Nick Smith

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, it is hard not to be aggressive when talking about this issue. Even today I heard a Member of the more liberal party suggest that look at how deficits have come down. Look how they came down in 1995. Look how they came down in 1996. Of course what happened is, when Republicans came into Congress January 1, 1995, the first thing we did was cut $13 billion our of the 1995 budget. Then we set the 1996 budget.

Mr. SMITH of Michigan. Will the gentleman yield?

Mr. SMITH of Michigan. That is right.

Mr. SMITH of Michigan. I think really this borrowing has masked, it has hidden the true cost of government. If we had to pay this out in taxes, I think the American people would say: ``Hey, wait a minute; I earned that money; do not take so much of it away from me''. As we borrow and somehow we make future generations obligated to pay our overindulgence, our overspending today, somehow it is easy to say: Well, somehow it will be taken care of. Yes, this chart, this chart represents the fact that Congress has lost its power, its constitutional power, to control spending. I just want to start out with a little white in the pie chart, because the white in the pie chart represents that part of the budget that is now paid and expended just to cover the interest on the Federal debt. This 15 percent, this 15 percent does not cover the interest on what we owe Social Security and the other trust funds when we borrow the surplus money coming into those trust funds. If we added the interest that is paid by the Federal Government on Social Security, for example, it would amount to an additional $90 billion that we are paying in interest. That means that interest is the largest part of this budget. But what Mr. Shays is suggesting is just take a look at the blue portion of this pie chart. This is what over the last 40 years, inch by inch and step by step, the Congress of the United States has said we are going to put on automatic pilot and give the authority to the President, whether or not we continue these spendings. So this is the entitlement spending, the welfare spending, the AFDC, aid to families with dependent children, it is the food stamp spending, it is the Medicare spending that Mr. Shays has become such a leader in in trying to get a grip and a handle on. It is the Social Security spending. By the way, even on Social Security, the unfunded liability, or what is called the actuary debt on Social Security, now approaches $4.5 trillion. Our overspending annually is $5 trillion. We are in a great deal of trouble, and we have got to start looking at some of these issues. We have the other side continue to demagogue and say: Look, look at those cruel, mean-spirited Republicans that are trying to cut spending.

Mr. SMITH of Michigan. I thank the gentleman. In fact, most States have the requirement of a balanced budget. So it is a shame that the United States that is overspending so much and that taxes so much does not have the same kind of legal obligation. I guess the gentleman from Connecticut, Mr. Shays, and I are still hoping that the Senate might be successful in passing that balanced budget bill. Somehow something has got to give us the intestinal fortitude to do what is very difficult to do, and that is to cut down on some of the spending in Federal Government.

Mr. SMITH of Michigan. But, see, by definition, if you were to cut out that 500, that means a balanced budget this year. That means no overspending. And I think the pickle that we have got ourselves into by continuing to promise more and more people more and more things that we cannot afford, whether it is Social Security or whether it is Medicare or Medicaid or AFDC or anything else, we are going to have to gradually phase this down. As a conservative that thought we should balance the budget as a high priority, I thought we should do it in 5 years. The decision was: Let us get the economy going with tax breaks and do it in 7 years. So I say OK, but let us take the best, the most frugal budget that gets us closer to the balanced budget, and so far it is the Republican budget.

Mr. SMITH of Michigan. Can I come up--you mean--are you talking about $500 billion that we owe----

Mr. SMITH of Michigan. No; I think there should be more cuts.

