Establishing the congressional budget for the United States Government for fiscal year 2007 and setting forth appropriate budgetary levels for fiscal years 2008 through 2011.

Mr. Speaker, I want to thank my good friend from Florida (Mr. Putnam) for yielding me the customary 30 minutes, and I yield myself such time as I may consume.

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

Mr. Speaker, we have seen this movie before. Just like last year and the year before that and the year before that, the budget resolution put forward by the House Republican leadership today is an awful piece of legislation. There is no other way to describe it.

It is a budget that hurts American families. It is a budget that continues to create a government without a conscience. It is a budget that punishes the poor and the middle class and rewards the very wealthy and special interests. It is a budget that explodes our Nation's deficit and passes mountains of debt onto our children and grandchildren. It is a budget that deliberately misleads the American people about the cost of our ongoing wars in Iraq and Afghanistan. In short, Mr. Speaker, this is a budget that deserves to be defeated soundly by every Member of this House.

The details speak for themselves. This budget includes a deficit for 2006 of $372 billion and a deficit for 2007 of $348 billion. In fact, if this budget is approved, the five largest deficits in the history of the United States of America will have occurred in the past 5 consecutive years, all during the period when the House, the Senate, and the White House are totally under Republican control. What in the world has happened to the party of fiscal discipline? They have become the party of runaway spending and reckless tax giveaways.

Even worse than this unchecked spending binge is the Republican leadership's deliberate misleading of the American people. We are at war, Mr. Speaker, and every day our brave soldiers patrol the most remote areas of Afghanistan and the most dangerous neighborhoods in Iraq. Every day the American people learn of more roadside bombings, insurgent attacks, and

death in Iraq. Every day the Iraqis seem more and more unable to form a functioning government, and every day Iraq slips further and further into chaos and civil war. And every day our credibility around the world gets lower and lower. And every day our Nation sinks deeper and deeper into a violent quagmire.

But with all of this, Mr. Speaker, how do you explain only $50 billion in funding for the wars in Iraq and Afghanistan for fiscal year 2007, and after that no funding at all? Now, if the Republicans actually carry out what they are promising in this budget, the United States won't be spending a penny in Iraq or Afghanistan after 2007. Maybe they have miraculously stumbled upon an exit strategy, which would be just fine with me. But last year, the United States spent over $100 billion on the wars in Iraq and Afghanistan, and all told we have spent $357 billion over the past 4 years on fighting these wars.

President Bush recently announced that the American troops will be in Iraq until at least 2009. The truth, of course, is that the Bush administration will be back before we know it asking for tens, if not hundreds of billions of dollars more in so-called emergency funding to pay for their failed foreign policy. But then, Mr. Speaker, why should we expect the Republicans in Washington to start telling the truth about Iraq now, given the fact we have been lied to, deceived, and misled from day one.

What will happen is that the Republican leadership will write a blank check without asking the tough questions, without demanding the straight answers, and without conducting the kind of oversight that is our responsibility as Members of Congress.

And while we are on the subject of war and its aftermath, Mr. Speaker, let us examine how this budget handles our veterans. Now, my Republican colleagues will pat themselves on the back and crow about how they have increased funding for veterans in fiscal year 2007, but once again the devil is in the details. The truth is that over the next 5 years, the Republicans actually cut the same funding by a total of $4 billion.

Do they think our current and future veterans are just going to fade away? Talk about cutting and running. At a time when America is creating hundreds, if not thousands of new veterans, and when thousands of those veterans are going to need significant health care support for the rest of their lives because of their service in Iraq and Afghanistan, it is shameful that the Republicans in Washington are blatantly ignoring our veterans. Sending our brave servicemen and women to war without providing for their care when they return is not an American value.

Let me say to my colleagues on the other side of the aisle, if you are going to send our servicemen and women into war, you have an obligation to them, a moral obligation to them that when they return home as veterans that they will be cared for. To do otherwise is to disrespect their service. And that is what this budget does. How does anyone in this Chamber vote for this budget and then go back to their districts, look their veterans in the eye and say with a straight face that we have done our best for you? You can't.

The list of misplaced priorities in this budget, Mr. Speaker, goes on and on. This budget slashes critical programs in the areas of education, job training, environmental protection and conservation funding, public health programs, medical research, and social services. It fails our responsibility to protect America by allowing $6.2 billion worth of cuts to homeland security programs.

And where is the money for port security? Didn't my Republican friends say that they were concerned about our ports when joining with Democrats in opposing the President's selling of our port security to the United Arab Emirates?

Maybe I need new bifocals, but I cannot find the necessary funding to make our ports secure in this budget.

This budget cuts programs that helps low-wage workers and vulnerable families. In fact, the Republican leadership cuts into these programs even more deeply than President Bush's proposal.

To top it all off with a Nation at war, with desperate priorities that need to be met, with veterans who need our help and the gulf coast still devastated from last year's hurricanes, the Republican leadership still has the audacity to give the wealthiest Americans $228 billion in new tax cuts while passing the cost of those tax cuts onto our children. It just takes my breath away.

My friends on the other side of the aisle will say this budget reflects necessary tough choices. My question, however, is this: Why do all of the tough choices hurt average families? Why don't some of the tough choices include forgoing tax cuts for wealthy people or ending subsidies in tax breaks for oil companies that are gouging families at the pump, or no more giveaways to pharmaceutical companies until they provide cheaper drugs for our citizens? Why is it all of the Republican tough choices spell tough choices for working families, senior citizens, students, veterans and the most vulnerable?

Mr. Speaker, there is a better way. Democrats have a plan that works, a plan that reestablishes fiscal discipline by implementing a pay-as- you-go strategy, a plan that provides our veterans over $8 billion more in assistance than the Republican budget, a plan that balances the budget by 2012, a plan that properly funds our domestic priorities including homeland security, a plan that gives our veterans the care and the respect they deserve, and a plan that provides fiscally responsible tax relief to millions of hardworking middle-class Americans.

What the Republicans have proposed today is out of step with the American people. Indeed, it is way out of the mainstream. This is a budget that reflects a heart of stone. I can only say to my colleagues on both sides of the aisle that the day has come for a new direction, a new set of priorities, a new commitment to the American people. The day has come for us to recreate a government with a conscience.

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

Mr. Speaker, let me just respond to the gentleman from Florida (Mr. Putnam). Facts are indeed a stubborn thing. The fact is that this budget that the Republicans have put forward cuts funding for veterans. Over 5 years, the budget cuts funding for veterans health care by $6 billion below current services.

Republicans will tout the fact that the budget raises discretionary spending for 2007 by some $2.6 billion, but these apparent gains are quickly reversed with a cut for 2008 of $59 million below current services, and cuts of increasing amounts in subsequent years culminating in a cut of $4 billion for 2011.

One other fact: a couple years ago, the VA itself testified it needed a 13 to 14 percent increase each year to maintain what it is doing. This budget in no way reflects what this Veterans Administration has said.

So facts are a stubborn thing. This budget is not good for veterans.

Mr. Speaker, I yield 4 minutes to the gentlewoman from California (Ms. Matsui), my colleague on the Rules Committee.

(Ms. MATSUI asked and was given permission to revise and extend her remarks.)

Mr. Speaker, I have here a letter from the major Jewish community service providers in our country, and they ask all of us to oppose this Republican budget resolution because it will force, in their view, harmful cuts in education, health care, nutrition, housing and other services critical for children, families, seniors, and people with disabilities.

I ask my colleagues to listen to the plea of these faith-based groups.

April 5, 2006

Dear Representative: The Jewish community has long

demonstrated a commitment to economic and social justice. We

have been vigorous in advocating policies and programs to

fight poverty and to help address the needs of

disenfranchised vulnerable populations, including the

elderly, working poor, disabled, youth, and refugees.

The budget process is one of the most important actions

taken by our government each year and is an integral part of

allocating funds for important human needs programs. While we

recognize that deficit reduction is critical to the economic

stability of our country, we believe it is essential that it

be done in a fair and balanced manner. Over the past months

we have spoken out against cuts that we believed would

disproportionately hurt those in most need.

The budget plan passed out of the House Budget Committee

would make huge cuts to domestic discretionary programs.

These cuts would be extremely harmful both to our social

service agencies that are dependent on public funding as well

as the vulnerable populations we advocate on behalf of.

Programs such as the Older Americans Act, the Social Services

Block Grant, the Community Services Block Grant, and the Low

Income Heating Energy Assistance Program are critical

to the elderly, refugees, children, and persons with

disabilities, and all would likely face severe cuts if this

budget proposal is enacted.

We believe that budgets are documents which reflect the

values and priorities of those who create them. With the

increase in hunger in American households; housing costs

rising faster than wages; and more than 45 million Americans

lacking adequate health care coverage, funding for social

services to assist these individuals is more critical than

ever. This budget does not accurately reflect our values.

As you consider the Budget this week, we ask you to oppose

this Resolution that will force harmful cuts in education,

health care, nutrition, housing, and other services that are

critical for children, families, seniors, and people with

disabilities.

