Thank you very much. What I'm going to do tonight is just introduce myself to the people here and just share some real life experiences. I have lived in Johnson City, Tennessee for 31 years, have practiced medicine there, have built a…
Thank you very much.
What I'm going to do tonight is just introduce myself to the people here and just share some real life experiences.
I have lived in Johnson City, Tennessee for 31 years, have practiced medicine there, have built a thriving medical practice from 4 physicians to over 70 with 350 employees, and so we've delivered and have worked in a small business.
A few years ago, I decided to run for public office after just sharing some thoughts with friends, and I was fortunate enough to be elected to our commission and as the mayor of our city. I brought a very simple philosophy to government, very simple. It's not calculus; it's not arithmetic. It's simple math. That is: Spend less than you take in.
When we went on the commission several years ago, we had deficit spending, and we had a bloated city government. With the help of some great leadership and our other commissioners, we cut almost 100 people from our workforce. In addition to that, we had only about $2 million in the bank, and that was essentially broke. During the last 6 years, we've passed six consecutive budgets without a tax increase, and have gone from a fund balance of $2 million to $24 million.
So our city has a great savings account set so that, when this rough economy came, we were prepared for it like any individual would be with a savings account. We did this without raising taxes and without cutting services, and I think the people there rewarded us for this prudent behavior. As a matter of fact, Wall Street rewarded us by increasing our bond rating to a AA rating.
I then fast forward. I come to Washington, D.C. in January, and I'm sworn in. In the fall, we all recall the $700 billion bailout, or the so-called ``TARP''--Toxic Asset Relief Program--that had already been passed by the previous Congress, and that was passed because of illiquidity in the banking market. People weren't able to get loans, and that's still an issue.
One of the first things we confronted here was an $800-plus billion spending plan, the so-called ``stimulus.'' Now, one of the reasons we were successful where we were was we had a plan to correct our problems. We had a very well-thought-out plan, and we executed that plan--reducing debt and improving the financial stability of our local government.
Here in the Federal Government, we had a massive, massive spending plan. As we went through it, it was 450 pages or so long. The plan was discussed here on the House floor and was sent to the Senate. It came back as a 758-page bill. After conference, it was 1,071 pages, which we were presented here on the floor at about 9 o'clock one Friday morning a couple of weeks ago. We voted on it 5 hours later, of which no one could have read that bill in its entirety and can tell me what's in it. So it was about $1 billion a page. What I saw was massive Federal spending.
The options we have as a local government are: Number one, we can raise your property taxes. Tennessee is not an income tax State, so we have sales taxes and property taxes--that's a way we can raise revenue--or we can expand growth where you have more property taxes coming in. That's what we chose to do. We can't ask people to go down and spend any more money at the local department stores or at Wal-Mart or wherever. People are protecting their money now, so we can't do that. The Federal Government has a third option, and that is to borrow money, and they have borrowed massive amounts of money from China. If the situation comes where we can't borrow any more money on the credit market, then we have to print money. The danger of that is, when you expand the money supply, you certainly will create an environment where inflation may occur.
I can tell you one of the things that I did. I took this responsibility so dearly to myself because the people who are hurt the most with higher taxes are the people at the lower income and our senior citizens on a fixed income. I can think of so many people in my community for whom $20 or $30 or $40 a month is just devastating. The gas price increases we had last year were just devastating--$4 or $5 a gallon. They just could not pay it. If you had people working, as we have had many people, for $10, $12, $13 an hour and they had to drive more than 10 miles to work, it took a day-and-a-half's work per week to pay their gas to get to work.
So the people who are hurt the most are not the people here in this Congress, who make a good salary, or the people out there making six figures. It's the people on a fixed income. I think, as for this particular bill that we've done, this spending, if we create an inflationary spiral, we've hurt the very people we've said here that we're going to help. We've hurt them the most.
I had the opportunity today to speak to a good many bankers because of some legislation that came on the floor, and it was about this, the home bailout. I called and spoke to numerous ones in my district. Let me just reminisce a little bit about the banking problems we've had.
