John Spratt

Mr. SPRATT

Mr. SPRATT. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Wisconsin (Mr. Kind).

Mr. SPRATT. Mr. Chairman, I yield 3 minutes to the gentlewoman from California (Mrs. Capps).

Mr. SPRATT. Mr. Chairman, I yield myself 7 minutes. Mr. Chairman, my colleague calls this a wartime budget, but everyone should understand there is nothing in this budget to pay for the war in Iraq that is now underway. There is not even anything in this budget to pay for the war against global terrorism which is being waged in places like Afghanistan. The administration deliberately omitted any provision for those costs in this budget for various reasons. They claim that they could not estimate accurately what those costs are likely to be, but we all know that there will be what we call in this House a supplemental appropriation coming, and it will run into billions of dollars, maybe 50- to $100 billion for the war in Iraq itself, and after that the postwar occupation will cost, the CBO says, between $1.8 billion a month and $3.8 billion a month. We have a huge, huge cost item that is not included here. I say that because everyone should understand that there is no surplus left in this budget. My friends, proposing a tax cut now that is as large as the last tax cut we undertook in 2001 will only drive the bottom line of the budget deeper and deeper by the proposals they have made here. Two years ago, we had the happy circumstance of a budget that was $5.6 trillion in surplus, or so we were told by our forecasters at the Office of Management and Budget in the Bush administration. Two years later, we open this budget season on a somber note, not just being at war, that is a grave situation, but that $5.6 trillion surplus, according to the Office of Management and Budget, is gone. First of all, they said we overstated the surplus by at least $3.2 billion. The real surplus was not $5.6. We are now told it is about $2.4 trillion over the time period 2002 through 2011. Of that $2.4 trillion, OMB tells us $2.5 trillion has already been committed, mostly to tax cuts undertaken in 2001, and, to some extent, to defense spending increases and other spending increases. But, in any event, the surplus is gone. We are actually in deficit as we stand here, and everybody is on notice that every dollar of additional tax reduction that you decree in this budget resolution will go straight to the bottom line. It will go straight into the deficit and add to the deficit, dollar for dollar. Knowing this, there is no way around it. What our Republican colleagues propose is they propose another $1.35 trillion in tax reductions, tax cuts, which will go straight to the bottom line and add to the deficit. Here is the situation: This is the first table in CBO's analysis of a couple of weeks ago of the President's budget, which was sent to us about a month ago. Strikingly, if you add from 2002, the first fiscal year that the Bush administration was in office, through 2013, which is the last year in our 10-year budget time frame, the total amount of deficits that the Bush administration's fiscal policies will yield is $5.158 trillion. That is what they propose to add to this national debt under the Bush administration. Now, my Republican colleagues, and I will give them part credit, saw this number, and I think they could not stomach it themselves, $5.158 billion under the Bush administration's fiscal policies. They undertook to provide some offsets. They did not give up the tax cut. No, they went with the full tax cut, or slightly less, but they undertook to come up with some offsets. The first thing they proposed to do was to tell the Committee on Ways and Means, which has jurisdiction over Medicare, and the Committee on Energy and Commerce, which has jurisdiction over Medicaid, cut $372 billion out of those two programs. They have now relented and backed off their own proposal. They reduced the instruction to the Committee on Ways and Means from $262 billion to about $62 billion, and they have reduced the instruction to the Committee on Energy and Commerce from $110 billion to $107 billion. But both of those cuts could come out of the two health care entitlements that we have in this country that so many people, maybe from 50- to 60 million to 80- to 90 million people, are dependent on. That is what they propose to do. This budget says a lot about priorities. What happens with the rest of the budget in order to make room for this tax cut? In saying it is a wartime budget, they attempt to make room in the rest of the budget, at least partially, to offset this enormous tax cut of $1.350 trillion. What does that mean? That means they cut with abandon, left and right. They cut our young, our children, in terms of education; they cut our seniors in terms of Medicare and Medicaid; and they cut some of the most worthy citizens in our society, the sick and disabled veterans. They put an instruction in this budget, which I cannot believe, and neither can any veterans' organization in America, to cut $15 billion out of veterans' disability compensation and some $12 billion to $13 billion out of veterans' health care facilities. They cut education by $40 billion below what is necessary just to keep it level with inflation. They cut Medicaid, as I said. All of this is necessary to accommodate their tax cut. It is not necessary because of the budget circumstances we find ourselves in. This is self-inflicted pain. Yes, it will be painful if these cults are made, you had better believe it, but they are not necessary. You do not have to make them. To prove it we have come up with a budget resolution about a better bottom line. We get to a surplus in the year 2010. It takes them until 2012 to get to a surplus. In the process of getting there, we have a lower deficit every year than they do, we accumulate $851 billion over 10 years less in national debt than they do, and we adequately provide for education. We do not eviscerate Medicare, we do not cut Medicaid, because it is already strained as it is, and we certainly do not cut our veterans in a time of war, or any time, for that matter, by $30 billion in just mindless cuts. So there is an alternate way. There is a better budget. It is a fiscally more responsible budget, and it meets the obligations we have. Members of this House today have a stark choice, a clear choice, in terms of values, in terms of fiscal responsibility. The right vote is our budget resolution.

