending my highest praise and congratulations to Courtnay McFeters for her selection as a winner of a LeGrand Smith Scholarship. This honor is also a testament to the parents, teachers, and others whose personal interest, strong support and active participation contributed to her success. To this remarkable young woman, I extend my most heartfelt good wishes for all her endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, let it be known, that it is with great respect for the outstanding record of excellence he has compiled in academics, leadership and community service, that I am proud to salute Christopher Aemisegger, winner of the 2000 LeGrand Smith Scholarship. This award is made to young adults who have demonstrated that they are truly committed to playing important roles in our Nation's future. As a winner of the LeGrand Smith Scholarship, Christopher is being honored for demonstrating that same generosity of spirit, intelligence, responsible citizenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, Michigan. Christopher is an exceptional student at Hillsdale High School and possesses an impressive high school record. Christopher has received numerous awards for his excellence in academics as well as his participation in school sports. Outside of school, he is an active member of his church community. Therefore, I am proud to join with his many admirers in extending my highest praise and congratulations to Christopher Aemisegger for his selection as a winner of a LeGrand Smith Scholarship. This honor is also a testament to the parents, teachers, and others whose personal interest, strong support and active participation contributed to his success. To this remarkable young man, I extend my most heartfelt good wishes for all his endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, let it be known, that it is with great respect for the outstanding record of excellence she has compiled in academics, leadership, and community service, that I am proud to salute Beth Ann Johnston, winner of the 2000 LeGrand Smith Scholarship. This award is made to young adults who have demonstrated that they are truly committed to playing important roles in our Nation's future. As a winner of the LeGrand Smith Scholarship, Beth Ann is being honored for demonstrating that same generosity of spirit, intelligence, responsible citizenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, Michigan. Beth Ann is an exceptional student at Vandercook Lake High School and possesses an impressive high school record. Beth Ann has received numerous awards for her excellence in academics as well as her involvement in band. Outside of school, she is an active member of her church community and a conscientious volunteer. Therefore, I am proud to join with her many admirers in extending my highest praise and congratulations to Beth Ann Johnston for her selection as a winner of a LeGrand Smith Scholarship. This honor is also a testament to the parents, teachers, and others whose personal interest, strong support and active participation contributed to her success. To this remarkable young woman, I extend my most heartfelt good wishes for all her future endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, let it be known, that it is with great respect for the outstanding record of excellence he has compiled in academics, leadership and community service, that I am proud to salute Matthew VanWormer, winner of the 2000 LeGrand Smith Scholarship. This award is made to young adults who have demonstrated that they are truly committed to playing important roles in our Nation's future. As a winner of the LeGrand Smith Scholarship, Matthew is being honored for demonstrating that same generosity of spirit, intelligence, responsible citizenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, Michigan. Matthew is an exceptional student at Hillsdale High School and possesses and impressive high school record. Matthew has received numerous awards for his excellence in academics as well as his involvement in the tennis team. Outside of school, he is an active member of his church community and a conscientious volunteer. Therefore, I am proud to join with his many admirers in extending my highest praise and congratulations to Matthew VanWormer for his selection as a winner of a LeGrand Smith Scholarship. This honor is also a testament to the parents, teachers, and others whose personal interest, strong support and active participation contributed to his success. To this remarkable young man, I extend my most heartfelt good wishes for all his future endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, let it be known, that it is with great respect for the outstanding record of excellence he has compiled in academics, leadership and community service, that I am proud to salute Aaron Baker, winner of the 2000 LeGrand Smith Scholarship. This award is made to young adults who have demonstrated that they are truly committed to playing important roles in our Nation's future. As a winner of the LeGrand Smith Scholarship, Aaron is being honored for demonstrating that same generosity of spirit, intelligence, responsible citizenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, Michigan. Aaron is an exceptional student at Hudson High School and possesses an impressive high school record. Aaron has received numerous awards for his excellence in academics. Outside of school, he has received many awards for his involvement in the Jackson, Hillsdale, and Adrian Youth Symphony Orchestras. Therefore, I am proud to join with his many admirers in extending my highest praise and congratulations to Aaron Baker for his selection as a winner of a LeGrand Smith Scholarship. This honor is also a testament to the parents, teachers, and others whose personal interest, strong support and active participation contributed to his success. To this remarkable young man, I extend my most heartfelt good wishes for all of his future endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, let it be known, that it is with great respect for the outstanding record of excellence she has compiled in academics, leadership and community service, that I am proud to salute Rachael Jankowski, winner of the 2000 LeGrand Smith Scholarship. This award is made to young adults who have demonstrated