The Budget
THE BUDGET -- (House of Representatives - April 27, 2005)
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Mr. SCOTT of Virginia. Will the gentleman yield?
Mr. SPRATT. I yield to the gentleman from Virginia (Mr. Scott).
Mr. SCOTT of Virginia. I just want to follow up on this briefly because we talked about fiscal responsibility and irresponsibility. And we have seen this chart. In 1993 we passed budgets that were very controversial. But they had the effect of eliminating the deficit and sending it up into surplus. And these were controversial, and those votes were used against the Democrats.
Right after these votes were cast, when we eliminated the trend line going down into further and further deficit and started going up, we had PAYGO in effect, where if you had a tax cut, you had to pay for the tax cut. If you had a spending increase, you had to pay for it with either more taxes or less spending somewhere else. You just could not spend without paying for it. You could not cut taxes without paying for it. And we ended up in a surplus at the end of 2000. We let PAYGO expire so you could pass massive tax cuts and increase spending all you wanted without paying for it. And that kind of fiscal irresponsibility puts us down here to $427 billion in the hole.
Now, it is going to get worse before it gets better. The President suggests in the rhetoric that he is going to cut the deficit in half in 5 years, which is actually somewhat modest. That means he is only going to clean up half the mess he caused. He is not even going to clean up just half. He is going to promise to clean up half.
But this green line down here shows if you actually include what we know must be included, there is no way you are going to even come close. It is just going to get worse and worse.
This blue line is an interesting line because this is the budget projection. All the surpluses of 300 billion-plus was the projection made in 2002, which is an interesting year, because it is after 2001. After 9/11 we still thought we could have surpluses, but we continued to cut taxes, we continued to increase spending without any limit.
Now, we have heard about the priorities that we are going to be missing. We have heard about education. We have heard about health care. We have heard about all of the things we cannot do. One of the things we cannot do, I live in Newport News, Virginia. We build aircraft carriers. Because of the budget crunch, they are talking about reducing the number of aircraft carriers.
We have a NASA research facility near my district, aeronautics research. We are scrambling to try to find a couple $100 million so that NASA Langley can have a few million dollars to continue the research that we are doing. We are having trouble finding that money. We hope we can find it.
But just last week, we passed another tax cut. When fully phased in, it would be another $70 billion a year. Without paying for it. Just passed it.
One priority we have, all of us here, Social Security. If you look at all of the tax cuts, you know, where are we going to find the money for Social Security to keep the plan we have got now, all of the tax cuts under this administration passed, and if we make them permanent, $14 trillion. Social Security only has a 3.7 to $4 trillion shortfall. If you add on Medicare, you could have solved both of those, or you can have tax cuts. And to add insult to injury, make the tax cuts permanent. That is over $11 trillion in present value cost. Social Security, 3.7. Make the tax cuts permanent for the top 1 percent, those making more than $350,000 a year. That is almost enough in itself to solve the Social Security problem that we have.
Matter of priorities. Are we going to give tax cuts to the top 1 percent, or are we going to save Social Security for everybody? Well, we are going to be voting on that. We have already passed estate tax repeal. We have got others. I believe that we ought to save Social Security first. If you are going to have an $11 trillion tax cut plan on the table, well, let us just take the first 4 trillion and solve Social Security. Then maybe we can only cut taxes $7 trillion. But we would have saved Social Security. Let us save Social Security first. We have got a good plan. All of the benefits being promised we cannot pay right now. We are 4 trillion short. It is actually better than the President's plan because his plan goes broke quicker and cuts benefits in the process. So that ought to be a nonstarter.
But we have priorities and because of our fiscal irresponsibility, we cannot meet those priorities. If we go back to the fiscal responsibility we had from 1993 to 2000, you had to pay for your new initiatives. You could not just pass a tax cut, and where a President would veto bills that were fiscally irresponsible, even if he had to shut down the government. In 1995 we shut down the government rather than President Clinton signing those bills that would have put us back in the ditch where we were. Now, that is the kind of leadership we need now. We do not have it.
And if the gentleman looks at the chart right beside him, where you pass these tax cuts that look a little modest for the next couple of years, but when you reveal the full 10-year and the next 10-year cost, you know they are fiscally irresponsible. We cannot afford them, and that is why Social Security is in jeopardy today.
Mr. SPRATT. I yield to the gentleman from Tennessee (Mr. Cooper), who I believe has a question he wants to put forth.
Mr. COOPER. I think it is important to return to the fact that we are going to be voting tomorrow on the budget for the United States of America, and it is a budget that no one has seen yet. They only appointed the conferees yesterday.
Mr. SPRATT. $2.6 trillion budget, which no one has seen.
Mr. COOPER. $2.6 trillion, covering all of the priorities of this great Nation, the fact that we are at war, Social Security and Medicare, all domestic spending, cancer research, CDBG grants, everything is rolled up into it and no one has seen it.
Now, last year we did not have a budget at all, so maybe the prospect of voting on a budget this year is a good one. But from all that we do know of the budget, and we will probably vote on it apparently about 2:00 tomorrow afternoon, it will be crammed down our throats with no one having seen the text of it. And the New York Times and responsible publications like that are saying it is really the worst of both worlds. It is going to help the people who need it the least and hurt the people who need it the most. It is going to hurt poor people. It is going to hurt middle-class people. It is going to hurt small businesses. It is going to hurt our schools, and that is irresponsible budgeting.
Mr. SCOTT of Virginia. Will the gentleman yield?
Mr. COOPER. I would be delighted to yield to the gentleman.
Mr. SCOTT of Virginia. When the budget left the House, what did it do to things likes Medicaid?
Mr. COOPER. I believe they recommended a $60 billion cut in Medicaid.