Mr. SPRATT. Mr. Chairman, I yield 2 minutes to the gentlewoman from Oregon (Ms. Hooley).

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

Mr. SPRATT. Mr. Chairman, I yield 3 minutes to the gentlewoman from Wisconsin (Ms. Baldwin).

Mr. SPRATT. Mr. Chairman, I yield 3 minutes to the gentleman from Minnesota (Mr. Oberstar).

Mr. SPRATT. Mr. Chairman, I yield 3 minutes to the gentleman from North Carolina (Mr. Price). (Mr. PRICE of North Carolina asked and was given permission to revise and extend his remarks.)

Mr. SPRATT. Mr. Chairman, I yield myself 1 minute, before yielding to the gentleman from Tennessee (Mr. Ford), to respond to our distinguished chairman, who wants to know where all these cuts we are alleging come from. They come from the budget documents. His budget calls on the Committee on Energy and Commerce, for example, to reduce spending by $107,359,000,000. The only thing they can take that out of is the Medicaid program. He calls on the Committee on Government Reform, which has jurisdiction over the Federal Employees Health Benefits Plan and the Civil Service Retirement Plan, to effect cuts in those programs of $38,319,000,000 to achieve savings. They are there. If you look at function 550 in this budget, which is the health function, if you look at the level of funding, it is $2.4 billion below what is necessary to maintain purchasing power. We say ``current services.'' That has got to come out of some of the organizations like NIH who get their funding from this particular function of the budget. It is there. No question about it. Mr. Chairman, I yield 2 minutes to the gentleman from Tennessee (Mr. Ford).

Mr. SPRATT. Mr. Chairman, I yield myself the balance of my time. Mr. Chairman, let us just go to the bottom line and look at the differences between the two proposals that will be the chief proposals before the House when we vote tonight on the budget resolutions, the Democratic proposal and the Republican proposal. As anyone who can see this chart can easily see, under our budget in every year from 2004, next year, through 2013, the Democratic budget has a lower deficit than the Republican budget, and by a significant margin. What is more, every year our bottom line gets better and better and better, until in the year 2010 we are in unified balance. All accounts included, we have no more deficit by the year 2010. And we do not get there with improbable, unlikely spending cuts of the kind you have heard mentioned on the floor today. We get there with good, solid economics and with complete fairness to things that are important to us. It is a huge difference. But this tells it all: Over that 10-year period of time, the cumulative difference between us and them, between Republicans and Democrats, between our resolution and their resolution, is $913 billion less public debt. So as we move from a deficit to a surplus, we accumulate $913 billion less debt than do the Republicans in their resolution. That is an enormous difference, particularly for anybody who says that deficits matter. We insist that deficits do matter. This administration has taken a different attitude. The Director of Management and Budget says we should not start hyperventilating over all these deficits. We think they matter. We think in the long run they affect the growth of our economy, they affect jobs and things that matter to people, they affect the interest we have to pay on our national debt. This is the difference between us and them. By 2010, we are in balance. It takes them until 2012 to get there. Along the way we accumulate $913 billion less debt. But what is most important is ours is feasible and credible and probable; theirs is infeasible, unlikely, and, to my way of thinking, unbelievable. The Republican budget presents us with two choices: We will either have devastating cuts, in which event they may get to balance in 2012, or those cuts will not be achieved, in which event the deficit itself will have done devastating damage. That is the choice before us, and that is why the Democratic balanced budget resolution is far and away the better choice for everybody in this House.

