Nick Smith

Mr. SMITH of Michigan

Mr. SMITH of Michigan. No. Thank you, Mr. Kingston, no. These were the trustees actually, were three of the Cabinet Members that the President appointed. You know, the President has even said as we look at the Medicare B provisions, he--this is--what he expects recipients to pay for their share of the premium ends up to be $7 less than what the Republican proposal is, so we have $7-a-month difference in the President's proposal and the Republican proposal. Everybody that is honest about this knows that we have got to do a better job, and I do not want to talk too long here with these good ideas, but look what the private sector has done, look what the private sector has done in terms of lowering their medical health care costs. We have actually had negative cost increases in the private sector while we have had 11 percent in the public sector.

Mr. SMITH of Michigan. Well, you know, it is only partisan for those individuals that think they have a target to shoot down something, to criticize rather than being constructive to help develop the best solutions to save, preserve, and keep Medicare available to the current recipients and the future recipients, so, as far as a budget consideration, the trustees of Medicare came to the Committee on the Budget, and they said Medicare is going to be going broke. We are going to take in less money than is needed for payout starting next year. Something has to be done.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I wonder how many Americans feel that there is fraud and abuse, wasteful spending, that there is fat in this Federal Government, that the overspending of the Federal Government is leading us into a debt situation that is going to be intolerable for our kids and our grandkids. Over the last couple of months, as Republicans have tried to cut spending, in every occasion the other side of the aisle says, ``Well, you are cruel and mean-spirited.'' I am afraid that we are not going to reach a balanced budget; I think we need more legislative determination to assure that we do that. I have introduced a bill called H.R. 2295 that incorporates the budget resolution that we passed, in the House and the Senate, into law. It changes the 1974 Budget Act to incorporate into law those spending caps that will last until 2002. That legislation is going to help give politicians the intestinal fortitude to do what we should do, and that is balance the budget.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I wonder how many Americans really think that the Members of this body will have the gumption to balance the budget 7 years from now. Mr. Speaker, I wonder how many Members of this Chamber think that we are really going to make the hard cuts that are going to be required that are called upon by the budget resolution that we passed earlier this year to balance the budget 7 years from now. I want to talk about the bill that I have just introduced, H.R. 2295, that will help assure that we reach that balanced budget by the year 2002. Mr. Speaker, the vacation is over, it is [[Page H 8891]] time for us to do what we were sent here to do, and that is balance the budget. In June we passed a historic piece of budget legislation, House Concurrent Resolution 67. This budget resolution starts us on a glidepath to a balanced budget by the year 2002. If we reach that goal, it will be for the first time since 1969. But there is a problem. This glidepath is a resolution and it is not a binding law signed by the President. That means in effect, it is only a suggestion to future sessions of Congress. In 1985, Congress passed Gramm-Rudman-Hollings, tying discretionary spending to deficit reduction. Unfortunately, the good intentions of that bill did not do much to reduce the deficit. In 1990 we had another confrontation. In fact, in the 1990 confrontation with President George Bush, we increased the debt ceiling six times in about a 2-month period to encourage the administration to sign on to that particular agreement. That agreement did place caps on discretionary spending. Those caps are set to expire in 1998, and those caps are too high to allow us to achieve a balanced budget by the year 2002. If we are serious about balancing the budget, let us put into law the spending caps of this year's budget resolution. That is what H.R. 2295 does. H.R. 2295 is my bill and we call it the Discretionary Spending Reduction and Control Act of 1995. H.R. 2295 amends the Congressional Budget Act of 1974, it amends the Gramm-Rudman-Hollings amendments by updating and extending discretionary spending caps and the pay-go requirements laid out in this year's budget resolution. It establishes into law this year's budget resolution targets for spending. These caps required by law will help ensure that we will stay on target toward a balanced budget by the year 2002. Mr. Speaker, is Congress going to have the willingness to continue to cut spending? Let me give you a verbal description of the glidepath to a balanced budget. We are asking for a reduction in spending, somewhat slight, not very much reduction, in the first year and second year. The big cuts in spending and those requirements and pressures on Congress will be in the outyears of the fifth, sixth, and seventh year. I mean with the complaints and the criticisms and the agony that we have seen this Chamber exhort with the slight budget cuts this year, it is going to be absolutely tough in those outyears. We have to have legislation that keeps us on that glidepath. I ask my colleagues to support H.R. 2295 that will put into law this year's budget resolution.