Sincerely,

Association of Jewish Aging Services of North America.

Association of Jewish Family and Children's Agencies.

B'nai B'rith International.

Hebrew Immigrant Aid Society.

International Association of Jewish Vocational Services.

Jewish Council for Public Affairs.

Jewish Labor Committee.

Jewish War Veterans of the USA.

National Council of Jewish Women.

Union for Reform Judaism.

United Jewish Communities.

Women of Reform Judaism.

Women's American ORT.

Mr. Speaker, I yield 4 minutes to the gentleman from Ohio (Mr. Kucinich).

Mr. Speaker, I appreciate the gentleman from California's comments. But I will tell you, most CPAs that fudge the numbers in real life go to jail. And the fact of the matter is in this budget, the numbers are fudged.

$50 billion for Iraq for the next 5 years? Give me a break. You know what is going on. You know what is going on. The bottom line is you are going to be coming back and back and back for more and more money.

Look, the gentleman raised the Democratic budget proposal. Well, let me just elaborate a little bit and suggest that he read it. The Democratic budget proposal would return the budget to balance. We reach balance by the

year 2012, and we also have smaller deficits than the Republican budget and accumulate less debt.

By contrast, the Republican budget never returns to balance and even refuses to show how big the deficit will be after 2011. Our proposal includes fiscally responsible budget enforcement rules. The Democratic budget backs the two-sided pay-as-you-go budget enforcement rule that requires that the cost of any new mandatory spending or revenue legislation be fully offset.

This is the way families operate. They pay as they go. They can't accumulate the debt that you have accumulated. There is no way that families could operate the way the Republican majority has operated here.

During the 1990s, the two-sided PAYGO rules played a critical role in turning record deficits into record surpluses. Do you remember those days?

The Democratic budget also requires a separate vote to increase the debt limit. You used to be concerned about that, but no longer. Now we sneak the increase in the debt limit through without having to put Members on record, and it prohibits using fast track reconciliation procedures to make the deficit even worse.

We invest in education, and we keep our commitment to veterans. I mean, to me one of the most egregious elements of the budget that the Republicans have proposed is that you turn your back on America's veterans. We have sent them to war. There will be more veterans in the future, not less, and you did not put aside the adequate funding to make sure that these men and women who have served our country with great honor get the respect that they have earned and that they deserve.

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

Mr. Speaker, I want to go back to the issue of veterans funding again. The gentleman from Florida keeps on bragging about how the Republicans have been so good to our veterans and have increased dramatically veterans funding over the last decade.

First of all, let me just say that I don't know of a single Member of Congress who have gone back to their districts and heard from veterans and people who work in VA facilities and other veterans health benefit facilities that somehow, boy, you have given us all we need. We don't need any more. What you have handed us is enough to meet the demand. I mean, in fact, what you hear is the opposite. And I am going to just say one thing to the gentleman. Over the past 10 years, all this bragging he is doing about increasing the veterans budget, from 1996 to the year 2000, the number of unique patients increased by $2.4 million. And on a per capita basis, veterans health care funding increases average only 0.1 percent per year, a level well below inflation for medical care.

So we are not meeting the current needs of our veterans, and in this budget there is no way we are going to meet the future needs of our veterans when we are creating more veterans because of the wars in Afghanistan and Iraq. Our policies in Iraq and Afghanistan are creating thousands of new veterans. That is an undeniable fact. Thousands of these men and women have been severely injured, and most will need medical services and benefits for the rest of their lives. And even without the influx of this new generation of veterans, the fiscal year 2006 and fiscal year 2007 spending for the VA doesn't even meet the health care needs of our current number of veterans and military retirees. According to every major veterans organization in the country, we are still about $1 billion short each year. But the Republican budget before us actually decreases the discretionary funding for VA benefits and services each and every year over the next 5 years. So FY 2011, just 5 years away, is actually $4 billion less than FY 2006. That is their budget.

So I ask, is this how we honor our troops? Is this how we support them when they come home? I hope not. And I would urge my colleagues to vote ``no'' on this.

I reserve the balance of my time.

Mr. Speaker, I want to thank the gentleman for his comments. Again, I would simply say that the spending he is bragging about for the last 10 years didn't even keep up with inflation.

But putting that aside, let's talk about the next 5 years. Let's talk about your budget, the budget you have. I have got the numbers here. In fiscal year 2007, it goes up by $2.6 billion.

Then in fiscal year 2008, you go down by $100 billion. In fiscal year 2009, you go down by $1.4 billion. And in fiscal year 2010, you go down by $3.1 billion. And then in fiscal 2011, you go down by $4 billion.

And I would just remind the gentleman, maybe he has not been reading the newspapers lately, but we are at war in Afghanistan and Iraq. Thousands of new veterans are going to come into this system. And your budget shortchanges not only them, it doesn't even meet the needs of the current veterans. So from the veterans' perspective, this budget is deeply flawed. I think it shows a disrespect for the service of those men and women whom we have sent over to fight for our country. We owe them more than this.

And I would urge my colleagues if you want to support veterans, this is not the way to do it. This is the place you take a stand. You say no to this budget, send them back, and let them do what is right by our veterans. There is no way we should be shortchanging our veterans, and this budget does that.

Mr. Speaker, I would at this time like to submit into the Record a letter from the Interreligous Working Group on Domestic Human Needs, representing the major Protestant and Catholic churches and faith organizations. They state that ``as communities of faith . . . we are called upon to hold ourselves and our communities accountable to the moral standard of our Biblical tradition. We speak together now to express our concern about our national priorities.'' The letter is called a ``Faith Reflection on the Federal Budget,'' and it opposes what is before us today.

Interreligious Working Group on Domestic Human Needs

A Faith Reflection on the Federal Budget

As communities of faith, we are grounded in a shared

tradition of justice and compassion, and we are called upon

to hold ourselves and our communities accountable to the

moral standard of our Biblical tradition. We speak together

now to express our concern about our national priorities.

In the year that has passed since this reflection was

originally written, this concern has deepened as we have

watched poverty, food insecurity, and the number of people

without health insurance climb for the fourth year in a row.

Across the country, churches and faith-based organizations

who care for our most vulnerable people are straining under

increased demand for services due to cuts in federal funding

for critical safety net programs. Devastating hurricanes have

underscored real problems of racism and inequality in our

country and along the Gulf Coast, and scattered throughout

the country survivors are struggling to provide for their

families while waiting for the bold action that has yet to

materialize from our national leaders.

These circumstances make it necessary to even more closely

examine our government's decisions, particularly those

concerning the budget, through a moral lens. The federal

budget remains a fundamental statement of who we are as a

nation. The choices we make about how we generate revenues

and spend our shared resources reveal our true allegiance. As

people of faith we must continue to ask: Do these choices

uphold values that will strengthen our life together as a

nation and as part of the global community?

We offer this reflection as a starting point for such a

dialogue and to make clear the values to which we hold

ourselves and our nation accountable.

Community and the common good

``But seek the welfare of the city where I have sent you .

. . and pray to the Lord on its behalf, for in its welfare

you will have your welfare'' (Jeremiah 29:7, NRSV).

Our nation's well-being is dependent on the well-being of

all its members. In order to form a more perfect union, the

preamble to the U.S. Constitution commits this nation to

promoting the general welfare. In faith language we would

call that the ``common good.'' The budget should reflect a

commitment to the common good by ensuring that the basic

needs of all members of society are met. At this time, when

Gulf Coast communities are still struggling to recover from

last year's hurricanes, when nearly 46 million Americans are

uninsured, 37 million live in poverty and one in five

children lives in a household experiencing food insecurity,

additional cuts to critical human needs programs cannot be

justified.

Investments in education, job training, work supports,

health care, housing, food assistance and environmental

protection strengthen families and communities and promote

opportunity for all. These should be budget priorities.

Budget decisions must be evaluated not just in the short

term, but with respect to their long-term effects on our

children's children, the global community and on all of

creation.

Concern for those who are poor and vulnerable

``Give the king your justice, O God . . . May he judge your

people with righteousness, and your poor with justice . . . .

May he defend the cause of the poor of the people and give

deliverance to the needy (Psalm 72: 1-4, NRSV).

As a nation we have a special responsibility to care for

the most vulnerable members of society. All budget decisions

and administrative procedures must be judged by their impact

on children, low-income families, the elderly, people with

disabilities and other vulnerable populations.

Whatever one's position on the war in Iraq or on the tax

cuts, these policies are driving the deficit. Attempting to

pay off the deficit by cutting programs that affect needy

populations, when these programs did not lead to the deficit,

is unjust.

Economic justice

``Woe to those who make unjust laws, to those who issue

oppressive decrees, to deprive the poor of their rights and

withhold justice from the oppressed of my people'' (Isaiah

10:1-2, NIV).