Mr. SPRATT

Mr. SPRATT. Mr. Speaker, I rise to correct the Record. It was said here that we raise taxes in our budget proposal. The truth of the matter is we open the proposal to reduce taxes to give hard-working Americans a tax rebate of about $60 billion. This time it will go to the millions who did not get it the last time and who are likely to spend it and give this economy a boost. We also provide for expensing of purchases made by small businesses in the year of purchase, and we provide a 50 percent bonus to larger firms. Corporations who make investments in plant equipment this year, 50 percent of it can be written off. That is in our bill. Furthermore, we take, instead of repealing the estate tax in 2011, we provide for the Pomeroy estate tax provision, which gives Americans immediate estate tax relief. That is a $33 billion reduction, too. The only thing we do is freeze the top two brackets, the very highest top brackets. We do not raise them. We simply freeze them in place. They can get the cuts they have gotten today, but until we get the budget back in balance, we would suspend those, but the tax effects, at best, are a wash. We are not raising taxes in our budget resolution.

Mr. SPRATT

Mr. SPRATT. Mr. Speaker, I ask unanimous consent that during consideration of H. Con. Res. 95 pursuant to House Resolution 151, the amendment numbered 4 in House Report 108-44 may be considered as modified by the form that I have placed at the desk.

Mr. SPRATT

Mr. SPRATT. Mr. Chairman, quickly let me commend to the gentleman's reading an excellent piece of work done by the Joint Economic Committee staff called an Economic Policy Brief, and in particular to page 8, because if you will turn here, we will see that the JEC staff have run these same numbers through several established mathematical economic models, including two that are used prominently by the White House. According to these models, the Democratic alternative will add 1.6 percentage points to GDP growth in 2003. The Bush alternative, at six times the cost, would yield 1.1 percent growth. Our proposal would yield or generate 1,122,000 jobs. Theirs, at six times the cost, would generate 600,000 jobs. If you go down to economy.com, you will find the same results. Our proposal generates, according to their model, 1,150,000 jobs for a $138 billion impact this year; theirs, for $726 billion, generates 640,000 jobs.

Mr. SPRATT

Mr. SPRATT. Mr. Chairman, reserving the right to object, and I will not object, I am completely agreeable. That procedure has been our custom and practice in the past. Mr. Chairman, I withdraw my reservation of objection.

Mr. SPRATT. Mr. Chairman, I yield 2 minutes to the gentleman from Maryland (Mr. Cardin).

Mr. SPRATT. Mr. Chairman, I yield myself such time as I may consume. I would simply say that these colloquies we are hearing on the House floor indicate how difficult it is going to be to achieve the kind of reconciliation cuts that have been directed to various committees. We see the committee people coming out here and saying, You are not going to cut this, are you? You are not going to cut that, are you? You are not going to cut government pensions, for goodness sakes. We will correct the procurement system and save $43 billion. That is why I find it hard to take this budget at face value. I am sorry, but that is way I approach it. Mr. Chairman, I yield 2 minutes to the gentlewoman from California (Ms. Millender-McDonald).

Mr. SPRATT. Mr. Chairman, I yield myself such time as I may consume. Before yielding to the gentleman from North Carolina (Mr. Etheridge), let me quote from a letter that was written to Speaker Hastert by the head of the Paralyzed Veterans of America. He said, ``We do not consider payments toward disabled veterans, pensions for the poorest disabled veterans, and GI benefits for soldiers returning from Afghanistan to be waste, fraud, and abuse.'' Mr. Chairman, I yield 3\1/2\ minutes to the gentleman from North Carolina (Mr. Etheridge).

