Concurrent Resolution On The Budget For Fiscal Year 2008
Mr. Speaker, pursuant to House Resolution 370, I call up the Senate Concurrent Resolution (S. Con. Res. 21) setting forth the congressional budget for the United States Government for fiscal year 2008 and including the appropriate…
Mr. Speaker, pursuant to House Resolution 370, I call up the Senate Concurrent Resolution (S. Con. Res. 21) setting forth the congressional budget for the United States Government for fiscal year 2008 and including the appropriate budgetary levels for fiscal years 2007 and 2009 through 2012, and ask for its immediate consideration.
Mr. Speaker, pursuant to House Resolution 370, I offer a motion.
Mr. Speaker, I yield myself 4 minutes.
Mr. Speaker, let me say from the outset what we said yesterday in the debate of this bill. But let me refer to third parties, independent, disinterested third parties like the Concord Coalition. They took a look at our budget, and they said unequivocally, and I'm quoting, ``Thus, to be clear, the budget resolution does not call for or require a tax increase.''
The Center on Budget and Policy Priorities, excellent analytical work, they took a look at our budget and they said, ``The House budget does not include a tax increase.''
And then, finally, the Hamilton Project of the Brookings Institution, independent, disinterested said, plainly, simply, ``This budget would not raise taxes.''
We have included in the budget resolution not one place, but twice, in different parts of the resolution, our wholehearted endorsement, our commitment, our pledge, our determination to see that these middle- income tax cuts are preserved and enacted and carried forward when they expire per their terms.
The budget resolution does not cause them to expire. They were designed to expire, written to expire when they were offered and passed. At that particular time, that was part of the provision.
In addition, I am making clear again that our budget resolution allows all of the deductions, credits, exemptions and exclusions that are provided in the 2001 and 2003 tax cuts. All of them are provided and allowed to stay in place this year, next year, and for the next 4 years. So there is very little disagreement about us except I am wondering about the arithmetic.
Budget resolution motions to instruct are nonbinding. They are a valid part of the process. But they do present a problem. They single out specific elements of a budget resolution without looking at how one goal, such as tax reduction, interacts with another goal, such as deficit reduction. In that respect, what my colleagues on the other side of the aisle have offered is a resolution that calls for support of all of the tax cuts they laid out plus a surplus of $96 billion.
Could I ask the gentleman from Wisconsin, what does this assume about the bottom line before the tax cuts? How big a surplus would you have to have in 2012 in order for there to be, after taking these tax cuts, a $96 billion remaining surplus?
I yield to the gentleman from Wisconsin.
How much?
So what is the surplus before these tax cuts are taken?
It would have to be pretty substantial. Isn't the cost of these tax cuts in the first year $180 billion or more?
It's my understanding, roughly speaking, that the cost of these tax cuts, the revenue impact of these tax cuts, in the first year was about $180 billion. If you take that kind of charge against the surplus and still have a surplus left of $96 billion, then you've got about a $276 billion surplus in that year.
Is this the CBO number?
CBO's projection.
And what you would then expect is a $276 billion surplus before the tax cuts?
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I yield 3 minutes to the gentleman from New Jersey (Mr. Andrews).
(Mr. ANDREWS asked and was given permission to revise and extend his remarks.)
Mr. Speaker, I yield 4 minutes to the gentleman from Oregon (Mr. Blumenauer).
I yield 3 minutes to the gentleman from Virginia (Mr. Scott).
Mr. Speaker, I yield myself 5 minutes.
Mr. Speaker, in response to the last speaker, if we support this resolution, it's because we originally provided in our budget resolution, in two different aspects of our budget resolution, our full, wholehearted support for these middle-income tax cuts. We still have, I will have to confess, concern about your arithmetic here, but we supported it in the budget resolution we filed, which passed the House. We endorsed and pledged that we would seek to the extension of the 10 percent individual tax bracket, the child tax credit, research and experimentation tax credit, all of these things. Read the resolution. They're there. We were there before you were, saying that, over the next 3 or 4 years, we need to see that when December 31, 2010, comes along, these tax cuts will survive and be preserved. We are committed to that, black and white print, budget resolution.
I will yield for one question.
No. I'm talking about statements in our budget resolution which state emphatically and clearly, ``It is the policy of this budget resolution to preserve, defend and protect the middle-income tax cuts adopted in 2001 and 2003, which will expire in 2010.''
Now, we do believe, and this also is in our budget resolution, we believe in the PAYGO principle. We believe that the Tax Code is full of deductions and credits and exemptions and exclusions, and you can go through a closet cleaning in the Code and come up with enough offsets to provide for the extension of many of these tax cuts, maybe not all but many, without any adverse impact on the bottom line budget deficit.
