Mr. Speaker, I thank the gentlewoman for hosting this hour for our Blue Dog group for the presentation of our budget proposal. The Blue Dog Democrats in the House are 35 members strong. We come from all over the United States. Tonight we…
Mr. Speaker, I thank the gentlewoman for hosting this hour for our Blue Dog group for the presentation of our budget proposal.
The Blue Dog Democrats in the House are 35 members strong. We come from all over the United States. Tonight we have had Members from California, Mississippi, Tennessee and Florida. We will hear from the gentleman from Arkansas (Mr. Ross) shortly.
This is a group that is united by one theme, and that is we believe that our country must return to balanced budgets, we must try to pay down our debt, which now stands at over $6.3 trillion, and, in order to do so, we have to adopt a fiscally responsible budget in this Congress this year.
Back in January the President revealed his budget plan, and we have had the opportunity to look very carefully at his plan. As you know, his plan calls for tax cuts and acceleration of tax cuts that were implemented 2 years ago when we passed the largest tax cut in the history of the country. That tax cut was to be phased in over a period of about 10 years. Those tax cuts have been phasing in, and the Blue Dog Democrats believe that the tax cuts that we have all received need to remain in place.
We also believe that the future tax cuts that will accrue to the benefit of low and middle income families need to be implemented immediately in an effort to bring about a short-term stimulus.
But the Blue Dog Democrats disagree with our President on two important points of his plan. First of all, we believe that it is wrong for half of his tax cut plan to be dedicated to the elimination of the taxation of dividends.
Now, there are many wealthy Americans who have a lot of stock and who would greatly benefit from eliminating the tax on dividends. But most Americans have very modest stock investments, and we believe it is wrong to dig the deficit hole deeper and to increase our national debt by proposing at this time the elimination of the taxation of dividends.
We also believe that at a time when our Nation is on the verge of war, that we as Members of Congress need to call upon the American people to share in the sacrifice that is being made by the young 18, 19, 20, 21-year-olds who are now gathered around the borders of Iraq, poised for military conflict.
In time of war, all Americans must share in the sacrifice. By eliminating the part of the President's budget plan that eliminates the tax on dividends, we believe we are calling upon those Americans who are best able to share in the sacrifice to postpone that part of the President's plan.
We also believe that American families who have incomes over $170,000 a year should be willing to defer the tax cuts that they would get under the President's plan in order to share in the sacrifice necessary to fight and pay for the war in Iraq.
That is the Blue Dog plan: Accelerate the tax cuts for the lower and middle income families, for all families who have incomes below $170,000 a year; but those who have greater incomes than that, they will get the tax cuts that would naturally accrue to the cuts in the lower tax brackets. They will get the benefit of the Blue Dog plan for accelerating the child tax credit and eliminating the marriage penalty, as will all Americans. But as far as a reduction of the top rates, those families at $170,000 and above should be willing to wait, wait until we get through this war, wait until our budget situation improves.
The difference in those two plans, the Blue Dog plan and the President's plan, has a dramatic impact upon our Federal budget. If you look at the chart to my right, you see the President's plan will dig the budget deficit hole deeper to the tune of $2.7 trillion in debt over the next 10 years. Our present $6.3 trillion debt under the President's plan at the end of 10 years will stand at $10 trillion. We think that is wrong. We think that is bad for the country. We think that is digging a hole that we will have a very difficult time getting out of.
The second chart I have shows that the amount of interest that every American family of four will have to pay just to service that debt that we will have under the President's plan. As you can see by the chart, currently every family in America pays $4,624 in interest just to service that $6.3 trillion national debt. That is what we call the interest tax, and the interest tax is the only tax that you cannot repeal, because the interest obligation on the $6 trillion debt must be paid every year by the taxpayers of this country.
So if you look at the President's plan, by the year 2013, 10 years from now, every American's debt tax will double. Every American family will be paying $8,458 every year, just to pay the interest on the ever- increasing national debt.
We believe that is wrong. We believe it is a tremendous waste of taxpayer dollars to invest that much in interest.
That is correct. As we said, by 10 years, the end of the budget period that we are now looking at, the tax paid by every family would be $8,458, just in interest. Today, 18 percent of every tax dollar collected by the Federal Government goes to pay interest.
