Expressing the sense of the House of Representatives regarding rates of compensation for civilian employees and members of the uniformed services of the United States.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise in opposition to this resolution. Certainly everybody always wants to be better paid. I do not know anybody that is an exception to that particular rule. So there is always tension between what people would like to be paid and what an employer can afford to be able to pay. The employer in this case is the taxpayers of the United States of America.

This is not necessary to give what this resolution proposes, that would be supersized raises, jumbo COLAs, to the Federal workforce. We have been very generous with the Federal workforce. In the last 7 years, for every $1 increase in the cost of living index, or for that matter in the cost of living adjustments to Social Security, for every $1 that the cost of living has gone up, Federal workers have gotten a raise of $1.66. They have gotten raises two-thirds higher than the actual inflation rate. In fact, in the past 4 years, Federal workers have gotten raises at twice the rate of inflation.

The President's budget proposes that the across-the-board raise for the Federal civil service should be 1.5 percent, consistent with the actual cost-of-living adjustment. This resolution, however, says that they should get 3.5 percent.

Why? Well, they say it is because we are going to give the military a larger raise and therefore we have to give the Federal civil service a larger raise, too. I do not think that is accurate. People that work at civil service jobs are not taking the same risks on behalf of their country as people that are working in our Armed Forces. We do not have the retention problems in the civil service sector as we do in the Armed Forces.

There is a letter that has been submitted by the administration, by the Office of Management and Budget, opposing this resolution and points out that we are almost at a record low on the turnover in the Federal civil service. About 1.5 percent a year, that is the whole turnover of people in Federal civil service jobs.

This is not a matter of retaining people. This is a matter of giving extra raises to people that, frankly, the taxpayers do not have the money to afford. This would cost us $2.2 billion this year and a similar amount next year and the year after and in perpetuity to give these extra large raises rather than holding the line as we should.

For State workers, the average pay raises in the last 4 years have been only about a third of what the pay raises have been for the Federal workers. The private sector is significantly behind what we have already done for Federal workers. This is not the time when we have record deficits to be giving more than a cost-of-living adjustment to the Federal civil service.

Mr. Speaker, we have been overly generous. It is not needed to retain people; and, frankly, the taxpayers are the ones that are being asked to foot this multi-billion dollars of expenses. This is the taxpayers' money. We are being fair. We should stay that way.

The supposed pay gap, people say Federal workers are 32 percent underpaid. Actually, that particular survey does not calculate all the factors. It does not calculate the locality pay that boosts Federal civil service workers,

which cuts that gap in half; and it does not cover the benefits they receive under which that gap evaporates.

We are being fair, and we should oppose this resolution on behalf of the taxpayers of the United States of America.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 3 minutes to the gentleman from Indiana (Mr. Buyer).

Mr. Speaker, I yield myself 15 seconds.

I include in the Record a copy of the letter from the Executive Office of the President of the Office of Management and Budget in opposition to this resolution.

We hear people say, well, we have Federal civil service workers that go in harm's way. The vast majority do not. But for those who do, what we have to do is avoid this across-the-board increase that consumes $2.2 billion so that we can target the extra assistance where it is needed.

Office of Management and Budget,

Washington, DC, March 30, 2004.

Hon. Dennis Hastert,

Speaker, House of Representatives, Washington, DC.

Dear Mr. Speaker: As the House of Representatives begins

consideration of a resolution on Federal pay policy, I

strongly urge the House to support the Federal employee pay

policy reflected in the President's FY 2005 Budget. The

Administration believes this approach, rather than the one

reflected in the proposed resolution, is the most effective

way to achieve the desired result: to recruit, retain, and

reward quality employees.

The President's Budget proposes to increase compensation

for civilian employees by 2 percent, or by over $2 billion,

targeted to address specific needs and opportunities. The

proposal includes: a 1.5 percent across-the-board pay

increase to maintain civilian employee buying power; $200

million spread across the agency budgets for use in

addressing specific recruitment and retention needs; and,

$300 million for the Human Capital Performance Fund, which

agencies can use to reward their highest performing

employees. The resolution under consideration would instead

support the same across-the-board increases for civilian

workers that the President has proposed for military

personnel.

The Administration strongly supports the proposed

resolution's goal of providing sufficient compensation for

civilian and military employees to support our critical

efforts to recruit, retain, and reward quality employees

effectively and responsibly. The Administration, however,

does not believe that providing the same across-the-board

increases for civilian workers that the President proposes

for military personnel will help us achieve this goal.

If added to the President's proposal for $2 billion in pay

increases for civilian employees, the additional cost of

providing every civilian employee with the identical across-

the-board raise proposed for the military would be about $2.2

billion. Because Congress cannot provide this funding without

exceeding budget limits or shifting money away from higher

priorities, this increase essentially acts as an ``unfunded

mandate'' that agencies must cover within existing funds.

Federal civilian employees have enjoyed cumulative annual

pay increases of 45.1 percent since 1993. For the last five

years, Federal employees have received raises that exceed

overall private sector wage growth. State governments, by

contrast, have provided smaller increases for their employees

when faced with similar resource constraints. In the past

four years, many States have frozen pay completely at various

points in time, and we are not aware of any State that in

2004 gave its workers as large an across-the-board raise as

is being proposed for Federal workers this year.

In addition, Federal employees receive other types of pay

increases. In 2005, we estimate the value of within grade and

quality step increases as 1.3 percent, the value of

promotions as 1.2 percent, and the value of cash awards as

1.3 percent of civilian payroll. While not everyone will

receive these increases, with the 3.5 percent across-the-

board pay increase that the proposed resolution supports,

overall Federal employee compensation in 2005 would increase

by about $5 billion.

Federal employee benefits are also increasingly more

attractive relative to those available in the private sector.

These include a

defined benefit annuity and lifetime health benefits for as

little as five years of service, as well as transit

subsidies, long-term care insurance, preferential tax

treatment of health insurance premiums, and flexible spending

accounts for dependent and healthcare expenses. The Federal

civilian benefits package increasingly stands out as one of

the most comprehensive available anywhere.

Both civilian and military employees perform crucial

functions on behalf of the American public. The

Administration believes, however, that giving every civilian

employee the identical raise proposed for the military does

not support the goal of providing compensation to effectively

and responsibly recruit, retain, and reward quality

employees. Advocates for providing identical pay raises to

civilian and military employees cite recruitment and

retention problems, but we have no evidence that the Federal

Government has widespread recruitment and retention problems.

With respect to retention, the voluntary attrition rate is at

a near historic low of 1.6 percent. Only in relatively few

occupations are recruitment and retention problems an issue,

and President's pay policy gives agencies the tools and

resources to address these concerns.

The President's pay proposal provides sufficient pay not

only to recruit and retain needed workers, but also to reward

the government's highest performing employees. The

Administration is implementing better agency performance

appraisal systems that will be able to distinguish superior

performance. Such systems will enable agencies to reward

employees with funds from the Human Capital Performance Fund.

These incentives will produce improved performance and

results for the American people.

Our civilian and military employees are vital to the

success of the Federal government in meeting its commitments

to the American people. Federal workers should be rewarded

with a pay policy that most effectively recruits, retains,

and rewards quality employees. The Administration believes

the pay policy included in the FY 2005 Budget supports those

goals. While we recognize that the proposed Sense of the

House resolution has no binding effect on either the budget

or appropriations processes, we urge Members to oppose the

resolution.

