John Spratt

Mr. SPRATT

Mr. SPRATT. Mr. Speaker, I believe the correct number is $984 billion over the next 12 months. And under rule 27, if it applied, the debt increase would go up every year, staircase for the next 10 years, and the public debt subject to statutory limitation would increase from just over $5 billion to a bit over $11 trillion in 10 years, if the fiscal policies implemented by this rule are actually passed and carried out.

Mr. SPRATT

Mr. SPRATT. Mr. Speaker, I yield 1 minute to the gentleman from Georgia (Mr. Bishop).

Mr. SPRATT. Mr. Speaker, I yield 1 minute to the gentleman from Massachusetts (Mr. Markey).

Mr. SPRATT. Mr. Speaker, I yield 1 minute to the gentleman from Texas (Mr. Stenholm) to straighten out the Blue Dog budget.

Mr. SPRATT. Mr. Speaker, I yield 1 minute to the gentleman from Washington (Mr. Inslee). (Mr. INSLEE asked and was given permission to revise and extend his remarks.)

Mr. SPRATT. Mr. Speaker, let me put this budget in context. Two years ago we all hailed a projected $5.6 trillion surplus, and our colleagues on the other side of the aisle bet the budget on that surplus, that blue-sky forecast. Two years later when the Office of Management and Budget sent us the budget for the next year, they acknowledged that was a vastly overstated estimate and that the surplus between 2002 and 2011 correctly estimated, accounting for the economy as we now see it, it is not $5.6 trillion, it is, according to the Office of Management and Budget, $2.4 trillion, and all of that has been committed. Now, there is a serious consequence that flows from that finding. It is simply this: Everything that is done in the way of tax reduction or spending increases over and above current services goes straight to the bottom line. There is no surplus anymore to mitigate or cushion it. It goes straight to the bottom line and adds to the deficit. Knowing this, knowing this, what do our Republican colleagues do? They call for $1.2 trillion in additional tax reduction, plus some big increases in defense and international affairs. What is the result? The result is that this year the deficit will be $347 billion. We will set a record. Back out Social Security, and the deficit is $512 billion. Next year, in 2004, as a result of the policy choices about to be made in this budget resolution, the deficit will go to $385 billion. On-budget, excluding Social Security, it will be $558 billion. Over the next 10 years, let me say it again, and, let me remind everybody, I am reading straight from your script, this is your budget, these are your numbers, over the next 10 years we will accumulate on- budget deficits of $4,006,130,000,000, your number. The national debt, which today is $6.4 trillion, will increase over the next year by $984 billion. If you vote for this budget resolution, that is a direct consequence of it, using your arithmetic. Over the next 10 years, listen to this, the national debt ceiling will have to go to $12,040,000,000,000; from $6.4 trillion to 12,040,000,000,000 as a direct consequence of this budget resolution, according to your numbers. You say we can grow out of it. We have to get this economy on its feet. Goodness knows, I agree, this wobbly economy needs help. But let me tell you, the underlying forecast upon which these numbers are based assumes that the economy will grow at 3.6 percent next year, real growth over and above inflation, and 3.2 percent over the next 10 years. You have held out the prospect of dynamic scoring, saying these tax cuts could boost the economy and sort of replenish the revenues that they will be otherwise cutting out of the Treasury. CBO undertook to dynamically underscore the budget, and, guess what? Using nine economic models, in five out of nine, the deficit actually increases as a results of these tax cuts. You say we have got to have spending cuts. Well, you have got them in this bill. This resolution would take domestic discretionary spending down by $168 billion below current services over the next 10 years. As for the other spending cuts, if that is what you say the prescription is and ought to be, where are they? Why not put them in your budget resolution? What we have got here is a recipe for disaster, and I cannot overemphasize the results of this budget resolution using your own numbers. It takes us down a path of endless deficits and deeper and deeper into debt, so deep that this problem becomes almost intractable. For those of us who were here in the 1980s and knew how long and hard and difficult it was to turn the budget around and put it into surplus again, we have an awfully forlorn, sinking feeling as we look at this budget, because we do not think, if you pass this budget resolution tonight, that we will be able to turn it around for a long time to come.

