John Spratt

Mr. SPRATT

Mr. SPRATT. I now recognize and yield 4 minutes to the gentleman from New Jersey (Mr. Andrews).

Mr. SPRATT. I yield first 1 minute for a rejoinder to the gentleman from New Jersey (Mr. Andrews).

Mr. SPRATT. I now yield 2 minutes for a colloquy to the gentleman from Virginia (Mr. Connolly).

Mr. SPRATT. I do. And I thank the gentleman for his leadership in our committee on this issue of ensuring that all Federal employees are equitably treated.

Mr. SPRATT. That is correct.

Mr. SPRATT. I yield 1 minute to the gentleman from New Jersey (Mr. Andrews).

Mr. SPRATT. Madam Chair, how much time is remaining?

Mr. SPRATT. I will go ahead and use the balance of my time.

Mr. SPRATT. Madam Chair, I have sat here keeping a list of things that were wrong that cannot be recited in 2 minutes. One speaker got up and said there were no spending restraints. Deficit neutral reserve funds are all about spending restraints. We cannot undertake any of those initiatives until they are paid for. It is a substantial restraint. PAYGO is built into this budget. And it is guaranteed to be accorded a vote on this House floor to become statutory PAYGO instead of rule-of-the-House PAYGO. There is a lot of talk about the costs of this budget, $3.9 trillion. It makes me gag as well. But do you know why it is up so big? TARP, Freddie Mac, Fannie Mae and AIG, much of which, much of which was incurred and fixed on your watch, the watch of your administration, Hank Paulson and others. That is why it happens in this year's numbers, secondly. Thirdly, as you listen to this debate you would think that President Obama has been in office in town for years now. Everything is effectively blamed on Democrats. His administration has been in office 3 months. What we are seeing today and next year and the following years is the wind down and the work off of the Bush structural deficits. They simply won't go away in short order. But Obama didn't wrack up this debt in the last 3 months. It has been created in the last 8 months when President Bush took a $5.6 trillion surplus over 10 years, and by 2004 converted it to the biggest in history, to a $412 billion dollar deficit, the biggest deficit at that time in American history. That happened under his watch, under his administration, under his spending policy and taxing policy. So all of this effort, and in particular, this newfound concern over debt, I share your concern. But where were you over the last 8 years? Your silence was almost deafening. This President Bush built up the debt of the United States from $5.7 trillion to $11 trillion. What we are now doing is living in the backwash of the Bush administration trying to straighten up the mess that he left behind.

Mr. SPRATT. Madam Chairman, I reserve the balance of my time.

Mr. SPRATT

Mr. SPRATT. Mr. Speaker, I ask unanimous consent that Members may have 5 legislative days to revise and extend their remarks and insert material relevant to the consideration of H. Con. Res. 85, the concurrent resolution on the budget for fiscal year 2010.

Mr. SPRATT

Mr. SPRATT. Mr. Speaker, I am transmitting a status report on the current levels of on-budget spending and revenues for fiscal years 2008 and 2009 and for the five-year period of fiscal years 2009 through 2013. This report is necessary to facilitate the application of sections 302 and 311 of the Congressional Budget Act and sections 301 and 302 of S. Con. Res. 70, the Concurrent Resolution on the Budget for Fiscal Year 2009. The term ``current level'' refers to the amounts of spending and revenues estimated for each fiscal year based on laws enacted or awaiting the President's signature. The first table in the report compares the current levels of total budget authority, outlays, and revenues with the aggregate levels set by S. Con. Res. 70. This comparison is needed to enforce section 311(a) of the Budget Act, which establishes a point of order against any measure that would breach the budget resolution's aggregate levels. The second table compares the current levels of budget authority and outlays for each authorizing committee with the ``section 302(a)'' allocations made under S. Con. Res. 70 for fiscal years 2008 and 2009 and fiscal years 2009 through 2013. This comparison is needed to enforce section 302(f) of the Budget Act, which establishes a point of order against any measure that would breach the section 302(a) discretionary action allocation of new budget authority for the committee that reported the measure. The third table compares the current levels of discretionary appropriations for fiscal years 2008 and 2009 with the ``section 302(a)'' allocation of discretionary budget authority and outlays to the Appropriations Committee. This comparison is needed to enforce section 302(f) of the Budget Act, which establishes a point of order against any measure that would breach section 302(b) sub-allocations within the Appropriations Committee. The fourth table gives the current level for fiscal years 2010 and 2011 for accounts identified for advance appropriations under section 302 of S. Con. Res. 70. This list is needed to enforce section 302 of the budget resolution, which establishes a point of order against appropriations bills that include advance appropriations that: (1) are not identified in the joint statement of managers; or (2) would cause the aggregate amount of such appropriations to exceed the level specified in the resolution.