Sincerely,

Joshua B. Bolten,

Director.

Mr. Speaker, I yield 3 minutes to the gentleman from California (Mr. Hunter), the chairman of the Committee on Armed Services.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, were we to adopt this policy of across-the-board raises, we would prevent the ability to prioritize for those people who actually put their lives at risk and put themselves in harm's way. I have worked in local government, I have worked in State government, I have worked in the Federal Government. Typically we make a distinction between people, whether they are police, whether they are fire, whether they are law enforcement, whether they are in the military. We make a distinction between those who put themselves in harm's way when we consider what we need to do in employment.

But if all the resources are consumed on saying, no, we have got to give everybody an across-the-board increase, then we cannot target our efforts towards those people who do put themselves in harm's way. That is what the President's proposal seeks to do, have an adequate across- the-board cost-of-living increase, so that you therefore retain the resources to target the additional assistance where it is most justified. This resolution wipes out that approach. This resolution says, no, somebody that works at a desk, and maybe doing a very important job at that desk, has to be given the same increase as someone who puts their life in harm's way. That is a wrong approach.

The people that we have a challenge retaining are those who do put their lives in harm's way. But across-the-board, they virtually never had as little a retention problem as they do now in the Federal Government. A 1.6 percent attrition rate. That is it.

This is not a matter of keeping the Federal employees in general. This is a matter of conserving the resources so that we can target them, as the President's budget proposal wants to do, to where it is most needed.

I wanted to cite from the letter that the White House sent over: ``If added to the President's proposal for $2 billion in pay increases for civilian employees, the additional cost of providing every civilian employee with the identical across-the-board raise proposed for the military would be about $2.2 billion dollars. Because Congress cannot provide this funding without exceeding budget limits or shifting money away from higher priorities, this increase essentially acts as an unfunded mandate.''

The letter goes on to state: ``The President's proposal is for targeting resources to where it is most needed, rather than taking this across-the-board approach that prevents us from making sure that we retain the people who have the specialties that are in highest demand and for whom we must compete with the private sector.''

This is a sop to people who wanted to treat everyone the same because perhaps they are part of the same employee organization. That is not what we need to do.

We go to great measures to protect Federal employees. As the Representative of most of Oklahoma City, come out and see the new Federal building that is being dedicated in about a month's time and look at the extraordinary security measures that we have put into place to protect our Federal civilian workforce, because we know their value, we know their importance. But that does not mean that we treat everyone as though they were putting their lives in harm's way and, therefore, undercut what we do to keep the good people that do put their lives in harm's way on behalf of the citizens of this country.

We do not have the extra $2 billion for the across-the-board increase this resolution seeks to do. We have got enough problems with the deficit already.

I ask people to oppose this resolution.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, is the gentleman aware that we did not have the money to fund it because the very across-the-board language that you propose today had already been put in and soaked up the money?

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, we had some interesting discussion about, well, why have we not gone to this system of saying let us reward people based upon their performance. Let us target, let us target funds, as the President wants to do. And the gentleman asked, well, why was it not done in the appropriations bill last year?

That program has not been created. There is no program to fund. We could not put it in the subcommittee mark. The gentleman from Virginia chairs the committee that has the ability to bring the legislation to the floor, to promote what the President wants to do. Let us not undercut.

If the gentleman agrees it is a good idea, I agree it is a good idea, if the gentleman from Virginia (Mr.Tom Davis) agrees it is a good idea, and certainly the White House promotes it, then instead of doing this one-size-fits-all across the board, why do we not support the President's proposal and bring that Human Capital Performance Fund, that is what he calls it, why do we not bring that legislation to the floor? But, for goodness sakes, do not pass this resolution soaking up the resources that would have to go to pay for performance.

The ball is in the court of the committee of the gentleman from Virginia. I know he is sympathetic toward the President's approach, but I am sure he would not want to adopt a resolution that defeats his ability to move the Federal Government to be more responsible, to say, we know that not all employees perform equally, not all are placing themselves in the same level of risk as others are, and we ought to be able to make distinctions.

Do the cost-of-living adjustment, the 1.5 percent that is proposed, that is already in the budget, but do not pass this resolution to take away the ability of pay for performance. Do not say that just because we have retention problems in the military and they are so poorly underfunded that, therefore, we have to do the same for the Federal civil service.

The Federal civil service, in the last 7 years, for every dollar increase in the cost of living, has already gotten $1.66 in increases, faster than anybody else. It is time to have a year where we say, let us hold back. Let us only do the cost of living adjustments, but, at the same time, put the pay for performance in place.

We do not need this. The turnover rate for Federal employees is at virtually an all-time low. There are spots where we need to be able to keep people with specific skill sets, and the President's proposal would let us address those. But we do not do it by giving a pay raise to the people that we do not have a problem retaining and then not be able to retain the people that do have the special skills.

Do not pass this resolution. Do not try to handcuff us and prevent us from reforming the Federal civil service process. We are being more than fair with the 1.5 percent. We do not need to go overboard.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, I do not think that people should vote for this resolution based upon someone's claim that, well, it really does not do anything, because the language, the very last phrase, makes it clear that it calls for the compensation for the civilian employees of the United States to be adjusted at the same time and in the same proportion as the rates of compensation for members of the Armed Forces. If the Armed Forces, as is proposed and as we know is going to happen, get 3.5 percent, then the Federal civil service would have to get 3.5 percent as well, rather than the 1.5 percent that is proposed.

Again, this has been looked at by the Office of Management and Budget, and I quote once more from their record about what this would cost. They say, ``It would be about $2.2 billion, and because Congress cannot provide this funding without exceeding budget limits or shifting money away from higher priorities, this increase essentially acts as an unfunded mandate that agencies must cover.''

We are talking about a vote to spend an extra $2.2 billion. That is what we are here about this morning. We are here because some people in the House insist that that ought to be the case, and they want to use this vote to leverage the appropriations process and everything else.

But the taxpayers are looking over our shoulders. They know that the Federal workers have gotten twice the cost of living over the last 4 years, and they have not. Federal workers have had their pay improved far beyond what has happened in the private sector. It is not out of line to say, let us just hold it down to inflation this year, but let us make sure that we hold back the resources to target, to target pay where we most need it for recruitment or for people who are putting their lives at risk. That is what we ought to be doing. We should not be voting for this resolution.

I ask my fellow Members, Mr. Speaker, to join me in opposing this resolution.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, I object to the vote on the ground that a quorum is not present and make the point of order that a quorum is not present.

Mr. Speaker, pursuant to House Resolution 649, I call up the conference report on the Senate concurrent resolution (S. Con. Res. 95) setting forth the congressional budget for the United States Government for fiscal year 2005 and including the appropriate budgetary levels for fiscal years 2006 through 2009.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on S. Con. Res. 95.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, first I would like to thank members of the Committee on the Budget on both sides of the aisle that have worked throughout the process this year. I wish to thank my ranking member and friend, the gentleman from South Carolina (Mr. Spratt).

We will embark today on a vigorous debate. I have a feeling that we will differ quite a lot on the policy and the issues before us faced in the budget, but we do so in a cheerful manner, one that is with full respect; and I have enormous respect for my very able friend and colleague, the gentleman from South Carolina (Mr. Spratt).