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, a lot has changed in Washington over the past 9 months, and the message that sent Republicans to victory last November is still ringing loud and clear. Americans are not talking about how we balance the budget, but whether or not we will do so. People are also talking about how we save Medicare, not whether or not we will do so. Our mission this fall is clear. We will pass a budget that brings us into balance by 2002. We will enact meaningful welfare reform that emphasizes work, families, and hope for the future. We will save Medicare from bankruptcy. We will reduce the size of this overbloated government that is taking away our freedoms. Government has grown quite large. After World War II, we spent 12 percent of our GDP, our gross domestic product, for government spending. Now, we spend almost 22 percent of GDP. We have done this not by taxes, but by borrowing. We must balance the budget if we care about our kids and our grandkids having a good future.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, I rise to address the House regarding the budget, the debt ceiling that we are now approaching, and why that is important to the American people in an expanded economy for the United States and an expanded job market. First let us look at the overspending of the Federal Government. Back in 1947 the Federal budget represented 12 percent of this country's gross domestic product. Today it represents almost 22 percent of the gross domestic product. The Federal Government is expanding at an alarming rate. The Government has not relied on the political negatives of increasing taxes to afford this increased spending, but rather has decided that it is more politically wise to continue borrowing. Our Federal debt today is $4.8 trillion. Our Federal debt after two world wars was only $340 billion. We are increasing spending at an alarming rate and you know most people in America say we do not care how Government keeps its books; what we want is better jobs and a better economy. Here is why it is important. Here is why how we keep our books affects those jobs and affects the economy of this country. Government this year is borrowing 42 percent of all of the money lent out in the United States. Think what that extra demand does for the pressure to increase interest rates. Alan Greenspan, the Chairman of the Federal Reserve, suggests that if we are able to balance our budget, we will see interest rates drop between 1\1/2\ and 2 percentage points. He says if that happens, the stimulation to the economy and the jobs in this country will be greater than we have ever seen before in our history. He says the flip side is that if we do not do it, we will give our children a lower standard of living and less expectations to have a good life than we have had. That will be the first time in history. How do we achieve a balanced budget with a group of politicians that sit in this Chamber and the one on the other side of the Capitol that are used to expanding programs, that are used to going back home with pork barrel projects, cutting the ribbons and getting their pictures in the paper and being on television, bringing more good programs to the people back home, and they have discovered that it enhances their chances of being reelected. The challenge is great today for these Representatives to say if we want a good future for our kids and not leave the kids the mortgage of our overindulgence and overspending, we are going to have to cut back on some of those programs. Mr. Speaker, I ask everybody in the United States to look at this predicament, to encourage their Members in Congress that it is important that we all tighten our belts. A group of us, 156 of us, have signed a letter to the President saying that we are not going to vote to increase the debt ceiling unless we are on an absolute glide path to a balanced budget. Now, that means passing legislation that limits spending, that changes some of the entitlement programs, that has appropriation bills that get us on that glide path to a balanced budget. It is important. We met with Secretary Rubin. We have now introduced legislation to give the President authority and flexibility to prioritize in the event that debt ceiling is reached. It is important, Mr. Speaker. I hope we are able to stick together to hang tough, to do what is good for America, to disregard the pollsters, to disregard the special interest lobbyists that are pushing for more and more spending, and do what is necessary to give this country and our children and our grandchildren a good future.