Mr. SPRATT. Mr. Chairman, I thank the gentleman for yielding me this time. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Maine (Mr. Allen).

Mr. SPRATT. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Michigan (Mr. Stupak).

Mr. SPRATT. Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Massachusetts (Mr. Olver).

Mr. SPRATT

Mr. SPRATT. Mr. Speaker, as our previous speakers have said, we stand tonight on the brink of war, the very precipice of war. It may seem untimely to talk about the budget, but it so happens that the budget is the order of business. We are about to go through the annual process of approving the budget resolution, which is the outline of a budget, an exercise that Congress undertakes about this time every year. But to make our position clear with respect to what is happening elsewhere in the world, let me say when it comes to supporting our troops in the field, our men and women in service, we will be unstinting. We will provide them every dime that they need to do their duty and to see that they are fairly compensated, their families are well provided for. We speak tonight about the budget deficit because when we get here on the floor, oftentimes we have the debate broken up in so many small pieces it is hard to see the whole. And it has never been more important for everyone to understand the whole, where we are, the situation, the dire situation that we find ourselves in. We are faced with deficits as far out as our forecasts go, and we have a President's budget before us delivered a few weeks ago that offers no solutions. It only makes the problems worse. This was brought home to me about 10 days ago when I went down to the Congressional Budget Office, which is the neutral nonpartisan budget shop of the Congress. They do good work. And every year by law they are required to give us, within a week or so after the President's budget gets here, their analysis of the President's budget for the forthcoming fiscal year. Friday a week ago they presented us with an interim analysis. I went down for the briefing, and I picked up the book and turned to the first table in it at the back. I looked across the top line. ``On-budget deficits.'' That means deficits not including Social Security. This year the expected deficit is $452 billion if we do not include Social Security. Next year, 2004, it is $512 billion. This is the CBO estimate of the President's budget, the CBO estimate of the President's budget, his policies. In 2005 it is $464 billion. Across the line from 2003 to 2013, that is the time frame of this projection, the deficit is no less than $400 billion if you exclude the surplus in Social Security, and by law we have taken Social Security off budget, and I do not think we should include it anymore than any business or any State includes its pension funds in its budget. I added up everything between 2002, which was the first fiscal year of the Bush administration, and 2013, which was the last year, the last column shown in this budget analysis. The total of the deficits to be incurred in that period comes to $5.138 trillion. Over the next 12 years, over that 12-year period of time, 2002 through 2013, the cumulative sum on budget deficits is $5.138 trillion. I do not know of anybody who thinks we can sustain that course without damaging our economy. When we have huge deficits like this, the government has to go into the capital markets, borrow money, run up the cost of credit. The cost of credit goes up, interest rates go up, stifles growth, costs people who have mortgages and car payments more to make those payments. It will be devastating if we incur deficits of this kind. That is why we are out here tonight and that is the point we are trying to drive home this week as we take up the budget, because we think we are on a path that we simply cannot sustain or support. With deficits like these that are implied by the President's budget policies, this is, after all, what this summary was, a summary of the President's budget, I can understand why my colleagues on the House Committee on the Budget, the ones across the aisle, the Republicans who chair the committee and run the committee, in effect rejected the President's budget and wrote their own. In fact, they provided $714 billion in additional spending cuts over and above what the President had called for in his budget. This is a budget of $2.2 trillion. They are adding at least one-third spending cuts that the President did not seek over and above, well, he sought 100 of those. So they are seeking 641 billion additional spending cuts over and above what the President sought, which is effectively rewriting the budget. So I admire them for trying. I admire them for their honesty in saying this budget is not workable; we cannot adopt it. But when I saw the end product, I thought this is in effect the same, will take us to the same destination, maybe by a different route; but their budget will take us down the same route as the President's budget, deeper and deeper into deficits. Here on this page full of numbers is a summary of their budget, what happens if we adopt the Republican