I also want to thank our staff. Rich Meade and the entire Committee on the Budget staff, they have worked very, very diligently on the majority side; and Tom Kahn and the minority staff have also done that. They prepare Members, not only on the committee but throughout our conferences and caucuses, so we are prepared for this debate today and throughout the year, and they deserve our support as we move forward and our appreciation.

As we started crafting the budget this year, there was certainly really no lack of naysayers who said that getting a budget passed this year would probably be next to impossible. There were way too many challenges, people said, facing our country, too many conflicting interests, too much pressure because of the upcoming elections.

All of those things are certainly true. It is true we are dealing with a number of other challenging issues, such as the ongoing conflicts in Afghanistan and Iraq, and the war against terrorism in general on a global basis.

But we will prevail as a Nation. Regardless of the debate that we have today on budgets and taxes and pay-as-you-go and the national debt, we will prevail as a Nation, because it is not about budgets in the end. It is not about taxes in the end. It is about an American spirit that will not die, because we believe in freedom, and that is freedom that is given to us as a little seed planted in our hearts when we are born and something that blossoms throughout our lives. We want to share that with the world, and we believe that by sharing it with the world, we will have a safer place in which to live.

I am also happy to report that we have prevailed, despite a myriad of critics who said it could not be done, that we would not even get a conference report agreement between the House and the Senate. We were able to do that. So today in the House we will complete the first step of what are some of our most fundamental duties.

I am extremely proud of this budget and what it stands for. I would like to particularly thank our leadership, our Speaker, the gentleman from Illinois (Mr. Hastert); our majority leader, the gentleman from Texas (Mr. DeLay); our deputy whip, the gentleman from Virginia (Mr. Cantor); and our whip, the gentleman from Missouri (Mr. Blunt); as well as the gentlewoman from Ohio (Ms. Pryce). All of the leadership team worked hard, standing our ground for the budget principles that we knew must be done.

And what was that must-do list for this year's budget? Clearly, this budget had to provide for the defense and homeland security of our Nation. That is job one. There is no excuse not to complete the most important job that this country requires of a Nation in order for it to be free, and that is the defense of our country.

Second, this budget had to continue to support a program of economic growth for our country, as well as continue our commitment to a host of critical domestic programs, such as veterans benefits, education, health care, and prescription drugs for seniors. And we had to do all of this while reining in our spending and working to reduce the deficits we incurred while responding to extraordinary circumstances over the past few years.

Getting a consensus on what was exactly right or correct was not easy. It has been very difficult. Every single person has their own idea of what a perfect budget would look like. This is not a perfect budget, and I dare say my friends on the other side will remind me of that time and time again today; but it is what is doable at a time of extreme circumstances in our Nation's history.

I have heard people say at time of war we ought to do this; at time of economic challenge we ought to do that; we ought to fund priorities. All of those are true. But we have never faced all of them at the exact same time: to have a downturn in the economy, be faced with two wars, a global response to terrorism, the most unbelievable tragic event of terrorism facing our Nation. All of this happening at the exact same time is something that has never happened to our Nation.

So these are extraordinary circumstances and we will respond. Let me tell you the guiding principles of this budget of how we are going to respond.

First is strength. We are free as a Nation as long as we are able to defend our freedom at home and abroad. And so the first principle is strength.

Second is growth. We must continue to grow. Our policies are helping to boost the economy. We do not want to grow government. We want to grow the earning capacity of people. We want to grow the ability to create jobs. We want to grow the entrepreneurial spirit in our country. That is what we want to grow. And we have already seen, the last 6 months have been the fastest growth in 20 years as a result of the policies put forward by our President and by this Congress. And we believe that must continue.

Business investment is up. Unemployment is falling, and it is lower now than it was on average for the 1970s, the 1980s or the 1990s. And most important, we are seeing jobs being created.

More Americans are working today than at any time in American history; 1.1 million jobs have been created over the last 8 months alone. So to remain the most prosperous superpower, our economy must be able to continue to grow.

Finally, opportunity. Strength, growth and, finally, opportunity. America's continued greatness comes from the unlimited opportunities that our American freedom provides. We are all for that. And we must continue to encourage those opportunities for a better life for every American citizen. Government certainly has a role in that.

Those were the guiding principles of our budget that we passed here in the House, and they remain the guiding principles as we work through this conference agreement.

I also want to talk to you about a few principles with regard to this budget that were included in the final conference agreement. First, there will be no tax increase. And let me be clear: If you vote ``yes'' on this budget, you are saying we do not need a tax increase. We do not want an automatic tax increase to happen, and we do not believe that this is a time for Americans to dig deeper in their pockets in order to deal with challenges we should be facing here in Washington.

Tax increases should not be the solution. And so if you vote ``no'' on this budget, be aware you are voting to automatically allow tax increases to occur this year.

That is what this budget will do. It will prevent an automatic tax increase. So by voting against it, an automatic tax increase will occur.

Second, on spending, our constituents have told us time and time again that we have got to rein in spending. We have got to control the waste, fraud and abuse in Washington. And certainly that is often in the eye of the beholder; but we believe that it is time to go through our departments, through our categories and look at ways to rein in spending. We cannot begin to address reducing the budget deficit without holding the current rate of spending growth.

This is what our spending growth has looked like in the past few years, a lot of growth. Most of that from necessary demands, but we cannot sustain that spending growth. So we have looked for ways to control spending throughout the budget. This budget calls for holding the line on nondefense, nonhomeland security discretionary spending. For the first time, this Congress, certainly in my tenure here and I daresay in the tenure of all Members of this body, this will be the first opportunity for you to vote to freeze or hold the line on nonsecurity spending in Congress.

Let us talk about the war. The President did not, when he submitted his budget back in February, contemplate the true cost of war because they were unknown at that time. Our budget has taken that into account.

We know, without question, that there will be costs for the ongoing war and that this budget will have an effect as a result. Do we know the exact amount? No. That is not known right now to the Congress, to the Defense Department, to the President.

We can speculate, and we have put into this budget a placeholder that says $50 billion, based on the estimate that we have for this year, is an appropriate figure to begin planning for the 2005 costs of the war.

And thank goodness we did that, because right after we passed our budget, we found out that at least $25 billion will be necessary to fund the ongoing conflict during 2005. So it is not with precision that we know this amount, but it is something we need to plan for in this, and this budget accomplishes that.

This budget does all of this, if we follow it, to get us back to balanced budgets and fiscal responsibility. We have to start somewhere.

There will be people who come to the floor today who say, you know, this is only a 1-year budget. Well, yeah, that is what we always pass. Last year we passed a budget; it had a lot of years on it, but we only followed it for a year. Then we renegotiated it this year. We will to the same next year and the year after. In fact, every year I have been here we have gone year to year to year with regard to taxes, spending, rules, appropriations, all of the different issues that face us today.

And so we are coming forward to present to you today a 1-year budget. It complies with the Budget Act. You will see 5 years' worth of projections for the amounts of money, but this is a 1-year budget. And we believe if we can get this right and if we can hold the House and the other body and the President to this plan, it puts us on a path to not only controlling the deficit, but getting us back to a balanced budget.