To look at it another way, if you took only the Federal personal income tax, about 25 percent of every dollar we pay, 25 cents out of every dollar that we pay, goes just to interest on the national debt.
What a waste. We talk about wasteful spending, there is no greater waste in any area of spending than what we waste every year just paying interest on this debt that we have accumulated. The Blue Dog plan is to stop that hemorrhaging.
That is correct. All of the discussion currently ongoing about the Federal budget, the levels of spending, do not include the cost of a conflict with Iraq or the cost of rebuilding Iraq once the conflict is over. The President has said that is a separate item, that it should be treated as a separate item. He has promised he will send a supplemental request to the Congress to pay for that if and when it occurs.
So we are actually talking about very conservative estimates of the size of the national debt, and the Blue Dog budget plan we are contrasting tonight with the President assumes the President's levels of total spending.
There are a lot of folks around here who believe very strongly, as I do and the Blue Dogs do, that we spend too much money and we have to be conservative in our spending. The President has sent us a budget that calls for significant reductions in the levels of spending that we have seen over the years. But even if you abide by the President's spending recommendations, which our budget does, his tax cut policies will increase our national debt to the level to the tune of $10 trillion by the end of this decade.
So, what we say is as long as we are facing war, facing growing deficits, those who are most blessed economically in our country should be willing to defer the future tax cuts they have yet to receive in order to help us dig our way out of this ever-deepening hole of debt and deficit.
The chart I have to my right shows in a line graph the differences and the surplus under the Blue Dog defense budget and the deficit that will occur over the next 10 years in the President's budget. The blue line shows the President's budget. The red line shows the path to a surplus under the Blue Dog budget.
As you can see, after 10 years, our Blue Dog budget has seen several years of improved fiscal condition of the Federal Government, and we have returned to surplus. We will have returned to a surplus by 2009. By the end of the decade, we will have returned to what we call a true surplus that does not account for the influx of Social Security funds, which we are currently spending, just to run the rest of the government.
This Congress a few months ago voted on several occasions never again to borrow money from the Social Security Trust Fund to run the rest of the government. We had 1 year, the last year of the Clinton administration, when we did that, when we accomplished that. But now we are back into deficit spending, we are using Social Security money once again to run the government, and the Blue Dog plan is a plan that will get us back to a point where we will no longer do that. The President's plan, to the contrary, does not accomplish that goal.
Just in the last 2 months, the Congressional Budget Office in revising its economic forecast on Federal income said that the Federal debt at the end of the 10-year period would be half a trillion dollars larger than they have said it would be in just January of this year. So the slide into ever-deepening debt has been dramatic.
The Blue Dogs call upon our President to take a look at the same numbers that his Office of Management and Budget produces, which are very similar to the numbers that our bipartisan Congressional Budget Office produces, and acknowledge and recognize that our picture, our financial picture, has changed dramatically, even since he announced his budget recommendations in January of this year.
I think, based on those changed numbers, the President should join with the Blue Dogs in trying to move toward a balanced budget within this decade, rather than continuing to dig this deficit hole deeper and deeper.
So, I hope tonight as the Blue Dogs have gathered on this floor, that we will be able to persuade not only our Democratic colleagues, who are well aware of this severe deteriorating budget situation, but our Republican colleagues, that they should take a good, hard look at the Blue Dog budget alternative.
It should be appealing to many of them, because for many years Republicans were known to be fiscal conservatives, and it has only been in the last 2 years when we have seen Republicans abandon that, and in fact on many occasions tell us that deficits really do not matter.
The truth is, common sense still prevails, and as you go along spending more money than you take in, eventually it is going to catch up with you. I have never seen a family that could sustain itself for very long incurring debts that they could not repay, and neither can your Federal Government.
So we believe Republicans will be attracted to our plan because we do not dig the deficit hole deeper. We believe that our spending levels, which are the same levels as the President's, will also be attractive to Republicans because they, I hope, would follow their President's recommendations on spending.
So we hope this plan will be well received, and we look forward to the opportunity to debate it when this House considers the budget resolution for this year.