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Speaker, according to the Department of Treasury, the new debt ceiling that Congress approved in 1993 will be reached sometime in October. The debt ceiling was $4.9 trillion. We are currently borrowing, and we are currently borrowing $4.6 trillion. So, we are going to reach that debt limit. This means that the Government's ability to borrow additional money will be exhausted by November, and the House and Senate will be asked to increase the debt ceiling for the 78th time since 1940. Since I and other fiscal conservatives of both parties firmly believe that we should put our fiscal house in order by making sure we are irrevocably committed to balancing the budget before increasing the debt ceiling, we are facing a potential cash-flow problem. That is because in next year's budget we are calling for a borrowing of about 10 percent, and revenues coming into the Federal Government only account for about 90 percent of that required spending. So that is going to mean a cash-flow program, it is going to mean prioritizing spending. As an enthusiastic supporter of the effort to use the debt ceiling to achieve a balanced budget, I have joined with 160 members of the Debt- Limit Coalition to pass legislation that will eliminate the deficit within 7 years. Later this month, Congress will present the President with a historic package of spending and tax cuts that will achieve that goal. If he vetoes this bill and does not present a credible alternative, we will be compelled to use the pending debt-ceiling vote to force the issue of the Federal Government's out-of-control spending. Mr. Speaker, I insert for the Record the next 3\1/2\ paragraphs, and I conclude by saying now is the time to hold the line on Federal spending before it goes through the ceiling. Some critics of the Republican budget-cutters, many of whom are those who helped get us into the Federal debt morass, say that cutting spending on social programs is mean-spirited and cruel, and that this is only designed to put pressure on the President and force him to take the blame for shutting down the Government. But there is ample precedent for Congress using the debt limit as leverage to resolve budget battles, including 1985 during the debate of the Gramm-Rudman balanced budget act and in 1990, when the Democratic Congress used the looming debt ceiling to force President Bush to raise taxes. So this isn't a partisan issue. It's an American issue. As a dairy farmer and former Michigan legislator, I have persistently advocated tax cuts and spending restraint. Now is not the time to back off. Now is the time to hold the line on Federal spending, before it goes through the ceiling. Thank you very much.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, I will vote in opposition to the Solomon amendment. I wish to make clear that I do not support compulsory student fees for campus political groups whose views the student may not support. Rather, students should only be given an option to donate to a student group of their choosing if they wish through a positive checkoff system, which would allow students to choose which groups, if any, received their money. Perhaps, if I were a university trustee and the amendment were a resolution before me I would vote for it. But I am not. I am a Federal legislator. As a Republican in the Federalist tradition, I stand opposed to national control of local and State matters. Recently, we saw the Clinton administration try to coerce the University of California using the Federal spending power when it voted to end affirmative action. We should not similarly coerce colleges and universities to do what we Republicans wish. I did not come to Washington to replace one set of Federal rules, regulations and mandates with another. Although the Solomon amendment represents a good idea, that students should not be forced to pay for political activities with which they do not agree, it is not enough. A good idea, when forced on States and local entities by Federal mandate, is no longer a good idea. For this reason, I oppose this amendment.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, in 1993, my amendment was passed on the floor of this House that encouraged greater cooperation between NASA and USDA. The amendment directed NASA and the Department of Agriculture to work together to make better use of NASA's remote-sensing data for agriculture. Our space program has resulted in development of remote technology that could greatly improve agriculture. Using remote sensing, we will be better able to, one, anticipate potential food, feed, and fiber shortages or gluts; two, predict impending famines and forest infestations and try to prevent or mitigate them; three, provide information on condition of crops and croplands; four, assist farmers in the application of pesticides, nutrients, water to maximize crop yields and protect the environment; and, five, to provide farmers with better information to decide what kind of crops to plant to meet market demands. The amendment supporting that effort was part of the NASA authorizing bill in both 1993 and 1994 and had the support of the gentleman from California [Mr. Brown] and the gentleman from Pennsylvania [Mr. Walker] of the Committee on Science, as well as the gentleman from Texas [Mr. de la Garza] and the gentleman from Kansas [Mr. Roberts] of the Committee on Agriculture. As we reduce funding for agricultural programs by $13 billion and move towards a free market, it makes sense to use all available information and technologies for farmers and ranchers. Mr. Chairman, I applaud the effort of the Committee on Appropriations in the report language on commercial technology programs. This program makes available dollars for allowing NASA-developed technologies for commercial use. I hope in some small way that we can also allow American agriculture to expand exports to world markets by assuring that American farmers and ranchers have the information available through NASA technology to predict supply and demand more accurately, and we are more able to do that, and I compliment the technology we have achieved, and I am hoping that the chair of the subcommittee supports that effort.

