Fiscal Choices

Floor Speech

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Mr. GARAMENDI. Thank you very much, Mr. Yarmuth.

For the members of the Budget Committee, you've had a steep and difficult job as the Republicans have attempted simply to ram down the throats of this Congress a really unacceptable budget, one that does destroy opportunities.

I would love to talk about Make It in America, and I will in a moment, but I was just listening to my colleague from California, and she raised the issue of the medical care here in the United States.

It was 1964 that the United States set out on a very, very important mission, and that was to provide health care to seniors. Prior to that time, and I know from my own county where I grew up in Calaveras County, if you became a senior, you were destined for a very, very rough road. There was literally no insurance available for you, and there was no opportunity for you to get yourself out of poverty unless you happened to be among the wealthy. It was a terrible situation.

So during the Lyndon Johnson period in 1964, they created a program called Medicare so that when you became 65, you had an opportunity to get a solid health care program available to you--a doctor program, a hospital program. You had to pay a little bit for the hospital program, but it was guaranteed available to you. And every American 65 and over had that policy.

Here we are, 40-some years later, and what's taking place? Our Republican colleagues are determined to terminate, kill, stop, eliminate Medicare. They do it in a subtle way.

But I want everyone to know that this year if the Republican budget goes forward, this will be the tombstone for Medicare: ``Medicare: 1965-2011. Created by Lyndon Baines Johnson, LBJ. Destroyed by the GOP.''

How do they do it? They do it by saying everyone that is 55 years old today will never get Medicare. It's over. And for those that are on Medicare, their lives will move on and eventually they'll be gone also. And Medicare dies with this budget. This is a central part of the American promise to every senior, and the Republicans are determined to terminate Medicare and put a tombstone dated this year, 2011.

You'll get a voucher; but as my colleague from Los Angeles so eloquently said, that voucher will be worth very little when the time comes. And you'll be thrown to the insurance sharks.

I understand insurance. I was the insurance commissioner in California for 8 years, and I know what the health insurance companies want to do. They want to make sure that they insure somebody who will never get sick. Preexisting conditions, raise the rates, change the benefits, increase the co-pays, end the deductibles, all of that. So the future population of seniors in just 10 years will be thrown to the wolves, and they'll be at the mercy of the health insurance companies.

We cannot let that happen. This is a fight for the very nature of America. This is a fight not only to protect seniors but to protect those who want to become seniors. I want to know what American out there today does not want to live long enough to get to Medicare.

They know that today because of the Democratic Congress they have an opportunity to get insurance with the Health Care Reform Act, but they know that the Republicans want to take that away, too. The very first piece of legislation that the new Republican Congress passed was the repeal of the Affordable Health Care Act. This is step two, to dismantle.

Now, I'm going to take another 30 seconds and then turn it back to my colleagues on the budget side.

But here's what we must do. We must get to the root cause of the underlying inflation in health care.

Terminating Medicare does not stop health care inflation. What could stop it are the kinds of reports and the kinds of suggestions that I made 5 years ago when I wrote this document called ``Priced Out.'' Forty-three separate things that we can do--specifically for California, but it's applicable for America--43 separate things that we can do to bring down the costs of medical care.

It turns out that about a dozen of those were in the

Affordable Health Care Act, very specific things to rein in the cost of medical care.

Two examples. One: hospital infections. Not only deadly, but costly. Now every hospital in the United States is forced by the Affordable Health Care Act to pay attention to hospital infections. It's probable that one of our colleagues who was with us here in this House last year died as a result of a hospital infection just last week. This is serious stuff. It's in the Affordable Health Care Act. Hospitals would be penalized.

Secondly, electronic medical records so that the mistakes are eliminated.

Let me turn this back to you, Mr. Yarmuth and Mr. Tonko. You on the Budget Committee have served so well, so hard, fighting the initial battle to protect America's seniors and to protect this Nation's future. Thank you for the opportunity to join you.

Mr. YARMUTH. I thank the gentleman for his contribution and also want to segue from what he said because he talked about Medicare and the ability to save money in Medicare. One of the ironic things about this debate has been that last year when we were passing the Affordable Care Act and found $550 billion over 10 years that we could save in Medicare and reinvest in new benefits, during the campaign that year, we were chastised for slashing Medicare. Yet those same Republicans, in developing their budget and saying how great they are at cost-cutting, are using the same savings that we found, the same savings of $550 billion, that they ran millions and millions of dollars against Democratic candidates last year. And they're taking credit for that in their budget, which is interesting.