This budget is the first step in accomplishing that but it only works if we stick to it. This is our next major challenge, I daresay, to begin to get past all of the excuses of the last few years, although they are appropriate, certainly important rationale for how we have gotten here.

But we need to move forward. This allows us to do that today. So we need to vote ``yes'' in order to move this plan forward. But let me be clear: If you vote no, as I said before, you vote for an automatic tax increase, you vote to cut veterans' spending because we increased veterans' spending here over the President's amount by $1.2 billion; you are not supporting the troops to the tune of $50 billion contemplating the war costs.

Sure, you can say we will vote for the appropriations bill, but this plans for it in a budget. And I also suggest, you are not doing what you need to do to plan for defense and homeland security of our Nation.

This puts us on a track to fiscal responsibility. It meet our needs and the strengths of our country and growth for the economy and opportunity for the future. And I ask my colleagues to support the conference report.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Let me just respond quickly and say, and I forgot this part, we are reducing the budget deficit by $100 billion. So I understand there is concern out there. We are taking $100 billion off the top as a result of this budget because we are planning our work and we are sticking to our plan, and it is a good plan.

I yield to the gentleman from Virginia.

It is my understanding. The gentleman is correct.

Mr. Speaker, I yield 4 minutes to the gentleman from Texas (Mr. Thornberry), a very valued member of the committees.

Mr. Speaker, could I inquire how much time is remaining on both sides.

Mr. Speaker, we will reserve our time and let the other side catch up a little bit.

Mr. Speaker, I yield myself 15 seconds, and then I will let them continue.

But I want people to listen. Listen. We have got half the speakers on that side saying, worry about the deficit and debt, and the other half coming like the gentleman from Minnesota saying we are not spending enough, we are not spending enough, we are not spending enough. So is it the deficit or is it spending? My goodness, my colleagues need to get their message straight.

Mr. Speaker, I continue to reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume to

respond to the gentleman that that is why our budget reduces the deficit next year, $100 billion alone, and that is without raising taxes.

Mr. Speaker, I yield 4 minutes to the gentleman from Ohio (Mr. Portman), a very valued member of the committee.

Mr. Speaker, I yield 2 minutes to the gentlewoman from Florida (Ms. Ginny Brown-Waite).

Mr. Speaker, I yield such time as he may consume to the gentleman from Texas (Mr. Neugebauer) for the purpose of a colloquy between myself and the gentleman from Texas, and ask the gentleman to summarize.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, that provision is still in the budget. We worked to preserve that. I appreciate the gentleman's leadership on that. The provision in the Senate-passed budget resolution concerning the farm payment limitation is not included in the conference version. I thank the gentleman for his leadership and his continued efforts in this regard.

The gentleman is correct and I appreciate his leadership on this issue and work to ensure that we keep the promises of the Farm Bill. The provision in the Senate passed budget resolution concerning farm payment limitations is not included in this conference version. Any major changes to farm payment limits or any other agricultural policies should be addressed by the Agriculture Committee which has jurisdiction over these issues.

While the House passed budget resolution, H. Con. Res. 393, included $371 million over five years in reconciliation instructions for the Agriculture Committee, these instructions, which were never intended to reduce critical farm commodity support programs, are not included in the conference agreement.

Mr. Speaker, I yield 3\1/2\ minutes to the gentleman from Connecticut (Mr. Shays), a very valued Member and the vice chairman of the committee.

Mr. Speaker, I yield myself the balance of my time.

It is often asked at a time, is America better off than it was 4 years ago? Is it better off at all?

Well, it is.

Homeland security. Since 2000, we have greatly strengthened our homeland security, in part because of the budgets that we have passed to make sure that our homeland is protected through strength. We have created the Department of Homeland Security and more than doubled the funding for homeland security since September 11. With the improved resources, we have increased presence in key ports, the Bio Watch program now on many large U.S. cities, and over 500,000 first responders have been trained. America's homeland security is better off.

Defense. Over the past 3 years, we have made great strides in correcting the defense deficit done in the early 1990s, including increasing the Department of Defense's annual budget by over $110 billion to prosecute the global war on terrorism, greatly improving the military quality of life. Our defense is better off than it was 4 years ago, and it is better off under this budget.

Our economy. The economy is growing now in 2004, the best in 20 years, not on the verge of a recession the way it was when President Clinton left office. Real gross domestic product growth is at its highest pace in 20 years. Payroll employment is growing strongly now. We have had 1.1 million jobs added to this economy just since last August. Manufacturing jobs are increasing, the unemployment rate is falling, and housing markets are the strongest in 20 years. The economy is much better off than it was 4 years ago and it will be better if we continue the policies of this budget.

Our budget is the blueprint that allows these policies to continue, and we will all be better off if we adopt that budget here today. We need to adopt it to provide the strength of this country, the growth for our economy, and the

opportunity for our future. And we can do it without a tax increase and reduce the deficit by over $100 billion next year alone. That is what this budget accomplishes. The other side offers nothing but fear and trying to talk down the economy and trying to scare people about our future. That is not an agenda. Fear and anger is not an agenda.

The agenda we need to adopt today is a positive one of strength, growth, and opportunity for our future; and we can do it if we adopt this conference report on the budget. I ask for the adoption of the conference report.

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, pursuant to House Resolution 585, I call up the resolution (H. Res. 581) expressing the sense of the House of Representatives regarding rates of compensation for civilian employees and members of the uniformed services of the United States, and ask for its immediate consideration.

Mr. Speaker, I ask unanimous consent that I be allowed to control 20 minutes, the gentleman from Illinois (Mr. Davis) would control 20 minutes, and the gentleman from Oklahoma (Mr. Istook) would control 20 minutes.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and to include extraneous material on the resolution now under consideration.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the issue today is of the utmost importance to our Federal employees, the Federal Government, and the American taxpayer. The Federal Employees Pay Comparability Act, FEPCA, of 1990, Public Law 101-509, sought to help achieve comparability through annual pay adjustments based upon the change in private sector wages and salaries. Despite our efforts, the Bureau of Labor Statistics currently estimates a 32 percent pay gap and a 10 percent gap between the military and the private sector.

In order to deliver what was promised, the Federal Salary Council recommends a 25 percent locality pay for 2005. There is clearly much work to do to fulfill the intent of Congress, and the resolution here before us is a step in that direction.

Mr. Speaker, I yield 3 minutes to the gentleman from Virginia (Mr. Wolf), my colleague and coauthor of this resolution, along with the gentleman from Maryland (Mr. Hoyer) and myself.

Mr. Speaker, I yield myself such time as I may consume.

I think the gentleman is aware that the Federal Employee Pay Comparability Act calls on the Federal Salary Council every year to make recommendations in terms of what the Federal employees would make. We could put a chart up here that would show that every year we have failed to come close to what the Federal Salary Council has recommended under the existing law of the land which is FEPCA, the Federal Employee Pay Comparability Act. This year, they have recommended a 25.73 locality rate for 2005.

Congress has a long history on this issue. This resolution merely reiterates the sense of the House. Annual pay adjustments for civil employees and military members provided through the appropriations process have been identical in nearly every year over the last two decades. In addition, language to this end was included in the budget resolution for fiscal years 2002, 2003 and 2004.

In 1999, the last time the Senate held a freestanding vote on this issue, the Senate voted 94-6 in favor of an amendment expressing the same sense of Congress that we do here today.