I think there are approximately nine banks in America that control about 70 percent of all of the financial assets in America and over 8,000 community banks that control the other 30 percent. Less than 5 percent of our community banks have had to ask for TARP money. Every single one of the major banks has been too big to fail. Well, who is going to go save these small community banks? I can tell you no one is, but most of them are very financially secure. I spoke to several today where less than 2 percent of their loans are a month behind or more, so they are doing very well.
Then they were presented with a situation today in this particular bill where a bankruptcy court can say to you, You have to mark down the difference. If the home price decreases in value from, let's say, $230,000 to $200,000, you have to eat that. This local bank has to eat that.
The gentleman will yield.
Absolutely. Not only that, but if you do what they have recommended or what we voted on today, another provision in that bill is that you could get a zero in bankruptcy court. The judge could say, You get a zero interest rate for 30 years.
I asked one of my banking friends, How do you make money if you lend at zero percent for 30 years?
The bottom line is that those costs are passed on to the other people who borrow money from that bank. So the taxpayers absolutely get the bill. That is a great point you just made.
Absolutely.
What we've just said to many of the banks in our area and to the folks who've borrowed money with the intent of paying it back--which is the example I gave today--is, look, if somebody had bought a Tahoe last January and they had paid $40,000 for this new Tahoe, well, when gas prices went to $5 a gallon, you probably couldn't get $20,000 for that Tahoe. You were probably upside down in your loan right then, but what did you do? Did you walk back and give it to the bank? No. You kept paying on that until you paid your Tahoe off. So that's what we've asked people to do.
I think this bill should be vetted extremely well in the Senate. We shouldn't cause people, the 98 percent of the people who are paying their mortgages on time in Tennessee, to say, Hey, I've got to also pay for this other mortgage when I'm doing it the right way.
I think the experience I've had in government is that we've always preached--and I have seen it myself, have lived it and have breathed it--smaller government and low taxes. Businesses move in, and your economy thrives. I have personally witnessed that. I know it works. I come to Washington, D.C. What do I see? The most staggering spending that I've ever seen in my life.
Let me pose a question. Then I'll let you answer this: When we passed the omnibus spending bill, I took that 2,000 pages back to show my constituents what we'd passed here. An 8.5 percent increase. Now you tell me what State government, what local city government is going to pass an 8.5 percent increase this year. The example we should be doing is: We in Federal Government are going to cut the size of this Federal Government. We're going to tighten our belt. It would be a wonderful example to the rest of the Nation.
The thing that I noticed when I was home and you have, I'm sure, the same--and I have to say you have a wonderful Charlotte airport. During the snowstorm, I got to spend 24 hours there. So it's a beautiful airport. The people from North Carolina were very good to their neighbor from Tennessee.
I think one of the things that we have to do is we have to set an example in the Federal Government to the rest of the Nation. If we did that, if we had a plan that we're going to balance the budget--I mean, this particular budget we're spending is $1.6, $1.8 trillion out of balance, and we're going to cut it--well, it's some gimmickry because when you don't have an $800 billion spending package, you've already cut that much of it. That's onetime dollars. So that's really not a fair cut.
A real cut would be when you actually spend less money than you did the year before, and that's never happened in my view of Congress.
Would the gentlelady yield for just one comment?
Just something even more sinister.
What the gentlelady from Wyoming was saying is that the carbon tax, if you look at it, or cap-and-trade, just so people understand what that is, is when oil is offloaded from a ship or comes out of a well, a tax will be placed on it at the wellhead. So you pay a tax that goes directly to the consumer. Again, the least people able to afford this are the folks on a fixed income, our senior citizens, which we have a lot in our community.
So when you go down to the grocery store to buy a bag of tomatoes or bread, it was brought there by a vehicle that's paying more to get there just because of this carbon tax. And the theory, as you pointed out, is we want to tax carbon to produce carbon dioxide into the atmosphere, and we'll use these other renewables.
And at some other time, I certainly would like to go into some ideas that we've shared at the local level about how to reduce carbon at no cost to the taxpayers.