Make it in America

Floor Speech

Mr. GARAMENDI. Thank you, Mr. Speaker.

I am going to be joined by my colleagues today, and we are going to talk about the financial situation here in the United States and about the meaning of the various ideas and proposals that have been put forward.

I want to compliment my colleagues on the Republican side for their tenacity in putting out their sound bites, but I think it's very, very important for the American people to understand in detail exactly what is being proposed here. Yesterday, we did have what was called the Cut, Cap, and Balance proposal. You might also call it the "Cut, Slash, and Burn'' proposal because, once you get past the sound bites and get into the details of what has actually been proposed, you've got to stand back and go, Whoa. Wait a minute. Is that really what a balanced budget amendment is all about?

We're going to go into that in a few moments to really understand exactly what this balanced budget amendment is and the effect that it will have on Americans, particularly on women in America; but before we go there, we need to step back a bit and understand how it is that we got into this situation with this deficit of $14 trillion. How did we get here? It's really important to understand that. Before you go off and try to solve the problem, you need to know what is the situation, what is the circumstance.

This little chart here lays out where the deficit came from. Now, understand that, at the end of the Clinton administration in January 2001, the United States Government was running a surplus, a $300 billion-plus surplus. It had run that for the previous 2 years. So we had a surplus, and we were on the path during the decade 2001-2010 to literally pay off the entire American debt. It would be paid off. Now, whether that's a good idea or not, you can debate that, but that's what we were on. So the trajectory was, had we maintained the same policies, the same growth in our economy, we would have paid off the total debt. However, something happened.

Now, what happened?

What happened was a change in policies and two wars: the Iraq and the Afghanistan war following the 9/11 event in 2001 and then the Iraq war in 2003--neither war paid for. For the first time in American history, neither war was paid for--all borrowed money for the first time ever in America's history. Another thing happened along the way, and that is: in 2001, the first George W. Bush tax cut followed in 2003 by the second George W. Bush tax cut.

Here is what they meant. Take a careful look at this. This is where the deficit started. We started here with the Bush-era tax cuts and then over the years so that in 2019--20 years--we have this extraordinary growth in the deficit caused by those tax cuts. Of course it assumes the tax cuts will continue on into 2019.

The red area here are the wars. Again, not paid for. So the Iraq war and the Afghanistan war.

The other thing is this downturn in the economy. The downturn in the economy occurred in 2008. How did it happen? Why did we have that crash of the American economy?

We had it because the Federal Government stepped back from regulating the financial institutions, allowing them to run wild, assuming that they would be smart enough to regulate themselves. That didn't happen. They were smart enough to be extraordinarily greedy. Wall Street went on a greed binge, and the result was the collapse of the financial industry. Needless to say, there are other players in this game. Many Americans, hundreds of thousands of Americans, joined in the game and took out mortgages and bought houses, but there was no way they could possibly afford them. It was the financial industry, the mortgage industry and the Wall Street bankers, and we wound up with the great collapse of 2008.

To deal with that, the bailout of Wall Street occurred. Most of that has now been paid back. It worked. Did it work for the benefit of Americans? It stabilized the financial institutions, and it certainly worked for the benefit of Wall Street. That program occurred in the final months of the George W. Bush administration. Unfortunately, the American economy has not recovered despite the spending of some $700 billion in the stimulus program. It actually worked. It didn't work enough to get the economy moving forward, so we wound up with this huge deficit.

Going forward, the deficit remains in place because the wars continue: $178 billion a year spent on the war in Afghanistan and Iraq. Also continuing are the George W. Bush tax cuts. This is where the deficit is coming from. Thirdly, the economy has not recovered. That's where the deficit is.

Now, what do you do about that? Do you put in place a constitutional amendment that has something really interesting? When the American public understands what is in that amendment, it's not just a balanced budget; there are real things in that amendment. Then that amendment, if ever put in place, will have extraordinary consequences for America--in my view, none of them positive.

A sound bite is great: Balance the budget. Force the government to balance the budget just like we do at home. Hello, America. Do you really balance your budget every month? every year? I don't think so. We take out a mortgage to buy a house. That's borrowing money, folks. That's not balancing your daily budget. That's borrowing money, and now you've got to pay the mortgage, pay the interest. When you lose your job or when you're laid off or when you're cut back in hours, what do you do? You do your best to cut expenses, and then you probably are going to borrow more money--maybe the home equity loan, maybe the credit card--to get by. We all do that, all of us. It's not so easy to at the end of every year balance the budget.