budget, which will be before us tomorrow and the next day and the rest of this week. Reading from their budget documents, the on-budget deficits for 2004 will be $497 billion. That is what happens to the bottom line of the budget if we adopt the budget that the Republicans will present to us this week. The deficit goes to $497.164 billion. The next year is $419 billion. The next year $375 billion. Over this 10-year time frame, and we run our budget numbers out in 10-year time frames so we can see some scope of what we are proposing to do, under their budget policies if they are adopted this week, we will incur over that 10-year period an additional $3.327 trillion in deficits. Here it is. I did not make the numbers up. They are written right here on this piece of paper. Now, how did we get to this dire situation? Believe it or not, in fiscal year 2000, the Government of the United States had a surplus of $236 billion including Social Security. Now we have got a deficit including Social Security of $287 billion. How did we get here? Let me take everybody back in time. When the first President Bush left office, he left behind the largest deficit in our Nation's history. And within 3 weeks of arriving at the White House, President Clinton sent Congress a budget that would cut that deficit by more than half over the next 5 years. It was not popular. It was not painless. It passed this House by one vote. Marjorie Mezvinsky cast that vote right there at that voting machine. I can see her doing it now, and it cost her the next election. But it passed the House. It passed the Senate with Vice President Gore's vote alone breaking a tie-breaker and was signed into law by the President. We were taunted with the charge that this budget would cut the economy off at the knees, mushroom the deficit. Well, within months the economy was up on its feet and running. The deficit was going down every year for 7 straight years, a record; until finally in 1998 for the first time in 30 years, it was in surplus including Social Security and Medicare. The next 2 years we moved all the way to a surplus of $236 billion. When President Bush came to office this was the context. He inherited an advantage that few Presidents in modern times have enjoyed, a budget that was in surplus. The first year he was in office he inherited the Clinton budget. 2001, he had a surplus of nearly $130 billion. President Bush, when he came to office, was told by his Office of Management and Budget that the surplus over the next 10 years would continue to increase, and he could expect a surplus of $5.6 trillion between 2002 and 2011, $5.6 trillion. A huge advantage. But we warned here that that surplus was based on a blue-sky forecast and there was storm clouds gathering over the economy. And we strongly advised our colleagues on the other side of the aisle not to be reckless with their first round of tax cuts, to have modest tax cuts each year to see if these numbers would truly pan out. Well, they enacted large tax cuts anyway, tax cuts large enough to take $1.7 trillion out of the surplus. By July of 2001 the economy had taken another $1.6, $1.7 trillion out of the surplus. As a consequence, when the Congressional Budget Office came back to the Hill, as they are required by law to do, and gave us their mid-session review just before we began to put together, put to bed all the appropriations bills, July 2001, the surplus not including Social Security was down to $575 billion. It was no longer over $3 billion excluding Social Security. It was $575 billion, and that included a surplus in Medicare of around $250 billion. So really we only had a surplus then of $200 to $300 billion. The President, the administration are apt to tell us that the deficit today stems in part from the tragedy of 9-11. There is no question about it. Terrorism has taken a bite out of the budget. It has taken its toll on the economy, but most of the surplus, as those numbers in July 2001 show, most of the surplus was gone before the terrorists hit New York. So this is where we find ourselves as we mark up the budget for fiscal 2004. OMB sent us a chart, I do not have a copy of it here, but I can picture it. It says we began by thinking that we had a surplus of $5.6 trillion. We now acknowledge 2 years later that we overstated that surplus by about $3.2 trillion. The real surplus, they say today, adjusted for the economy as it has turned down, is really over this 10- year period, 2002-2011, about $2.5 trillion, but here is the rub. Congress has enacted policies committing all of this surplus and then some. In fact, if we did not do anything else, we would have a deficit of $129 billion, and this is where we are, with no surplus, so that any additional tax cuts passed by this Congress will go straight to the bottom line. That will be no surplus to offset them. They will add dollar for dollar to the tax cuts. So what does the President recommend? What does the President recommend, knowing that everything he proposes in additional spending over and above the rate of inflation will go straight to the bottom line and swell the deficit, every