Madam Chairman, I yield myself as much time as I may consume. Madam Chairman, as Chair of the Joint Economic Committee, I am pleased to speak in the time reserved by the Budget Act for a discussion of economic goals and policies. I rise…
Madam Chairman, I yield myself as much time as I may consume.
Madam Chairman, as Chair of the Joint Economic Committee, I am pleased to speak in the time reserved by the Budget Act for a discussion of economic goals and policies.
I rise today to put our fiscal problems into a broader economic context. Our budget is an important blueprint for getting our economy back on track by making critical investments in health care, clean energy, and education that will create jobs and enhance our global competitiveness. We will also restore fiscal responsibility by cutting the deficit by nearly two-thirds by 2013.
Throughout this budget debate, it has been generally acknowledged that President Obama inherited a fiscal mess. The previous administration had taken office facing a robust economy and a fiscally sound government. President Bush inherited a projected surplus of $5.6 trillion. We stood poised to deal with the budget challenges posed by the retirement of the baby boom generation, and prepared to invest in improving the future standard of living of our children and grandchildren.
Under President Bush's management, our economy set record after record, but they were all the wrong kinds of records. His administration's policies produced historically poor levels of job growth, the greatest gap between the haves and the have-nots since the 1920s. Record number of uninsured Americans, 47 million in 2006. A record $10.6 trillion Federal debt when he left office, and the largest single-year deficit in U.S. history, $459 billion in 2008. And he left over $1 trillion in deficits in 2009. Record oil prices, record current account deficits, the broadest measure of our trade deficit, the largest in history, record declines in housing prices and home equity that have left families owing more than their homes are worth.
As you can see on this chart, through a series of disastrous choices and flawed policies, the Bush administration squandered surpluses and left us with record deficits. Here are the projected surpluses, but this is the reality of the actual budget deficits left us by the Bush administration. President Bush presided over a tragic and unprecedented reversal of fortune for our Nation and for our American families.
As this next chart shows, the 8-year tenure of President Bush was a period of the lowest and slowest job growth of any administration in 75 years. His administration left us with a mere 2 million more jobs than when he came into office. Compare that to the 8 years under President Clinton, where nearly 23 million jobs, more than 10 times as many, were created. You can see this small red bar. That's the jobs that Bush II created. Compare that to all the prior administrations that produced many, far many more jobs than this failed administration.
Despite his frequent assurances that his policies were working to make the economy stronger, President Bush earned the dubious distinction of presiding over not one but two recessions. After a jobless recovery from the recession in the first term, the economy fell back into recession in December of 2007, and has been shedding jobs at an alarming rate ever since.
By nearly every measure, the 2001 and 2007 recovery period was among the weakest in the post-World War II period. There were warning signs that all was not well. During the recovery, two important economic variables, growth, and the growth in fixed nonresidential investment, grew more slowly than during the other expansions. Both grew more slowly than they did during the expansion of the 1990s, when taxes were raised, not cut.
Consumption, net worth, wages, and salaries, and employment also grew at remarkably slower rates during the Bush recovery than during other expansionary periods.
The one bright spot for some in the recovery was the large growth in profits that went to corporations driven, in large part, by the ever- increasing productivity of the American worker. However, the increases did not translate into bigger paychecks for hardworking middle-class families.
Unlike the expansion of the 1990s, under President Clinton, where workers' productivity and compensation grew in tandem, during the 2000 recovery under President Bush, workers' compensation lagged far behind their robust productivity growth. The increased wealth just went to a very few
at the top of our economy, exacerbating the divide between the haves and the have-nots.
As this chart shows, the typical household income, after accounting for inflation, was actually $324 lower at the end of 2007, leaving them struggling to stay afloat, even before the current recession hit.
It is now all too clear that even the relatively weak economic growth during the Bush administration was not broadly shared and was built on an unstable foundation. The soaring housing prices that helped fuel our economic recovery now appear to have been a classic asset bubble. The disastrous effects of the collapse of that bubble have now spread throughout our entire financial system and around the globe.
When President Obama took the oath of office on the steps of this building just 2 months ago, he immediately inherited a deficit of over $1 trillion for Fiscal Year 2009, and trillions more in deficits over the next 10 years. He became heir to an economy in the worst crisis since the Great Depression. Almost 4\1/2\ million jobs have been lost in the last 15 months.