God has created a world of sufficiency for all; the problem

is not the lack of natural and economic resources, but how

they are shared, distributed and made accessible within

society and throughout the world.

Our government should be a tool to correct inequalities,

not a means of institutionalizing them. The federal budget

should share the burdens of taxation, according to one's

ability to pay, and distribute government resources fairly to

create opportunity for all.

Endorsing organizations

National: American Baptist Churches USA; American Friends

Service Committee; Bread for the World; Call to Renewal;

Central Conference of American Rabbis; Church of the Brethren

Witness/Washington Office; Church Women United; Conference of

Major Superiors of Men; The Episcopal Church; Evangelical

Lutheran Church in America; Friends Committee on National

Legislation; Institute Justice Team--Sisters of Mercy of the

Americas; Jesuit Conference USA; Jewish Council for Public

Affairs.

Leadership Conference of Women Religious; Maryknoll Office

for Global Concerns; Mennonite Central Committee U.S.

Washington Office; National Advocacy Center of the Sisters of

the Good Shepherd; National Council of Churches of Christ in

the USA; NCCC Justice for Women Working Group; NETWORK, A

National Catholic Social Justice Lobby; Pax Christi USA;

Presbyterian Church (U.S.A.) Washington Office; Union for

Reform Judaism; Unitarian Universalist Association of

Congregations; United Church of Christ Justice & Witness

Ministries; The United Methodist Church--General Board of

Church and Society; Women of Reform Judaism.

State and Local: Arizona--Lutheran Advocacy Ministry in

Arizona. California--Lutheran Office of Public Policy--

California; Pacific Central West Region of Union for Reform

Judaism; Sisters of the Good Shepherd, San Francisco.

Colorado--Lutheran Advocacy Ministry--Colorado. Delaware--

Lutheran Office on Public Policy, Delaware. Florida--Union

for Reform Judaism--Southeast Council. Illinois--Lutheran

Network for Justice Advocacy; Lutheran Social Services of

Illinois; Protestants for the Common Good. Minnesota--

Institute for Welcoming Resources; Minnesota Council of

Churches. Missouri--Sisters of the Good Shepherd--St. Louis,

Mr. Speaker, let me just respond to the gentleman from Texas, my colleague on the Rules Committee. He says he is proud of this budget. Quite frankly, I am ashamed that this budget is coming out of this Congress with the cuts that are contained in this budget that I think are going to hurt working families and also be devastating for our veterans.

I want to point out to my colleagues on the other side that in 1995 the VA treated 2.6 million people. Last year it was 5.4 million people. And that number is going to go up and up and up. And yet in this budget, we see over the next few years a $4 billion cut. That to me makes absolutely no sense. We know that the demand on the VA is going to become greater and greater, and yet we are deliberately shortchanging veterans health and veterans benefits. We know what the future is going to hold, but we are fudging the numbers here. I think that that is not only irresponsible but, Mr. Speaker, it is dishonest.

The gentleman from Texas talked about planning. Well, boy, the planning that the Republicans have done here has just led to such great success. We have the biggest deficits in the history of the United States of America. Boy, that is great planning. More of our debt is owned by foreign countries than at any other time in our history. I don't know too many people who feel good about that.

Your planning has done such a great job that, quite frankly, it is pushing our country towards bankruptcy.

And he talked about the insatiable appetite of people who want to spend money. Look, I am all for fiscal restraint. We want to pay as you go. We want to make sure that every new program that we talk about, every new revenue initiative that we talk about is paid for. That is the way families do it. That is not the case with Republicans.

But when you talk about insatiable appetite, I can't help but think of your energy bill, which provides these incredible tax breaks and subsidies to oil companies that have never made more profits than they are right now, that are gouging American taxpayers at the pump, and you are giving them billions of dollars. Talk about insatiable appetite. Or the drug companies that can't provide our senior citizens a decent cost for prescription drugs and you are sending more and more subsidies and tax breaks and liability protections to these industries that, quite frankly, need to respect our citizens more.

So that is the kind of insatiable appetite that has gotten us into this mess, and we have had enough of it. We need new priorities; and I hope that my colleagues, again, will turn down this budget.

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

Mr. Speaker, let me just point out to the gentleman, in case he has not read it, the Democratic proposal actually balances the budget by 2012, which is something that the Republican budget does not do.

What we have a problem with is giving tax breaks to Donald Trump at a time when you are shortchanging veterans. We think those are misplaced priorities.

At this point I would like to yield 2 minutes to the gentleman from Florida (Mr. Hastings), my colleague on the Rules Committee.

Mr. Speaker, let me just close by saying there are numerous reasons to oppose this budget. Education funding goes down, health care funding goes down, environmental protection money goes down, and I go on and on and on. But what particularly I find astounding is the way our veterans are being disrespected in this budget.

The gentleman mentioned before all these veterans groups that are thanking him for what they are doing. The fact of the matter is, I am hearing the opposite from every major veterans organization in this country. I have a letter here from the Disabled Veterans of America asking us to end the cycle of the constant cutting of benefits, that people right now are waiting in lines. And we have more veterans that are going to be produced as a result of this war in Iraq and Afghanistan.

I have been to Iraq, and I have seen those men and women serving our country. I have a disagreement with our policy, but they are doing an incredible job. And you on the majority are doing a disservice to these veterans by not providing the necessary funding not only to meet the needs of the veterans that currently exist, but you don't even account for the veterans, the thousands of veterans, that will be produced as a result of this war. It is wrong, it is immoral for us to pass a budget that doesn't respect our veterans.

Vote ``no'' on this budget. Vote ``yes'' for the Spratt substitute.

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, I demand a recorded vote.

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

Mr. Chairman, I am proud to be here as the chairman of the Budget Committee to propose and debate the budget resolution for this fiscal year 2007, the blueprint that will guide the Congress' spending and revenue decisions for the coming year.

It is not easy to write a budget ever. It is particularly challenging to write a budget when you have to deal with an economic recession, when you have to deal with the worst terrorist attack that has ever hit practically any nation, but particularly ours on our own shores. It is difficult to write one when you are at war, when you have a whole new priority of homeland security that was never even considered just 10 short years ago, or the largest natural disaster ever to affect the United States called Hurricane Katrina. It is never easy to write a budget, and it is particularly challenging to do that when those kinds of things hit you not just one at a time but all at one time.

Today we are going to hear a lot about politics. You know, there is this new movement around the country that I think is pretty important, and that is that we need new science and math education for our kids because we are falling behind, but I think we probably ought to add history to that, too.

I love how the Democrats come to the floor today, and this is modern history for Democrats. In 2001, George W. Bush took office, and look at the deficit we have today. Nothing happened in between. Of course, there have been 6 years that have occurred, and during those 6 years we had those things like an economic recession, like Hurricane Katrina, like 9/11, like a global war on terror, the need to deal with homeland security. And all of those priorities not only were cheerfully voted by both sides, but the national debt not only went up under all of those votes, but in fact the Democrats proposed even more spending to drive that debt even higher.

And probably the most humorous conversation was the one I just heard on welfare reform, how the President is the one who ushered in welfare reform, President Clinton? This is the same President Clinton who vetoed welfare reform twice, and in fact had to be dragged kicking and screaming to support the Republican-passed welfare reform, which was the first opportunity for us to reform entitlement spending and to deal with some huge challenges that gave us the first surpluses in history.

So this budget is always going to be a challenge to write, but it is particularly going to be challenging if all we are going to hear on the other side is complaints and politics, and not any serious proposals to deal with it.

Is this budget going to please everyone? No. You have just heard quite a few complaints about how this budget is not going to please Democrats, and I can certainly understand why. But this budget takes into account the conversations that we have heard from our constituents back home in particular, and I believe this is the budget that is the right budget and the plan to keep our country moving forward with a strong growing economy, with a secure homeland, to provide endless opportunities both today and tomorrow for our kids and our families. It is guided by what we think are our most important priorities and it is based on a clear set of principles: Strength, spending control, and reform. And let me just touch on these briefly.

First on strength. This budget will further build on our Nation's greatest strengths, which include our Nation's national defense and homeland security, and the robust growth of our Nation's economy and job markets as a result of the plans and proposals that we have passed on this floor over the last 5 years.

Spending control. This budget will continue our efforts to control spending across the board by further restraining the nonsecurity discretionary spending, and building on our progress from last year to reform government, achieve savings in mandatory entitlement programs.

In addition to those reforms, we also believe that it is time for us to reform the budget process and continue the work that has already been done. This budget will begin to reform the budget process by actually dealing with emergency spending.

And I will come back to all of these, but let me first touch on our strengths.

The economy. As I just noted, our underlying strength comes from the Nation's economy, and in the past 4 years, 5 years, it really has delivered. I mean, we have seen some wonderful things as a result of the American people being able to spend and invest and use their own resources. After adjusting for inflation, our economy has grown at a robust average of better than 3 percent a year since 2003. Nearly 5 million new jobs have been created in America as a result of this economy, and the unemployment rate has fallen to 4.8 percent, which not only is historically very low, but by many economists that is considered full employment. Even in the face of higher energy prices, which we are working to deal with, and the worst natural disaster on record, our economy has proven remarkably resilient and strong, growing, creating jobs, and increasing personal incomes.