tax cut will swell the deficit? He proposes, these are his numbers, OMB, $1.993 trillion of new policies, actions, of which $1.6 trillion is a new tax cut. That racks up $2.1 trillion in additional deficits. All of these are OMB numbers. Back in 2001, we could say that one could argue for a tax cut, even a tax cut of $1.6 trillion or $1.7 trillion. They could point to a projected surplus of $5.6 trillion and say there is more than enough here, and we should give some of it back to the American people. The problem is, of course, that surplus never obtained. It has not panned out. But we could excuse, I suppose, that first tax cut on grounds that maybe we were a little too easy, too anxious, too eager to bet the budget and blue sky forecast. Chalk it up to lack of due caution. But today, today, we know there is no surplus, so any additional tax cuts we undertake will add to the deficit directly, and in the long run deficits matter. The administration has tried to come up with some revisionist economics to suggest that deficits do not matter, after years and years of having mainstream economies tell us that they do matter. They matter for several simple reasons. First of all, when the government goes into private capital markets or the country's capital markets and borrows, they simply run up the cost of credit. They increase the demand, and so the product costs more. Credit costs more. When we borrow, we simply say to our children that they pay the bill. We are putting it on our Nation's credit card. When they take over as citizens, they pick up the tab. That is what it comes down to. There is a moral question as well as a fiscal and financial question involved. Deficits do matter, and above all, they raise interest rates, and they stifle growth in the economy, and that hurts everybody, no question about it; hurts the budget, makes it harder to get the budget back on its feet. As we saw when the gentleman from Virginia (Mr. Scott) was up, we can have tax cuts today, but a few years down the road, the interest on the debt that is created by those tax cuts, if we borrow to make up for the revenues that are cut because we do not have sufficient revenues to run the government, we have got more debt; therefore, we have more debt service, more interest to pay, and as a consequence, pretty soon, as citizens, we are all paying a debt tax. We are all paying additional tax to service the national debt, and that is what is happening right here. So our Republican colleagues got the President's budget, and they recognize this path that it led to, as outlined here in the CBO study, was not a sustainable path, and I give them credit for that, and they undertook to offset the cost of the tax cut. That is where I think they made their mistake in assuming this, that these circumstances on the brink of a war, deep in deficit already, warrant another tax cut. Tax cut when we have to go into the open market and borrow for the money that we give up by the tax cut itself? Does not make a lot of sense to me. Nevertheless give them credit. They at least tried to offset part of it, but in trying to offset part of it, they have reached out and hurt more groups and more worthy programs than I have ever seen in any single budget yet. Veterans, everybody's mentioned veterans tonight. I could not believe it when I saw the Republicans' budget and it called for a $15 billion reduction in mandatory spending; that is, entitlement spending for veterans. What kind of entitlement spending do veterans get? They get entitlement spending for veterans' disability compensation, service- connected wounds and injuries, service-connected disabilities. This reconciliation provision that they put in their budget would require us to cut $15 billion out of veterans' disability compensation, and as the gentleman from Wisconsin (Mr. Kind) said, what sort of message is that to send those wonderful young men and women who are serving with such pride and such elan in our forces in the Persian Gulf?

Mr. SPRATT. Typically not. That means they will be added to the total amount of spending. It will go straight to the bottom line, because, as I said, there is no surplus anymore to absorb the amount of money that will be needed, $50-, $100 billion, whatever it may be, and that applies also to the cost of an occupation after the war. The postwar occupation was estimated by the Congressional Budget Office at a cost of $1.8 billion per month to $3.8 billion per month, depending upon the difficulty, the size of the force. We could easily have an occupation force there trying to rebuild Iraq after the war of over 100,000 troops. General Shinsheki, who last commanded the reconstruction forces in Bosnia, has more experience than anybody. He estimated they needed over 100,000 troops, and that would cost us on the upper end of that estimate. All of this has to be added to the budget.

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

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

Mr. SPRATT. Mr. Speaker, I thank the gentleman for his presentation. Mr. Speaker, I yield to the gentlewoman from Connecticut (Ms. DeLauro).