As this chart shows, in the waning days of the Bush administration, the economy shrank at an astonishing annual rate of 6.3 percent in the fourth quarter of 2008, the fastest rate of contraction in over 25 years. In 2008, the final year of the Bush administration, $11.2 trillion of wealth simply vanished into thin air as housing prices fell almost 20 percent.
Our gross Federal debt stands at more than $10.6 trillion, nearly $35,000 per person in America. That is how much every person in America owes to the Federal debt. And as a share of our economy, that's the highest level since 1955, when we were still paying off debts from World War II.
This is the fiscal mess President Obama inherited, and we have our work cut out for us to clean it up. One year ago I stood here in this same spot, as part of this same process, and pointed out that when our opponents were asked how to address our financial problems, their answer was, to cut benefits for middle-class families and cut taxes for the wealthiest few. And our opponents still offer the same solutions.
We propose a different course. Restoring growth is key to getting our economy back on track, and spurring growth takes investment. Congress has worked closely with President Obama in his first 70 days to develop an integrated and multipronged attack to revive the economy.
Under the American Recovery and Reinvestment Act, we have provided relief to middle-class, middle-income taxpayers, invested in infrastructure, renewable energy, and education to create and save millions of jobs and extend unemployment benefits for millions of jobless Americans.
Congress has also acted, with President Obama, to reauthorize and expand the Children's Health Insurance Program, so that it now covers 11 million low-income children.
The economic recovery packages we passed were aimed at boosting demand in the short term because consumers are reluctant to spend, but we were careful not to enact provisions that will exacerbate our long- term deficits and debt. This budget builds on those policies by making important additional investments that will strengthen our economy, invest in the future and put us back on the path of fiscal responsibility.
According to the Congressional Budget Office, ``rising costs for health care [are] the single greatest challenge to balancing the Federal budget.'' Clearly, containing health care costs is critical to addressing the country's long-term fiscal challenges, and we must act now. That is why a key priority of our budget is health care reform, which will expand coverage, improve the quality of care and address those skyrocketing costs of care that are weighing down our economy and are putting pressure on family budgets.
During the last administration, the growing cost of care pushed the number of uninsured Americans to record levels. At the end of the recovery in 2007, there were 46 million uninsured Americans, 7.2 million more than when President Bush took office.
I would like to thank Chairman Spratt and the Budget Committee for including a deficit-neutral reserve fund in the budget resolution for the 9/11 health programs, consistent with last year's budget conference agreement. This will provide some legislative flexibility for the Energy and Commerce and Judiciary Committees to pass H.R. 847, the 9/11 Health and Compensation Act, and to ensure it is fully paid for under PAYGO rules. H.R. 847 would provide medical monitoring and treatment to World Trade Center responders and to community members whose health has been impacted by Ground Zero toxins in the aftermath of September 11, 2001. We have a moral obligation to care for the heroes and heroines of 9/11, and this reserve fund is an important step toward fulfilling that obligation.
Our budget makes investments in education a priority so that every child has the opportunity to receive a quality education. According to a report by the Education Trust, the United States is now the only industrialized country where young people are less likely than their parents to earn a high school diploma.
Improving education and training will prepare our children to compete and win in the global economy. This budget builds on investments with further support for early childhood education, setting high standards and providing the tools to achieve them for elementary and secondary school students. This budget reaffirms our commitment to making college affordable for every American by raising the maximum Pell Grant award to help more students obtain a college education.
Our budget also embraces the President's goal of increasing America's energy independence and energy security. Record gas prices last summer left Americans at the mercy of the gas pump. We build on the funding and tax incentives in the Recovery Act by expanding our investments in renewable energy and energy efficiency that will reduce America's dependence on foreign energy, and we provide new training opportunities to prepare workers for green jobs in a clean, green economy. Our budget is the blueprint for strengthening our economy and for putting people back to work. After 8 years of misguided policies, we must be mindful of the future as we take steps to rebuild our economy.
President Obama has called on us to address the systemic challenges facing our economy by making investments in accessible, affordable health care, energy independence and quality education. The investments we make now will pay off later as we emerge from this current crisis stronger and better prepared for challenges of the 21st century.
Thank you, and I yield to the gentleman from Texas (Mr. Brady) for 10 minutes.