that they are truly committed to playing important roles in our Nation's future. As a winner of the LeGrand Smith Scholarship, Rachael is being honored for demonstrating that same generosity of spirit, intelligence, responsible citizenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, Michigan. Rachael is an exceptional student at Deerfield High School and possesses an impressive high school record. Rachael has received numerous awards for her excellence in academics and has held many leadership positions throughout her high school career. Outside of school, she is an active member of her community's church. Therefore, I am proud to join with her many admirers in extending my highest praise and congratulations to Rachael Jankowski for her selection as a winner of a LeGrand Smith Scholarship. This honor is also a testament to the parents, teachers, and others whose personal interest, strong support and active participation contributed to her success. To this remarkable young woman, I extend my most heartfelt good wishes for all her future endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, I thank the gentleman from Illinois for yielding to me. Mr. Chairman, I want to thank the gentleman from Illinois (Mr. Porter), the gentleman from Wisconsin (Mr. Obey), the gentleman from Pennsylvania (Mr. Goodling) for having some excellent provisions for giving education a priority. I understand that an amendment that was going to take money out of Even Start and put it into IDEA is now not going to be offered, and I just want to emphasize how important I think that we move ahead with the concept of Even Start. Even Start brings parents in to make sure that parents are part of that encouraging effort. Just briefly, what happened in Michigan, I put in some appropriations for what we call the HIPY program in Michigan, it is Home Improvement for Preschool Youth, and that program helps teach parents how to react to their kids to help their kids do a better job before they went in school. What was exciting, it increased the reading comprehension for those children by 80 percent; but even more significant, it increased the reading comprehension for the parents by an equal amount. And 60 percent of those parents went on to get their GED. As we move ahead with Even Start, as we move ahead with Head Start, it is important that we continue to bring parents into the picture to be part of that coordinated effort to encourage better education for their kids.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, let it be known, that it is with great respect for the outstanding contribution of love, caring and message, that members of Congress join with her many friends and family in honoring the Reverend Ruth Smith. Ruth Smith have served for twenty years as an active minister and approaching twenty years as a retired minister of the East Liberty Church Universalist-Unitarian. Ruth and Donald Smith have been community leaders. In addition to their church, they have made significant contributions to education through their involvement with Addison Public Schools. Ruth and Donald have contributed time and effort to improve their community, their state, and their country. They have raised four wonderful children and have seven grandchildren. Reverend Ruth Smith's knowledge, experience and dedication to the church as well as her understanding of humanism and its abiding worth has helped and guided many. This tribute is made to Ruth for demonstrating her success and caring in helping others along their life's journeys. Ruth Smith's leadership in improving the church in such ways as renovation, being a catalyst for harmony, and developing successful church groups such as the Kupples Klub and an active youth group is recognized. Therefore, we are proud to join with her many admirers in extending highest praise and congratulations to Ruth Smith for her dedication and devotion to her family, her community and her forty years of association with the Universalist-Unitarian Church of East Liberty. This honor is also a testament to the family members, friends, and others whose personal interest, strong support and active participation contributed to her success. To this remarkable woman, we extend our most heartfelt good wishes for all her future endeavors.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, American farmers and ranchers are at risk. Let me briefly try to explain what I see as the problem and how this legislation partially provides a solution to part of that problem. We are at record low commodity prices, some lower than they have been for 30 years. The world is overproducing some of these commodities and prices are way down. Part of the problem for the survival of our agricultural industry in this country is going to be how much other countries subsidize their farmers. Right now we are in a situation where Europe, for example, subsidizes their farmers five times as much as we subsidize our farmers, and much of that encouraged production goes into what otherwise might be our markets. So the American consumer, America, this Congress, is faced with some decisions of are we going to do what is necessary to keep a viable, strong agricultural industry in America. This legislation encourages farmers to take out more insurance, insurance that covers not only yields, helps to ensure against low- yield disasters, but also helps to ensure against the prices they might receive for that particular commodity. We do that by increasing subsidies for some of these farmers so that in the beginning, as we start experimenting in this new crop revenue insurance endeavor, we are better able to encourage more farmers to move into that arena. This kind of legislation, I think, is very important as part of our effort to start remodeling, refashioning where we go in future agricultural policy. Mr. Speaker, I thank the chairman and the ranking member for their leadership.