I used to work for a billion-dollar company out in Fairfax, Virginia. Our greatest asset was not our building. It was not our computers. It was not the land. It was our employees. They walked out the door every night, and we did what we had to to make sure they came back the next day. In an information age, people are the number one asset of any organization.

The same is true with the Federal Government. We are in danger of losing in the procurement force over 60 percent of our qualified workers over the next 5 years. These are people that can walk across the street to the private sector and make more money than they are making for the Federal Government and leave with their full retirement. These kind of minor incentives in a 3.5 percent pay raise that I do not think anybody except maybe the gentleman opposing this resolution would call a gargantuan pay raise or a huge pay raise, this is in line with what we are seeing in many cases in the private sector and in State and local governments and in my own counties that I represent in Congress.

We have to be able to recruit and retain the best and the brightest to fulfill the policies that this Congress passes and sends on. To do that, pay comparability is important, and we continue to lag significantly in that respect. The Federal Government may never be able to compete with the private sector dollar for dollar, but we have to ensure that we do not fall further behind in the war for talent.

While wages are not the only factor in our recruitment and retention efforts, what employer can hope to succeed in a labor market where it is offering salaries so far below the average? This is not a cost-of- living allowance as some have argued, saying it is too generous. The purpose is to assist the Federal Government in providing salaries comparable to those in the private sector. This is achieved through annual pay adjustments based on the change in private sector wages and salaries, not the cost of living. That is the fundamental precept behind the Federal Pay Comparability Act. This is achieved through our annual pay adjustments.

The fact remains that Federal pay is not competitive. It is also important to note that providing a higher annual adjustment would not result in any budgetary increase. As they have over the last two decades, agencies pay for all their salaries, including these annual adjustments, with discretionary funds from their salaries and expense accounts. This does not score under CBO.

I think we can all agree that both armed services and the Federal civilian workforce are integral to fulfilling the role of government in America and both must be compensated accordingly. In the coming fiscal year, parity and pay adjustments remain the vehicle to help achieve comparability between the public and the private sectors on the issue of pay so that the government can continue to perform. This resolution is integral to this effort. I urge my colleagues to support it.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I include in the Record a letter addressed to me from Steven Strobridge, who is a colonel, U.S. Air Force, retired, and director of Government Relations for the Military Officers Association of America, supporting this.

Military Officers Association

of America,

Washington, DC, March 30, 2004.

Hon. Tom Davis,

Chairman, Committee on Government Reform, House of

Representatives, Washington, DC.

Dear Mr. Chairman: On behalf of the nearly 380,000 members

of the Military Officers Association of America (MOAA), I am

writing to express MOAA's support of the principle of pay

raise parity for the federal civilian workforce.

Pay comparability with private sector workers is a

fundamental statutory requirement for both federal civilians

and the uniformed services. To the extent such comparability

is not sustained over time, our government will not be able

to attract and retain the kinds and numbers of personnel it

needs for a professional, highly qualified career work force.

Improved military pay raises in recent years have been

aimed at restoring long-term comparability with private

sector pay after decades of military pay caps. Those in the

federal civilian workforce also have had their raises capped

below comparability for many years.

Improved military pay raises in recent years have been

aimed at restori8ng long-term comparability with private

sector pay after decades of military pay caps. Those in the

federal civilian workforce also have had their raises capped

below comparability for many years.

While MOAA would not presume to recommend a particular

civilian pay standard for the long term, we believe the

resolution you propose, along with Representatives Wolf and

Hoyer, represents a reasonable step in the right direction,

given the well-documented years of federal pay raise caps.

Sincerely,

Steven P. Strobridge,

Colonel, USAF (Ret),

Director, Government Relations.

Mr. Speaker, I yield 2 minutes to the gentleman from Oklahoma (Mr. Cole), a strong advocate for military and Federal employees.

Mr. Speaker, I yield 1 minute to the gentleman from Virginia (Mr. Moran).

Mr. Speaker, I yield myself such time as I may consume.

We have heard discussions about how the vast majority of Federal employees do not go in harm's way. Let me make a comparison.

The gentlewoman from the District of Columbia (Ms. Norton) has just raised an important point, and that is in the war on terrorism and protecting the homeland we are relying on our Federal employee workforce, and many of these people were drafted into this.

We look at the Oklahoma City bombings in my friend's home State, over 100 Federal employees died just for being Federal employees and for being there as a symbol of this government, their lives involuntarily on the line, dying for this country.

Officer Johnny Spann was killed in an Afghan prison uprising on November 25, 2001, the first American combat death in Afghanistan, a Federal civilian employee, a CIA employee.

Inspector Tom Murray, a 31-year veteran of the Customs Service, died from toxic fume inhalation during an inspection of the hold of a vessel at the Port of Gramercy in Louisiana in October of 2001.

Twenty-three firefighters died in wildland fire-fighting incidents in 2002, primarily in California and Colorado, where the fire season was especially severe. These account for almost a quarter of the on-duty deaths of firefighters in 2002, Federal employees.

Who are our Federal employees? Hundreds of Federal firefighters spent weeks without pause, working day and night to quell the multiple wildfires that consumed much of Southern California.

Coast Guard Chief Kevin Concepcion directed the safe and orderly seaborne evacuation of 70,000 confused and frightened people from Lower Manhattan amidst the chaos of the September 11 attacks.

FBI agents William Fleming and Ben Herren brought to justice two of the men responsible for the infamous 1963 bombing of an African American church in Birmingham, Alabama, 40 years after they committed the crime.

Dozens of foreign service officers have returned to the embassies in Nairobi and Kenya after bombs demolished the embassy buildings in 1998, killing and wounding dozens of embassy officials.

Employees from the Federal Highway Administration, the Social Security Administration, HUD, DEA, Agriculture, Secret Service, all of these died in the Oklahoma City bombings in April of 1995.

Three-and-one-half percent. Over 20 percent under what the Federal Salary Council recommended to the President Federal employees ought to get this year.

Mr. Speaker, I urge Members to support this resolution.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself 2 minutes.

Mr. Speaker, let me assure the gentleman, and maybe I can talk him into supporting this resolution when I ask him to read it here, the language of the resolution itself makes it clear this is not across the board. It says: ``Compensation for civilian employees and members of the uniform services must be sufficient to support our critical efforts to recruit, retain and reward quality people in government service, and to help achieve this objective, compensation for civilian employees should be adjusted at the same time and at the same proportion as our rates of compensation for members of the uniform services.''

Nothing in there mandates across-the-board. This language, in fact, was changed from previous years to accommodate some of OMB's concerns.

But I have got to tell you, where I get the most concerned is that last year on this floor I put an amendment on this floor to add $500 million for a Human Capital Compensation Fund so we could give out bonuses and award people on the basis of merit, and the gentleman's subcommittee did not fund it.

I am happy to yield to the gentleman from Oklahoma.

Mr. Speaker, reclaiming my time, no, I am not aware of that.

I am happy to yield to the gentleman from Maryland.

Mr. Speaker, reclaiming my time, as the gentleman is aware, this authorization was authorized by the full House in an

up-or-down vote. Unfortunately, we called on the appropriators to fund it, the money was there, as the gentleman noted, earlier on before the additional money was appropriated; and it still was not funded. So it is easy to talk one way, but we have to look at consistency and action.

