The Israeli Blockade and the Flotilla

Press Release

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Mrs. LUMMIS. Well, thank you. I thank the gentlemen for allowing me to join you both this evening.

I thank the gentleman for his courtesy to the previous group that was talking about our policy with Israel. I thought that was appropriate to allow them to finish their remarks and to acknowledge the importance of our allies there.

One of the issues that we are going to have to address, as we address this economic downturn we are in, is the role of the Federal Government in exacerbating the problem.

As we all know, Federal employment and private-sector employment are not the same thing. A private-sector job pays for other people's jobs through taxes; whereas, a public-sector job consumes more than it pays in taxes. So it's important that we watch the relationship and the growth of Federal jobs versus the decline in private jobs.

This first chart that I have shows the Federal Government employment and how it has changed in the past number of years. I'd like to point out the years 2002, 3, 4, 5, and 6 when the Federal Government's employment was relatively flat--in fact, almost as flat as a pancake. Then we get into the Pelosi Congress, and it's going up markedly, with the year 2010 here on the end of this chart showing you that we're getting back to levels that are unprecedented since Republicans took over control of Congress in 1995.

I also want to illustrate what has happened to private-sector employment during this time period. This chart compares private-sector employment to public-sector employment, or government employment. The red line is government employment. This more flat line of the red line illustrates, once again, those years that were relatively stable--2003, 4, 5, and 6. Then the Pelosi Congress took effect, and here the government employment begins to shoot up.

The scary part of this chart is the blue line, which is what is happening to private-sector employment. It has crested. Then from the Pelosi Congress on, it has declined dramatically, and these are the years of the Pelosi Congress. When private-sector employment plummets, the ability to pay for your family plummets. Unemployment payments go up. Of course, those are coming out of the public sector. Tax collections go down. The number of jobs, of course, declines dramatically. This is an illustration of what has happened to our economy. Unless we get this number under control, we are in trouble.

Among the things that I oppose, which the majority party here in Congress is pursuing, are tax increases on the employer class. The employer class includes those small businesses all over the country which are employing less than 50 employees who are unable to borrow money because of the constraints on capital that you addressed earlier, Mr. Akin. All of these create the downward spiral that we are seeing. In order to get out of that spiral, we have to make dramatic changes in our tax policy, in our spending policy, and in our overall economic policy in relation to other countries and in relation to the amount of debt that we are issuing.

I yield back.

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Mrs. LUMMIS. I thank the gentleman for yielding.

The chart he has up does compare the U.S. to Greece. But what is really frightening about that chart is, in 5 years, our debt to GDP will be at 112 percent, whereas right now Greece is 115 percent. In other words, in 5 years, we're going to be right where Greece is right now. And that illustrates the type of nosedive that the gentleman said we are in.

Mr. Akin, could I ask you to put up the chart that you have there that is called ``Tidal Wave of Debt''?

The chart that he's going to put up was prominently displayed on numerous occasions today in the House Budget Committee, where we heard from Dr. Ben Bernanke, the Chairman of the Federal Reserve. Multiple questions made reference to this chart. And it is the trajectory on this chart that Dr. Bernanke expressed such concern about.

If you look at the line of 2010 and follow it through the year 2046, which is the end line of that chart, you see the enormous upward spiral of our debt. This is, of course, part of the unsustainable situation that Dr. Bernanke was asking us to address. And if we do not, we will put our country in terrible financial straits.

So, we talked about a number of alternatives. One is americanroadmap.org, which is the ranking member of the Budget Committee, PAUL RYAN's proposal. It is very comprehensive. It would have a slow glide path to bring both our deficits and our debt under complete control, and do it without raising taxes, and do it without affecting the Social Security or Medicare benefits of people over age 55 or 56.

The problem is, the longer we wait, the more out of reach that type of strategy becomes because of the enormous crowding out of our budgets that will happen by interest on our national debt. Consequently, we need to address the Paul Ryan proposal sooner rather than later.

Even under the Paul Ryan scenario, when compared to our anemic economy, the budget cannot be balanced and the debt cannot be eliminated until the second half of this century. So it takes over 40 years, given that scenario, to balance the budget and eliminate the debt. However, that is the kind of slow glide path that we have to take with an economy this anemic, and in a way that does not raise taxes.

And if we learned anything from the Japanese in the 1990s, it was: You don't raise taxes during a recession. That is what slowed and retarded their growth out of their economic slump.

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Mrs. LUMMIS. In May of this year, we issued some Treasury bonds, and the sale was undersubscribed, which means there were not enough countries or individuals who purchased U.S. treasuries, our debt, at the price at which they are being offered, which means that pretty soon we are going to have to raise the interest rates that we are willing to pay people who purchase our debt.

When we have to raise our interest rates, that means that we are paying more in interest on the debt every year. That crowds out private investment from our economy. That makes it more difficult for the private sector to create the jobs that were on this chart earlier. That is part of the death spiral that we have been talking about.

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Mrs. LUMMIS. The Republican Study Committee has a proposal through JIM JORDAN's subcommittee on the economy that would balance the budget in 10 years. It would cut spending in areas other than homeland security and defense, and it does not touch Social Security. I am one of those who believe that we have to protect our entitlement system by reforming it rather than by leaving it alone. But let's save that discussion for another day.

Another proposal, one that I have with Representative Sam Johnson of Texas, would reduce the size of the Federal employment force through attrition. In other words, every time someone vacates a position through retirement or other means, that position would go into a position pool. And only those positions that are absolutely necessary to sustain the rolls of government as contemplated by the Constitution would be reclaimed and redeployed into the Federal employment force.

There are any number of ideas. The PAUL RYAN proposal, the JIM JORDAN proposal, this proposal. JEB HENSARLING has proposals, many that are comprehensive in nature that will provide that glide path to a better economy and do it without raising taxes.

So even though you hear frequently that the Republicans are being shortsighted in the fact that they do not want to consider tax increases as part of an economic recovery plan, you are correct that most of us don't. And the reason we don't is because we know we can recover this economy without raising taxes, and raising taxes will slow our ability to recover.

I yield back to the gentleman from Missouri.

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