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, social security, as we see on this chart, now is the largest expenditure of the Federal Government. It uses 20 percent of all Federal Government funds. Medicare is 11 percent, but within the next 35 years Medicare, the way it is growing, will actually grow faster and be a larger percentage of the budget than social security. Over the last 6 years I have introduced three social security bills, each one scored by the social security actuaries, to keep social security solvent for the next 75 years. I am very concerned what is happening in this presidential campaign. The Wall Street Journal reports that the chairman of the Democrat House campaign committee has sent a memo urging Democrat candidates to bash and criticize Governor Bush for proposing social security reforms. These election year tactics I think are very dangerous because it will discourage fact-centered dialogue about what the real problem is: How we are going to keep social security solvent to pay benefits for future retirees. Instead, they use fear-based rhetoric to reduce this important issue to demagoguery for political gain. I think American workers deserve better. Many will have payroll taxes taken from their paychecks for 40, maybe even up to 50 years. When it is time for them to retire, the promises made by candidates who demagogued during the 2000 elections will not produce the money to pay benefits at the levels that current retirees receive. Only real reform is going to do that. As we see by this chart, this is the predicament of social security. Social security in 2016 is going to run out of funds, a cash flow problem, so there is less money coming in from social security taxes than is needed to pay benefits. So somehow we have to come up with money in those future years to pay for the benefits that have been promised. There are only three or four ways to do that: We either cut existing programs, and probably that is not going to happen in this Chamber; we can increase taxes, and I think that is a very bad idea, because 72 percent of American workers today pay more in social security tax than they do in income taxes. Every time we have been in trouble in the past, we have just said, well, we are going to raise the tax on American workers. So the problem is, how do we do it without raising taxes? Increase borrowing? Probably! Director Crippen of the CBO pointed out in Thursday's Washington Post that finding the money to repay this trust fund debt means taxes will have to be raised, spending cut, or borrowing increased. As he said, reform proposals that do not change some of the program's basic principles are not going to solve the problem. Another alternative is getting a better return on some of those taxes paid in. Right now, a young worker 20 years old going to work and paying social security can expect at the most a 1.2 percent inflation-adjusted return on what he or she and their employer pay in. So if that young worker can take some of their tax and get a better return than Social Security's 1.2 percent by investing in bonds, CDs maybe some of it in indexed stocks, they can have more retirement income. They now own that 2 or 3% of their wage plus the compounded earnings. It is part of their estate if they might die early. We do not need Vice President Gore saying, we are just going to simply add giant IOUs to the Social Security Trust Fund and pretend somehow we are going to come up with the money in the future. It is our biggest, most important program in this country. Let us talk realistically, because the ultimate solution is going to require that Republicans and Democrats get together on a bipartisan basis to do this. Demagoguing it, criticizing it, having memos go out that say, bash Governor Bush for any proposal he makes on social security, is not the way to move ahead on a bipartisan solution. I urge the President of the United States, I urge the Vice President, to stop it and to talk in a cooperative, factual manner about the real problem and how we might save Social Security and keep it solvent for our kids and grand-kids. Mr. Speaker, Thursday's Wall Street Journal reports that the chairman of the Democrat's House Campaign committee has sent a memo urging Democrat candidates to bash Gov. Bush for proposing Social Security reforms. These election year tactics will discourage fact-centered dialogues about the reforms needed to keep Social Security strong for generations. Instead, they use fear-based rhetoric to reduce this important issue to demogoguery for political gain. American workers deserve better than this. Many will have payroll taxes taken from their paychecks for forty and even fifty years. When it is their time to retire, the promises made by candidates who demagog during the 2000 elections will not produce the money to pay benefits at the levels that current retirees receive. Only real reform that sets cash aside for the future will do this. Starting in 2016, Social Security starts to draw down its trust funds, and the Treasury must find the cash to meet these obligations. CBO Director Crippen pointed out in Thursday's Washington Post, that finding the money to repay this trust fund debt means taxes will have to be raised, spending cut, or borrowing increased. As he said, reform proposals that do not change the program's obligations or take actions to promote growth in the economy are an empty gesture. Governor Bush has shown true leadership by taking on this issue. He is not willing to accept the status quo, and we shouldn't be, either. The only way to get to real solutions is to discuss the facts and work together on a bipartisan basis to build a solution.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Madam Speaker, yesterday, Governor Bush came out with some general parameters on saving Social Security and the importance of saving Social Security. There has been a lot of discussion of whether there should be any privately-owned investment owned by the American worker as opposed to continuing to keep on going with a system that is insolvent. What it boils down to is that because of the demographics, because people are living longer, because the birth rate has been going down, there are fewer workers paying their taxes into a system to support and finance existing senior citizens benefits. It is important that everybody understands that it is a pay-as-you-go program. It is a program where taxes come in one week, and by the end of the week, they are paid out in benefits. If you are an average worker today, then you are going to get an estimated 1.7 percent real return on the money you and your employer put into the system. If you are a young