All we are asking the House to do today is do what we did last year, the year before, the year before, what the Senate did in their budget resolution. This is 20 percent below what the Federal Salary Council has recommended this year.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 1 minute to the gentleman from Illinois (Mr. Davis).

Mr. Speaker, I yield myself 1 minute, and then allow the gentleman from Oklahoma (Mr. Istook) to respond and close, and then I will make a very brief closure.

I think it is important to note again that this resolution does not mandate

across the board. We took any language here that mandates that out. In fact, we have agencies right now where pay for performance is the rule. They are working under it at DHS. DOD passed a performance review last year. The IRS and FAA already have those provisions of pay for performance in there. Before this last Congress, GAO came and asked for it. They have it. These are agencies that our committee and other committees in the House, working together, are already working to pay for performance.

But if we do not pass this legislation, there can be no pay for performance. There will be no pay for performance without pay comparability. Otherwise, they do not even get the 1.5 percent, Federal employees. So this is a natural precursor to get what the gentleman from Oklahoma, what the administration, and what we all want. This has got to be there first.

So I think maybe we have a chicken-and-the-egg situation, but we have to have the money, I say to my friend from Oklahoma, before we can do the other kinds of things. And we took the mandatory, across-the-board language out of this resolution exactly for that purpose: to give us all an opportunity to work together, to give Federal employees pay comparability, but to do it in an appropriate fashion.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself the remaining time.

The world has changed. It might have been a decade ago where you looked at the Federal workforce being uninvolved and in a different light from our men and women in uniform somewhere else across the world. But, today, the battleground has shifted here to the Pentagon, to Oklahoma City, to Manhattan, to our embassies abroad, and it has seen in each instance Federal employees dying on the front lines, just performing their day-to-day duties as targets of terrorists. We see that the first individual killed in the Afghan war was a Federal civil servant. Every Federal employee now, as they go to work, is a potential target of a terrorist.

In addition to that, OMB's opposition to this is nothing new. We saw this under the previous administration. That is traditionally the line they take. That is why Congress passed and President Bush won, signed the Federal Employee Pay Comparability Act in 1990, to try to have an independent body review what it would take to get pay comparability. Because the American taxpayer does not want an underfunded rocket scientist, a cancer researcher at NIH that we are not paying appropriately. We do not get top talent on the cheap, and that is not what they want.

So the Federal Salary Council appointed by President Bush made the recommendation. They recommended a 25 percent increase; and the administration said, no, we want 1.1 percent. All we are saying today is comparability says this ought to be at 3.5 percent, the same as military, and how we spend that money we can decide through the process as we move forward in the appropriations process.

This resolution does not even mandate it across the board. In fact, in some agencies, those have gone by the wayside as we formed the pay schedules there.

This is an important issue for this Congress. It is an important issue to our Federal workforce and our military workforce, of which we have shown support to some of those groups as well.

I urge my colleagues to vote for this. Let us send a message to our Federal employees and our military personnel that we honor what they do, we value what they do, and we are going to pay them appropriately. I ask for support of this resolution.

Mr. Speaker I yield myself 4\1/2\ minutes.

Mr. Speaker, my good friend, the gentleman from Iowa (Mr. Nussle) and I work together well, and I have the greatest regard for him, but let me put it the way it is. He is trying to put the best face on a bad situation.

What we have got here is a new high for the budget deficit and a new low for the budget process. For the first time in 20 years, for the first time since the 1980s we have a budget that only goes out 1 year. Ever since the Budget Act was adopted, the principle has been that you will run out your numbers 5 years so that we can see the implications of tax cuts and tax increases, spending cuts and spending increases, spread over a reasonable period of time. Not in this budget: 1 year for the first time in 20 years.

Now, what does that allow you to do? It allows you to dodge the deficit. It keeps you from having to show on a multiyear basis how you will get from a $300-$400 billion deficit to something that is half that size to a respectable, sustainable number.

If you only take it out 1 year, there is no way in the world that we will ever get our arms around the deficit in that period of time. So it exonerates you from presenting any kind of process or plan to get where we all know where we have got to go, and that is to a much lower deficit.

Another thing: When you do not put real numbers in the outyears, in 2006, 2007, 2008, it allows you to reduce the President's request and not acknowledge what you are actually doing. By our calculations, when we look at the numbers that are on the chart contained in this budget resolution, this budget resolution provides $122 billion less for defense than the President requests or projects for himself over that same period of time.

This much is clear: Vote for this and you are voting for a huge deficit by the acknowledgment of the drastic $367 billion. And while they have included $50 billion for supplemental spending in Iraq and Afghanistan next year, I think that is at least $25 billion short of where we will really be. Add that 25 to the 367; you get to 392. Take out the Social Security surplus because it should not be included, and the deficit in the basic budget is $552 billion.

That is what you are voting for if you vote for this budget resolution, a deficit of $552 billion.

Now, when you run a deficit like that, you stack up debt, and once again we will have to raise the debt ceiling; and one of the key provisions of this bill buried beneath all of the line items is a provision which would automatically spin off an increase in the debt ceiling of $690 million--$690 billion. It will take the debt of the United States up to $8.1 trillion.

It is hard to get my tongue around those numbers.

When Mr. Bush came to office, the statutory debt ceiling of the United States was $5.9 trillion. Adopt this budget resolution and we will raise that ceiling by $2.2 trillion to $8.1 trillion. That is how much we have had to increase the debt ceiling, $2 trillion in order to accommodate the fiscal policies of the Bush administration.

Now, we have got record deficits. We have record debt. That is bad enough, but even worse, even worse in this budget resolution, there is no plan, no process and no prospect, not even a PAYGO rule for balancing the budget or anyone issuing the deficit over a period of time. All we have here, after a lot of huffing and puffing, is a puny version of the PAYGO rule that House Democrats and House Republican on two occasions in the 1990s adopted to apply to both tax cuts and spending increases on the entitlement side. All we have got here is a 1-year extension that applies only in the Senate, no application whatsoever in the House. That is all we have got.

The gentleman says if you do not vote for this, it could impair the recovery. Well, let me say, Mr. Greenspan warned us only a week or two ago that this recovery we are beginning to enjoy may be short lived unless we come to grips with this critical problem, and that is mounting, never-ending deficits that these budgets are producing.

So the thing that is incumbent upon us now is not to kick the can down the road, is not just to pass something for the sake of saying we passed the budget resolution, we fixed the 302(a) number. We can go ahead with our appropriation bills. We need a plan; we need a process. We need to deal with this deficit now, and this budget resolution does not do it. That is why we should defeat it, send it back to conference and do it right.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Virginia (Mr. Scott).

Mr. Speaker, I yield 1 minute to the gentleman from Illinois (Mr. Emanuel).

Mr. Speaker, I yield to the gentlewoman from New York (Mrs. Maloney) for the purposes of a unanimous consent request.

(Mrs. MALONEY asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Minnesota (Mr. Oberstar), the ranking member of the Committee on Transportation and Infrastructure.

(Mr. OBERSTAR asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Virginia (Mr. Moran).

Mr. Speaker, I yield 1\1/2\ minutes to the gentlewoman from Oregon (Ms. Hooley).

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Wisconsin (Mr. Kind).