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

Mr. SMITH of Michigan

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

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Will the gentleman yield? It seems to me in discussing the Department of Commerce or any reduction in the Federal Government spending, there are two questions: Does it make sense to cut this particular program, and the overall picture is how important is it to cut? You related to the fact that it is important to cut. But I wonder how many people listening to us tonight realize what percentage of all of the money lent out this year will be borrowed by the Federal Government? The Federal Government will borrow 42 percent of all of the money lent out in the United States this year. That means that people that want to have that money available to buy a car or go to college or most importantly, expand their businesses and jobs, are not going to have that money available. If government gets out of insisting that they take 42 percent of all of the money that is up for borrowing, Alan Greenspan, our top banker in this country, Alan Greenspan, the Chairman of the Federal Reserve, says that interest rates will drop exactly the way you say, Dick. They are going to drop some place between 1.5 and 2 percent. That means everything is going to be cheaper in this country for people that need to borrow money, whether it is going to school or buying a home or expanding their business. So it does make a difference. On the second point, how about how are we going to know whether it is reasonable to close down the Department of Commerce? Well, I called our Michigan Department of Commerce in Michigan that is very active in promoting jobs and business opportunities in Michigan, I said, how often do you call the United States Department of Commerce? They said, never. They do not contact the United States Department of Commerce; it is not a service in terms of their efforts for business and job expansion. I asked the Chamber of Commerce in the United States that has 200,000 members, how many of your members have called in expressing concern about closing the Department of Commerce? Four. They said, four. Out of 200,000 members, they said four have called in, saying are we sure this is the right thing to do? I think it is evident that this is one department that people do not use that does not expand business, and I just congratulate the freshmen and encourage them to keep the spirit, because your spirit is what is keeping the rest of us going today.

Mr. SMITH of Michigan. I think my summation, Mr. Speaker, would be to the American people that, look, these are politicians down here. If the American people decide this is important, those of people that might be viewing this tonight, you know, call your Representatives in Congress, give them some encouragement, because we need the will of the American people to make sure we accomplish this giant task. So, Mr. Speaker, I am proud to be here with this delegation, and I just hope the American people feel that it is important that we bring down the size of this overbloated Government, that we support this initial step of doing such things as closing one of the least useful departments at State government.

Mr. SMITH of Michigan

Mr. SMITH of Michigan. Mr. Chairman, I yield myself 15 seconds for a response. Mr. Chairman, I would just like to say that the cost to finalize this project in the Detroit to Chicago would be $700 million. Department of Transportation says no. The Federal Government will not pay for it. The taxpayers of the particular States that it does through are going to have to end up paying for it out of tax money or out of ISTEA money.