worker, because we are going to run out of enough money eventually, there is not going to be adequate tax money, coming in to pay benefits, then you are going to get even a smaller return. There are two ways to fix Social Security; you either increase the revenue coming in, or you reduce the benefits going out. None of us want to reduce benefits. Everybody, including Governor Bush, has committed that we are not going to reduce benefits for current retirees or near-term retirees. So then the question is, is there merit in having privately-owned accounts, and if we get a larger real return than 1.7 percent, then, absolutely, it brings more revenue into the system. In fact, if my Social Security bill had been passed, the first one that I introduced 5 years ago, the 25 year old when they retire would have $150,000 more than what they are going to receive under the current Social Security system. There are safe investments even through the worst parts of the history of this country, on dips in Social Security. We saw that there was no 12-year period where there was not at least a positive gain on Social Security. There are companies now that will guarantee you a gain, and if you are going to do a reasonable investment, and I would say reasonable for people over 45 is maybe 40 percent in bonds and 60 percent in safe stocks, in most all the proposals, Democrats and Republicans have all agreed that there needs to be privately-owned investment accounts, I mean Senator Kerrey, Senator Moynihan respected in this regard, Democrats in the House, the gentleman from Texas (Mr. Stenholm) has been working on this for years, and he comes to the conclusion that there needs to be some privately-owned accounts, that are put into safe investments, low-risk investments, because it is an absolute certainty: If you leave those investments in more than 12 years, it is going to recover more than the 1.7 percent average that Social Security is going to pay people. Now, the other part of the problem is that Social Security is running out of money, so we need to do something. We cannot just pretend that the problem is not there. On this chart, Social Security the bottom piece of pie now represents 20 percent of all government spending. This is a graphic impression of what is happening in Social Security. The blue at the top left is this short period of time where there is more tax money coming in than is needed to pay benefits, but over time, for the next 75 years, we are short $120 trillion. Tax revenues are short $120 trillion of what is needed to pay what is promised in benefits today. Another way to say that is that the unfunded liability is short, $9 trillion today. You would have to put $9 trillion into an interest bearing account today to come up with the $120 trillion that is needed over the next 75 years. We have got to do something. Madam Speaker, suggesting, like the Vice President has, that simply if we pay down the debt, and you are doing that by borrowing the excess money from Social Security and using that money to pay down the debt held by the public, it is like using one credit card to pay off the debt of another credit card; to pretend that is going to somehow solve this red deficit problem is unrealistic. It cannot be scored by the actuaries over at the Social Security Administration. So I plead with the Vice President, I pled with the President of the United States do not demagog suggestions of how we move ahead to fix Social Security. It is too important a program. I have met with the President maybe four times over the last 16 months, he ended up saying that he is not going to come up with a plan because he is afraid it would be criticized. Let us move ahead, let us work together, let us, Republicans and Democrats, make sure that we fix this important program.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, I yield myself 3 minutes. Can my colleagues imagine that 4 to 5 months after a new Congress is elected in November that they are going to be asked to analyze and evaluate and decide on a 2-year budget? What we are doing, again, by forcing a new Congress into that position, is transferring power to the executive branch. On oversight. I served in the administration, and it is my firm conviction that the administration, the agencies, the Departments, are much more respectful and responsive to Congress at budget time. If we allow the administration to have this longer leash, a longer leash because they are only obligated to come to Congress half as often, we are going to see an extra transfer of power and a further weakening of the legislative branch. The authorizing committees are not affected by a 2-year budget. They already have 2-, 3-, 5-year authorization bills. They are the committees that should be doing the greatest part of that work in terms of oversight; evaluating how the administration is performing and assuring that the taxpayers get their money's worth. Mr. Chairman, does anyone believe Members facing reelection will spend their time going over the dry details of Federal programs? With those States that have biennial budgets, every one of those States comes in for a second year modification of that budget with huge supplementals. Does anybody believe that Members that have 2 years to go or 18 months to go on a new budget are going to be able to get a quorum in those authorizing committees? Look, I plead with this Chamber. Let us evaluate this idea. Let us not rush into a situation that may very well weaken the legislative branch, which has already been weakened. We have an executive branch that is now passing more laws in the form of promulgated rules than actually the legislature passes. Let us evaluate this idea. Let us have long hearings to make sure that we are not losing further control. Let us have the kind of review that is necessary to consider this kind of dramatic change, after 200 years of annual budgeting. Let us not jump into something new in a 2-year budget that is going to weaken the legislative branch. Mr. Chairman, I submit for the Record an article in Roll Call written by me dated February 28. Entitlement Reform the Way To Go For 224 years, Congress has wrestled with the budget. As an ex-wrestler and current Budget Committee member, I know that can be both strenuous and challenging. This has led