I know Mr. Tonko is chomping at the bit to talk about Medicare some more, so I'll yield to him at this point.

Mr. TONKO. Thank you, Representative Yarmuth and Representative Garamendi. Thank you both for your input.

Now, Representative Bass of California talked about the Medicare transformation that would really hurt people across this great country, and it seems as though you would expect everyone that serves here to be an avid fan of history, that we would want to be taught by the history that has built this great Nation.

We heard earlier from Representative Yarmuth about the repeats of the tax cuts that were recent history. We saw it during the second Bush Presidency. We saw it during the Reagan era where we did this trickle-down theory: if we reduce the burden at the top, it will trickle down and everyone will have jobs galore.

Well, you look at the history, and those two scenarios just did not work. They did not work. And as students of history, all of us as Representatives, we should absorb that lesson, and we should know that a repeat of that kind is only going to wreak damage on the American economy and, more importantly, on the American families, the middle class.

What did work, what lesson in history stands very strong and tall is that during the FDR Presidency when this country was hurting from one of the worst economic struggles it had to face, they came up with a program that invested in job creation, invested in the American worker, invested in American families.

We created infrastructure; we built across America the needs of this great Nation. And today, some of those institutional efforts are still serving our needs. They stand as a monument of government responding in a way that embraced compassion, that came forward with an intelligence that enabled us to grow out of those economically difficult times. And we were benefited by that sort of leadership.

What we need today is an investment in job creation. Think of it. As we enter into a global race on clean energy and innovation, other nations are bulking up and we are defunding with this budget. We are defunding R&D, research and development for science and tech jobs. How can we expect to win a race, a global race, when we're tying our hands behind our backs and are not allowing us to go forward?

But to Medicare, the history learned there, and Representative Garamendi pointed it out, pre-1965 people were being cherry-picked, they were being led along without appropriate health care coverage, without insurance because they were perhaps dealing with a preexisting condition, they were a complex case, they were ignored, they were totally just abandoned by an insurance opportunity. Because of that, our Nation, with compassion again, the history it wrote through those LBJ years was to establish a Medicare program.

Look what happens. This chart will tell us when we get rid of Medicare, when this Republican plan, if it had its way, ends Medicare, we are going to see this very impact coming upon our seniors. We will go back to the pre-1965 years. Look at this. This is the current Medicare program, where benefits for our seniors enable them to avoid oftentimes the out-of-pocket expenses.

It is forecasted by independent groups out there, not by partisan thinking here in the House, but independent bodies are suggesting that it will double in the early years in terms of what is expected of our seniors digging deeper into their pockets. And by the year 2030, it's forecasted triple what they are paying today. This is another way to provide savings for the sole purpose of investing those savings in millionaire, billionaire tax cuts, in oil company handouts, in corporation relief. This is the effort here. It is a reverse Robin Hood. It is going after the middle class, which is the strength of America.

Give that middle class its purchasing power. Give our middle class seniors their Medicare program. Let them have dignity. Let there be a quality of life. Let there be the opportunity for work, for employment, and let the masses enjoy the benefits of those sorts of programs. That's what we're talking about here. History repeated. Bad history repeated. Good history ignored. And our seniors will suffer from this Medicare program. This end to the Medicare program will bring about suffering for them because of greed and because of the road to ruin that has been established by this so-called path to prosperity.

Representative Yarmuth, I believe that we need to do better than this. We should not fail our seniors, our disabled, and as Representative Garamendi said, future generations of seniors, an onslaught of baby boomers that will be impacted by all of this activity.

Mr. YARMUTH. Thank you very much, Mr. Tonko. There are so many aspects of this that deserve to be discussed. One of the things that's kind of sad is that the Republicans, in talking about their plan to privatize Medicare, say, oh, this is just like the plan that Members of Congress have. Well, first of all, Members of Congress have the same plan as every other Federal employee, so it's not necessarily anything special that we have.

But the only thing that is somewhat similar about this is that you have some options in the private sector. We buy insurance from private vendors, and we have a certain allowance. And under the Ryan plan, the Republican budget, seniors, all those under 55 now, when they become seniors they would have a certain amount that they could spend--not just could spend, had to spend in the private sector because they won't be allowed to buy into any Medicare program or a public option. The difference is, as you pointed out in your graphic there, that Members of Congress and Federal employees pay about 28 percent of the premium. Under the Republican budget, seniors are going to pay 68 percent of their premium.