Mr. SMITH of Michigan. Yes.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I ask unanimous consent that the following committees and their subcommittees be permitted to sit today while the House is meeting in the Committee of the Whole under the 5- minute rule: Committee on Agricultre; Committee on Commerce; Committee on Economic and Educational Opportunities; Committee on Government Reform and Oversight; Committee on International Relations; Committee on the Judiciary; Committee on Resources; Committee on Small Business; Committee on Transportation and Infrastructure; Committee on Veterans' Affairs; and Permanent Select Committee on Intelligence. Mr. Speaker, it is my understanding that the minority has been consulted and that there is no objection to these requests.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, look, most of the American people know that our welfare programs are not working. They have been successful in transferring money, and in the process they have taken away the self-respect, in many cases they have taken away the eagerness for those individuals to get up every morning and go to work and be a contributor to society. Mr. Speaker, can we imagine any American family going to their young teenage daughter and saying, ``I want to talk to you about individual responsibility and pregnancy''; and then they say, ``If you get pregnant, we are going to increase your allowance by $500 a month, give you a separate place to live, and give you a food allowance''? We would never do that as individual families, yet our society does that. It has got to change. My Governor, John Engler, has come to this administration for waivers. Governor Thompson of Wisconsin has come in for waivers. Let us change welfare as we know it.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I called Joseph Stiglitz over at the White House the other night. Mr. Stiglitz is chairman of the Council of Economic Advisers for the President. I called him because I was reading his textbook where he said, there is danger in increasing the minimum wage. That textbook that he published a couple years earlier, it said wherever there is a group of people demographically or wherever there are parts of the country in particular distress, whenever the minimum wage is above the equilibrium wage, there is going to be unemployment. Mr. Speaker, so I asked him: Do you not, do you still agree with that concept? He said: Well, we talked about how much unemployment would result, and we concluded that the unemployment that is going to result from the minimum wage increase is not going to be that significant. The fact is that he agrees, everybody agrees that it causes unemployment. We seem to be on a trend of saying, since 82 percent of the people think wages should be higher, let us have Government do it. Do we really think that Government control can determine markets, can determine productivity, can ultimately determine the wages of people? I think the answer is no. Mr. Speaker, George Washington asked the question, and I quote: ``If to please the people, we offer what we ourselves disapprove, how can we afterwards defend our work?'' I wish he were here today to save Congress from doing what really most of us know is wrong: telling our citizens that they cannot work unless the Government approves the salary they make. If the question to the American people were put such, do you believe that Government should make it illegal for you to work unless you receive $5.15 an hour, do you think that is a good idea for that kind of Government intrusion or not, I think most of the people would say, keep Government out of our lives. We are telling seniors that want to work in a nursing home overnight they cannot do it anymore unless they get the wage we require. I think it is a bad idea. I think it is a shame we are doing this. We will be telling teenagers that they cannot get work experience unless the Government approves of their wage. In effect, Government is saying that people are too stupid to know what their minimal wage requirements are. My constituents want the Federal Government to stop trying to run their lives. Raising the minimum wage is Government meddling in their lives which could cost them their job.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I thank the chairman of the committee for yielding time to me. Mr. Speaker, in 1993 we increased the marginal tax rate on small business from 31 to 39.6 percent. Small business creates jobs. The first bill that I introduced when I came to Congress in 1993 was neutral cost recovery. It allowed a business to deduct the cost of machinery and equipment and facilities in the year they bought it. This is an excellent bill for small business. It does include an increase in expensing up to $25,000. It is what we have to do if we want to expand jobs in this country, and ultimately expand revenues coming into the Federal Government to pay off this mess that we have found ourselves in as far as overspending and overborrowing.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, will the gentleman yield?

Mr. SMITH of Michigan. Mr. Chairman, the reason that I think in our Committee on the Budget there was not much talk about the positive notes on the President's budget is because the President's budget is full of tricks. It takes taxes and says we are going to have tax cuts, but then it restores all those tax cuts and ends up actually with a tax increase of $16 billion after the year 2002. It does not have many spending cuts so nobody is particularly offended. Technically it balances because of a gimmick. The President says, ``Look, if we're not on track by the year 2000, then I want you to take another $67 billion out of discretionary spending.'' That is more discretionary cuts than even the Republicans have suggested in that length of time. It is going to be impossible. It is pretending that it balances when it does not. I bet there are a lot of Democrats that are going to be unwilling to vote for the President's budget.

Mr. SMITH of Michigan. Mr. Chairman, is the gentleman voting for the budget?

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, I thank the gentleman for yielding time to me. Very briefly, if the Democrats or the coalition or the blue dogs had presented this budget 2 years ago, I suspect most everybody on this side of the aisle would have voted for it. The reason I suggest we should not vote for this blue dog budget is because it would replace an even better budget passed by the Budget Committee. Here is why I think the Republican budget is better. The Democrat proposal has higher taxes. It has increased spending and that means returning to a tax and spending philosophy. We had a tax increase in 1993. All of this side of the aisle voted for the tax increase. That tax increase, according to the Heritage Foundation, cost Americans 1.2 million additional private sector jobs and $208 billion in economic output. The Democrat coalition budget continues all of the 1993 tax increases. We have such huge budget problems. I compliment the coalition Members for looking at Social Security. That could be the next catastrophe to hit this country. We need to start dealing with it. I say we have got to have a tax change policy that encourages job expansion for more and better jobs to assist our effort to solve these budget problems.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, who do we want to please with this budget? I think we want to please the American people. The Republican Budget Committee for the first time in many, many years held hearings across the United States the last couple of years to ask the people what kind of a budget they wanted. They said they would like a budget that allows them to keep more of their hard-earned income in their pockets rather than paying it out in taxes. They said America needs a budget that shifts power, money, and influence out of Washington and back to the people and the States and their communities. This budget is based on these principles. It takes less of each person's income by reducing the massive tax burden we have placed on our people. The average person in my State of Michigan now works 86 days a year just to pay their share of taxes at the local, State, and national level. Since President Clinton had his huge tax increase of 1993, my Michigan workers now have to work 7 additional days just to earn all of that money that goes in additional taxes. The Heritage Foundation estimates that the 1993 Clinton tax increase has cost Americans 1.2 million jobs, private sector jobs, and $208 billion in economic output. This budget calls for studies, Mr. Chairman, to say to States maybe it is going to be better if they keep the Federal tax money, rather than detour it through Washington to have Washington politically decide how that money is going to be distributed, and what they do send back? They send back massive regulations and restrictions. Andrew Jackson realized that transportation is primarily a State issue. This budget gives seniors a choice in their medical coverage. This budget reduces the deficit every year and finally balances.