some Members to seek a ``quick fix'' in an attempt to end the annual struggle. Biennial budgeting, however, is a mirage that distracts us from the real budget problems we face. Biennial budgeting would be an enormous change in our budget processes, the biggest since at least 1974. The effects on the budget struggle would be far-reaching and very largely negative from the Congressional perspective. Biennial budgeting will deprive Congress of much of the leverage it needs to compete equally with the administration. Specifically, Congress gives up: Reconciliation in off years. The Congressional majority could lose much of its power in election years to use reconciliation. This will endanger its priorities in election years and would rule out the House tax cut strategy for this year. Congress could include multiple reconciliation instructions in a biennial budget resolution, but this deprives Congress of flexibility needed to react to changing political and economic needs. The majority would have to fashion its political strategy for the next two years just three months after the preceding election. Control over the agencies. The annual budget process allows Congress to express its will to government agencies. I know that we were more eager to cooperate with Congress at budget time when I was a member of the Nixon administration. Biennial budgeting will reduce our leverage to hold agencies accountable and encourage defiance. Budget accuracy and flexibility. Economic forecasting is highly uncertain. The Congressional Budget Office estimate for fiscal 2000 two years ago was for a $70 billion unified budget deficit. That's $240 billion off the current fiscal 2000 estimate of a $170 billion unified budget surplus. The estimate has shifted by $40 billion just since October 1999. This uncertainty means the President would bargain for high second-year spending, and we would frequently need or be tempted to reopen the budget. When we reopen the budget, we would find ourselves with little leverage against a pre- funded administration that can resist unwanted budget modifications with near impunity. When revenue is lower or spending is higher than projected, the pressure to increase fees, taxes and borrowing, rather than cut the administration, would be considerable. Leverage over spending. Congress will inevitably grapple with supplemental spending requests in the off years. In the absence of pressure to produce a complete budget, an administration will always have poll-tested and politically motivated requests in off years that will be hard to fend off in the absence of broader budget issues. As a result, we will pass supplemental appropriations bills in most years that will grow as Members add their own pet election-year projects. All of this threatens even the very modest spending restraint that we've been able to exercise over the last five years. I find it surprising, then, to hear of growing support for moving from our current annual budget to a biennial budget process. It does seem sometimes that we are on a budget treadmill that never stops. There is no solution, however, in ducking our responsibilities to exercise the power the Constitution grants us. Power atrophies unless it is used, that is what will surely continue to happen to Congressional power is we adopt biennial budgeting. Members interested in getting a handle on the budget should focus on substance rather than process. The truth is that the discretionary portion of the budget--which is the substance of the 13 annual appropriations bills--makes up just one- third of total federal spending. The rest of the spending--chiefly, entitlement programs--is on automatic pilot and rising faster than inflation. This growth in entitlement spending puts enormous pressure on the other parts of the budget and will inevitably necessitate higher taxes or a return to excessive government borrowing. Acting promptly and boldly will bring benefits as well. The unremarked secret of our current budget surplus is the welfare reforms enacted in 1996 and the Medicare changes enacted in 1997. To be blunt, we should still be in deficit without these reforms. But in both cases, one could also argue that the programs have been strengthened. I have long believed that there are similar opportunities to improve our largest entitlement, Social Security, which is now 23 percent of total federal spending. As chairman of the Budget Committee Task Force on Social Security, I helped develop 18 unanimous and bipartisan findings that could serve as the basis for reform. After the completion of the task force's business, I also introduced the bipartisan Social Security Solvency Act (H.R. 3206), which is scored to keep Social Security solvent based on these findings. The effect of this reform (or of similarly reforms such as the 21st Century Retirement Act (H.R. 1793)) would be to dramatically reduce the growth of government spending for decades to come. The charts (not shown here) indicate how significant reform can be. The first chart shows that federal spending will rise to nearly 35 percent of the nation's gross domestic produce without changes in our entitlement programs, about 75 percent higher than it is today. Needless to say, giant tax increases will be needed to sustain this level of spending. In contrast, the second chart shows what could happen if we simply adopt the Social Security Solvency Act. Under this scenario, we would experience a gradual reduction in federal spending as we shift to a retirement system based partly on worker-owned accounts starting at 2.5 percent of income and partly on traditional government-paid benefits. This legislation would also fully restore the program's shaky finances and create opportunities for workers to live better in retirement by making full use of the power of compound interest. This is not easy work. But if we do nothing, taxes will have to rise to the equivalent of 40 percent of payroll by 2040 to pay for Social Security, Medicare, and Medicaid. Social Security and our other entitlement programs are complicated and alternation carries political risk. The benefits from this effort, however, will also be substantial. Sound reforms will allow Congress to master the federal budget where gimmicky process reforms such as biennial budgeting are bound to fail.