This is shifting the burden, the cost, and putting it on seniors who are on fixed incomes, who don't have the ability to pay. And what's going to happen to them? This is so unlike the Federal insurance program. It's frightening in its dishonesty.

But I want to talk about one thing quickly and then yield to Mr. Garamendi again, because we talked about taxes and tax rates. In the Budget Committee last week I offered an amendment to the Ryan budget that would have restored the Clinton era tax cut, highest tax rate of 39.6 percent on Americans making $1 million a year or more. Now, that is a very small percentage of Americans. Very small percentage. Less than 1 percent of the Americans make over a million dollars a year.

I said let's just have them pay what they paid under the Clinton era. Not one Republican voted for that. And their argument was, and I know they believe this because they keep saying it and have always said it, that if you raise the tax rate on the highest-income Americans that

they're going to lose incentive, that they're not going to work as hard, that they're not going to make investments because you are eliminating their incentive.

Well, for those with a long memory, the highest marginal tax rate in this country's history back in the sixties was 91 percent--I am sorry, under the Eisenhower administration--was 91 percent. When my father built his company in the sixties and seventies, the highest marginal tax rate was 70 percent. When Ronald Reagan took office it was 50 percent. Now it's down to 35 percent, and they want to cut it even further.

Now, they had this belief, again, that if you raise rates you're going to destroy incentives. I built a company, both my brothers have built very successful companies, my father built a very successful company. Not one of us has ever said, oh, my gosh, because I can only keep 60 cents of that next dollar I make rather than 64 cents or 65 cents, I am just not going to make that dollar. Just doesn't make any sense for me to work harder. Business people don't think that way. That is not human nature.

I have one brother who is very successful. He is in the barbecue restaurant business. You have all heard me tell this story a hundred times. I am going to tell it again. I asked him, ``What about this marginal tax rate thing?'' And he said, ``You know, if people can't afford barbecue it doesn't matter what my tax rate is.'' And that's really where we are as a country. That's where we've come as a country. Because we have let the middle class decline, because their buying power has declined not just in relative terms, in absolute terms over the last decade, while the wealthiest Americans, these people making $1 million, $1 billion and more have done extremely well.

Right now 1 percent of the American people make as much as the bottom 90 percent combined. We have the greatest disparity in income and wealth in this country that we have had in almost 100 years. Yet ask millionaires and billionaires to pay a little bit more--not a lot more. We are not saying go to 70 percent. We are saying go to 39 percent from 35 percent. Not one Republican vote.

We've seen in the past what's happened with tax rates. We have been talking a lot about history tonight. Under the Clinton administration, during the Clinton years, top tax rate of 39.6 percent, 20.8 million jobs created. After the Bush tax cuts, reducing that top rate to 35 percent, 653,000 jobs lost. That is not evidence for cutting the marginal tax rate on the highest-income Americans even further.

We have seen again right now the Bush tax cuts--this is the job loss thing--the economy floundered after the Bush tax cuts went into effect. So again, all we're saying is if we're going to ask people to sacrifice as we try to get our fiscal house in order, we need to ask everybody. In particular, we need to ask the people who have done the best and who have earned the most and who have the most wealth.

Again, the person who has talked more about what it takes to create jobs in this economy is my colleague from California. I yield to him again.

Mr. GARAMENDI. Thank you very much, Mr. Yarmuth. This is what you were talking about here, a different way of saying the same thing that you discussed. This is over the period of time from 1979 to 2005. This is the income growth by each 20 percent of the population. So those people at the very bottom saw almost no income growth at all, 200 bucks. And as you go to the next 20 percent and the next 20 percent, you get up to the last 90 percent, they did okay. They made about $745,000.

So that's the 90 to 99 percent of the population. Those are very, very wealthy people. They did okay.

But you go to the top 1 percent, the top 1 percent--excuse me, I am wrong. That's the top one-tenth of 1 percent, not even 1 percent. One-tenth of 1 percent. That population saw their wealth increase by nearly $6 million each, and that's what you were talking about, a different way of displaying it.

What's happening in the United States is this enormous shift of wealth to the super wealthy, and our Republican colleagues want to reward them for their good success by reducing their tax rate. So much for shared sacrifice.

And as Mr. Tonko pointed out, the sacrifice is really the middle class, because the benefits that the middle class had, the future opportunity for Medicare, they are going to wind up paying more, getting less, as the Republicans terminate Medicare as we know it today.