Mr. SMITH of Michigan. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, I rise to offer an amendment to eliminate funding for the high speed rail project. While the amount in this budget is $15 million, this is a foot in the door for projects which, according to a GAO report, could cost as much as $12 billion. Three copies of the executive summary are available at the desk for your review. The taxpayers would end up providing operating subsidies in the future in order to keep the projects solvent. Of the $15 million in this bill, $3 million goes to Michigan for developing a radio system for train traffic control in the Detroit-Chicago corridor. This corridor goes right through the heart of my district. I think it is important that with a debt approaching $5 trillion that we be willing to cut nonessential programs in our own districts. While it would be nice to have this technology, the freight operators are working on a similar technology on their own in the Pacific Northwest. In fact, another $1 million in this bill is to have the State of Washington ensure that the system being developed by the private sector is compatible with what the Government-subsidized experiment is doing. Another $5 million in this bill goes to develop, in the Chicago-St. Louis corridor, a more advanced system of locating trains by global positioning and feeding that information to a central system. Again, the freight operators are already experimenting in this area on their own. The budget committee recommended elimination of this project. The Heritage Foundation made elimination of this project one of its priorities in its rolling back Government analysis. Citizens for a Sound Economy supports its elimination. The reasoning behind these calls for elimination is threefold: First, these projects will be exceedingly expensive. To upgrade the infrastructure along the Detroit-Chicago corridor just to get to a 3- hour travel time between Chicago and Detroit will cost more than $700 million. Upgrading trains and track to achieve the lowest of the high speed range will cost, for a typical 200-mile corridor, more than $11 million per mile. Second, freight traffic in these corridors will be disrupted. To quote the GAO report mentioned earlier, ``freight railroads believe that these improvements will generally provide few benefits for their freight operations.'' Freight companies do not want to be liable for collisions between 100 plus miles per hour passenger trains and slower moving freight trains. The GAO report states that freight companies want total endemnification from liability for passenger train accidents. In my district, Conrail has said that, if a high-speed rail corridor were built on the lines it runs between Detroit and Kalamazoo, it would sell that line, move traffic out of the corridor, and reserve a freight easement for some of the less-traveled time on the line. This would reduce the availability of freight service for some of Michigan's largest companies. The problems of 125 miles per hour passenger trains traveling with 60 miles per hour freight trains are evident. The fact that the freight operators will go so far as to turn over their lines in order to avoid the liability problems says that they feel the problems are not surmountable. Third, the private sector has shown that these systems would not be able to compete with existing air, bus, and auto travel. Several GAO reports note that the private sector is unwilling to invest in any system without huge Government subsidy. What this means is that the resources that would be consumed in producing such a system are valued more in the production of other goods and services than they are in the production of a high-speed rail system. We need to look at the opportunity cost of these systems; $12 billion would provide a lot of services which are clearly more highly valued than a high-speed train, as witnessed by the fact that no one will put their own money into high-speed rail unless the Government guarantees the return. Fourth, these systems are clearly regional, they are not a role for the Federal Government. There is no reason that taxpayers in Montgomery, AL should pay for someone in Michigan to ride a 125 miles per hour train instead of flying in an airplane or driving their car to get to their destination. In a time when we have a $5 trillion Federal deficit, and unfunded liabilities in Social Security and Medicare of additional trillions, there is no good reason for the Federal Government to be involved in taxing the vast majority of Americans so that a few can travel by train instead of plane or car. Mr. Chairman, I reserve the balance of my time.

Mr. SMITH of Michigan. Mr. Chairman, I offer an amendment.

Mr. SMITH of Michigan. Mr. Chairman, I move to strike the last word. Mr. Chairman, inasmuch as our last amendment lost at a three to one rate, I will not call for a record rollcall on this, and hope that the committee, both the authorizing and the Committee on Appropriations, will consider it.

Mr. SMITH of Michigan. Mr. Chairman, I yield myself such time as I may consume. Mr. Chairman, we could call this a revised Smith-Chabot amendment. It is an amendment that negates every person that got up an spoke against the first amendment, because this places a 1-year moratorium on funding for only those fixed guideway mass transit projects, the subways and the el's, that do not have a full funding grant agreement, an FFGA, or have not reached a final design phase. It saves 92.9 million. The Department of Transportation says that mass transit costs for existing systems range from $4,800 to $17,000 per rider. Our goal is to conserve energy. Our goal is to help people move into where they want to move. The fact is that these fixed guideways, these fixed rail systems, are not used by the poor people, they are not used by the elderly, because they have chosen, according to the Congressional Research Service, to use automobiles because it places them at a disadvantage in the beginning point, the fixed beginning point, and the fixed ending point. According to DOT, a new mass transit is not cost-justified unless it costs less than $6 per rider per trip. The average cost per rider per trip for the 15 projects that this amendment would put on hold is $10.50. The fares are expected to make up no more than $2 of the cost. That means some taxpayer someplace, either paying taxes to the Federal Government or paying taxes to local government, is going to have to make up the difference between the $10.50 and the $2. The President requested in this budget funding for just 12 new starts, yet the Committee on Appropriations proposes funding for 30 new starts. The revised amendment would allow further study of these projects before committing Federal funding. Mr. Chairman, I would like to commend the members of this subcommittee of the Committee on Appropriations because they have done wonderful things with this proposal that they have brought to the floor. There are no longer the pork barrel projects for demonstration projects. I am delighted, the American taxpayers are delighted. I am simply offering amendments that hopefully will fine tune this bill and save taxpayers even more money, or instead, maybe put this money to improve some of the highway systems, some of the local bridge needs, in the United States, as opposed to starting new mass transit subway systems that are going to be so inefficient and cost so many American dollars, not only to build but to subsidize in the future.