Mr. SPRATT

Mr. SPRATT. Madam Speaker, I would like to recognize the service of Thomas Woodward, who is retiring on March 6 after serving the Congress with distinction for 30 years in an extraordinary variety of ways and places. This nation and this Congress owe a great debt of gratitude to this outstanding public servant. Tom may be the only person--and if not, is certainly one of very few--who has worked at GAO, CRS, and CBO. He began his government service in 1979 at GAO, where he first became involved in analyzing the economy and helped produced GAO's economic outlook. In 1982, Tom went to work for the Congressional Research Service, where he was a specialist in macroeconomics in the Economics Division and produced a number of studies on the banking system, monetary policy, and other issues. Tom was detailed to the House Budget Committee in 1991 and 1992, where he served as Chief Economist for the Republican staff. Tom returned to CRS after his service on the Budget Committee and continued to produce and supervise high quality analyses for members of Congress. In 1998, Tom became Assistant Director for Tax Analysis at the Congressional Budget Office. For the past 11 years, Tom has overseen the production of numerous studies, revenue forecasts, and cost estimates for committees and Members of Congress. In all of his interactions with Members and their staff, Tom maintained the high quality and timely analyses that we have come to expect of CBO. Tom's breadth of knowledge, objective analyses, and good humor are appreciated by everyone who works with him--and next week, for the first time in 30 years, this Congress will not have the benefit of his wisdom, economic knowledge, and analytical skills as it addresses the critical public policy issues that face the nation. I understand he plans to continue to research economic issues after his retirement from Congressional service, and we look forward to that work and wish him well in his retirement.

Mr. SPRATT

Mr. SPRATT. Madam Speaker, under section 301(c) of S. Con. Res. 70, the concurrent resolution on the budget for fiscal year 2009, I hereby submit for printing in the Congressional Record revised 302(a) allocations for the Committee on Appropriations for fiscal years 2008 and 2009. Section 301(c) of S. Con. Res. 70 directs the chairman of the Committee on the Budget to adjust discretionary spending limits for certain program integrity initiatives described in section 301(a) of the concurrent resolution. A corresponding table is attached. DISCRETIONARY APPROPRIATIONS--APPROPRIATIONS COMMITTEE 302(A) ALLOCATION [In millions of dollars] ------------------------------------------------------------------------