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 Kelly Bunch, winner of the 1996 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, Kelly is being honored for demonstrating that same generosity of spirit, intelligence, responsible citenship, and capacity for human service that distinguished the late LeGrand Smith of Somerset, MI. Kelly Bunch is an exceptional student at Tecumseh High School and possesses an impressive high school record. A member of the National Honor Society, Kelly has also been a student council representative and the treasurer of her senior class. She was nominated to National Young Leaders Conference, and was listed in ``Who's Who Among American High School Students.'' Kelly also was a member of the softball team and the varsity volleyball team. Outside of school, Kelly was involved with the Fellowship of Christian Athletes. In special tribute, therefore, I am proud to join with her many admirers in extending my highest praise and congratulations to Kelly Bunch for her selection as a winner of the 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 she has compiled in academics, leadership, and community service, that I am proud to salute Aliceson Robinson, winner of the 1996 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, Aliceson 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, MI. Aliceson Robinson is an outstanding student at Homer High School and her high school record is exceptional. President of the National Honor Society, Aliceson has also earned the Jackson Citizen Patriot Class Act Award, the Albion College Sleight Leadership Award, and was listed in ``Who's Who Among American High School Students.'' As captain of the Quiz Bowl Team, a science olympiad participant, she has excelled academically. Aliceson has also been involved with student government and a member of SADD and other community organizations. In special tribute, therefore, I am proud to join with her many admirers in extending my highest praise and congratulations to Aliceson Robinson 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 she has compiled in academics, leadership and community service, that I am proud to salute Kathryn Sosinski, winner of the 1996 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, Kathryn 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, MI. Kathryn Sosinski is an exceptional student at Bronson High School and possesses an impressive high school record. Kathryn's involvement in student government and school activities began her freshman year and continued through her senior year as the class president. She is a member of the National Honor Society and the Varsity Club. Kathryn was a member of the homecoming court and attended Girl's State. Outside of school, Kathryn has spent much of her time volunteering for several local organizations. In special tribute, therefore, I am proud to join with her many admirers in extending my highest praise and congratulations to Kathryn Sosinski 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, earlier today I attended a Social Security forum. One of the presenters at that forum said Social Security could be taking in less money from FICA taxes than it is required to pay Social Security checks by the year 2005. By the year 2005, Social Security under that definition could be broke. There is no real trust fund. That is why, Mr. Speaker, I have entitled my remarks for this morning ``Protecting Social Security--Will America Grow Up Before It Grows Old?'' In 1983 Congress passed historic legislation to save Social Security. At that time the Social Security Administration warned that the system had an unfunded liability equal to 1.82 percent of payroll. In other words, the taxes would have to be increased by 1.82 in order to accommodate the requirements for survival for Social Security. A 1983 law eliminated this liability temporarily. However, the actuaries today now say that the unfunded liability is 2.17 percent of taxable payroll, 19 percent worse than in 1983, and yet, Mr. Speaker, we do nothing. Some people have called it a third rail. Some people say, do not touch Social Security because you might not be reelected, because seniors do not want their Social Security interrupted or considered. I do not believe that is true. I believe most senior citizens today want to protect Social Security for their kids and their grandkids. Let me tell my colleagues about the existing liability that equals $4 trillion in Social Security. Put another way, under the current system every beneficiary for the next 75 years will have to absorb a 14- percent cut in benefits for the system to balance. The other alternative is that we raise taxes by 16 percent on the already overburdened American worker. Traditionally Congress waits until the last minute or the last moment to solve these kinds of problems, using a crisis environment to convince our constituents and ourselves that sacrifices could be made. If that happens, probably what Congress would do first is to look at reducing COLA's for existing retirees. That is not the right way to solve this problem. I think, no matter how we try under current law, there will only be two workers paying into the system for each retiree drawing benefits by the time that we reach the 2010 to 2020 era. When we started this program, there were 38 workers for every 1 retiree. Today there are 3 workers for every retiree. When we hit the catastrophic era of 2010 to 2020, there will only be two workers for each retiree. I am introducing legislation this year, and it offers a way out and I believe it justifies consideration. Part one of my bill eliminates the unfunded liability of the trust funds by slowing the growth of benefits in two basic ways. Under the bill initial benefits will still rise after inflation, but they will not