Mr. SCOTT of Virginia. Did they direct the Education and Workforce Committee to cut mandatory spending?
Mr. COOPER. Well, unbelievable cuts are in this and unbelievable aid to countries like Iraq. It is really a crazy set of priorities and unbelievable tax cuts.
Mr. SCOTT of Virginia. And if you cut mandatory spending and the education budget, the only thing you have for school lunches and student loans, that is the only thing you can cut under that program.
Mr. COOPER. One thing we know will go up is interest expense on the national debt because the deficits are the largest in American history. It is getting harder and harder to blame 9/11 for that because they have produced the largest deficits in American history year after year after year, as this chart shows right here. As the gentleman illustrated earlier, the sea of red ink is continuing; deficits, the largest in American history, as far as anyone can see.
Mr. SCOTT of Virginia. The gentleman mentioned 9/11. It seems to me that it is fair to have been surprised in September of 2001 or maybe later that you suffered 9/11. Does the gentleman find it surprising that people still appear to be surprised that 9/11 happened here, 4 years later, that we are budgeting as if it did not happen? And surprise, after you pass the budget, oh, we forgot about 9/11?
Mr. COOPER. All the experts, including Chairman Greenspan of the Federal Reserve, say right now under these Republican budgets we are clearly on an unsustainable path, a literal road to ruin for our Nation. And the head of the GAO, the Government Accountability Office, David Walker, has said the same thing. In fact, he pointed out that 2004 was the worst year in American fiscal history, the worst year in our entire Nation's fiscal history because we are piling up deficits in such an irresponsible fashion. It is time for that to stop, but the situation will not be helped tomorrow when they cram down a budget on us that literally no one has seen. But if it resembles the House Republican budget or the Senate Republican budget, it is likely to be bad news for the American people.
Mr. SCOTT of Virginia. Let me ask one more question. The gentlemen mentions interest on the national debt. I remember in 2001 when this administration came in, when Chairman Greenspan was testifying, the questions he had to answer were along the lines of should we pay off the whole national debt or should we pay off just the short-term debt or the long-term debt? What will happen to the interest rates when you pay off the national debt?
Were the projections not at the beginning of 2001 when this administration came in that we could pay all the debt held by the public, we could pay it off by 2008, and by 2013, 2015, we could have put all the money back into the trust funds that we borrowed from like Social Security?
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Mr. COOPER. The gentleman mentioned earlier that in early 2006 they will be asking for another increase in the debt ceiling, perhaps even 2005.
Mr. SPRATT. That is correct. This time next year they will need another increase, probably in the range of $800 billion.
Mr. SCOTT of Virginia. Would the gentleman remind us what the 10-year surplus was projected to be at the beginning of this administration?
Mr. SPRATT. $5.6 trillion.
Mr. SCOTT of Virginia. For those same 10 years, what is the projected surplus to be now?
Mr. SPRATT. It is more like $3.3 trillion deficit. We have had a swing in the wrong direction of nearly $9 trillion.
Mr. SCOTT of Virginia. Mr. Speaker, I would ask if the entire take of the individual income tax, is that not about $800 billion?
Mr. SPRATT. That is correct.
Mr. SCOTT of Virginia. And we have an average of $900 billion overspending from what was projected every year for the 10-year period?
Mr. SPRATT. Yes. It is a serious problem. It is a result of policies. It did not just fall off out of the sky. It is not terrorism necessarily. It is not war, even. It is the fiscal policies of this administration.
Now, one thing we did, as the gentleman will recall, in 2001 we did not do it, I did not vote for that budget; but in the Senate in particular, they said these tax cuts will have to sunset at the end of 2010 because, one reason, there may not be the surplus that we think there will be. This is a blue-sky estimate. It may not obtain it. If it does not, we do not want to be committed to these tax cuts only to find out that the surplus that they are predicated upon does not actually happen. And so they were all made to expire or terminate by December 31, 2010.
Now, we know that the surplus projection was wrong, grossly off, vastly overstated. And we have huge deficits in the place of huge surpluses now. But the administration is still pushing the same fiscal policy, asking, insisting, scheduling these tax cuts to be extended, all of them, almost all of them, after the year 2010, even though they can only do one thing at that point in time and that is go directly to the bottom line and vastly, hugely, expand the deficit of the United States.
Mr. SCOTT of Virginia. Does the gentleman have a chart that shows what the surpluses were supposed to be and what the annual deficits look like?
Mr. SPRATT. Here is one good chart that does just that. The gentleman can see it better than I can from his vantage point. We can see what they projected.
In the year 2002 they projected a surplus of $313 billion. That was with the implementation of their policies. It turned out to be a deficit of $158 billion. In the year 2003 they projected $359 billion. At least that was the January 2001 projection. I beg your pardon. That was without policy. That was the projection before Bush policy. A $359 billion surplus turned into a $377 billion deficit with Bush policies.
Mr. SCOTT of Virginia. Now, Mr. Speaker, could the gentleman show me where Social Security and Medicare present surpluses are on that chart?
Mr. SPRATT. Most of the numbers that we have quoted, as the gentleman well knows, are net of the Social Security surpluses.
Mr. SCOTT of Virginia. So that means we spend the Social Security plus, and then spend even more than that after we have spent the surplus?
Mr. SPRATT. That is correct. We had a deficit last year of $412 billion. But that was after deducting $150, $160 billion surplus in Social Security. If that Social Security surplus had not been offset, there was a deficit in the general account of the Federal budget equal to nearly 600.
Mr. SCOTT of Virginia. In the final years of the Clinton administration we had the Social Security and Medicare surplus and we were talking about a lockbox where that would be put to save Social Security and Medicare without spending it; is that right?
Mr. SPRATT. That is correct.
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