Clearly, the real credit for the growth goes to the people who do the work in this country, who work and save and invest and create jobs and allow our economy to continue to grow. But we in Congress did support their efforts by lowering their tax burdens, and this budget continues that because we believe there should be no tax increases, as opposed to the Democrats who propose tax increases in their alternative budget. And we did this because of our fundamental belief that the people back home really do make better decisions about their daily lives, about their businesses, about their farms, about their families and communities than the Federal Government ever could make for them.

As a result of giving Americans more control over their money, we have seen more investment, more jobs, greater opportunities in our country, and as a further direct result of this growth from what Americans have done, revenue has come pouring into the Federal Treasury. In fact, last year we saw Federal revenues increase by almost 15 percent in one year.

Now, I realize we have got to stop and just highlight this because if you have been listening to the rhetoric on the other side, you will believe that the bane of all of our illnesses is because we have reduced taxes and that somehow tax cuts have caused this government to fall off its pedestal, when in fact reducing taxes has actually brought in 15 percent more revenue growth to our Federal Government, and it is because our economy works. When you are allowing people to keep their money and invest it on their own, it creates opportunities and jobs and business development, and as a result of that more people pay more taxes and that brings more revenue into the government.

In short, our economy has gone from recession just a few short years ago to a strong sustained period of growth, and to ensure that that growth and strength continues to be in an upward momentum our budget does not increase taxes.

Second is national security. This budget will also continue to provide whatever is needed to support our American troops and to ensure our Nation's defense remains the strongest in the world. We do not have a secret plan, as you will find in the Democratic alternative substitute, that basically says we are not going to fund the war after next year. It is kind of a secret plan to basically say one of two options. We are either going to bring all the troops home like the gentleman from Pennsylvania wants to do or we are not going to fund them so they are able to claim balance. They have basically put no more money, no support to our troops in the field over in Iraq and Afghanistan.

The President's budget, not including war funding, has requested an increase of 7 percent to ensure that our men and women have the opportunity to support and defend our Nation and our budget will accommodate that request. We will also, as we have for the past two budgets, place $50 billion in reserve to fund those wars in Iraq and Afghanistan. And we know that it is going to take a commitment in years to come and we plan to support that commitment, not claim balance and not have some secret plan that is either going to underfund it or bring them home before their job is done.

But even as we provide those resources, we also believe that the administration needs to get the message that we need a full accounting of how this money is being spent and what the implications are for the future. Particularly in the area of defense, we have got to do a better job to ensure that every dollar that we invest and that we put into this critical area is hitting its intended target. It makes our country safer. I cannot think of any activity that deserves more diligent oversight than our national defense.

For homeland security we will provide whatever is needed to ensure our homeland at the border, in our country, in our cities, in our rural areas, whatever is needed. The President has proposed 3.8 percent of an increase and our budget accommodates that request. But just as with defense, we have got to do a better job in this new Department of Homeland Security to make sure these monies are being spent wisely and are actually working to make our Nation more secure.

The second big principle on which we write this budget is controlling spending. Let's start with what we call ``discretionary spending.'' With the necessary shift of our Nation's priorities to provide for these areas of, after 9/11 as an example, we have come to employ kind of a shorthand to effectively divide this discretionary spending into two categories. Let me do that for people who are watching.

We have security spending, which involves our national defense and our homeland security, and what we call ``nonsecurity,'' which is everything else. That is where you will find education, veterans, agriculture, the environment, et cetera. So you have security and nonsecurity. And as most of my colleagues will detail in this debate, we increased our security appropriations funding at a truly incredible rate over the past few years to deal with the challenges that our Nation has needed in regard to security.

But that said, when we decided that our Nation's security was our highest priority, it also meant that everything else needed work and that everything else must come after, although many seem to regularly forget the Federal Government simply does not have an infinite supply of money, nor should it. So when we decide to increase spending in one area, you have got to determine how to pay for it and how to reduce spending in other areas. That is what budgeting is all about.

Last year we held our nonsecurity spending to a freeze tighter than the previous year's 1.3 percent growth and certainly a marked improvement over the previous 5-year average of 6.3 percent. This year the administration has asked for a freeze, according to CBO's estimate, for all the nondefense, nonsecurity spending in our budget. We will assume that freeze is for nonsecurity spending. We believe that our security must come first or none of these other programs will matter much.

That said, it is important to note that while our budget sets an overall number, it is the Appropriations Committee who determines how that money is allocated. Clearly there are high priority programs that receive and should receive increases. But in order to provide those increases, they have to have offsetting reductions and eliminations of other programs, and we know the Appropriations Committee can do this and will do this. Last year alone they eliminated somewhere near 110 specific programs in order to ensure that we fund those programs that are higher priorities.

Now, let's get to where the real rubber is going to hit the road with this budget and where it needs to hit the road.

This is the funding that is truly out of control.

Our biggest challenge in Federal budgeting is the problem of mandatory, automatic, entitlement spending. That is now two-thirds of the budget, and two-thirds of the budget needs some attention. Well, we provide the attention while the Democrats, you can hear the crickets. They do not even look at it. There is no reform in their budget for the mandatory programs. Just do not worry about two-thirds of the budget. We are only going to talk about one-third, they say.

We need to work on reforming these programs. They are important to the people back home. They are not always doing the job they need to do. We need to constantly reform and weed the garden to make sure that garden can continue to grow and make sure that we can eliminate the waste, fraud, and abuse in those programs.

Currently, our mandatory spending is growing at 5.5 percent a year. That is faster than our economy is growing. It is faster than inflation, and it is certainly faster than any of our means to be able to sustain it.

To put it another way, if our budget were balanced right now today, our entitlements would drive it right back into deficit; and so we have got to deal with these challenges which, of course, are highlighted probably most dramatically because there are 78 million baby boomers who are beginning to turn 60 this year, and medical costs are skyrocketing, and there is a steady decline in the number of workers for each retiree.

The problem only gets worse. So we have got to address this. We have got to acknowledge on both sides of the aisle that ignoring this problem, offering no solution on how to fix it, and fighting against those who are trying to help is not going to benefit any one person, is not going to benefit any group. Certainly it is not going to be able to give us the opportunity to be able to deal with these programs in the future.

Just throwing more money at programs, my goodness, you would think somebody would get real, get a more creative budget than this just to throw more money at things and assume that they are actually going to work. We need to reform these programs.

Last year, for the first time in nearly a decade, we took the first step to reform some of these largest programs. We saved $40 billion in the process. We allowed better delivery of these programs to the people they were intended for.

This year's budget will continue to build on those savings by yet again reforming the mandatory programs and establishing that we should, on an annual basis, reform government, even if it is a small amount.

I know people around here say why are you bothering with $6.8 billion. Well, that may be small to some of you, but it is not small to the taxpayers who have to pay the bills around here. This budget will continue to build on those savings by, again, reforming mandatory programs and establishing this annual process.

Finally, let me talk about reform, which this budget is based on. To some extent, we are still learning lessons from Hurricane Katrina. We should continue to always learn the lessons; but one of them that became, I think, very clear is that if we do not control spending, if we do not get good control of spending, it becomes very difficult to manage unforeseen events that inevitably face us.

One certainly could have foreseen that we were going to have a hurricane. We have them every year. We have them every year that I have been in Congress; but no one, no one, could have foreseen the devastation that has occurred as a result of Hurricane Katrina, and no one would have expected it to be built into anybody's budget. We did not build it into ours. The President did not build it into his. Certainly the Democrats did not build it into theirs. In fact, this year they build no money into their budget for emergencies.

Now, wait a minute. I realize this may surprise you. It was in all the papers. We had a disaster last year. We had an emergency. We had a hurricane. Not just a little one, but a big one. Why do we not at least plan for the little ones? Let us at least plan for the disasters that we know are coming.

Mr. Chairman, I believe I have the time, and I have not yielded.

No, I do not.

Mr. Chairman, I appreciate that.

So while we are continuing to learn the lessons, Congress needs to plan for it. Congress needs to plan for these emergencies, and our budget does that. This year, not only will we build in a reform of our mandatory programs and further restrain our nonsecurity discretionary spending, but we need to reform the budget process as well to reflect the actual spending that is currently spent outside of that normal budget process, and it is called emergency spending, for many natural disasters where appropriate spending is certainly necessary.

In addition to emergency reforms contained in this budget, we will continue the process of reforming the budget and reforming the budget process and how we make spending decisions throughout this year. We need to tackle earmarks. We need to tackle the sunsetting of programs that have outlasted their usefulness. We need to deal with line-item veto, and we will do this throughout this year.