Mr. SPRATT

Mr. SPRATT. Mr. Speaker, we are here this afternoon to talk about a serious subject, something gravely facing our country, and that is the budget deficit for this fiscal year 2009 and for the years thereafter for as far as the eye can see. As we speak, the deficit for the year 2009, fiscal 2009, is soaring to record highs. CBO, the Congressional Budget Office, our budget shop, which is neutral and nonpartisan, has recently projected that the deficit for 2009 will be $1.2 trillion. And as high as this projection may be, our friends, it's probably a low-ball estimate. It omits, for example, the supplemental to pay for our deployment in Afghanistan and Iraq, which will be around $70 billion for the remainder of this fiscal year; it assumes that the alternative minimum tax will stay in full force and effect reaching 20 or so million-income tax payers for whom it was never intended. This increases the revenues by $70 billion though AMT has, in fact, been omitted year so that it does not apply for middle-income taxpayers for whom it was not intended. It also assumes that the tax cuts passed in 2001 and 2003, despite the fact that we have huge deficits, will expire on December 31, 2010, and as provided by the law which enacted them in the first place. When you add all of these into the equation--the Bush administration's last deficit, the deficit that we inherited from President Bush and must work our way out of--the deficit could easily top $1.4 trillion. It staggers the imagination. These are deficits that happened on the watch of the Bush administration and under their fiscal policies. But we, as Democrats, won the election, and it is our responsibility to decide what should we do about the deficits left us. Unfortunately, we've got forces converging on the budget which make it difficult to bring the deficit down to realistic terms. For example, we have the severest economic downturn in our economy since at least the first or second world war ended. So we have the mounting costs of counter-cyclical policies, TARP, the stimulus now pending in the Senate, the conservatorship of Freddie Mac and Fannie Mae. All of these things are hugely expensive. We have the rising costs of major entitlements--Social Security, Medicare, Medicaid--due to the retirement of the baby boomers. We have defense budgeted and funded at historically high levels and sustained for an historically long period of time. Funds funded to front-end accounts, accounts in the budget which need to be funded adequately but are not. Transportation is a good example. It will exhaust its reserve early next year and run close to zero unless we can get funds back into that particular account. Of course, as always there's education, which is not funded as robustly as many of us think it should be. And of course there are new topics--alternative energies and various incentives for increasing the energy supplies and making this country energy independent. Then we have the renewal of existing tax cuts, which are slated to expire on December 31, 2010. When we add all of these things in, in addition to the price commitments we have to do something about the climate and something about universal health care coverage, it becomes very, very difficult to do anything to the bottom line of the budget, despite the fact that it is bigger than it has ever been before in peace time. The overarching question that faces this whole country as we incur these huge sums of debt is: How long will foreigners help us? How long will they keep buying our Treasury debt? We have, therefore, the worst budget since World War II and the worst economy in which to work out the problems of these budgets. Every recession has its own pattern to it. But it is clear that it is difficult in every recession, any recession, to work out of the recession when you're swimming upstream, when the economy is working against you; to work out of a budget deficit when the economy is working against you. Let me show you some charts, those who are listening. This is a simple bar graph. It shows that the Bush administration, when he came to office, had a phenomenal inheritance. A budgeting surplus over the next 10 years by $5.6 trillion. That was January, 2001. By January, 2004, that surplus of $236 billion was gone. Vanished. In 4 year's time, we went from a $236 billion surplus to a $412 billion deficit. This happened under the policies and the watch of the Bush administration. This next chart portrays out over time the assets of this administration and the previous administration. This is the first George Bush administration. The first Mr. Bush. There was a significant decline in the budget at that point in time. But, when the Clinton administration came to office, President Clinton sent us a budget in February of 1993, on February 22, the first full significant action taken by his administration, and every year after the adoption of that budget by one vote in the House and one vote in the Senate, the bottom line is the budget got better and better and better, to point where we were at this point right here, 1997, 1998, the year 2000. The budget was, in those years, balanced for the first time in recent memory. Then, in 2001, the year 2000, we had a surplus of $236 billion. The second Mr. Bush came to office here. You can see the bottom line got worse and worse and worse until there was a slight pickup here. But, then in the out years 2004, 2005, 2006, 2007, the budget got worse and worse and worse, until the point it runs off the chart at the bottom of the page. That is the deficit we are now looking at, a deficit of as much as $1.4 trillion. Now, that would be a concern under any circumstances. But, in the present situation, the deficits that we have incurred over the last 10 years have largely been funded and financed by foreigners. Japan, China, Great Britain, Europe, and Pacific Rim countries. They have run trade surpluses with us and used the surplus dollars they hold to buy back our Treasury bills. It's a convenient short-term arrangement. But, over the long term, it means foreigners own more and more of our debt, and you find it hard to be totally independent as a country, certainly the world super power, when you're also the world's largest debtor. As of 2008, the total amount of foreign-held Treasury securities had tripled under the Bush administration. Starting out at $1 trillion, it rose to $3.1 trillion--over $2 trillion--during the period 2001 to 2008. That is the accumulation of foreign-held Treasury bills and certificates. As for the total debt of the United States, this is where we began-- $5.7 trillion in 2001. That is where the total debt of the United States stood when Mr. Bush came to office. A substantial sum. But every year that number went up and up and up, to the point where, when he left office a couple of weeks ago, the amount of debt stood at $10.7 trillion. Nearly doubled in an 8-year period of time--from $5.7 trillion to $10.7 trillion. And, as a consequence of that, we are feeling the effects of it in all sectors of our economy. Would the gentlelady from Massachusetts care to make a comment or a statement? I gladly yield time to her.

