John Spratt

Mr. SPRATT

Mr. SPRATT. I yield 2 minutes to the gentleman from Oregon (Mr. DeFazio). Before he begins, could I inquire how much time remains on this side.

Mr. SPRATT. Let me say to the gentleman, I don't expect this to be the last iteration of this bill. It is the third already. If there are issues of clarity, issues of definition, we will revisit those issues and work them out in conference towards a common purpose here. I do think this bill advances the process. I think it is better than the previous two bills, and we are building towards a conclusion we can all accept. You can count on my cooperation to that end. So I thank you for your observations. We will be visiting this topic again. I yield back the balance of my time.

Mr. SPRATT

Mr. SPRATT. I yield myself such time as I may consume. Mr. Speaker, on March 13, we passed the budget resolution. It's a good resolution. It moves the budget to balance by the Year 2012 and, along the way, it accumulates less debt than the Bush budget. It limits spending to a reasonable level. But I can truthfully say that this bill does more for education, more for the environment, more for energy, more for science and innovation than the President's budget or the Republicans' resolution. And also, critically important, it avoids the deep cuts in Medicare and Medicaid that are provided for, called for in the President's budget. And it protects the middle income tax cuts; provides AMT relief for middle income families for whom it was never intended. Therefore, we have the outline of a good budget for the coming fiscal year, and we need to pass it, send it to conference, bring the conference report back. We have an excellent chance, I think, of passing the first conference report, back to back, since the year 2000. What my friends on the other side of the aisle have introduced is, to my way of thinking, a distraction, a red herring. ANWR is never mentioned in our resolution. And to my recollection it was not mentioned in your resolution. So the topic here is wholly out of the scope of the resolution on either side, particularly ours, and wholly outside the jurisdiction of our committee. We don't assume ANWR revenues, we don't preclude ANWR revenues because we don't have the authority to prescribe that. The most we can provide for in a budget resolution is a certain revenue floor, a certain amount of revenues be collected over the year to be applied against the expenditures that we broadly distribute in something called the 302(a) section of our bill and the 302(b), providing for 302(b) allocations. So this budget resolution, this resolution to instruct, motion to instruct conferees, goes off on a tack that is totally different from what the resolution's all about, what the committee's jurisdiction is. If you want to debate this, there's another forum for debating it. There's another committee, the Resources Committee. We don't have the authority to do what you would call upon us to do. We don't take a position for ANWR or against ANWR in the budget resolution because it's not the place for that kind of policy resolution. There are other places here for that to be established. So we've got a good budget resolution. We do not need this resolution, this motion to instruct conferees, to do anything towards balancing the budget. You've got a very nominal sum of money in here when it comes to a 5-year period of time. And one question I would leave with you, is you call for an increase in negative budget authority and outlays. If I didn't know what that meant, I wouldn't know what it meant when I first saw it on the printed page here. But I would take it that not only does oil revenues fall under this rubric, but so would forest products, national parks and things of that nature. So it's not clear exactly what you're calling for here. I can only say it's a distraction. It's a red herring, it's not needed, and it does not really belong in the budget resolution process. I retain the balance of my time.

Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from Massachusetts (Mr. Markey).

Mr. SPRATT. Mr. Speaker, let me say again, but say more emphatically, what I said at the outset, and that is that ANWR is never mentioned, never mentioned in the budget resolution, never mentioned in the report that accompanies the resolution. So it's wholly out of scope; it has nothing to do with the budget resolution before us, And it's also outside the jurisdiction of our Budget Committee. The jurisdiction over this drilling in Alaska, or wherever in the continental United States, belongs to the Resources Committee, not to the Budget Committee. So if you want to do what they're proposing to do here, you're in the wrong place before the wrong committee with the wrong proposal. Revenues from ANWR are not provided for in this budget resolution, they're not precluded in this resolution. The Budget Committee does not have the jurisdiction, as my good friend, Mr. Ryan, knows to tell the Ways and Means Committee or any other committee that has the power to produce revenues exactly how to do it. We simply tell them how much, not by what policy. We don't make policy prescriptions as to revenues in our committee. We simply tell the Budget Committee, the Ways and Means Committee, or the other committees that have the capacity to raise revenues or offsetting receipts, or what we have here called negative budget authority. In addition, if you read the cryptic language of this resolution, you will find it doesn't mention oil, or ANWR either, anywhere in it. You have to make some mighty extrapolations to get to the conclusion that this is talking about ANWR drilling and ANWR oil. It simply says we should issue instructions to increase negative budget authority, which could apply, in my estimation, to selling parkland, selling other assets of the United States which would be negative budget authority just like the revenues coming from a lease for drilling in ANWR. In any event, this is a red herring when it comes to the resolution before us. It has nothing to do with our budget resolution. Our budget resolution should be looked upon on its own four legs, and let it stand or fall on those merits. I think we've got a budget resolution. As I also said at the outset, we come to balance by the year 2012. And along the way we accumulate less debt than the President's budget. We limit spending in a reasonable fashion, but we provide more for education, more for the environment, more for energy, more for science and innovation than the President's budget. We protect the income tax cuts for middle-income Americans, we provide tax relief from the AMT for middle-income Americans, for whom it was never intended. This is a good budget outline for our country and will move us over time, if we adhere to it--and we do adhere to the PAYGO rule throughout the resolution--if we further adhere to it, it will move us to a balanced budget within the foreseeable future. Therefore, we do not have to vote for this motion to instruct conferees. It's not necessary. We need to go to conference and come back next week with a conference report that we can put to work so the House can get on with its business. Mr. Speaker, I yield back the balance of my time.

Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentlewoman from Florida (Ms. Wasserman Schultz).

Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from California (Mr. Becerra).

Mr. SPRATT. I yield 2\1/2\ minutes to the gentleman from West Virginia (Mr. Rahall), the chairman of the Resources Committee.

Mr. SPRATT. I yield the gentleman 1 additional minute.

Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from Michigan (Mr. Stupak).

Mr. SPRATT. I yield the gentleman 1 additional minute.

Mr. SPRATT. Mr. Speaker, I yield 3 minutes to the gentleman from Illinois (Mr. Emanuel).

Mr. SPRATT. Mr. Speaker, I yield 2 minutes to the gentleman from Oregon (Mr. DeFazio).

Mr. SPRATT

Mr. SPRATT. Will the gentleman yield?

Mr. SPRATT. I thank the gentleman for yielding. Mr. Speaker, more than a year ago, in meetings with Chairman Peterson and the Ag Committee staff, the Budget Committee made it clear that the new farm bill had to stay within the CBO baseline for the current farm bill. Policies could be added or altered, but the aggregate cost could not exceed CBO's current baseline. We based that position on the so- called ``pay-as-you-go'' rule. Pay-as-you-go requires that any new legislation, in the form of mandatory spending, be fully offset, that it not exceed the current baseline. In this instance, with the new farm bill, which about to come from conference, it appears that the farm bill will be complied with the fiscal year 2007 baseline but perhaps not fully complied with the fiscal year 2008 baseline. I have not seen the numbers yet. CBO produces many baselines, and for a time the House PAYGO rule was ambiguous about the proper time for switching to a newer, updated baseline. Over time the House Budget Committee, in consultation with the Parliamentarian, came to an agreement to use longstanding scoring principles. These principles or guidelines allowed the Budget Committee discretion so that we could choose the appropriate baseline. This principle evolved over many years as a rule of practicality. It was founded on the rationale that we should not change the rules in the middle of the game or the middle of the legislative process or, in this case, in the middle of a complex conference. This rule was applied in 1996 to the farm bill passed then and again in 2002 to the farm bill which was passed then. Once again, the underlying idea is to avoid changing the rules in the middle of a contested process that is complex and protracted enough already. The House PAYGO rule, the rule which we adopted in January of 2007, does set a limit to it. It does say that the latest baseline can and should be used until such time as the Budget Committee reports a budget resolution. The Senate has a different rule. The Senate PAYGO rule also sets a limit. It proposes that the last baseline be used until a conference report on the budget is adopted. So there is a significant disagreement in the position between the two rules in the two bodies. As part of the resolution of all the differences in the conference, this too has to be resolved. Much of the farm bill about to come before us was hammered out in 2007. The bill passed the House and passed the Senate and the conferees on all sides believed that the final package would emerge certainly no later than March of this year. The Budget Committee determined and informed the conferees that any farm bill would have to be scored against the FY07 baseline up until the Budget Committee reported a budget resolution for fiscal year 2009. The budget resolution was passed on March 7. Our committee staff informed the conferees that the baseline for measuring compliance with PAYGO would now be the fiscal year 08 baseline. In rendering that advice, we didn't resolve or really consider the pertinent problem. As I said earlier, the rules require that the conferees use the March 07 baseline until the Senate adopts the conference report on the budget for fiscal year 2009. This makes sense because then you will have something done definitively by concurrent budget resolution passed in both Houses. And the purpose of a conference is to resolve disagreements between the two Houses. Here, we have such a disagreement, as I said earlier. Either we use the FY07 baseline or we use the FY08 baseline. We can't use base because there is a significant difference between the two. It seems fair and reasonable to me to use the FY07 baseline since so much of this conference agreement was written with the FY07 baseline as the yardstick, and to revert to FY08 would require more protracted negotiations and maybe no conference report at all. I have to say to you I could argue you this either way. But I believe on balance that this is a good application, a proper allocation of the baseline rule, and certainly the rule of practicality in this instance.