Let me just end by saying this. I do not think I need to remind anybody about the massive challenges and changes that our Nation has endured these past few years or the myriad of challenges that lie ahead. We have had enormous challenges in writing the budget. I do not shy away from any of them. I know it would be easy for somebody to just punt.

Well, we decided we were going to meet each one of those challenges and deal with them, and every single year we have had a plan. Finally, this year, the Democrats rushed to the floor with a plan and suggest that they finally now have an idea on how they are going to balance the budget. We will take a look at that a little bit later.

But we have had a plan every year, and our plan has worked, and we have been able to manage our deficits and our debt and our taxes and our economy and deal with so many important priorities in an appropriate way. We have kept our country going when many people, after some of these disasters, said our economy was going to collapse, that we were not going to be as powerful as we were in the past; but because of the leadership we have provided, much of which started in these blueprints, we believe we have been able to keep our country growing and growing strong.

We have seen how the Nation's most fundamental priorities have shifted dramatically, some by circumstance, some by choice, but they have shifted; and we have managed through the process as best as we could.

For the past three budgets, after recovering from the initial shock of 9/11, we have set a bold plan to shore up and strengthen our defense and homeland security, to get and keep our economy growing strong and creating jobs and controlling spending and continuing the process of reform and reducing the deficit, and the deficit has reduced.

We followed that plan, and adjusting it to last year, making a down payment on the immense new hurricane spending. We have made real progress.

But last year's hurricane served as a stark reminder that controlling the budget does not just happen one day out of the year. It is a long- term, step-by-step commitment that takes resolve. It takes more than one person to do it. It takes particularly in extraordinary circumstances a plan, and that is what we present today, our plan for fiscal year 2007.

We need to pass it. We need to stick to it. We need to enforce it. Certainly if there are challenges, we need to adjust to it, but we need a plan. We need

to work the plan. We need to enforce the plan, and we need to pass the plan today.

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

Mr. Chairman, I yield 2\1/2\ minutes to the distinguished chairman of the Veterans' Affairs Committee, the gentleman from Indiana (Mr. Buyer).

Mr. Chairman, I yield 2 minutes to a distinguished member of our committee, the gentleman from Texas (Mr. Conaway).

Mr. Speaker, by direction of the Committee on Rules, I call up House Resolution 766 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. PUTNAM asked and was given permission to revise and extend his remarks.)

Mr. Speaker, House Resolution 766 is a rule that provides for general debate of House Concurrent Resolution 376, the bill establishing the congressional budget for the Federal Government for fiscal year 2007, and setting forth the appropriate budgetary levels for fiscal years 2008 through 2011.

As a member of both the Rules Committee and the Budget Committee, I am pleased to bring this resolution to the floor for consideration. This rule provides for 4 hours of general debate, with 3 hours equally divided and controlled by the chairman and ranking member of the Budget Committee, and 1 hour on the subject of economic goals and policies, again equally divided and controlled by Representative Saxton of New Jersey and Representative Maloney of New York or their designees.

The rule waives all points of order against consideration of the concurrent resolution, and it provides that after general debate the Committee of the Whole shall rise without motion and no further consideration of the bill shall be in order except by subsequent order of the House.

This rule allows the House to begin consideration of the congressional budget. The budget is an important tool of the Congress, allowing us to establish our priorities for the coming year. I am proud that this budget responds to the Nation's complex challenges with the straightforward principles of strength, spending control, and a continued commitment to reform.

The budget resolution continues policies that have helped to reestablish a strong United States economy. We have included savings for working Americans to the tune of $228 billion. We extend the 2001 and 2003 tax reforms, preventing what would otherwise be an automatic tax increase from their scheduled expiration. The budget also assumes the extension of other expiring tax provisions, including the alternative minimum tax relief, a House-passed pension bill, and other important economic growth measures.

While working to give Americans back some of their hard-earned dollars and letting them keep more of their hard-earned dollars, we are also working to enact a responsible spending plan that exercises control and restraint. I am proud that once again this House has delivered a budget that practices conscientious spending. Our goal is to stem the ever expanding outflow of Federal dollars.

House Concurrent Resolution 376 has an overall discretionary spending level that is equal to the President's budget request of $873 billion. It allows for the President's requested 7 percent increase in defense and a 3.8 percent increase for homeland security. As always, the discretion lies with the House Appropriations Committee to determine the final allocation of these funds. This budget essentially freezes nonsecurity discretionary spending, with only a 0.1 percent increase over last year's level, a tenth of a percent. As an additional savings method, the budget caps advance appropriations, spending that is for the year after the budget year.

In the area of mandatory spending, entitlement spending, we provide a total of $1.5 trillion. In an effort to control the automatic effusion of dollars, the budget resolution calls for mandatory spending reforms from several committees. These savings, these mandatory spending savings, total $6.75 billion over 5 years.

This is an important distinction. This is one of the first times in the history of modern budgeting that there has been back-to-back reconciliation instructions in the House budget. Today, over half of Federal spending is essentially on autopilot. Fifty-five percent of Federal expenditures today are going into what is known in budget parlance as mandatory accounts. So all of the discretion that lies within this body and lies within the Senate is not even half of the Federal budget. And within 10 years, if these reconciliation instructions are not implemented, that are embedded in this budget for the second year in a row, then within 10 years it will consume two- thirds of the Federal budget, two-thirds of the Federal budget being on autopilot if we don't implement the reforms that this budget calls for.

Last year was the first year since 1997 that we had made the effort through passage of the Budget Act to get our arms around mandatory spending through reconciliation instructions. This year we do that again. This is an important reform effort. Again, it is one of the few times in modern history where there has been back-to-back reconciliation instructions that allows us to reduce the size of the Federal deficit.

Mr. Speaker, I am pleased that this year the Budget Committee included an emergency reserve fund to help Congress plan for unforeseen costs that may arise in the future. We have set aside $50 billion toward an expected wartime supplemental, as well as $4.3 billion for unanticipated emergencies, such as natural disasters, and $2.3 billion for potential avian flu costs.

As a Congressman from the great State of Florida, I can tell you with a great deal of certainty that the last several years have been very active in the Atlantic hurricane season. We know, without being able to see into the future, we know that somewhere in the next year there is likely to be a hurricane that will make landfall in the United States. Somewhere in the United States this year there will almost certainly be devastating wildfires. Somewhere in the United States in the coming fiscal year there will almost certainly be an earthquake or devastating tornadoes.

Hopefully, we will not have a natural disaster that reaches the catastrophic level that Hurricane Katrina reached. But nevertheless, just like responsible businesses and responsible homeowners who set aside money in their savings accounts for when the hot water heater breaks or when the car needs new tires or when the transmission goes out, the Federal Government, a little bit slowly, but nevertheless has come around to the notion that we should plan for emergencies, particularly those types of very expensive natural disasters that do frequently strike our shores.

With increased spending control, tax relief, and these important budget reforms, this budget makes a sizable dent in our deficits. Under these policies, the deficit will fall by more than half, from $521 billion, which is projected in fiscal year 2004, to $191 billion in fiscal year 2009, which is below the President's planned budget achievements.

I am proud of the work of the Budget Committee this year. I thank Chairman Nussle for pushing forward with fiscal discipline and bringing us this excellent budget for our consideration, and I urge Members to support the rule and the underlying bill.

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

Mr. Speaker, it is always fun to have these debates. We ought to at least start out with our facts straight, though. For the last 10 years, spending per veteran under Republican leadership has doubled. In the last 10 years, spending budget authority for veterans medical care nearly doubled going from $16.2 billion to $31 billion.

Facts are stubborn things, my friend.

Mr. Speaker, I yield 3 minutes to the gentleman from North Carolina (Mr. McHenry).

Mr. Speaker, I think the gentlewoman raises an important point about the need for us to continue to invest in research and development, in health care initiatives that allow us to remain a Nation on the cutting edge of technology both in biosciences, basic research, and the whole gamut of diseases and disorders that afflict the human condition.

This majority takes a back seat to no one on investments in health. The National Institutes of Health are preeminent research institutions run by this Federal Government that are making great strides against cancer, against juvenile diabetes, against HIV/AIDS, against a whole host of orphan diseases and disorders that only afflict a small number of Americans, but nevertheless in a huge, huge way to that individual family.

Since 1998, NIH funding, because of the investments that this majority has made, has more than doubled. More than doubled since 1998. Funding in 1998 was at $13.5 billion. Today this Nation invests nearly $28.5 billion in the National Institutes of Health.

We take a back seat to no one in recognizing that it is fundamentally important that America remain on the cutting edge of innovation, that it is fundamentally important that we continue to produce graduates in the health sciences, in engineering, in mathematics to keep us on that cutting edge. We take a back seat to no one in recognizing that it is important to have in place economic policies, tax policies that encourage people to make those investments in this country instead of in other countries; that we have in place incentives to people to add new lines of scientists at their workbenches and their laboratories in Silicon Valley, California, or at the CDC in Atlanta.