double as they do now under current law. It also imposes some modest means testing of benefits. This proposal holds harmless low-income workers and also existing retirees. I repeat, my proposal holds harmless the low-income workers and also existing retirees. Furthermore, this proposal gradually raises the retirement age, then indexes it to life expectancy. These two reforms more than eliminate the unfunded liability of this system, according to the Social Security's actuaries. The Social Security Administration has scored this bill and found that each worker could invest between 1.8 percent of what they earn in payroll and 10 percent of their paycheck in a personal retirement savings account that is going to be their personal passbook savings account, their property, so at least for those funds they do not have to be worrying about a government that is going to use these moneys up and eventually not pay those payments. Over time, the assets in workers' accounts will grow very rapidly, producing genuine retirement security. The balances grow so rapidly that it seems only fair to ask these successful investors to agree to lower Social Security benefits. Thus, worker/investors will still receive Social Security checks, although they will be smaller than those defined under part 1, as well as full ownership rights to their plans. However, the benefits flowing from their personal retirement savings accounts will more than make up the difference. Furthermore, account balances will belong to workers and will be passed on to their heirs, improving the financial security of wives, husbands and their children. Personal retirement savings accounts are a very good deal. With some guidelines I believe it should be up to each worker to determine how his funds will be invested or if he wants to fund a personal retirement savings account at all. In fact, workers may elect to remain in the existing system if they wish and collect only Social Security benefits. It will be their option alone whether to place a portion of their paychecks in the hands of professional money managers. However, eligible investments in accounts include only assets now eligible for investment in individual retirement accounts [IRA's]. Also, under the proposal, managed investment accounts will have to meet investment and reporting requirements. Another important benefit of this proposal is that it will stabilize fiscal policy. This year, Social Security will take in $75 billion more than it distributes. By 2005, the annual cash flow surplus will rise to $135 billion. But in 2025 and beyond, there will be annual cash deficits of $330 billion and rising as far as the eye can see. Under this plan, cash flow in and out of the Social Security System will always be equal. Pressure to cut other spending or to raise taxes will not be required by cash flow problems. Social Security will be depoliticized--as it should be. I plan to introduce this bill soon and invite my colleagues to cosponsor. Together, we can restore the solvency of America's most popular program and make it even better.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, let it be known that 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 Dianna Frobel, winner of the 1996 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, Dianna 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, MI. Dianna Frobel is an exceptional student at Reading High School and possesses an impressive high school record. Dianna was the president of the National Honor Society and has earned the DAR Good Citizen Award, and was listed in ``Who's Who Among American High School Students.'' She was the senior class vice-president, and the quizbowl captain. She has been involved with SADD and has spent much of her time volunteering for a variety of other local activities. In special tribute, therefore, I am proud to join with her many admirers in extending my highest praise and congratulations to Dianna Frobel 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 she has compiled in academics, leadership, and community service, that I am proud to salute Megan Larson, winner of the 1996 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, Megan 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, MI. Megan Larson is an exceptional student at Jackson County Western High School and possesses an impressive high school record. Megan has been involved with the National Honor Society and has earned several academic awards. She has also served as student government secretary and president. Megan has excelled athletically receiving the coach's award in basketball and track. She was also a snowfest princess and a homecoming queen candidate. Outside of school, Megan has spent much of her time volunteering for a variety of local activities. In special tribute, therefore, I am proud to join with her many admirers in extending my highest praise and congratulations to Megan Larson 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 Damon Williams, winner of the 1996 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, Damon 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, MI. Damon Williams is an exceptional student at Homer High School and possesses an impressive high school record. Damon has been a member of the National Honor Society, and was listed in ``Who's Who Among American High School Students''. He has excelled academically and athletically. He participated in both the Science Olympiad and Quiz Bowl Team. Damon was a member of the track team, Future Farmers of America, and 4-H. In special tribute, therefore, I am proud to join with his many admirers in extending my highest praise and congratulations to Damon Williams for his selection as a winner of a LeGrand Smith Scholarship. The 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.