Mr. SPRATT

Mr. SPRATT. Mr. Chairman, I demand a recorded vote.

Mr SPRATT

Mr SPRATT. Mr. Chairman, I yield 1 minute to the gentlewoman from California (Ms. Pelosi), the Speaker of the House of Representatives.

Mr. SPRATT

Mr. SPRATT. Mr. Chairman, I rise in opposition to the substitute.

Mr. SPRATT. Mr. Chairman, I yield myself 6\1/2\ minutes. Mr. Chairman, I think it bears remembering that 8 short years ago the budget of this government was $236 billion in surplus. Since 2001, we have experienced, on the watch of this administration, the largest deficits, nominal deficits, in American history, and an accumulation of debt that's enough to blow the mind. The debt of this country was $5.7 trillion when Mr. Bush came to office. When he leaves office, it will be $10 trillion. So that explains why we are skeptical, if you will, and even more skeptical and dubious when we look at the substitute resolution that has been brought to the floor, about which the leader barely spoke until he got to the very end of his presentation a few minutes ago. To find the real numbers in this resolution, the leader said that this is addressed to deal with a spending problem, not a revenue problem. So as we look through the spending side of the resolution, we have to go all the way to an obscure account called function 920 Allowances to find where the real action is. Now, this function is typically an allowance function where we have things we haven't decided how to assign yet and put into allowances because we know it is a catch-all account until some decision is made as to how to treat it. Typically, therefore, you find smaller amounts in this account; but in this particular case, in this particular resolution, $817 billion in additional cuts are called for. If you look at the Republican resolution, initially it seems to be providing current services for just about every function. But then you get to function 920 and you see that what has been provided is taken back. And when you ask where these cuts are distributed, who bears the brunt of $817 billion in cuts over a 5-year period of time, there is no real answer because they're unallocated. We've heard them say they've added a billion dollars to veterans health care; but once they begin allocating the $817 billion, that billion dollars is likely to be wiped out. The same can happen to defense and nondefense programs. We can't say, because $817 billion is left unresolved tucked away in this account called function 920. This is the first black hole in this budget. This budget then goes on. You can do a little arithmetic and figure out that $405 billion is assigned to cuts in domestic discretionary spending, $417 billion is assigned to mandatory cuts. Mandatory cuts are entitlement programs like Social Security, Medicare and Medicaid; and if you look at the accounts here, you will find that basically it appears that the Ways and Means Committee is being directed to save $253 billion, is presumably out of Medicare; the Energy and Commerce Committee is being asked, told, directed to save that $116 billion out of Medicaid. These are not just small cuts, minor adjustments that you would normally find in function 920. These are emasculating cuts for programs that are critically important. Then when we come to the reconciliation provisions, we find that the Republicans' substitute anticipates at least another $1.1 trillion in tax reduction. How that's allocated, we can't tell for sure; but the tax cuts have to be reconciled against the mandatory spending cuts. When you do that, what we find is the tax cuts equal $1.1 trillion; the mandatory spending cuts equal $412 as a $739 billion addition to the deficit. It worsens the deficit rather than improving the deficit. That's the second black hole in this particular budget. Reconciliation actually works as a problem instead of improves it. We know that the other side intends to repeal the alternative minimum tax after 3 years. We know also that they intend to extend the tax cuts that were enacted in 2001 and 2003. The total of these would come to $2.5 trillion easily over a period of 5 to 10 years; and if that's the case, the third hole, the third hole that this resolution leaves is a big hole in the bottom of the budget. So what we've got here is work that is not really a completed product. It is not a finished product because function 920 leaves $817 billion still to be distributed, still to be determined. By whom? Apparently by the appropriators or someone like this, but not today on the floor. When you vote for this today, it has tremendous consequences. Let me just offer one illustration of what the consequence might be. After the cuts in Medicare and Medicaid, which are truly sizable, they are starkly large, there is a cut called for of $115 billion in savings by the Education and Labor Committee. Now, where would the Education and Labor Committee go to get such cuts? They would go to student loans. We have just done something phenomenal. In last year's budget, we were able to make some rearrangements and reduce the interest rate over time and subsidize student loans from 6.8 percent to 3.4 percent. A phenomenal accomplishment. This indicates that the reduction in interest would be abolished, reversed, as one way of achieving that direction to save $115 billion. We just passed a College Cost Reduction and Access Act. One of the things it did would take Pell Grants up to $5,400 over time. That, too, would have to be repealed in order to meet $115 billion. So watch out for the black holes. Watch out for the things that won't easily appear as you read the language here. If anyone votes for this, we are voting, in effect, in my opinion, to go back to where we were over the last 7 years in a period of endless deficits and mountainous debts. This is not the way to go. This is not good work. This is not a finished product, and we should not support this as an amendment to the base bill. I reserve the balance of my time.