We recognize it is important to have a growing economy that allows us the luxury of being able to invest in research that may not bear fruit for decades to come. And we take a back seat to no one in the commitment we have made for the last dozen years in funding the National Institutes of Health.

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

Mr. Speaker, my colleagues join me in complimenting your selection of neckwear this morning.

I yield 3 minutes to the gentleman from California (Mr. Campbell), one of our newer members of the Budget Committee and a CPA.

Mr. Speaker, I would remind the gentleman of two points. First, spending per veteran and spending for veterans' medical care both have nearly doubled in the last 10 years. I remind the gentleman of that.

Second point, with regard to the procedure around here for changing the debt limit, it is known as the Gephardt rule. The process for adjusting the debt limit was put in place when your team was in charge. So the gentleman takes issue with a process that was invented by his team.

I am pleased to yield 2 minutes to the gentleman from North Carolina (Mr. McHenry).

Mr. Speaker, I am happy to respond to the gentleman's concerns about funding for veterans, and I would remind him again that since 1995 veterans medical care spending has increased from $16 billion to more than $31 billion, an increase of 92 percent. The funding increase for next year, over this one, year-to-year increase is nearly 4 percent, a substantial jump, especially relative to other discretionary programs who will see a tenth of a point cut.

They are getting a 4 percent increase.

We recognize the sacrifices that veterans make. We recognize our lifelong commitment to them for the sacrifices that they have made and continue to make. This budget builds on that strong foundation. It accommodates general veterans funding at $75 billion, and it is $800 million above even what the President requested. This Congress is meeting the needs of America's veterans. In addition to increasing over the President's request, it does not increase the fees that were called for in his request.

Frequently on this floor we get sucked into these debates based on what the President's proposal is, and that is not the document that we are debating here this morning. This is the House budget. In fact, in the budget markup, we had an opportunity to vote on the President's budget, and we chose to go a different path with the document that this House is producing.

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

Mr. Speaker, perhaps in the gentleman's stack of letters that we are entering into the Record, he could find the thank you notes from the veterans who thank us for finally, after decades of inactivity under the previous leadership, acting on concurrent receipts giving veterans what they need; doubling funding for veterans in 10 years; a 4 percent increase next year over this.

We budget year to year, and the gentleman knows it. Every year this majority has come through for our veterans. Every year we have been there, and we will continue to be there for America's veterans.

Mr. Speaker, I am pleased to yield 5 minutes to the gentleman from Texas (Mr. Sessions), my good friend from the Rules Committee and the Budget Committee.

Mr. Speaker, I would remind my friend from Massachusetts in the conversation about insatiable appetites that nearly every amendment offered by the Democratic minority on the Budget Committee spent more money. There was no amendment offered by the Democratic minority that changed the Tax Code in any way. In previous years they had sought to raise taxes. They have learned that lesson, that it does not fly with small business men and women across the America, that it is not particularly popular, and it is terrible economic policy to raise taxes. So they dropped that. But nearly every amendment offered in the committee markup was to spend more money and to pay for it using the mythical potential of what is called the ``tax gap,'' which is the difference between taxes owed and taxes collected. That is money that may or may not appear based on an aggressive IRS. That was their pay- for to feed their insatiable appetite for more spending.

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

Mr. Speaker, the myth is this: in your plan, you assume that the $200 billion tax gap will magically appear tomorrow. If we knew where the $200 billion was, we would find it now. You assume that the $200 billion in uncollected taxes are available to be collected and then be spent under your budget plan the day your proposal passes. It wouldn't be uncollected if we knew where it was. It wouldn't be uncollected if we could go get it. Somebody has to go hassle these people to pay their taxes.

That is the myth. Does it need to be done? Absolutely. Should we close it? Absolutely. But that is a crap shoot. You will not have 100 percent collections of all income taxes due by the day that your bill passes, if it were to pass tomorrow. That is the myth.

You point out that our deficit is different than the CBO baseline. You are correct. The CBO baseline assumes, and your budget assumes, that you will allow the tax reforms that passed in 2001 and 2003 to expire. So capital gains taxes go up; dividend taxes go up; taxes on middle-income brackets go up; the 10 percent bracket disappears; AMT relief, no action.

You allow those things to expire. The CBO assumes those things will expire. We assume they will stay in place because we believe that those are the drivers of the economic engine that is giving this country 4.8 percent unemployment, which is lower than the average of the 1970s, the 1980s and the 1990s. It is what allows this government to collect 15 percent more revenues, more money from the taxpayers this year than last year, even though the tax rate is lower.

That is the difference. That is the myth. That is the problem with the competing budgets as ours stacks up against yours.

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

Mr. Speaker, it has been a good debate. We have 4 more hours to go. We need to pass this rule.

The gentleman has grabbed the veterans issue by the horns, and appropriately so. We will stand by our veterans funding. It is a 4 percent increase in an era when the rest of the budget is assumed to be reduced by a tenth of a point.

This is a two-step process, and the gentleman knows it. The budget lays out the fences, the appropriations process decides what is spent within those fences. We have doubled spending per veteran, not spending on veterans, spending per veteran in the last 10 years. We have doubled spending on veterans medical care. These are issues that are hugely important.

I am proud of the way this debate has been conducted, because this budget lays out the competing visions for America, one that inspires economic growth through sensible tax policies, and one that wants to spend, spend, and spend some more based on the myth of the tax gap collections that would miraculously appear tomorrow under the Democrats' proposal.

Mr. Speaker, I yield back the balance of my time, I move the previous question on the resolution and urge the adoption of this rule.

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

As you just indicated, the first hour of this budget debate has been set aside pursuant to the Humphrey-Hawkins section of the Budget Act. Under the rule, the Joint Economic Committee will have this hour evenly divided on two sides.

According to most neutral observers, including the Federal Reserve, and a consensus of private economists, the current economic expansion is quite healthy. That is good news. Indeed, if anything, there seems to be a little concern in most quarters that the economy may be growing too fast, a concern that I do not share.

The U.S. economy grew 4 percent in 2004 and advanced at a rate of about 3.5 percent in 2005. The growth rate in the first quarter of 2006 is expected to be very robust, probably over 4 percent, consistent with the trend of strong growth seen since 2003.

The improvement in economic growth is reflected in other economic figures as well. Let me name a few.

Since August of 2003, business payrolls have increased by 5 million jobs. The unemployment rate has declined to 4.8 percent. Consumer spending continues to grow. Homeownership has hit record highs. Household net worth has also reached a record high. Productivity growth continues at a healthy pace. Long-run inflation pressures appear to be contained. Long-term interest rates, including mortgage rates, are still relatively low, although somewhat higher than what they had been previously. The resilience and flexibility of the economy have overcome a number of serious shocks, most recently the hurricanes of last year. Equipment and software investment have been strong over this period. However, with somewhat higher mortgage rates, the housing sector is slowing, although it appears that a soft landing is most likely. It is clear that the Federal Reserve remains poised to keep inflation under control.

In a recent policy report to Congress, the Fed noted that the U.S. economy delivered a solid performance in 2005. Furthermore, the Fed observed that ``the U.S. economy should continue to perform well in 2006 and 2007.'' The Fed, along with a number of private economists and government agencies, expects that economic growth in 2006 will be about 3.5 percent, still very healthy growth. This economic growth will continue to expand employment and further reduce unemployment.

In summary, overall economic conditions remain positive. The U.S. economy has displayed remarkable flexibility and resilience in dealing with the many shocks, including terrorist attacks and weather effects.

The administration forecast for economic growth in 2006 is comparable with those of the blue chip consensus and the Federal Reserve. With growth expected to be about 3.5 percent in 2006, the current economic situation is solid and the outlook remains favorable.

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

Mr. Chairman, I yield such time as he may consume to the gentleman from northwestern Pennsylvania (Mr. English).

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

It seems like there must be an election coming to hear some of the rhetoric here on the floor which actually defies reality. Let me try and explain to those who are at least open-minded about the situation what has happened with our economy over the past 5 or 6 years.

We all remember during the late 1990s we had very robust growth in the stock market. Things were perking along at a rate that most economists at the time thought was an exuberant time when investments were being made for reasons other than perhaps good, solid rationale.

In the third quarter of 2000, the economy began to get soft and in the last quarter of 2000 it did even worse. As we look at the reasons for that, there were a number of economists who concluded different things. One thing became clear, and that was investment was not being made and that something needed to be done.

This chart to my left is a chart which shows fixed private, nonresidential investment, in other words, investment in things that would be productive in our economy. As we look at what happened as we began to move through 2001 and 2002, these bars that drop below the line show there was negative investment. People were not investing in productive things; and as a result of that, the economy was not doing well.

The administration proposed a fix, and that fix was to do things here in the House of Representatives and in the Senate and through the administration that would encourage the American investor to reengage in investing in productive things. And so in 2003 the House of Representatives and the Senate collectively, together, passed some tax cuts to encourage investment. And those tax cuts, which were temporary in nature which we continue to talk about making permanent, had the desired effect.