The other part on taxes, and then I want to turn to one of my favorite subjects, and that is how did we get to this deficit, Republicans want to continue giving $12 billion to $15 billion of our tax money, this is money that you, I, the stenographer there, the people that work here, the men and women across America that are working, $10 billion to $12 billion of their tax money, and they want to hand it over to the oil companies.

Now, what in the world did the oil companies need a tax break for? They need a subsidy like, well, like they don't need it. Why? Because in the last decade, the oil companies, the big oil companies in the United States, have earned $947 billion dollars in profits. That's just shy of $1 trillion dollars in profits. And yet our Republicans demand that we give them another $12 billion to $15 billion a year.

Now, that's bad enough. But I just came across this fact. ExxonMobil was the most profitable company in the world in 2008. In 2009, ExxonMobil made $19 billion of profit. Well, good for them. And I am sure they paid their fair share of taxes, right? Wrong.

Their effective tax rate was zero. So since they didn't pay any taxes, we ought to give them another $12 billion, to the oil industry. This is just plain wrong. This is not good economic policy.

One thing, and then I know you want me to talk about Make It in America, and I will in a few moments, but I get so concerned when people talk about the Democratic deficit. Hello? Not so, not a Democratic deficit; really, a Republican deficit.

That fellow over there, that's Ronald Reagan. President Ronald Reagan left at the end of his 8 years with a projected $1.4 trillion deficit, followed by George H.W. Bush. At the end of the George H.W. Bush period the projected deficit going forward would be $3.3 trillion. Thank you, George H.W. Bush. Between the two of you, you really ran up the deficit.

Then along came this fellow Democrat, Bill Clinton, put in policies voted by Republicans and Democrats, raised the tax rate to what you said, 39 percent for the super wealthy, and put in place PAYGO. That PAYGO required that any new spending had to be paid for with cuts or new taxes.

The result? Bill Clinton left office in 2001 with a projected $5.6 trillion surplus.

Then along came George W. Bush, Jr. What did he do? First year in office, a tax cut. You were here weren't you, Mr. Yarmuth?

Mr. YARMUTH. I am sorry, no, I wasn't here. I didn't have the honor of voting against those.

Mr. GARAMENDI. Okay, so you weren't here. A tax cut year one, a tax cut year two, a war, two wars, Afghanistan and Iraq followed by a Medicare drug p[Page: H2598] GPO's PDFrogram that wasn't paid for and the deregulation of Wall Street. The result: He left office with an $11.5 trillion projected deficit going forward. This is where we are.

The day Obama came into office, President Obama came into office with a $1.3 trillion deficit the day he took office, and we worked ourselves out of it. Thank goodness the two of you were here to vote for those pieces of legislation. We are working ourselves out of it. That chart that you showed a moment ago shows the growth of the economy.

We need to understand that we are not going to get out of this deficit with the kinds of cuts that are being discussed by our Republicans. It's going to take a balanced approach.

President Obama has set out a balanced approach. He said no growth, no growth in the discretionary Federal budget. He will probably, tomorrow, talk about how to hold down medical costs, and I gave you some examples a moment ago. Those are the big drivers, and the military.

You want to deal with this deficit? End the war in Afghanistan and bring home $120 billion a year. We can do this. Tax policy? Let's let the wealthy pay their share, let the oil companies pay their share.

Hold the expenditures steady and reduce it, as has

been proposed, and do it in a way that creates economic growth. We can do this. I know you gentlemen on the Budget Committee fought hard for that kind of policy. The Republicans refuse.

In fact, their proposal, it's 30 years before you eliminate the deficit. We can't have that.

I will talk about Make It in America before we are finished here, but I am going to turn it back to you Mr. Yarmuth. But I think it's really important for the American public to understand where the deficit came from and how it can be solved over the long run without harming seniors, without taking away Medicare and by making the critical investments that you have talked about, Mr. Tonko, education, research, Make It in America, those kinds of things.

Mr. YARMUTH. I thank the gentleman. Just to elaborate a little bit on the issue of what creates jobs and what kills jobs, under H.R. 1, which was the Republican continuing resolution that was passed earlier this year--we are still fighting that battle, and we will be fighting it this week--but these are the principles that were reflected in here that are now are reflected in the Ryan budget.

And this is what various economists said would happen if H.R. 1 would go into effect, and this was just for 6 months of the year. Call it ``Slash-onomics.'' Federal Reserve Chairman Ben Bernanke--again this is 6 months, 200,000 jobs lost; Mark Zandi, who was John McCain's economic adviser during his Presidential campaign, 700,000 jobs lost; the Economic Policy Institute, 800,000 jobs lost; and the Center for American Progress, just shy of a million jobs lost. That's over 6 months.