Mr. SPRATT. Mr. Speaker, I yield myself such time as I may consume to respond to the gentleman. First of all, when the budget resolution before us now left the committee, it provided for $30 billion in Veterans Administration cuts, as the gentleman well knows. Let me have the time. Thirty billion dollars. It was reduced to $28 billion when it left the floor. When it comes out of conference and comes to us tonight, it is $6.2 billion less than current services over the next 10 years. And I say to the gentleman from New Jersey that this is $8.2 billion lower than the amount that our budget resolution provided when we had it on the floor and offered it as an alternative, $8.2 billion lower in this resolution today, and $6.2 billion below current services. This is a cut. Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. Hoyer). (Mr. HOYER asked and was given permission to revise and extend his remarks.)

Mr. SPRATT. Mr. Speaker, I yield myself such time as I may consume to respond that if my colleague will read closely, she will see that there is a function called function 920, and in it she will see $128 billion in undistributed cuts. So all of these adds, all of these gains she is talking about, could very well be wiped out, and probably will be, once those cuts are distributed. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Texas (Mr. Turner).

Mr. SPRATT. Mr. Speaker, I yield 30 seconds to the gentleman from Texas (Mr. Stenholm) so he can set the record straight with respect to the Blue Dog budget, and I do not have enough time to correct all of that economic fiction.

Mr. SPRATT. Mr. Speaker, I yield 30 seconds to the gentlewoman from Oregon (Ms. Hooley).

Mr. SPRATT

Mr. SPRATT. I yield to the gentlewoman from Texas.

Mr. SPRATT. Mr. Speaker, I yield to the gentlewoman from California (Mrs. Capps).

Mr. SPRATT. Mr. Speaker, I yield to the gentleman from Washington (Mr. Baird).

Mr. SPRATT. Mr. Speaker, I thank the gentleman, and yield to the gentleman from Texas (Mr. Stenholm).

Mr. SPRATT. Mr. Speaker, I yield to the gentleman from Virginia (Mr. Scott).

Mr. SPRATT. There are deep cuts that have been made in veterans programs on both sides, mandatory entitlement programs and the veterans health care service, which is discretionary. We fund it every year in appropriations bills. By the way, we are talking about just getting them just up to the level the President provided. We actually provided more in our budget resolution. We have up to the level of current services, so there would not be any loss in purchasing power.

Mr. SPRATT. I thank the gentleman from Virginia.

Mr. SPRATT. Mr. Speaker, I yield to the gentlewoman from Wisconsin (Ms. Baldwin).

Mr. SPRATT. I yield to the gentlewoman from Oregon.

Mr. SPRATT. That is exactly the point. They claim they were actually allowing the veterans budget to increase. And in nominal terms it does go up. But of course a dollar today will not buy the same thing as a dollar tomorrow, number one. Number two, in all events if you want some sort of benchmark to determine how much their cut was, we used the President's request. And what we were saying is that they were cutting the budget first $30 billion below the President's request, and then they modified that a bit and reduced it to $28.6 billion. But they left it in that position until we had our motion to instruct here on the House floor. Now, we all know how much regard those motions to instruct get when there is a conference, particularly a conference like the one going on now. We do not go to those conference meetings. We had a big photo-op at the beginning, where everybody got to make a passionate statement and pound the table. But it is the last time we will see the budget conference report making these critical decisions until it comes here on the House floor to be voted upon. That, of course, is a time when everybody can take assessment of it; and if it does not do right by veterans and education, then, by golly, if we are true to what we said in the motion to instruct, we should vote it down.

Mr. SPRATT. Mr. Speaker, I thank the distinguished gentleman, and I wish to yield now to the gentleman from Washington (Mr. Baird) to talk about Medicare and Medicaid, which if anything serve even more people than veterans programs and involve even deeper cuts.