Mr. SPRATT. Mr. Chairman, I yield 4 minutes to the gentleman from New Jersey (Mr. Andrews). (Mr. ANDREWS asked and was given permission to revise and extend his remarks.)

Mr. SPRATT. Mr. Chairman, I yield 2 minutes to the gentleman from Illinois (Mr. Emanuel).

Mr. SPRATT. Mr. Chairman, I yield 5 minutes to the gentleman from Virginia (Mr. Scott).

Mr. SPRATT. Mr. Chairman, I yield 2 minutes to the gentleman from Virginia (Mr. Scott).

Mr. SPRATT. Mr. Chairman, I yield 1 minute to the majority leader of the House, Mr. Hoyer, the gentleman from Maryland.

Mr. SPRATT. Mr. Chairman, I yield myself 4 minutes. We have heard throughout this debate the charge repeatedly that we are raising taxes by as much as any tax increase since the history of time. The charge won't really bear itself out. But let me just turn to third parties. Don't take it from me, let me turn to third parties who have a tremendous interest in the Federal budget and in the deficit in particular. None is more respected or more truly nonpartisan than the Concord Coalition, and here is what the Concord Coalition says: ``Allowing some of the tax cuts to expire would not be the result of Congress' raising taxes. It would be the result of sunsets that were included when those tax cuts were originally enacted to avoid the level of fiscal scrutiny that PAYGO is designed to ensure.'' Now, I have a chart here which is a replica of our famous eye chart to test your visual acuity. I am not sure whether you can see it, but the bottom line is instructive. We will reach surplus, starting from a CBO baseline, our budget will take us to surplus by the year 2012. That surplus will continue throughout time, 2012, 2013. And if you total that surplus up between 2012 and 2018, the total amount you get is $1.4 trillion. Out of that $1.4 trillion in surpluses, a lot of money can be derived if we so choose to offset tax cuts. And toward that end, we have pledged ourselves as specifically and explicitly as we possibly can in the budget resolution before you in commitment to the middle-income tax relief. And anyone who has any doubt of this should come and read this paragraph in our budget resolution itself, not in the report, it is in the budget resolution itself, which says the following: ``It is the policy of this resolution to minimize the fiscal burdens on middle-income families and children and grandchildren, to provide immediate relief for tens of millions of middle-income families who would otherwise be subject to the AMT, the alternative minimum tax,'' and, by the way, we provide a 1-year patch. Talk about tax cuts, we have got a tax cut, and it is offset in our bill. To extend the child tax credit we commit ourselves; to extend the marriage penalty relief, we commit ourselves; to eliminate estate taxes on all but a small fraction of estates, we are committed to that; to extend the research and experimentation tax credit, we are committed to that; to extend the deduction for State and local sales taxes; to extend the deduction for small business expenses; to enact a tax credit for schools. This resolution assumes that the cost of enacting these policies is offset by reforms within the Internal Revenue Code that promote a fairer distribution of taxes across families and generations and economic efficiency and higher rates of tax compliance. And we put money in the bill for program integrity, for the IRS to bear down and try to close the tax gap. When you take what we can reap from doing that, it may not be as great as it would seem since the tax gap is estimated to be $500 billion, when you add to that the $1.4 trillion in surpluses per our projection of our budget, you have a lot to work with, not just for tax relief, but for other things as well. Debt retirement, the retirement of the baby boomers, all of these things will be demanding. That is why we put this decision off until a later time. It is not pressing now. It doesn't have to be committed to now. The tax cuts don't expire until December 31, 2010. In the interim, nobody's taxes are going up because of what is done here on the House floor today, and nobody's taxes are going down, because it doesn't work that way. Over time, we think that we have got a partial solution here. If we can simply adhere to the budget that we are proposing in House Concurrent Resolution 312, we believe that we can produce surpluses along this bottom line, a substantial portion of which can be used to offset tax cuts. Mr. Chairman, I reserve the balance of my time.