Now as we saw on the chart before, contrast that with what's happened just under the Obama administration and the policies that we adopted when we were in the majority. Job growth now, over 200,000 private sector jobs last month created. We are on the right track.

And to slash spending the way that the Republicans have proposed, without an accompanying increase in revenue, is going to do further damage to what is now a solid recovery that's under way.

I just have to laugh a little bit again about the projections of the Ryan Republican budget, because they have made a big deal out of saying this is $6 trillion better than the Obama budget over the next 10 years.

Well, the way they get to that, once again we said it earlier, is to project that unemployment will come down to 2.8 percent in 5 years, which no economist says it would be. But more importantly, they say, that we will increase revenues by almost double from $2.2 trillion dollars last year to $4.3 trillion 10 years from now.

Now, to put that into perspective, the 10 years before that we went from $1.9 trillion in revenue to $2.2 trillion in revenue. Now, we have been up higher, we have been up around $2.5 trillion. That's the highest we have been.

Now they're saying we're going to cut taxes on corporations from 35 to 25 percent, we're going to cut taxes on the wealthiest Americans from 35 to 25 percent, and yet we're going to experience unprecedented growth in revenue even though we are cutting taxes. Again they can't get anybody to verify this except the Heritage Foundation, which has not been particularly accurate in the past. This is the Harry Potter budget. This is their theology: Cut taxes, the economy explodes.

We've been down that road before, Mr. Tonko. I would like to yield to you to talk about the Road to Ruin that we are about to be asked to drive.

Mr. TONKO. Thank you, Representative Yarmuth. I believe we don't have much time left in this hour of discussion. But let me just indicate that this entire House experienced an election last November. Everyone was up for election. And I would dare say in talking to many, many colleagues about the message that resonated back at home it was about jobs, jobs, jobs. It was about the economy. That was the driving dynamic I believe at the voting booth.

And look at our track record here for the first 3 1/2 months for the 112th session of Congress. Not one bit of legislation that would produce jobs was brought to the floor. However, that budget, as you just pointed out in your Slash-onomics bar graph, might take as many as 975,000 jobs off the picture for American workers, after we've spent just over a year creating over 2 million private sector jobs. Now that's in contrast with 8.2 million lost under the Bush recession. So we've got a long way to go.

But why would you reverse progress with a budget that, with Slash-onomics, reduces nearly--well, we'll even take some of the lower estimates of 400,000; why would you want to do that at a time when we are recovering from that very difficult economic time?

I think it's so important for us to inform the constituents out there and tell middle class America this is a tipping point in our history. This is whether we fix an economy, create a situation where we come forth and produce products not yet on the commercial scene. A leading nation can do that when it embraces its intellectual capacity. You build products not yet discovered and engineered. That is making it in America. That's what we can do if we invest in our workforce and invest in our education. But we're denying all those investments with this budget, just like this Medicare chart which, as you indicate, will have seniors receiving 32 cents on every health care dollar they require, and they're going to have to fend for the rest.

So we're asking middle class America to pay more, everything but 32 cents on the dollar for their health care as seniors qualifying for Medicare, and then we're going to take and destroy this economy and snuff out the dreams and the opportunities for America's middle class. We were told in November, America start growing the economy, stop draining and reducing the middle class. You are reducing, you're snuffing out that middle class. And that was the message.

And also on taxes I believe America is waking up to what has happened here with some of these scenarios. They understand it is not about who's cutting taxes but whose taxes are you cutting? Whose taxes will you cut? There's a big difference. And when you do this mindless handout to profit-rich oil companies, historically profit rich, sitting on about a trillion dollars worth of profit, and mindlessly for nearly a century we have handed out these benefits to oil companies. It's wrong. We can do better. This plan is the Road to Ruin.

Mr. YARMUTH. I thank the gentleman. We have a couple minutes left. I would just like to yield to my friend, Mr. Garamendi, for some closing comments about making it in America.

Mr. GARAMENDI. If America is going to make it, we have to make it in America. Once again, manufacturing matters. The problem with the Republican budget is it hollows out, continues the hollowing out of American industry by denying the research, reducing research and reducing job training and continuing the kind of tax policies that actually give corporations tax breaks when they send jobs offshore. We want to reverse that. We're putting together the Make it in America agenda, a real jobs agenda for the middle class.

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