Mr. SPRATT. Madam Speaker, I would like to open up by saying when the President sent us his budget this year the Office of Management and Budget, OMB, acknowledged that the surplus of the $5.6 trillion which we all hailed 2 years ago is gone. It has vanished. In fact, OMB now says there never was such a surplus when they, the Office of Management and Budget, adjust the surplus to account for the economy as they see it now. The 10-year surplus is no longer $5.6 trillion. It is $2.4 trillion. And all of that $2.4 trillion has been committed, or I should say overcommitted, by policy action to the tune of $129 billion. That is what we would incur if we did not do anything else, mostly due to the tax cuts passed in June of 2001. So any additional tax cuts and any additional spending beyond current services will go straight to the bottom line. There is no surplus anymore to mitigate or cushion or offset that deficit. It goes straight to the bottom line and adds dollar to dollar to the deficit. The arithmetic is simple. Knowing that, the President of the United States nevertheless proposes $2 trillion in additional policy actions, legislative actions here, mostly, once again, in new tax cuts that will add $2 trillion to our national debt over the next 10 years. Now, when the Congress Budget Office sent us their analysis of the President's budget as they are required by law to do, they saw deficits out as far as they forecast. As a matter of fact, when you back out Social Security as I think you should because I do not think we should be spending Social Security, and everybody on this House floor who was here just a couple of years ago foreswore the practice of ever again spending the Social Security surpluses, so when you back it out and look at what CBO portrays and depicts the President's budget to produce, you will see that over the next 10 years they forecast deficits, without a Social Security surplus to offset them, deficits of $400 billion at least every year for the next 10 years. So when you remove the Social Security surplus from the equation, the accumulation of deficits is $4 trillion over the next 10 years. As a consequence of this budget that the President sent up here, in a way both Houses repudiated the President's budget. Both Senate Republicans and House Republicans rejected what the President sent. When the House Republicans saw the President's budget, they warmly embraced his tax cuts. They were ready for another round of tax cuts, despite our experience with the last round; but they at least acknowledged the responsibility to go find some offsets, some spending offsets that would help mitigate, reduce, cushion the impact of these huge tax cuts. The President was seeking another $1.4 trillion in tax cuts as much again this year as he did back in 2001. They went back looking for some offsets; and they came up with $470 billion in what we call, in budget parlance, reconciliation tax cuts. These are reconciliation spending cuts. These are directives to the committees of jurisdiction that write legislation that deal with Medicare and Medicaid and school lunches, a whole array of entitlement programs, to go change that permanent law so that they can save a certain sum of money by a certain date. In this case, as I said, the total of all those reconciliation instructions came to $470 billion. Our Republican colleagues wanted to cut Medicare over the next 10 years by $262 billion, Medicaid by $110 billion, veterans by $15 billion on the mandatory side, the entitlement side and 15 more on the veterans health care side, education by $9.4 billion on the mandatory side. That would have to come out of school lunches and student loans, government pensions $40 billion, the railroad retirement program, a vested benefit if there ever was one, $3.7 billion. Well, those offsets had a short shelf life. They survived attack in the Committee on the Budget. They all voted for it on the Republican side of the committee; but during the markup, the chairmen of these different committees who were about to be the object of these reconciliation instructions came forth and they said, you have got to give us some relief. We cannot do it. So the number was cut from $470 billion to $265 billion. Then when we got ready to go to conference, we came out here with a motion to instruct the conferees. And what we said is, even though you have cut this number from $470 billion in Medicare and Medicaid and education and veterans cuts, even though you shaved this somewhat, you are still taking $107 billion out of the Medicaid program in all likelihood. You could wipe out the children's health insurance program with the budget in the form you have got it right now. So we said let us have a vote of the whole House on these and see if this really is the sentiment of the House. And guess what? By all of 300-and-some-odd votes, 22 nays, we said we do not want to cut Medicare and Medicaid and these other programs, education, veterans, by this amount. The Senate took a totally different tact, but they likewise repudiated the President's budget. The President in effect wants another $1.4 trillion dollars in tax cuts this year even though they all go straight into the deficit and swell the deficit. So the Senate said, no, the first half of your tax cuts, Mr. President, which would make the tax cuts you did in June of 2001 permanent, right now they expire on December 31, 2010, rather than make that permanent now, we will put them on the back burner. We will come back to that one. That will take at least $650 billion out of the tax package. And as for the rest, they said, let us cut it about in half. So they shaved it to $350 billion. So the House rejected the President's budget request by seeking to offset it and failed. The Senate rejected it by coming up with a much, much smaller tax cut; but we have still got tax cuts looming. You have still got the problem of sunset of the 2001 tax cuts. You have still got something call the alternative minimum tax which 30 million tax payers will confront over the next 10 years, and it will have to be adjusted. There is no question about it. These two actions alone, making permanent the 2001 tax cuts and adjusting the alternative minimum tax, could take another 1 trillion, $1.3 trillion out of revenues over the next 10 years and make resolution of the deficit all but impossible. So here we are talking tonight because this is a serious problem; and it has received very, very little attention. We want to call it to the attention of both Houses because, as we see it, we are positioned right now between two fatally flawed alternatives. The House and Senate resolutions, the one that passed the House and the one that passed the Senate, framed the conference such that there is no responsible way out. Both resolutions lead to large intractable deficits: $2 trillion in additional deficits if you back out Social Security, $4 trillion if you back out Social Security. And both lack any plan or process for wiping these deficits out. This was not necessary, Madam Speaker. That is the first point to make. All of this pain, all of this confusion, all of this deviation from the straight and narrow path of fiscal responsibility we were following just a couple of years ago could have been avoided if we simply recognized that we could have tax reduction, but not the massive tax reduction that was passed in 2001 or that the President would have us pass again. All of these cuts in Medicare and Medicaid and veterans and education would not be necessary but for these tax cuts. They are made necessary to make room for the tax cut. If you simply left the budget alone and let current services be provided at the current level and left the tax cut alone, by the year 2008 the budget would be in unified balance including Social Security. Instead, under the budget alternatives we have now, we have the equally unpalatable choices of a budget that we hope gets to balance in the year 2012, that is so far out hardly anybody can validate it, or maybe 2013. That is how bad a situation we find ourselves in because we have not faced reality. And we offered an alternative here on the House floor. The Democratic resolution would have adequately provided for education, would have provided $528 billion for Medicare prescription drug benefit, and would have provided some tax cuts. We wanted to put some money in the pockets of American consumers likely to spend it to give this economy a boost, a jump. We wanted to give some money to businesses to encourage them to invest, some tax cuts to businesses to encourage them to invest. We had tax cuts too, just not as massive as those included in the President's proposal. And we got to balance in the year 2010. We accumulated a trillion dollars less debt than the Republicans. We had a budget that was commendable. It was rejected. But we have not given up, and that is why we are here tonight. To begin, we want to talk about veterans benefits, not the biggest item in the budget; but I would say one of the most important. If there is any promise we should keep, particularly in a time of war, it is the promises we made to our veterans. And those promises, under the two budget resolutions, one passed by the House, House Republicans, the other passed by the Senate, are in jeopardy. Madam Speaker, I yield to the gentleman from North Carolina (Mr. Price).