If we look at this chart and look at when the negative investment ended and positive investment started, it happens to be after those tax cuts went into effect. As a result of reducing the percentage of taxes paid on dividend gains and as a result of tax cuts on capital gains, we see beginning in 2003 and through 2004 and through 2005 and projected to continue by the Fed and by other blue chip economists and blue chip forecasts, we are expecting to see that growth continue through 2006 and 2007. As a matter of fact, we had 4 percent growth in 2004; 3.5 percent growth in 2005; and in the first quarter of 2006, we saw 4 percent growth continue. This is good news for not only the American investor; it is also good news for others in the workforce and in the economy.

Here is what happened to employees' payrolls during that period of time. Once again we see some lines that drop below the positive mark. We see some negative growth in nonfarm payrolls as we move through. And as we saw the 2003 tax cuts go into effect, once again we saw the economy rebound and we see employees in nonfarm payrolls begin to increase to much healthier levels than they had been during the 2000, 2001, 2002, and 2003 period of time when investments, productive investments, were not being made.

As we sought an answer and the administration proposed the tax cuts and the House and the Senate implemented the tax cuts, once again nonfarm payrolls and employees' payrolls began to grow, as demonstrated by this chart.

Finally, gross domestic product, which is how most economists measure growth in the economy, continues to be very good. Beginning in 2003, as our tax cuts went into effect, dividend tax cuts, the taxes on dividends were lowered, the taxes on capital gains were lowered. We see in 2003 and 2004 as we move across here, and as I said before in 2004, we had an average of 4 percent growth. In 2005, we had an average of 3.5 percent growth over the four quarters of that year.

The forecast for the first quarter of this year, which is in red, the first of the four lines, the actual forecast is 4.7 percent. I think that might be a little high. I think it might be closer to 4 percent. But that is healthy economic growth, and we continue to see the effect of the policies we have put into place. We expect that the growth may slow somewhat during the first, second, and third quarter; but we believe we will average 3.5 percent this year.

I might add one thing that I think is important for us to remember, and that is that the tax cuts, together with other policies, have produced this growth and we need to continue to support those policies as well. The Federal Reserve has been a huge part of this as well. While it is nice for the Congress to take credit with the implementation of the tax policy that we implemented, the Federal Reserve also deserves a lot of credit for what has happened here through the policies that have been brought about through something called ``inflation targeting.''

Today, inflation is very low. Inflation is around 2 percent; and it is around 2 percent because, in my opinion, the Federal Reserve has used this policy of inflation targeting as the cornerstone for Fed policy. As inflationary expectations, as we look to the future, interest rates have continued to be historically low. In spite of the fact there has been a little up-tick in interest rates because of Fed policy in the last year or so, we continue to see affordable interest rates and interest rates that influence investment and continue to provide the stimulus that we need for the kind of economic growth that we have seen since 2003.

Mr. Chairman, I just wanted to make these points. I think this is a very important background for us as we begin this budget debate.

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

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

One additional way to look at our economy and to see how it compares with what we may have seen around the rest of the globe is to simply look at the statistics as to how our U.S. economy has performed as compared to some others. For example, when we look at real GDP growth from the first quarter of 2001 through the fourth quarter of 2005, the U.S. economy expanded at an average annualized rate over all of those times, even though it was slow during the earlier years, at 2.6 percent, and the United States ranked first among its peer group in the world in real GDP growth.

In terms of investments of fixed assets, from 2001 to 2005, growth investments in fixed assets as a percentage of GDP growth rose in Canada and the United States but fell in the European Union and Japan. And so once again, the United States was a leader in terms of investment and fixed assets.

In terms of industrial production from 2001 to 2005, through 2005, the United States industrial production increased by 7.1 percent, a very, very healthy picture. And I might add that this industrial production increased because of investments, because of investing in productive things, investment brought about by the budgetary policy and the tax policy of the Congress of the United States and the administration.

Employment and unemployment. From January 2001 through December 2005, the United States ranked second in employment growth in both absolute and in percentage terms. In the United States employment grew by 5,165,000 jobs, or 3.8 percent. Canada ranked first in percentage growth with 9.3 percent, while the European Union ranked 15, first in total increase of 5.7 million, which was actually 3.4 percent, far below the United States.

In December of 2005, the U.S. had an unemployment rate of 4.9 percent, the second lowest among its peer group. If we look at this chart next to me of unemployment rates, if you look at the unemployment rate in the European Union, it was 8.3 percent. If we look at the unemployment rate in Canada, it was 6.4 percent. And at the end of the year, same time frame, the unemployment rate in the United States was 4.8 percent.

Just interestingly enough, there is a member of the U.K. Parliament in town today, and I saw him early this morning and he said, I envy you. I said thank you, and why is that? He said, when I go to work at home and I earn an income for my family, 59 percent gets paid to the government. I envy us, too, because we have seen beyond the period of high taxes. We have seen beyond the period of producing an economic policy that in Europe provides today for an 8.3 percent unemployment rate or in Canada of a 6.4 percent unemployment rate. We are fortunate. But it is because of good policy. It is because of the policy of this administration and this Republican Congress that we have a 4.8 percent unemployment rate.

Labor productivity is up in our country as well, and that is one of the reasons for this great economic growth. From the first quarter of 2001 to the fourth quarter of 2005, labor productivity grew by 9.5 percent. That means that because of technology that we have invested in, smartly, and partly because of tax policy, we have made our workers more productive than at any time in our history and the most productive work force in the world.

I said a word a few minutes ago about price stability. Price stability is what it is today, lack of inflation, inflation of 2 percent or under, because of Fed policy. Chairman Bernanke told me earlier this week that he intends to continue policies that have price stability as the number one goal as inflation targeting continues, to keep our rate of inflation low and to keep interest rates low accordingly. Smart economic policy.

And so as we walk through the things that have occurred, partly because of the Congress and partly because of the Federal Reserve, we see that things in our country are doing well, particularly when compared to others.

On balance, the U.S. economy has outperformed its peer group and large developed economies in a number of key measures of economic well- being between 2001 and 2005, during the period that George W. Bush has been President.

Pro-growth tax policy and good monetary policy have contributed to the superior performance of the U.S. economy, and as my friend from the U.K. Parliament said today, yes, we are proud of this record.

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

Mr. Chairman, I yield such time as he may consume to the gentleman from Michigan (Mr. McCotter).

Mr. Chairman, I yield 2 minutes to the gentleman from Missouri (Mr. Hulshof).

Mr. Chairman, just to conclude this debate, it was not a Republican idea originally to stimulate economic growth by use of the tax policy. It was John Kennedy's idea. When Ronald Reagan was elected President, we Republicans all stuck our chests out and said what a wonderful idea. But it was John Kennedy, who, in his State of the Union speech after he was elected, said we cannot expect to continue to lead the economic world if we fail to set the economic pace at home. And he went on in his speech to detail the tax cut plan that he wanted to put in place. It was put in place and the economy grew. And Ronald Reagan did the same thing. A different plan, same concept. And George Bush I did the same thing, and George W. Bush has embarked upon the same thing.

Now, it has been suggested by the minority that somehow we can have tax cuts without cutting taxes of people who pay taxes. This chart to my left shows who pays taxes. As a matter of fact, the top 1 percent of the taxpayers pay 34 percent of the taxes. The top 50 percent of the taxpayers pay 96 percent of the taxes. And that means that about 4 percent of the personal income taxes that are paid in this country are paid by the bottom 50 percent of the wage earners. As Mr. Hulshof just pointed out, many of those folks have been taken off the tax rolls altogether.

So the charge that people who earn more money get a larger share of the tax cut, I guess I would just ask this question: If you believe, as I do, that tax cuts stimulate economic growth, and if you are going to have tax cuts at all, then you have to cut taxes from the people who are paying them, and they are almost all in the upper half of the income brackets.

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

I cannot find anything of what the gentleman from Texas just said in the budget. I am still looking. None of those policies exist. All of that is just kind of created out of whole cloth. I have looked through it. There is no tax on veterans. My goodness, what kind of rhetoric is that, taxes on veterans. My goodness. Not in here. You cannot find it. I defy you to find it. I don't see a tax on veterans.

Mr. Chairman, I yield 2 minutes to the gentleman from Kansas (Mr. Ryun) and a member of the committee.

Mr. Chairman, I yield to the gentleman from Alaska (Mr. Young), the chairman of the Committee on Transportation and Infrastructure, for a unanimous consent.

(Mr. YOUNG of Alaska asked and was given permission to revise and extend his remarks.)

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

I have to put on my glasses, these numbers are so small. I have to tell you, on page 63, I have it right here: veterans goes from $71.9 billion to $74.6 billion. $71.9 billion to $74.6 billion. I am trying to think now, mathematically that sounds like an increase. Maybe I am missing something, but 71 to 74. Let's see, that's a bigger number; 74, bigger, not a cut. That is an increase.

