Annual Budget Debate

Floor Speech

ANNUAL BUDGET DEBATE -- (House of Representatives - March 27, 2007)

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Mr. SMITH of Nebraska. I thank the gentleman from Texas (Mr. Hensarling). It is good to be here this evening as we discuss, I believe, an important aspect of our future.

Later this week we will begin debating the majority party's budget resolution. It promises to balance the budget by 2012 without raising taxes and with significant increases in both discretionary and mandatory spending. Basic math tells me this is impossible.

The majority party's budget assumes the expiration of all of the 2001 and 2003 tax cuts by adding those revenues into the budget over time to bring it into balance. Chasing higher spending with higher taxes, Mr. Speaker, will fail to address the unsustainable growth of government and will undo everything our economy has accomplished.

Even as our Nation faced tremendous challenges over the past few years, the strategy of economic growth through tax relief has delivered significant deficit reductions, including job growth.

If we are to raise taxes to balance the budget, entitlements would quickly drive us right back into the deficit, just at a higher level of taxing and spending.

With the retirement of the massive baby-boom generation looming, this situation will grow more serious, not less so. Most importantly, however, from an agricultural point of view, the majority party's budget promises more than $110 billion in increased mandatory spending in selected issue areas. They address this by creating 10 so-called reserve funds for specific items like health care, education and the farm bill. Agriculture gets a $20 billion ``reserve'' fund to be released at the discretion of the Budget Committee chairman. Sounds like a good deal, well, until you read the details.

This farm bill reserve fund can only be made available if the farm bill would not increase the deficit or decrease the surplus through 2017. In other words, to get the $20 billion, it must be offset by spending cuts or tax increases. This is either a shell game to give the impression of increased funding with no substance, or it is part of a larger plan leading to tax hikes, and I believe it is a part of a larger plan that would lead to the largest tax increase in American history.

It is interesting to note that in Nebraska this tax hike would cost the average Nebraskan, with over 656,000 taxpayers in Nebraska, an average of over $2,800 per taxpayer. My friends in Wyoming, almost $3,200 per taxpayer. My neighbors in Colorado over $3,000; Kansas, almost $2,900; South Dakota, almost $2,600 per taxpayer.

What concerns me the most, Mr. Speaker, is that sitting through several long hearings in the Budget Committee because it is certainly an important topic, we heard from the experts, and I would say the experts of the experts, who gave us clear warnings that we must reform entitlements.

The Federal Reserve Chairman, Mr. Bernanke, in the Budget Committee on February 28, 2007, said, ``Without early and meaningful action to address the rapid growth of entitlements, the U.S. economy could be seriously weakened, with future generations bearing much of the cost.''

The Comptroller General, Mr. David Walker, also in a Budget Committee hearing, on January 23 stated, ``Health care is the number one fiscal challenge for the Federal and State governments. It is the number one competitiveness challenge for American business, and it is a growing challenge for American families. If there is one thing that can bankrupt America, it is health care. We need dramatic and fundamental reforms.''

Mr. Walker went on to say on ``60 Minutes'' that the rising cost of government entitlements are a fiscal cancer that threatens catastrophic consequences for our country and could bankrupt America.

Even the Democrat chairman of the Senate Budget Committee has acknowledged, ``It is always easier to defer, to kick the can down the road to avoid making choices.''

Mr. Speaker, I rise with great concern about our future. I am concerned that when it comes to fiscal policies we have ignored the past, we haven't learned our lessons, and that we expect spending into prosperity, taxing into prosperity, and there is a law of diminishing returns. We know that is not a sustainable situation, and we have to practice fiscal responsibility because what concerns me the most is that the more we delay the decision, the tougher the decision becomes.

I know as we look at this budget and the revenues it necessitates are not sustainable with those policies. I rise out of great concern and look forward to a good, hearty debate as we address these issues that are so important to middle-class America.

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