Mr. SMITH of Michigan. Mr. Chairman, I yield myself 1\1/2\ minutes. Mr. Chairman, we have problems with budgets projections. It should be obvious to everybody how far off our projections are 1 year in advance, let alone 2 years in advance. Two years ago, CBO projected a $70 billion deficit for the year 2000. The current estimate is that there will be a $170 billion surplus. That is a $240 billion difference. Budget inflation. Agencies will deal with uncertainty in two year budgets by padding their budget request. This will result in more spending. Mr. Chairman, Congress has had annual Federal budgets since 1789. Our present budget problems have nothing to do with annual budgets. Our present budget problems have to do with the willingness of Members to take the time to make the effort to oversee and review spending bills in the United States Congress. When it comes to giving taxpayers their money's worth, whether the budget is 2 years or 1 year, there will be no difference unless there is a willingness of Members to review programs that need to be reviewed. The authorizing committees that now have 2-, 3-, 5-year authorization bills now have the time available to do that. What is going to happen with an election year when Members want to go home if there is no budget to pass? I urge Members to vote against this amendment.

Mr. SMITH of Michigan. Mr. Chairman, I thank the gentleman for yielding me time. Mr. Chairman, just following up a bit on what the gentleman from Wisconsin (Mr. Obey) suggested, what is eventually going to make us successful in the way we budget, in the way we appropriate, in the way that we oversee administration, is the willingness of the Members of Congress, of the House and the Senate, to be more diligent, to have some guts, to have some intestinal fortitude, to make sure we are doing the right thing to best of our ability. Whether you have a 1-year budget or a 2-year budget, whether you have the President sign on to something early on or later on, if Congress wants to be, excuse the expression, lazy and shift more power to the administration, we are going to lose what made this republic great in the first place. Our forefathers, when they wrote this Constitution, gave us a powerful legislative branch and a less powerful executive branch. Biennial budgeting puts this at risk and may diminish us in terms of our effectiveness as a democracy and a republic.

Mr. SMITH of Michigan. Mr. Chairman, I yield 1\1/2\ minutes to the gentleman from South Carolina (Mr. Spratt), the ranking member of our Committee on the Budget. (Mr. SPRATT asked and was given permission to revise and extend his remarks.)

Mr. SMITH of Michigan. Mr. Chairman, I thank the gentleman for yielding me this time, and I yield myself 2 minutes. In 1940, there were 44 States that had biennial budgets. Today, there are just 20 States that have biennial budgets, with eight of those having biennial legislatures. As we talked to the CRS, as we talked to the executives of budget directors for all of the States, they suggest and claim that a biennial budget transfers power from the legislative branch to the executive branch. Look, we have not had hearings on this issue. The Committee on the Budget that has jurisdiction on this issue had zero hearings on biennial budgets. The Committee on Rules had three informational hearings. None of the hearings were in Committee on the Budget. Also, we are looking at a situation where, on the 39-page amendment at issue, there have not been hearings anyplace. Informational hearings only in the Committee on Rules. So if we risk transferring power from the legislative branch to the executive branch, do we really want to charge ahead to make this decision? Look at this chart. This 20 percent goes to Social Security pretty much on automatic pilot. The Congress has transferred already too much power to the executive branch of government. Medicare, 11 percent, on automatic pilot; Medicaid, automatic pilot; other entitlements, 14 percent, automatic pilot; interest on automatic pilot. Only Defense and the other 12 appropriation bills that represent less than 40 percent of the total budget is in the control of the Congress, and I think we have to be very careful as we move ahead. The result of the congressional majority, whether it is a Republican or a Democrat, will find it far more difficult and perhaps impossible to pass agenda-setting legislation, like tax cuts, tax increases, whatever, if we lose reconciliation in the Senate. Mr. Chairman, I yield 2 minutes to the gentleman from Michigan (Mr. Knollenberg).