Mr. Chairman, I yield 2 minutes to the gentleman from Alabama (Mr. Bonner), a distinguished member of the committee.

Mr. Chairman, I yield 2 minutes to the gentleman from Indiana (Mr. Chocola), a member of the committee.

Mr. Chairman, I yield 2 minutes to the gentleman from Florida (Mr. Mario Diaz-Balart), a member of the committee.

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

Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. Daniel E. Lungren), a member of the committee.

Mr. Chairman, I yield 3 minutes to the very distinguished chairman of the Education Committee, my friend from California (Mr. McKeon).

Mr. Chairman, will the gentleman yield?

Does the gentlemen know that the Spratt alternative does the exact same thing?

But is the money in there in this ``reckless'' plan the gentleman was suggesting?

Mr. Chairman, I yield myself 3 minutes.

Mr. Chairman, let me just say to start with, I cannot let that go. In this body we have had bipartisanship with regard to national defense for quite a long time, and I hope that continues. But the irresponsibility of the statement that was just made has got to be called on the carpet.

The Spratt alternative, everyone has a right to come to the floor with an alternative, and I have enormous respect for the gentleman from South Carolina. We are friends. We work together on budgets. He has the full right to come here. But don't come to the floor and tell us that we have an irresponsible plan, when your plan has the same numbers, number one; and, what is more, fills whatever gap you were just talking about with something called the ``tax gap,'' which is a $290 billion pipe dream that somehow you are going to collect money on past taxes from people who didn't pay them.

Good luck. I would like to see you try. But that is how you fill the hole, I would say to the gentleman from New Jersey. And what is more, and I will bet it is in your press release already, you claim balance by supporting the Spratt substitute.

There is only one way you can claim balance, only one way. Do you know what that is? The way you claim balance is if you spend no more money on Afghanistan, no more money on Iraq, no more money supporting troops in the field, no more money for body armor, no more money for any benefits to those troops that are serving us so well over there in the Gulf.

So for you to come to the floor, when we have bipartisanship on national defense 99.9 percent of the time around here, for you to come here and for you to suggest somehow that it is reckless for us to put that in our plan when you not only put it in the plan but then somehow claim balance, there is only one of two ways: You either have some secret plan to bring the troops home immediately, similar to evidently what was proposed by the gentleman from Pennsylvania here not that long ago, or you intend to have no money for those troops in Afghanistan and Iraq.

Now, my guess is that is not true, and my guess is I just went over the line. My guess is that is not what the gentleman intends, and my guess is that when the bill comes to the floor and when the very distinguished gentleman from Missouri, the Democrat ranking member and when the very distinguished gentleman from California, the chairman of the full Committee on National Defense and Armed Services comes to the floor, that that will not be the case whatsoever.

But for you to increase the rhetoric down here about some irresponsible defense plan is irresponsible.

I hope we can put that partisanship back in the bottle, because it ought to end at the shore when our men and women are fighting in harm's way, and I hope that the gentleman will check that rhetoric next time he comes to the floor, because we can have disagreements over a lot of things, but when the numbers are the same for the same reason because we have the same passion and concern about our men and women, please, I would ask the gentleman not to heighten the rhetoric so he can put out a press release.

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

Yes, they are. In fact, we put into the budget an emergency reserve fund for the purpose of funding that war, the same way Mr. Spratt does, the exact same amount.

Mr. Chairman, I yield myself 1 minute.

First and foremost, we added $1.3 billion back into the budget for that very purpose on CDBG. So the gentlewoman is mistaken on that point.

Plus, I am glad the gentlewoman is at least one of the Members who have been willing to come here and be honest about her lack of support for the war and what that means for the budget priorities. If you do not support the war and you do not support the funding, it makes it clear why you would not put it in there and then claim balance.

We are not trying to pretend to anybody that there are not going to be expenses in the outyears. We just do not know what they are. And nobody on either side knows what they are going to be. The Pentagon does not even know what they are going to be. We hope that they are minimal, but we have at least put the funding in the budget to demonstrate that.

The difference is that in this alternative I think we are starting to see the glimmer of what the plan is really about, and that is a secret plan to bring the troops home, do it immediately, not fund in the outyears, claim balance, and as a result not support what we are doing.

That is fine if that is what you want to do. I am glad you are at least being honest about that and that is exactly what is being planned in this budget. By not putting the money in there, by claiming balance, it is clear that there will be no more money for the war in Afghanistan and the war on terror after this budget year.

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

Mr. Chairman, I yield 3 minutes to the gentleman from New Jersey (Mr. Garrett), a distinguished member of the committee.

Mr. Chairman, I yield 4 minutes to the gentleman from North Carolina (Mr. McHenry), a very distinguished member of the committee.

Mr. Chairman, I yield myself 1 minute.

I am sure I misunderstood what the gentleman just said. You mean to tell me he supports tax cuts? My goodness. He supports cutting taxes for people? I can't believe my ears. At a time of deficits? At a time of national debt? At a time where we are not meeting our obligations the gentleman is supporting cutting taxes?

My goodness. There is not a scientific scintilla of evidence that cutting taxes is right, he says, but yet he supports cutting taxes? My, my goodness. Why would the gentleman be supporting cutting taxes for people at this desperate time in American history? There must be a reason.

I believe I have the time, Mr. Chairman.

I just am shocked. There is no scientific evidence, Mr. Chairman, but we are understanding that the gentleman, and that there might even be in the Democratic substitute tax cuts? Why would we do such a thing when there is no science, when we have desperate times, when we have deficits? Why would we do that?

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

I hope my colleagues understood what I was trying to point out, and that is it seems very convenient for Members to come to the floor and decry the irresponsibility of tax cuts and yet propose them themselves. Isn't that interesting? Oh, but they are targeted, the gentleman will say. They are targeted. They are targeted for the exact right one person they want to target it for.

Our tax cuts reduce taxes for every taxpayer in America. We didn't pick and choose the winners. We didn't decide who was appropriate and who wasn't appropriate. Every taxpayer in America, every taxpayer in America got tax relief under this plan, and it is working because, as the gentleman fails to understand, last year alone there was a 15 percent increase in revenue.

Because there is scientific data to show that when you allow people to spend their own money, as opposed to having to come crawling to you to have a little bit of it back for the dignity that they seek from a big government; when they make those decisions for themselves, they make better decisions, and the economy grows and it expands.

We have had 18 quarters of economic growth and expansion with 5 million new jobs created. There is your proof, and that is the reason why the gentleman comes down now and says, yeah, I am kind of for those tax cuts; kind of like them now. I don't want them for everybody, I will pick and choose who I want. I have decided who the winners and losers in America are going to be because I can make that decision. I am smart enough to do that.

Well, on this side of the aisle, we believe everybody in America is a winner. Every taxpayer deserves that kind of respect, and that is the reason why we reduce taxes for every American. Every American is a winner in our vision of America.

Mr. Chairman, I yield 3 minutes to the gentlewoman from Michigan (Mrs. Miller).

Mr. Chairman, at this time I yield 3 minutes to a distinguished member of the committee, the gentleman from New Hampshire (Mr. Bradley).

Mr. Chairman, I yield myself 2 minutes just to compliment the gentleman on his turn of phrase. There isn't anybody in the body who does it better, and I have enormous respect for him as well.

But let me suggest that it is an attitude about who are winners. I certainly understand as the gentleman knows very profoundly that there are people who struggle in America. No question.

But if you have an attitude about them being successful, about them being able to be successful and being able to be winners without crawling to you, without crawling to me, without having to crawl to anyone or be dependent on any government or any government check, that is a different attitude than the one I hear so often from colleagues who come here saying that the only way they will ever survive is if government is there, and that is not how our country was founded, as the gentleman knows better than anyone. That is exactly why we believe everyone in this country is a winner.

Let me also suggest to the gentlemen that when the President spoke from that well saying he would not pass off to a new generation the challenges of this generation, that speech was given approximately 8 months before September 11, 2001. In those 8 months before and in the 5 years since, we have learned a lot, haven't we.

I would suggest that we are working hard together, often in a bipartisan way, to ensure that we do not leave terrorism to the next generation, to ensure that we do not leave Katrinas to the next generation, and to ensure that we leave prosperity in our economy to future generations.

Certainly there are short-term challenges and there are short-term deficits that we need to deal with. But to suggest that the President somehow woke up today with the same challenges he woke up with the day he made that speech is either trying to not be honest about history or forgetting it, or trying to suggest that it did not happen, and I don't believe the gentleman would suggest that one way or another.

Mr. Chairman, I yield 3 minutes to the gentlewoman from Tennessee (Mrs. Blackburn), who is not a member of the committee.

Mr. Chairman, I yield 2 minutes to the gentleman from Texas (Mr. Burgess).

Mr. Chairman, I yield 3 minutes to the gentleman from Alabama (Mr. Bonner), a member of the committee.

Mr. Chairman, I have no further speakers, and we are prepared to close. I believe I have the right to close the general debate, and we are prepared to close debate at this point.