Mr. SPRATT. I now yield to the gentleman from Maryland, our distinguished majority leader, Mr. Hoyer.

Mr. SPRATT. I thank the gentleman. And I yield the balance of our time to Dr. Schrader from the State of Oregon, a freshman Member, a veterinarian, I believe. Let me find out from the Speaker how much time is remaining.

Mr. SPRATT. Six minutes.

Mr. SPRATT. I thank the gentleman for his statement and yield back the balance of our time.

Mr. SPRATT. Going back to the topic before Ms. Tsongas spoke, here are just some highlights of the economy we also inherited, so that we have got, in effect, a dual negative double whammy--a budget deficit that is soaring out of sight and an economy which is contributing to that deficit--and it makes the effort to reduce and dispel and wipe out the deficit ever harder. For example, here's the unemployment rate. It stands at a 17-year high. Nearly 600,000 thousand jobs lost last month. Against a head wind like that, it's very, very difficult to bring the budget deficit down. In fact, you need to have countercyclical policies in effect that are actually adding to the demand of the economy in order to get the economy back on track, back on its feet, which is what we are doing right now. Here's another chart which shows what happens in an economy like ours, where unemployment is close to 8 percent. Revenues that were expected last September, when the Congressional Budget Office did its forecast of the budget, the revenues that were forecasted then are not obtained. We are $2.7 trillion short over that period of time, 2009 through 2018, in the revenues that were assumed last September, which changes the basis for all of our policies when you simply don't have the funding that you're anticipating having only a few months before. It also shows you one of the frightening features of this current recession is how fast it's coming on. It lingered for some time. There were definite earmarks that we were headed toward a recession. But now that it's here, we are seeing, in 1 month, 500,000 to 600,000 jobs lost, as tragic evidence of what's befalling us. 3.6 million jobs lost since January of 2008. 3.6 million jobs lost since January of 2008. Mr. Moran, I gladly yield to you for any comment you would like to make on this topic.

Mr. SPRATT. You said the key point when you said it didn't have to happen. In the year 2001 when President Bush first took office, we proposed at that time, since we had a surplus for the first time in 30 years, to take the surplus in Social Security and use it only to buy down or buy up outstanding Treasury debt. That way we would have added to the net national savings of the United States, which is woefully deficient. We would have added to the capital availability in the United States and driven down to some extent the cost of capital. And by the year 2020, 2022 when the baby boomers began retiring in big numbers, Treasury would have seen much of its debt held by the public paid off. Now I am not so naive as to think that we would have religiously stuck with that proposal, but that is what the Blue Dogs were pushing and that is what many of us were pushing under the corny name ``lockbox,'' but it had a serious, substantive idea beneath it, namely that we would increase the net national savings and we would at the same time clear up much of the debt owed by Treasury so that when the Social Security claimants came and presented their claims in 2020 and 2022 in large numbers, Treasury would be more solvent to meet those claims and less in need of borrowing in order to satisfy those claims. That was a potential, very potential. The Bush administration came to our committee, you were on it at that time, and said we don't need to do that. We won't need to increase the debt ceiling of the United States for at least 7 or 8 years. And the next year they were back hat in hand asking for a huge increase, several hundred billion dollars, until finally the increases got to be nearly a trillion dollars a year, all because they spurned what was a genuine offer of a truly fiscal conservative policy on what to do with our surpluses in the year 2001.

Mr. SPRATT. Four years.

Mr. SPRATT. I yield now to the gentleman from Florida (Mr. Boyd).

Mr. SPRATT. Mr. Moran, in addition to what you just said, not only did the deficit come down in 1998, 1999, 2000 and 2001 as a result of the Clinton administration's policies, but employment went up also. Every year the bottom line of the budget got better and better and better for 8 straight years and so did the job market, to the point where the average job creation in the Clinton administration was 230,000 a month. Twenty-two million jobs were created as opposed to this dismal picture here for the last year of the Bush administration. So 230,000 jobs a month on average, all together 22 million jobs created during the Clinton administration. And it was connected with, I think to some extent, the virtuous fiscal policy we were running at that time which shows you that it does pay to have sound fiscal policy.

Mr. SPRATT. Let me turn to Mr. Melancon and yield to him, the gentleman from Louisiana.