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, yesterday the Governor of Texas came out with a proposal that we have got to do something on Social Security to save it. He suggested that some of the tax that American workers pay in should end up in their own name invested to bring in more returns to Social Security and to those individuals when they retire. I think that when Al Gore suggests that it is risky to invest any of that money in indexed funds, or in 401(k) type funds or, for government workers, the Thrift Savings Account funds, where their performance has averaged a very high positive return, we should also note that there has never been a 12-year period in the history of this country where indexed stocks did not have a positive return. In fact, according to Mr. Jeremy Siegel, there has been a positive return of at least 1 percent for any 12-year period, even during the worst of times, and over 70 years there has been an average return of 7.5 percent. Some suggest that it's risky to have real investments. What is really risky is not doing anything and spending Social Security trust fund money on other government programs.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I thank the gentleman for yielding me the time. Mr. Speaker, it is so important that we discuss and debate how we can improve the budget and the budget process. Right now we are approaching $1.8 trillion in annual spending. We are dealing with overspending in the past that has left us with approximately a $5.7 trillion total national debt. We are going to talk about ways we can improve this process. We are going to talk about the hopeful ideas to increase the efficiency of budgeting and spending. But the bottom line is the intestinal fortitude and the will of the Members of Congress to do a better job. It does not make any difference if we have a 2-year budget with biennial or 1 year. I think biennial, by the way, shifts more power to the administrative branch. It does not matter if we have supplemental appropriations bills. It boils down to the determination, the will power to do a better job in the way we spend taxpayer dollars. That is the bottom line. The debate is going to be good. I congratulate the Committee on Rules for getting this before us.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, I will vote against H.R. 701, the Conservation and Reinvestment Act (CARA). CARA violates the Budget Act. The legislation creates a new entitlement and is inconsistent with the budget resolution passed by the House and Senate. It would and should be subject to a Point of Order. The Rules Committee, however, passed a rule that waives the Point of Order objection. By creating a new entitlement program, the legislation reduces the power of Congress to prioritize spending. When push comes to shove, environment interests should still compete for funds with other spending priorities such as education, Social Security and Medicare. Entitlement status for this program impedes sensible prioritization of this program. As a result, it is poor public policy to expand our entitlement spending as provided in CARA. Mr. Chairman, as a further explanation of why this bill is not good public policy, I submit the following article from today's Washington Post entitled, ``A Green Bill in the House.'' The House is to vote today on a bill that will pass for precisely the reason it should fail. The measure is doubly green: The purpose is environmental, and the votes have been bought. A new entitlement would be created, in part by people who in other contexts are wont to declaim against entitlements as poor fiscal and social policy alike. About $3 billion a year would be distributed to buy and thereby protect environmentally valuable land and for other conservation purposes. Enough members think, with cause, that their districts would benefit that the bill has 315 cosponsors. What better tribute could there be to the wiliness of those who cooked the measure up? The money would come fro the proceeds of offshore oil and gas leases. The spending would be automatic. The program would go to the head of the line--ahead of national defense, education, tax collection, biomedical research, you name it. The annual appropriations process in which less-favored programs compete for funds would be waived. About a third of the money would be split between the federal and state governments for land acquisition. Another third would be reserved for coastal states, as supposed compensation for the environmental costs of offshore drilling. The rest would be artfully scattered across other purposes and districts--for wildlife conservation, urban parks, historic preservation. Our objection is not to the purposes but to the automatic spending without regard to competing claims on the federal dollar. It's as wrong to create this carve-out as it was to yield to the highway and aviation lobbies and create similar, larger carve-outs for them in the past few years. The sponsors say that they had no choice--that the only way to ensure a steady funding stream for conservation was to bypass appropriations and spread the wealth. So which worthy programs do they do it for next? Why this and not those? That's the question this bill begs.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, on the issue of Social Security, on the issue of total public debt, it has been suggested by Vice President Gore that we start using the surplus coming in from Social Security and borrowing that money to pay down what is called the debt held by the public. Just for a brief review, we now owe about $5.7 trillion total debt. That includes what I call the Wall Street debt, the debt held by the public, at about $3.7 trillion dollars. It includes what we owe Social Security at approximately $1 trillion and what we owe the other trust fund at approximately $1.1 trillion. The suggestion is that if we use the surplus coming in from Social Security and pay down the Wall Street debt, the debt held by the public, then the savings in interest, which represents about 15 percent of our budget now, pretty bad, we should pay down that debt, using all of that savings to apply to the Social Security Trust Fund so it becomes another giant IOU of a future promise that somehow the Federal Government will come up with the money, but it is sort of like taking one credit card and paying off another credit card because we still owe the money to Social Security. The suggestion by the Clinton-Gore administration and by Republicans and Democrats is that if we use all these funds by the year 2013 or 2014, we will have paid down that portion of the debt held by the public, the $3.6 trillion. That sounds good. But what happens if we do nothing to take care of the long-term problem of Social Security? That debt starts to go back up again. So the paying off is just a blip. Because when the baby-boomers retire, they go out of the paying-in mode and go into the taking-out mode to take Social Security benefits. We change from a dramatic situation of no longer will Social Security taxes be enough to pay existing benefits. So we have a cash flow problem. Currently, in this country, our total debt represents 35 percent