Mr. SPRATT

Mr. SPRATT. Mr. Chairman, $74.7 billion seems sufficient to wage war for quite some time, but when it is broken down, there is less than meets the eye. Of the $74.7 billion, $62.6 billion goes to DoD. Of the $62.6 billion allocated to DoD, $30.3 billion goes to cover ``sunk cost,'' which the supplemental calls ``coercive diplomacy.'' Of the remaining $32.3 billion: $13.1 billion is allocated for a ``short, extremely intense period of combat operations''; $12 billion is allocated for post-war ``mopping up'' and phasing the combat force into an occupation force; $7.2 billion is allocated for redeployment, replenishment of munitions, and repair of weapon systems. Of the $7.2 billion, about $1.1 billion goes to Iraq's reconstruction. In addition, $7.8 billion is allocated out of the $74.7 billion for aid and humanitarian assistance to Israel and Jordan and other nations as well as post-war Iraq. Out of this $7.8 billion, some $2.4 billion is identified for reconstruction and humanitarian aid to Iraq. Added to the $1.1 billion, this makes aid to post-war Iraq equal to about $3.5 billion. One must conclude, therefore, that this supplemental is probably a first installment on the cost of this war. The supplemental will not cover (1) the cost of combat lasting more than 2-3 months, (2) the cost of prolonged occupation by a sizeable force, or (3) our likely share of the post-war reconstruction and humanitarian aid.

Mr. SPRATT

Mr. SPRATT. Mr. Speaker, I believe we have the right to close.

Mr. SPRATT

Mr. SPRATT. Mr. Speaker, I commend both sides for the bipartisan effort they have made here to restore a proud, proud tradition. I am just old enough to remember the Gold Star and Blue Star Banners. I am a war baby born in 1942. But I still have a dim recollection of that and a warm feeling of the pride that those who displayed these banners had, to let all the community know that they had a loved one who was serving abroad or serving in service at some place in time. I spent this past weekend, Sunday afternoon, in the little town of Jefferson, South Carolina, where we had a memorial service for a staff sergeant in the Air Force, Jason Higgs, whose helicopter was on a rescue mission to pick up two Afghan girls, both of whom were in need of medical care, to bring them back and have them attended to by Air Force doctors. He did not make it back. The next day they sent for the girls, they had their surgery, that was successful. Sunday afternoon we laid him to rest. All over America there are countless stories like this, about these folks who are laying their lives on the line for us and our freedom. This is a wonderful tradition to restore, and I wholeheartedly support this legislation.