(Mr. KIND asked and was given permission to revise and extend his remarks.)

Mr. Speaker, could I inquire of the Chair how much time is left on this side.

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Massachusetts (Mr. Markey).

(Mr. MARKEY asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from New York (Mr. Engel).

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Florida (Mr. Davis).

Mr. Speaker, could the Chair tell me how much time is left?

Mr. Speaker, I yield 1 minute to the gentleman from Tennessee (Mr. Cooper).

Mr. Speaker, I yield myself 15 seconds to respond to the gentleman.

The gentleman said jobs are coming back, and the recent job growth is a welcome development, but, Mr. Speaker, we are still 2.2 million jobs below the level of jobs existing in the economy in March of 2001 when the last recession began. We have never seen such a jobless recovery as we have seen now.

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from New Jersey (Mr. Andrews).

(Mr. ANDREWS asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 4 minutes to the gentleman from Maryland (Mr. Hoyer), the minority whip.

Mr. Speaker, I yield myself the balance of my time.

(Mr. SPRATT asked and was given permission to revise and extend his remarks.)

Mr. Speaker, let me make a couple of points clear because they have been brought up repeatedly throughout this debate.

First of all, how much have we reaped in the way of jobs as a result of these enormous tax cuts mainly benefiting wealthy Americans? What has been the pay-off in jobs?

This economy went into a recession in March 2001. If we take the level of jobs in the private sector at that point in time and compare it to today, we are short. There are 2.2 million fewer jobs today, notwithstanding the enormous stimulus of all these tax cuts, 2.2 million fewer jobs. For the first time since President Hoover, we have a recovery where we have not recovered the jobs even though we are 15 months, 18 months out from the trough of the recession. Actually, it is longer than that.

It has also been said that revenues have been rising, and they have taken an up-tick recently; but this chart shows when President Bush proposed his tax cuts, and we said, Mr. Bush, you are betting the budget on a blue-sky forecast; you are betting it for everything it may be able to sustain, this was the course of revenues that he projected, OMB projected with the tax cuts. With the $3.5 trillion worth of tax cuts that was enacted in 2001, the Bush administration nevertheless projected that revenues would rise and stabilize at that level.

Here is the actual level. The broken blue line is the projected level, the red line which descends precipitously is the actual level of revenues, and the difference between these revenues here, which is about $1.1 trillion and this level here, which is below $750 billion, is at least $250 billion. Revenues have not risen; taxes have not rebounded. We have not had the supply-side phenomenon now, as we did not have in 1981. This is the actual record.

Let me show Members the situation we find ourselves in which makes it absolutely essential for us to use the budget resolution, the one tool that we have which deals in the aggregate with everything we have spent and everything we take in by way of taxes.

This is the curve on which we were proceeding in 2001 when Mr. Bush came to office. He inherited an advantage that no President in modern times has had, a budget in surplus. He was in surplus by $236 billion in fiscal year 2000, and this was the course that was projected by his economists at the Office of Management and Budget. This is the course that we have determined we are on today. If you are just for what Iraq is likely to cost and what Afghanistan is likely to cost, if you assume that all of the tax cuts are going to be renewed, which is a politically likely assumption, this is where we are. We get a little up-tick from the economy, but the bottom line shows that having risen a bit from a projected deficit of $521 billion this year, we go up a little bit over $324 billion, but 10 years from now we are right where we started: $502 billion. We tread water. We do nothing. We accumulate debt, and that is why we are having in this resolution to raise the debt ceiling by $690 billion, because year after year we are stacking debt on top of debt. That is the result of this budget, and this resolution does nothing on the revenue side or the spending side.

We have heard a lot of talk about how we have this runaway spending, but let me show where the spending is occurring. If we look at all of the spending in the Federal budget and you take these spikes in the budget where spending in certain accounts is faster than current services, guess what those accounts are: defense, homeland security, the response to 9/11, accounts for 4 fiscal years accounts for 90 to 95 percent of all of the increase in spending over and above current services.

There are two points Members can draw from this. First of all, the President has requested this. We provided it. We had to spend it.

Secondly, the likelihood this is going to be reined in significantly, defense, it goes up to $422 billion. That is without including the supplementals. This is not going to be reined in significantly. So to talk about accounts where spending is growing, we cannot expect in the near term any significant cuts in that area.

What we continually hear talk about is the sector of the budget called domestic nonhomeland security, domestic discretionary spending. That is it right there. That is one-sixth of the budget. It is about $384 billion. The budget deficit is bigger than that. Clearly, this has the FBI, the National Park Service, the court service, the whole operation of the government in it. Clearly, we cannot squeeze enough blood out of that turnip to begin to get rid of this enormous deficit.

Let me show Members one final chart just to show it can be done. This budget resolution does not do it, but it can be done. When President Clinton came to office in January 1992, we had just recorded our biggest deficit in history, $290 billion at the end of fiscal year 1992. He came into office in 1993. Spending was at 22.5 percent of GDP. We did it by lowering spending and raising revenues. It can be done again, but this budget resolution does not do it. Let us vote it down and send them back to conference and start over again.

Mr. Speaker, the Budget Resolution Conference Report marks the end of a long, arduous process, during which our staff do most of the work and get little of the credit they are due. I would like to thank my excellent staff for their expertise and energy and tireless work. They are as follows: Tom Kahn, Sarah Abernathy, Arthur Burris, Linda Bywaters, Dan Ezrow, Jennifer Friedman, Jason Lumia, Sheila McDowell, Diana Meredith, Joe Minarik, Kimberly Overbeek, Scott Russell, Andy Smullian, Lisa Venus, Andrea Weathers, and Jesse Contario.

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 681 and ask for its immediate consideration.

Mr. Speaker, for the purpose of debate only, I yield the customary 30 minutes to the gentleman from Massachusetts (Mr. McGovern), pending which I yield myself such time as I may consume. During consideration of this resolution, all time yielded is for the purpose of debate only.

(Mr. REYNOLDS asked and was given permission to revise and extend his remarks.)

Mr. Speaker, House Resolution 681 is a closed rule that provides for consideration of H.R. 4520, the American Jobs Creation Act of 2004. The rule provides one hour of debate in the House equally divided and controlled by the chairman and ranking minority member of the Committee on Ways and Means.

The rule further provides that an amendment in the nature of a substitute recommended by the Committee on Ways and Means, as modified by the amendment printed in the Committee on Rules report accompanying the resolution, shall be considered as adopted.

The rule waives all points of order against the bill, as amended, and against its consideration.

Finally, the rule provides one motion to recommit with or without instructions.

Mr. Speaker, America's economy has taken its share of hits over the past several years. We had a triple shock of terrorist attacks, corporate scandals, and recession. But each time this economy was stricken, this administration and this Congress responded with action to move forward, to create jobs, and to spur economic growth.

In fact, in just his first few months in office, after inheriting a slowing economy, President Bush and this Congress enacted a series of tax cuts that resulted in the shortest and shallowist recession in this Nation's history. Our work towards recovery has continued throughout its time and today real GDP growth has grown at its fastest rate in 20 years. More than 1.4 million jobs have been created. The unemployment rate is below the average level in each of the past 3 decades. Productivity has grown to the fastest 3-year rate in 40 years. Home ownership is at an all-time high and we have the highest number of total payroll employees in our history.