I yield myself as much time as I may consume.
Madam Chair, as we consider the budget proposal for the coming year, we are facing, really and truly, one of the most important votes in recent memory. We can choose now to honor the pledge we made to the American people in the last election and begin the process of health care reform, make investments that will lead to energy independence and invest the needed funds to reinvigorate our educational system or we can follow the same failed policies that brought us to the crisis we find ourselves in now. Our budget builds on our integrated approach to lifting us out of the recession, and it returns us to fiscal discipline by cutting the deficit by nearly two-thirds by 2013.
Now, the gentleman mentioned our tax plan. Well, I am very proud of the Democratic plan. Our plan makes permanent the $800 Making Work Pay tax cut while preserving all dedicated payroll taxes that go to Social Security and Medicare. This is a new tax cut President Obama promised in his campaign.
The Democratic plan expands the child tax credit helping millions of families with children. It makes the $2,500 opportunity tax credit permanent to make college more affordable. This is a new tax cut President Obama promised in his campaign.
It permanently protects millions of middle-class families from being hit by
the alternative minimum tax. It expands the earned-income tax credit by providing tax relief to families with three or more children and increasing marriage penalty relief. It provides for automatic enrollment in IRAs and 401(k)s and expands the current tax credit for saving for retirement. It eliminates capital gains on small businesses, cuts taxes for 95 percent of American workers, cuts spending--non- defense discretionary--over 10 years to its lowest level as a percent of the economy in nearly half a century. It cuts the deficit in half over 4 years, grows nothing but jobs and ends an era of irresponsibility and gimmicks.
I would like to inquire, Madam Chairman, as to how much time remains on both sides.
I reserve the balance of my time.
Madam Chair, I yield myself as much time as I may consume.
I would like to address the deficit that the gentleman mentioned and point out that President Obama inherited deficits over $1 trillion. The Obama administration inherited an economy deep in recession and a projected annual deficit of well over $1 trillion. This deficit didn't arise out of the blue.
President Bush inherited a $5.6 trillion projected 10-year budget surplus, which he dissipated on misguided fiscal policies and choices. That surplus represented an opportunity to address some of the major issues confronting our country, including preparing for the needs of the retiring Baby Boom generation.
The Democratic plan cuts the deficit by more than half. The President sets a firm goal of cutting the deficit in half over 4 years, and this budget does just that. It takes the record deficit that President Obama and the 111th Congress inherited in 2009, and cuts the deficit from $1.7 trillion in 2009 to $586 billion in 2013.
And it also makes more realistic deficit estimates. To provide for a more realistic accounting of the government's financial position, our budget--like the President's plan--includes likely foreseeable costs that have been omitted from past budgets. These include costs of our overseas deployment, Medicare reimbursements to physicians, and emergencies such as natural
disasters that can't be predicted with precision but that occur every year. These were all off-budget during the Bush years. We have put them on with more transparency.
And I would like to say that very importantly, the Democratic plan begins to address health care. It begins to address rising costs. It sets us on a path to increased coverage for the 46 million who do not have medical coverage. It aims to improve the quality of care. And Republicans have no real plan for addressing rising health care plans and health costs. And the Republican plan for health care, including Medicare, is to give everyone a voucher and deregulate the insurance market.
So I say the Democratic plan is better in terms of reducing the deficit, and it also invests in health care, energy independence, and education and to long-term goals and needs of our young people and of our citizens who need to compete and succeed in the global market.
I would like to inquire as to how much time remains on my side and the other side.
I reserve my time.
Madam Chairman, my good friend on the other side of the aisle mentioned energy policy, talked about taxing energy. Well, the Democratic plan makes critical investments in energy, with $1 billion more in appropriated funding for 2010 than the 2009 level of regular appropriations.
It also includes a deficit neutral reserve fund for legislation to promote energy independence, spur the reduction of greenhouse gas emissions, and help businesses, industries, States, communities, and households adjust to an economy with reduced emissions levels.
It provides job opportunities in the new energy economy and relief for Americans. It creates green collar jobs to help address rising unemployment and keeps jobs in America, provides tax incentives for renewable energy, funds weatherization to help low-income
families save $350 per year, on average, on their energy bills.