Forty-nine States? Yes, they have balanced budget amendments. I'm from California. Democrat Jerry Brown: facing a balanced budget amendment. Guess what? He borrows money. He doesn't balance the budget. Oh--and his predecessor, Arnold Schwarzenegger--Republican, said he was going to
"blow up the boxes'' and balance the budget. It happened twice in the 7 years that he was Governor that he was able to balance the budget.

Why did this happen? Why did it happen? America, ask the question: What is in the balanced budget amendment? I'll tell you what's in it: a requirement that a two-thirds vote be enacted for every expenditure and every tax increase--a two-thirds vote. This is a fundamental shift in the very nature of American democracy.

We had a dozen wonderful Representatives of the Republican Party talk for an hour here, and not once did they mention that the American democracy will be forever changed. No longer majority rule. A fundamental tenet of American democracy, majority rule, pushed aside. And now should this ever become law, a minority rule, one-third of this House, one-third of this Senate dominating the will of 65 percent of every elected Representative and Senator. The end of the most fundamental tenet of American democracy, the end of majority rule.

It also works in a very pernicious and bad way. You can cut taxes with a majority vote. It takes a two-thirds to raise taxes.

So years and years ago, the oil industry had the opportunity in our democracy to receive a tax reduction. They got a tax reduction. And the oil industry went on with that tax reduction, called a subsidy, so that they can explore for oil and gas. For a hundred years they have had a tax break. Now, we can give them another tax break; but under the balanced budget amendment, it would take a two-thirds vote to take away the tax reduction, the tax break, the subsidy that they have received for a hundred years, a century, would take a two-thirds vote to do that because that would be considered to be a tax increase.

So what does it mean to the oil industry? Well, here's their profits from last year. Let's see: Exxon, $10.7 billion; Oxy, $1.6 billion; Conoco, $2.1; Chevron, $6.2 billion; BP, of gulf fame, $7.2 billion, that's their profit. Part of that profit is your tax dollar. Part of that profit is the tax dollar of every American that has been given to the oil companies for more than a century so that they can go explore for oil.

Is there an American that believes that the oil industry needs our tax dollars to continue to be viable? I don't think so. But if the constitutional amendment passes, becomes part of our Constitution, a majority of this House and the Senate could increase the subsidy, but it would take a two-thirds vote to get our money back. We need to understand the details of what a balanced budget amendment means.

I've been joined by my wonderful friend and extraordinary Representative from the great State of New York representing the Hudson River Valley in the capital region.

We had a discussion last night about a piece of this, and I've been waiting for you to arrive when we could talk about how the balanced budget amendment and the cuts in the legislation that was passed yesterday would affect women.

We just had 20 women from the Republican Party here telling us that we ought to enact a balanced budget amendment. What does it mean for women who are 65 and over?

Would you please join us and enter this conversation.

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Mr. GARAMENDI. Thank you so much for bringing our attention to the way in which the balanced budget amendment would fundamentally alter the very nature of our government.

Earlier I talked about the majority vote versus the minority rule that is in this amendment. And now you bring to our attention the percentage that is in the amendment. Those percentages have real meaning beyond the issue of just a very, very important issue, the very nature of our government, and the reason why we have representative government, why we have the Senate, why we have a Congress.

But there's something else to it and that is, the percentage that they have chosen would force the government expenditures to go back to the 1965 level where there was no Medicaid and no Medicare program in America. So, once again, there are different ways of assaulting and terminating Medicare. One was the direct way that was in the Republican budget that passed this House earlier in which they explicitly said that for all Americans who are not yet 55, there would be no Medicare. They would be given a voucher, and they would have to go buy insurance from the private insurance market, which all of us understand is a very difficult place to get a fair deal. The other way of doing it is in a constitutional amendment, as was proposed yesterday, that would make it impossible to fund Medicare and similarly impossible to fund things like natural disasters.

Let's assume we were at 18 percent, which is the number they've chosen, of GDP and the Federal budget, and we have the great Mississippi flood or the great Missouri flood or the earthquake in California or the hurricane in Florida, billions of dollars. The Federal Government would have no ability under this amendment to step in.

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Mr. GARAMENDI. Before we leave the balanced budget amendment, the bill that was on the floor yesterday had two other pieces to it. One of them was to go after the budget of the United States and reduce it by $111 billion, beginning in October of this year. That has real impact. Part of that impact would be felt on Medicare.

Let's just put some understanding into what Medicare is all about. Our colleague from Connecticut did this last night, but it really, I think, is well worth repeating, and so I am going to just read off some statistics, so please bear with me.

In 1965, when Medicare was established, 44 percent of all seniors 65 and over did not have health insurance. Now, of those, 40 percent of the seniors lived in poverty. So you had heavy poverty and you had no insurance. The two are tied together. You get sick, you lost your money, you spent everything you had. The life expectancy at that period was 70 years.

