Mr. Speaker, I am pleased to join the gentleman's special order and participate in the discussion with my colleagues. We are watching something extremely unserious unfold with respect to the Nation's balance sheet. We have to understand,…
Mr. Speaker, I am pleased to join the gentleman's special order and participate in the discussion with my colleagues.
We are watching something extremely unserious unfold with respect to the Nation's balance sheet. We have to understand, as we deal with the budget of this country, we are dealing not just with the matters that are presently before us and will affect the upcoming year, we are literally talking about the future of this country. To the extent we do not pay our way, our kids pick up the difference.
Many of us were terribly concerned when we saw the pre-Hurricane Katrina budget forced through the House, forced through the Senate, yet to be reconciled and passed finally, but it proposed to drive the deficit deeper and in fact that was from a position where the deficit position was the third worst in our Nation's history.
Now the difference in the deficit, and we talk deficit around here, deficit is our annual shortfall. The national debt is what it all amounts to. When we run deficits, we add to the debt. And while we are third worst in the Nation's history in terms of annual deficit, we are absolutely on unchartered ground with the kind of debt we now have, debt approaching $8 trillion.
This would be I believe very alarming by any measure, but a further look shows who owns the debt. The debt held by the public is increasingly owned by central banks of Asian nations. I have heard some Members, some friends of mine from the other side of the aisle say look, I know that is a scary deficit number, but we have had, relative to the size of our economy which is now bigger, we have been worse than this before. I do not think we ought to have the very worst in our country's history as the benchmark against which we compare, but how about the very best in our Nation's history. They try to excuse the scary state we are in by saying it has been worse in terms of real dollar terms compared to GDP.
It has never been this bad. We have never had so much debt owned by foreigners. I am not just talking about Ole and Sven and whomever else across the world, I am talking about central banks controlled by central governments, especially Asia, Japan, and even more by China.
This morning I visited with a former member of the Office of Management and Budget and asked her whether or not we were losing control potentially in the future of our monetary policy as a country, giving up essentially sovereignty of our ability to set interest rates in light of the level of debt owned by foreign governments. She indicated we are heading down that path.
So anything that we talk about in this Chamber that adds to the deficit,
increases the holdings of foreign governments of our national debt and diminishes the sovereignty we have over our own country, this is an extremely alarming situation and that is why I was so adamant against the budget reconciliation proposal being advanced in Congress.
Recently we have had a new chapter in the debate. Majority Members have said my gosh, that Hurricane Katrina was expensive, we have to offset every dollar of relief we are spending on that hurricane. Look, I welcome very much some concerns about spending and deficits and the notion that we might offset some of this stuff, but if we are going to offset, let us look at the total picture. There is nothing about a Nation's balance sheet that treats hurricane debt different from other debt. So if we are going to offset for Hurricane Katrina, let us offset for the war in Iraq, let us offset for tax cuts which deprive the government of revenue and throws us further out of balance. That is not what they are talking about.
In other words, this is window dressing on a scheme that ultimately drives us further into debt. Look at this chart. This chart shows the small bar which is the amount of spending they want to cut while the tall bar shows the depth to which the tax cuts they are including in this package would drive us further into deficit, further into the hands of more Chinese bonds residing in the Chinese government.
We need to do something about this, and it does not start with basically this window dressing on cutting many of the programs so vital to those displaced by the hurricane as an excuse to offset hurricane relief. We need to get serious about getting back to a balanced budget. There are a couple of ideas that I would advance in the concluding part of my remarks.
First, we need to reinstate a requirement given the deficits that we are in that we pay as we go from here. If we are going to take a step that adds further to the deficit, we have to find a way to offset that payment. If we spend more, we have to find a way to offset so we do not drive that deficit deeper. If we pass some tax cuts, we lose some revenue, we have to cut spending so we hold that deficit in balance.
Mr. Speaker, we have had these pay-as-we-go requirements, known as PAYGO, throughout the entire 1990s, and I will tell Members what brought it about. What brought it about was divided government. President Bush won, and the Democratic controlled Congress arrived at pay-as-you-go requirements to bring the budget into balance. President Clinton, dealing with a Republican controlled Congress, had pay-as-you-go requirements to get us to a balanced budget.
Something very, very problematic has happened under united Republican control of the White House, the House and the Senate: They blew away the PAYGO requirements and have added to the deficit like there is no tomorrow, giving us such deep debt problems with the Chinese.
What happens is you get yourself into the deepest deficits you have ever had in the history of the country, which is precisely the problem. What the gentleman means is you do not have to pay for it in this year's budget because your children are going to pay for it down the road as they retire the national debt.
I would just cite a couple of other spending areas that might be cut, and it relates right back to the administration's handling of the hurricane. Just listen to this. You want to cut food stamps, Medicaid, programs that are going to be so vitally important to getting displaced people from the hurricane back on their feet again, but before we go there let us take a look at some of the ways the Republican administration has spent money for hurricane disaster relief: $1,275 per person for a cruise ship that costs only $599 for an actual cruise. What kind of deal is that? Or $15,000 paid for a load of ice that was worth $5,000; $88,000 for mobile classrooms that normally cause $42,000; $59 per hotel room per night for months on end.
And that is not all. The Federal Government paid full retail for trucks, laptop computers, clothing and sleeping bags. Firms have been awarded contracts for millions without competition. Contracts have gone to construction companies that do not even have building licenses.
If we look at how this administration has administered the relief of the hurricane to date, we are going to find all kinds of places to cut spending before starting after programs which are so vitally needed like food stamps, helping displaced families get the groceries they need to feed their children.
The thought that the other side of the aisle would cut these programs while trying to ram through a budget reconciliation package that drives up the national debt because it funds those tax cuts to the most affluent, even while you leave this shameful, wasteful spending totally untouched, this is a package of shame.
I have just learned in the course of our hour that the budget reconciliation amendment will not be brought to the floor tomorrow. Apparently the disarray on the majority side found them short of votes to bring it up tonight. If something fundamentally does not add up, I would hope, and it is high time, there is a debate within the majority conference about it. We need to get serious about controlling the spending. We need to get serious about controlling the deficits. We need to get back on a path that brings us to fiscal sanity.