In the particularly hard hit manufacturing sector we have seen the best 4-month period of job growth in 6 years and the manufacturing employment index was at its highest level since 1973. Even in my region of the country, which has traditionally lagged national recoveries, one prominent economic survey reported ``signs of a long awaited rebound in hiring demand were evident across most regions and industries, suggesting that the economic growth may soon begin to shift into a new higher gear.''

But our work is not done until every American looking for a job finds one, and that is why, Mr. Speaker, I am pleased to be here today on behalf of the American Jobs Creation Act by supporting this rule and underlying bill.

The most recent data shows that employment remained strong last month, evidenced by the creation of 248,000 new jobs and continuing three quarters of a strong economic growth. Now it is time to seize on this momentum and continue to take steps to grow our economy, generate jobs, boost domestic manufacturing, and protect small businesses and farmers.

As my colleagues well know, recent European sanctions on American exports are hurting our manufacturers and farmers to the tune of up to $4 billion a year. Tariffs currently stand at 8 percent and will increase a staggering 1 percent per month until FSC-ETI is repealed. These sanctions are increasing the price of U.S. goods sold outside the United States. They are reducing the exporting capability of multiple industries, and they are threatening the ability of our domestic country to create jobs here at home.

We have the power to stop them now, and without our action many small businesses and other employers face financial ruin while their employees face their own job losses. But by repealing FSC-ETI through the underlying bill, this Congress will put an end to these sanctions and help yet again to put Americans to work.

H.R. 4520 permanently reduces the corporate tax rates from 35 percent to 32 percent for domestic manufacturers, producers, farmers, and small corporations. This is yet another stimulant for job growth, encouraging production and manufacturing here at home, giving employers incentives to reinvest, expand and, most importantly, create new jobs in the United States.

Mr. Speaker, the underlying bill also addresses a fundamental hurdle in realizing even bigger job growth, the double taxation of U.S.-based manufacturers. Our global counterparts currently share a significant advantage over the United States simply due to the onerous U.S. Tax Code. In reducing this double taxation faced by U.S.-based companies, we will greatly enhance their competitiveness and ability to sell American-made goods in the global market, all the while making it easier for them to create more jobs here in the United States.

Last month the Institute for Supply Management's manufacturing index

showed the twelfth straight reading above 50 percent and the seventh reading above 60 percent. Readings at this level indicate substantial expansions in manufacturing activity, which is more good news for manufacturing job creation.

Mr. Speaker, another important part of H.R. 4520 is its relief for millions of small businesses and farmers from the Alternative Minimum Tax. Over the years this tax has burdened more and more middle-income Americans, a clearly unintended consequence. With the passage of the underlying bill today, this House will deliver much needed relief for millions of American farmers and small businesses. This relief will help keep individuals from sending exorbitant amounts of their hard- earned money to Uncle Sam and use it instead to create new jobs and new opportunities.

Finally, H.R. 4520 makes it cheaper for existing businesses to increase their investment and for entrepreneurs to also expense their new ventures. The underlying bill includes provisions to promote investment in new equipment. Increased investment such as this provides significant stimulus to the economy and further aids in boosting job growth.

Shipments of core capital goods, which is the category most directly linked to business investment, has continued to rise recently, and we can build on that progress.

Mr. Speaker, the Committee on Ways and Means has worked tirelessly on behalf of the American people and I would like to commend the chairman and committee members for their steadfast support of sound tax policy and job creation.

We have the opportunity and responsibility to not only continue, but to accelerate the last 9 months of economic growth and job creation. We can do that today by passing the American Jobs Creation Act. I urge my colleagues to support the rule and the underlying bill.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I spent a good deal of time doing the presentation, the fact that I think our economy is moving, that the American Jobs Creation Act of 2004 is going to create more jobs across America; and I just want to make sure that my view of that is again on the record.

Mr. Speaker, I yield 4 minutes to the gentleman from Washington (Mr. Hastings), a distinguished member of the Committee on Rules.

Mr. Speaker, I yield 5 minutes to the gentleman from California (Mr. Thomas), the distinguished Committee on Ways and Means chairman.

(Mr. THOMAS asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 2 minutes to the gentleman from Kentucky (Mr. Lewis).

Mr. Speaker, I yield myself such time as I may consume.

I sit here and I listen to some of my colleagues on the other side of the aisle try to rewrite history. It was only 4 hours ago that we were in the Committee on Rules. We took testimony. Some of the Members who are the loudest critics on the floor today were not there.

When I came to this Congress, I had served almost all of my entire career in the minority. I know what it is like to have to cough up a substitute and not be able to do it because of the diversity of the minority party in coming up with it. I did not see a substitute. It was awfully clear there was no substitute for the committee's consideration.

Now there are a number of line-by-line amendments that were brought before the committee by the minority in rollcall votes. They are well recorded. There will be no document that says there was a substitute before the Committee on Rules.

I yield to the gentleman from Massachusetts.

None.

The amendments were brought before the committee. Again, there was no substitute.

I did see a Rangel amendment that excluded all parts of the tax cuts and left the tobacco bill.

Today this body, after this rule is passed, is going to have the opportunity to make a decision: Tax cuts and a competitive agenda, or the same old business as usual, drag it out, mess it up.

Today, with H.R. 4520, the American Jobs Creation Act of 2004, my colleagues are going to be able to end sanctions by repealing the FSC- ETI, compensating for lost benefits by permanently cutting corporate tax rates for domestic manufacturers and producers and farmers and small corporations.

It is going to provide a pro-growth tax incentive for manufacturers, small businesses and farmers to help create more American jobs, and it is going to enhance the competitiveness of U.S.-based companies engaging in exporting and/or manufacturing by greatly reducing double taxation. These companies receive more than 90 percent of the FSC-ETI benefits under the current law.

Mr. Speaker, we talked about it a long time. Today we are going to have a vote up or down. America deserves this legislation because it is going to give everyone who wants a job an opportunity to get a job.

Mr. Speaker, I reserve the balance of my time.

announcement by the speaker pro tempore

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, the gentleman from California (Mr. Lantos) outlined a couple of things, and the debate on this rule also should bring us back to perspective on this.

I thought I understood from the gentleman that his plan encourages American companies to outsource overseas. The U.S. companies only benefit if they manufacture in the United States. This plan temporarily reduces the tax rate on repatriated income but only if that income is currently reinvested in the United States.

The plan provides for $13 billion in transitional tax relief to manufacturing and production in the United States. It eliminates double taxation on foreign sales corporations and will not allow these businesses to expand their operations hiring Americans.

Finally, any sanctions imposed by the EU and other tariffs imposed on the American products will encourage business expansion, creating jobs right here at home in the United States.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield myself such time as I may consume.

I know that my colleagues in the Chamber know there is a debate on. I believe those who are watching throughout the offices know there is a debate on. I hope America knows. We are having that debate first on this rule, and we are seeing viewpoints expressed. And then we will have full debate on the Ways and Means chair and ranking member managing the underlying legislation. Let it be clear that there will be 2 full hours of debate that this honorable body will have on this issue. I am sure there will be many different viewpoints that are expressed. At the end, I hope we are successful in passing this legislation so that we can continue to grow jobs in America.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 30 seconds to the gentleman from Texas (Mr. Stenholm).