Mr. SMITH of Michigan. Mr. Chairman, I offer an amendment.

Mr. SMITH of Michigan. Mr. Chairman, I demand a recorded vote.

Mr. SMITH of Michigan. Mr. Chairman, these are local projects. We are asking for a 1-year moratorium. The gentleman from Ohio, John Kasich, chairman of the Committee on the Budget, and several of us have requested that GAO evaluate these projects. Mr. Chairman, I would like to mention that we have the Committee on the Budget resolution that we passed, the National Taxpayers Union, the Citizens for a Sound Economy, Americans for Tax Reform, and Heritage support this amendment. We have to take time to move back and decide the best way to spend available funds.

Mr. SMITH of Michigan. Mr. Chairman, how much time do we have remaining?

Mr. SMITH of Michigan. Mr. Chairman, I yield 2 minutes to the gentleman from Florida [Mr. Scarborough].

Mr. SMITH of Michigan. Mr. Chairman, I yield myself 3 minutes. It is very difficult to proceed with an amendment that reduces 666 million out of a budget and just simply give an argument of 10 minutes. Four of us will attempt to do that. When I was director of energy for the U.S. Department of Agriculture, in the early 1970's, we met every morning at 6:30 at the White House to decide how we were going to conserve energy, how we were going to reduce pollution, and how we were going to serve people that needed to move to the inner cities. We decided to give extra support for mass transit at that time for those reasons. In every case for the pollution question, for the environmental question, for the conservation of energy question, for helping people move to the inner city, those efforts in these fixed guideway systems have failed. This bill has $660 million which is an incredible increase of $19 million over last year's appropriation. The point is that many new starts are losing local support because of the inefficiency, because of the high cost, so we see local units pulling back while willy nilly we continue to say we will use Federal taxpayer dollars to continue to support these projects. I name a couple, the Tasman project in California, which was approved and funded. They pulled out because of lack of local support. The Chicago circulator project pulled out. The Salt Lake City and the Los Angeles and the Portland project are now under scrutiny because even with the maximum 80 percent cost share by the Federal Government and only 20 percent cost share by locals, they think their 20 percent is a waste of money. So this amendment simply says, let us set back for one year, let us have a moratorium of 1 year and have an examination of what is helpful and realistic. We have sent a letter to GAO, signed by myself, the gentleman from Ohio [Mr. Chabot], the gentleman from Ohio [Mr. Kasich], the chairman of the Committee on the Budget, and said, evaluate these projects to see if it is reasonable to have this cost and if they will be helpful. This amendment is what was recommended by the House budget resolution passed by this body just weeks ago. It is supported by the Citizens for a Sound Economy. It is supported by the American Legislative Exchange Council. It is supported by the Americans for Tax Reform. The National Taxpayers Union is scoring it. It was actually suggested by the Heritage Association. This, my colleagues, is an important amendment. Consider where you want to borrow the money and spend that money in future years. By building these projects, we are also committing ourselves to subsidizing these projects in future years, because they cannot operate by themselves. Mr. Chairman, I yield 2 minutes to the gentleman from Oklahoma [Mr. Largent].

Mr. SMITH of Michigan. Mr. Chairman, I would also like to comment that almost one-half of these projects are unauthorized. They have been appropriated, but they have been unauthorized projects. It is not consistent with the rules of this House to do that except when those unauthorized projects are protected by a decision of the Committee on Rules. In this case, they have. The only recourse Members have is to consider a reduction in the amount appropriated, and I would suggest to the Chair that that is consistent with the rules of the House.