of gross domestic product. By 2013, if we use all of the money to pay it back, then it gets to zero on the debt that we owe the public. But eventually that goes back up to 65 percent if we borrow the money to pay the benefits that we have promised Social Security. Let me review this chart, sort of a Federal Government spending. The pie chart represents where the Federal budget is being spent this year. Starting at the bottom at 6 o'clock, Social Security is 20 percent. Going clockwise, another entitlement, Medicare, is 11 percent. Medicare eventually, in the next 25 years, will over take Social Security as a cost. We have Medicaid, the health care program for low-income. The other entitlements represent 14 percent. Domestic discretionary spending represents 19 percent. Defense represents 17 percent; interest, 13 percent of the total budget. Social Security is the biggest program. It is the biggest program in this country. It is the biggest program of any country in the world. And it has been quite successful, so it deserves our attention this presidential election year. So let the debate begin. Let us start talking about it. Let us increase our understanding of the predicament, of the problem, of the estimate by the Social Security Administration actuaries that Social Security is going broke. Here is why. We have a current surplus coming in from the Social Security tax. The actuaries estimate that somewhere between 2011 and 2014, the cash flow problem will hit us and we go into the red. The red represents that we are going to have to come up with that money. Through cutting other government programs? I doubt it. Increasing taxes? It is going to be hard for politicians to do that. Increased borrowing? Probably the majority of this body, Republicans and Democrats, will say, ``Well, let's borrow the money because you can't see that as evidently what we are running as far as a debt that we are leaving to our kids and grandkids.'' I am a farmer. I am from a farm. What we grew up doing is saying, we are going to try to pay down the mortgage so that there is a lesser obligation for our kids and grandkids. What we are doing in the Federal Government by not dealing with this problem of Social Security and Medicare entitlements is we are increasing the burden, increasing the mortgage for them to pay in their future years. It is not fair. Let us discuss and debate it this election year.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I would like to make a couple of comments on Social Security. If the American people insist that it be an issue in this presidential campaign, it will receive the kind of discussion and debate that is needed and very appropriate. Social Security is one of our most important government programs. Spendingwise it is our largest government program. Social Security benefits takes a larger percentage of the Federal budget than the Department of Defense, more than we spend on the other 12 appropriation bills. The interest on the total debt is about 20 percent of our total budget. Social Security payments represent approximately 22 percent of the total Federal budget. It has been suggested by some that Social Security is not that big a problem; that if we are able to have the kind of economic growth that we have had in the past, then the economy will take care of the problems. Two facts need to be considered: One, that the official estimate of increase in GDP, (gross domestic product), is not going to be as great in the next 30 years as it has been in the last 30 years, simply because, even with the increase in productivity, we have fewer workers trying to produce the gidgets, the gadgets, the goods and services that represent the GDP. GDP ultimately represents productivity times the number of people involved in trying to utilize that productivity. So the growth in GDP is slowing down. Secondly, because of the fact that Social Security's benefits are based on earnings, the greater the earnings, the higher the eventual benefits are going to be. So even if we were to have an exceptionally strong increase in the economy, GDP, the cost of benefits would grow proportionally. Existing retirees have a cost of living or inflation index to adjust their benefits. Future retirees, as they retire, have their Social Security benefits increased based on wage inflation that is higher than standard inflation. So, again, as the economy expands, with lower unemployment and higher wages, so will the cost of eventual benefits. So over the short run, we see an increase in Social Security taxes coming in that makes the situation look somewhat better than it is because, ultimately, eventually, when those workers retire, they are going to receive that much higher Social Security benefit. Now, some have said let us do nothing. We do not want to disrupt this great program where we are guaranteed a monthly payment for the rest of our lives. The problem is that we are running out of money in the Social Security system. It is, in effect, going broke. Some people have said, well, look, somehow government is going to keep those promises. But in that regard, let me just bring to the attention of those interested, what happened in the past when Social Security had problems. The Congress and the President in 1977, reduced benefits and increased taxes. In 1983, again short of money. What happened? Again, benefits were reduced and taxes were increased. Seventy-five percent of Americans, Mr. Speaker, now pay more in Social Security tax than they do their income tax. It is important we face up to this problem this election; that we do not put it aside, that we do not demagogue it; that we do not start criticizing some of the solutions. Because if we start criticizing particular parts of the solutions, it will be that much tougher, when Democrats and Republicans ultimately get together, hopefully under the leadership of a President that is willing to move ahead on this issue, to save Social Security, to keep it solvent.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I want to just make a couple comments on Social Security. Mr. Speaker, I see a lot of young people joining us today. They are the generation at risk on Social Security. The actuaries of the Social Security Administration report that, if we do nothing with Social Security, we are either going to see taxes increase by 54 percent or benefits cut by 33 percent. The chart I have here is a pie chart of the Federal Government spending this year. The bottom green piece of that pie represents Social Security benefits and equals 20 percent of total Federal spending. The cost of senior programs continues to grow. The problem is exacerbated by the fact that people are living longer and therefore are drawing on Social Security longer. At the same time our birth rate is going down. The result is fewer workers paying payroll tax to finance higher benefit costs. That leads us to a predicament where we are going in the red on Social Security. This year, with the Presidential race, it is an appropriate time to discuss Social Security, to get into the details of how we are really going to solve this problem and how we are really going to save this very important program.