Now, what's happened in the intervening years since 1965? Now, 40 million seniors, nearly every senior in the United States, has health insurance. Not just a little health insurance, they have a comprehensive health insurance policy that covers most everything they need--doctors, hospitals, and drugs.

The poverty rate for seniors has fallen from 40 percent to 10 percent. Why? Social Security and Medicare.

Now, they lived to 70 in 1965. Today, seniors live to an average age of 78 1/2 years. Why? Because they have medical care and they have Social Security providing them with the basics of life.

Now, what happens if the Republican budget were to pass and Social Security were to end, not only for those who are 55 years of age now and want to have Social Security 10 years later in their lives when they become 65, but immediately for seniors, now, if the Republican bill passed, would become law that passed yesterday, and the previous one, the budget bill were to become law? $880 billion would be removed from Medicaid.

Medicaid's a different program than Medicare. This is for impoverished people in America, almost all of whom are in nursing homes. $880 billion, over 10 years, removed from Medicaid. So those seniors, most of whom are women--and I would remind you that we heard from the Republican women here earlier promoting a program that would cut $880 billion out of Medicaid, 70 percent of which goes to nursing homes, the majority of whom in those nursing homes are women. This is not a women's program that they've put forward.

And on the drug side, you were talking about this, Mr. Tonko. This is an immediate reduction, an immediate reduction in the drug benefits, so that 3.9 million seniors would wind up paying $2.2 billion more immediately if the Republican budget were to go into law because of the reduction in the Affordable Care Act that provided this benefit.

These are just some of the things that the American public needs to understand when you get past the sound bites. We must balance the budget and, therefore, the balanced budget amendment.

Well, wait. What is it? What does it really do? It terminates majority rule in America and institutes minority rule so the fundamental of American democracy is trashed; requires that the budget of the United States be ramped back, back, back to the 1965 percentage of GDP, before there was Medicare, which, inevitably and inextricably means that Medicare is over once that balanced budget amendment passes.

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Mr. GARAMENDI. Before we leave the balanced budget amendment, the bill that was on the floor yesterday had two other pieces to it. One of them was to go after the budget of the United States and reduce it by $111 billion, beginning in October of this year. That has real impact. Part of that impact would be felt on Medicare.

Let's just put some understanding into what Medicare is all about. Our colleague from Connecticut did this last night, but it really, I think, is well worth repeating, and so I am going to just read off some statistics, so please bear with me.

In 1965, when Medicare was established, 44 percent of all seniors 65 and over did not have health insurance. Now, of those, 40 percent of the seniors lived in poverty. So you had heavy poverty and you had no insurance. The two are tied together. You get sick, you lost your money, you spent everything you had. The life expectancy at that period was 70 years.

Now, what's happened in the intervening years since 1965? Now, 40 million seniors, nearly every senior in the United States, has health insurance. Not just a little health insurance, they have a comprehensive health insurance policy that covers most everything they need--doctors, hospitals, and drugs.

The poverty rate for seniors has fallen from 40 percent to 10 percent. Why? Social Security and Medicare.

Now, they lived to 70 in 1965. Today, seniors live to an average age of 78 1/2 years. Why? Because they have medical care and they have Social Security providing them with the basics of life.

Now, what happens if the Republican budget were to pass and Social Security were to end, not only for those who are 55 years of age now and want to have Social Security 10 years later in their lives when they become 65, but immediately for seniors, now, if the Republican bill passed, would become law that passed yesterday, and the previous one, the budget bill were to become law? $880 billion would be removed from Medicaid.

Medicaid's a different program than Medicare. This is for impoverished people in America, almost all of whom are in nursing homes. $880 billion, over 10 years, removed from Medicaid. So those seniors, most of whom are women--and I would remind you that we heard from the Republican women here earlier promoting a program that would cut $880 billion out of Medicaid, 70 percent of which goes to nursing homes, the majority of whom in those nursing homes are women. This is not a women's program that they've put forward.

And on the drug side, you were talking about this, Mr. Tonko. This is an immediate reduction, an immediate reduction in the drug benefits, so that 3.9 million seniors would wind up paying $2.2 billion more immediately if the Republican budget were to go into law because of the reduction in the Affordable Care Act that provided this benefit.

These are just some of the things that the American public needs to understand when you get past the sound bites. We must balance the budget and, therefore, the balanced budget amendment.

Well, wait. What is it? What does it really do? It terminates majority rule in America and institutes minority rule so the fundamental of American democracy is trashed; requires that the budget of the United States be ramped back, back, back to the 1965 percentage of GDP, before there was Medicare, which, inevitably and inextricably means that Medicare is over once that balanced budget amendment passes.

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