But very importantly, going forward, we need to improve fiscal discipline through statutory PAYGO, pay-as-you-go, rules, and the Democratic budget improves fiscal discipline by requiring House passage of statutory pay-as-you-go rules as a condition for making current policy adjustments to the baseline for tax cuts and the Medicare physician payment system. Statutory PAYGO was critical to turning the budgets around in the 1990s, but the Republican Congress and the Bush administration allowed it to expire in 2002, contributing to the deep deficits they accumulated.
As one of its first acts, the 110th Democratic Congress instituted a tough new House PAYGO rule. The resolution would reaffirm and strengthen the commitment to pay-as-you-go by providing for action on statutory PAYGO to enforce a realistic baseline.
It also is very important about oversight and accountability and enforcement. Our budget generates valuable savings by expanding oversight activities and large benefit programs, more aggressively pursuing fraud, and increasing tax compliance and enforcement activities to ensure taxpayer dollars are spent wisely. It is a wise plan, with wise investments.
I reserve the balance of my time.
May I inquire on the time, please, on both sides of the aisle.
Madam Chair, this budget, the Democratic budget, invests heavily in education. This budget embraces the President's goal of furthering investments in education for Americans from early childhood through post-secondary education and training. Our budget provides a fiscally responsible plan to improve American education and train a workforce that is prepared to compete and succeed in the global economy.
A highly educated and skilled workforce is critical to the overall success of our economy. The benefits to investing in education include higher earnings, higher graduation and employment rates, less crime, decreased need for special education and welfare services, and better health.
In 2008, the unemployment rate for workers with a bachelor's degree was 2.8 percent, while the unemployment rate for workers with a high school diploma was double at 5.7 percent. For workers with less than a high school diploma, the unemployment rate was 9 percent. So if we want to attack unemployment, prepare our young people for the future, we should invest in education. That's what this budget does.
I reserve the balance of my time.
I yield myself such time as I may consume.
Over the last 8 years, through fiscally reckless policies, President Bush squandered the Clinton-era surplus and left behind a legacy of debt and deficits. He made a number of records, but they were the wrong kinds of records. Record deficit, record trade deficit, record debt.
Over the 7 years from 2002 to 2008, those surpluses from the Clinton years would accumulate to $3.2 trillion. Instead, under President Bush, the government ran 7 straight years of budget deficits totaling $2.1 trillion. When President Obama was inaugurated in January, he inherited from President Bush an estimated deficit of $1.5 trillion--the worst budget deficit in history. And trillions more in deficits over the next 10 years.
Now the Democratic budget resolution begins the process of turning around the Republican budget legacy of deep deficits, mounting debt, an economic decline due to the Bush administration's reckless fiscal policy. It takes steps to put the budget back on a fiscally sustainable path by restoring fiscal responsibility and substantially reducing the deficit.
The President set a firm goal of cutting the budget deficit in half over 4 years, and this budget does just that. It takes a record $1.5 trillion deficit that President Obama and the Congress inherited in 2009, and cuts the deficit from $1.7 trillion in 2009 to $586 trillion in 2013.
Our budget makes strategic investments in health care, education, energy independence, areas critical to a strong economic future. For these and other key priorities, it includes deficit neutral reserve funds that will accommodate legislation in these areas consistent with the pay-as-you-go principle.
Our budget generates valuable savings by expanding oversight activities and large benefit programs, more aggressively pursuing fraud and increasing tax compliance and enforcement activities to ensure taxpayers dollars are spent wisely.
It is a balanced and fair budget that makes investments in critical areas.
I would inquire as to how much time is remaining on both sides.
I reserve the balance of my time.
I reserve the balance of my time for a closing statement.
Madam Chair, the policies advocated by my colleagues on the other side of the aisle have been tried and we are all living through the disastrous results. Our budget is an important blueprint forgetting our economy back on path that restores confidence, produces growth, and puts people back to work.
We make critical investments in health care, clean energy, and education that will create jobs and enhance our global competitiveness. We will also restore fiscal responsibility by cutting the deficit by nearly two-thirds by 2013.
A budget is fundamentally about priorities--and our priority is to strengthen the economy and help struggling families regain their footing. Americans are optimistic by nature, and I am optimistic that the investments we make now will pay off later and that together we will emerge from this current crisis stronger and better prepared for the 21st century challenges that we face.
Madam Chair, I yield back the balance of my time, and I move that the Committee do now rise.