I will yield.
There was a provision that allowed for reserve accounts so that we could provide for these tax cuts. But basically we took the position that this decision does not have to be made now, and indeed it can be better made closer in time to December 31, when we see what is the bottom line then. How much debt have we accumulated? What is the total deficit? What is the forecast for the future? At that point in time, we can consider the tax cuts, extension of them.
By my understanding, if you extend all of the 2001 and 2003 tax cuts that expire on December 31, the cost over 10 years is about $2 trillion. That's a big decision. We think you should make it deliberately and closer in point of time to when these tax cuts actually expire.
Let me say also that not only did we put these tax cuts and state our support for them in the budget resolution, but in addition, when the tax cuts were passed in 2001, we either had substitutes or occasionally voted for independent free-standing provisions like the marriage penalty relief. Democrats were there when that passed the House. I voted for it the first time it came up and voted for it again repeatedly. In our substitutes, we had a 12 percent bracket and then a 10 percent bracket. We had a child tax credit, which we continually increase, and we had the R&E tax credit extension. We had expensing for small businesses. Many, if not all, of the things you are talking about here we voted for, maybe not on your bills but on our bills because these are tax policies favoring middle-income Americans for whom we think tax relief is well in order.
Secondly, we have a problem still with the arithmetic that you've got here.
According to my information, looking at CBO's most recent report, the Social Security surplus for 2012 is $255 billion. If you want to stay out of Social Security, you have got to have a surplus of at least $255 billion, a unified surplus of at least $255 billion, am I correct?
Mr. Speaker, reclaiming my time, I understand that. But the Social Security surplus is $255 billion.
Mr. Speaker, on the other hand, if you look at the surplus you are claiming, $96 billion, and also provide for these tax cuts, my information is that these tax cuts have a revenue impact of at least $180 billion.
That would mean in the year 2012 there has to be a bottom line surplus of $276 billion before the tax cuts are taken.
$180 billion I believe is 1 year.
But you haven't shown us the arithmetic. We are not sure your arithmetic is correct.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I yield 3 minutes to the gentleman from Virginia (Mr. Scott).
Mr. Speaker, Mr. Speaker, I yield 30 seconds to the gentleman from Virginia (Mr. Scott).
Mr. Speaker, I yield myself 2 minutes.
I have here a copy of the President's budgetary proposals for fiscal year 2008 published by the Congressional Budget Office. If you turn to page 6, you will see that the cost of the tax cuts, extending the tax cuts, which the motion proposes, the cost or the revenue impact of that in the year 2012 is $231 billion. That is what CBO says.
If you now add $96 billion to that, the surplus that year must be $327 billion. The surplus, $327 billion. Last year the deficit was $248 billion. If we move to a surplus of $327 billion in the year 2012, that requires a movement in the right direction of $575 billion which is hard to believe.
I yield to the gentleman from Wisconsin.
The point, I am sure, is you are supportive of all of the 2001 and 2003 tax cuts. You are limited by procedural rules to only dealing with that which is in the scope of the two resolutions. But, in fact, I am sure you are supportive of that. If that is true, you have to acknowledge that the number is $231 billion. That is the revenue impact of extending all of the tax cuts. If you add 96, which is the surplus you project, you get a big, big number.
Mr. Speaker, I reserve the balance of my time.
Mr. Speaker, I yield myself 3 minutes. Mr. Speaker, this goes back to something that our President called fuzzy math. And if I seem hung up on the topic of math, it is because arithmetic is important when you are putting together a budget.
What they are telling us is they can run a $96 billion surplus in the year 2012 even though they are taking tax cuts that will take $231 billion in revenues out of the Federal Treasury. It is a stretch, to say the least. That involves assuming that we will have a surplus in the year 2012 of $327 billion.
How far from that are we today? Last year we had a deficit of $248 billion. If
we are to move to a surplus of $327 billion by the year 2012, there has to be a movement in the right direction, a positive movement of $575 billion. Let's hope it happens, but I wouldn't bet the farm on it.
They then say and just said we are raiding Social Security. How absurd can you get? Here it is right here. The Social Security surplus is $255 billion. They do not even claim more than $96 billion on the surplus. If they left the tax cut out, they would indeed have enough bottom line, 96 plus 231, to cover the surplus, but they haven't done that.
Here on the bottom line, the back of an envelope, is a simple chart that I bring down to the well with me every time I talk because we need to be reminded. When President Bush came to office, the national debt was $5.7 trillion. Six years later, the national debt is $8.8 trillion, an increase of $3.1 trillion over the last 6 years. That is a 60 percent increase in the debt of the United States. We have not seen anything like it since the Second World War.
Are we worried about fuzzy math? You better believe we are because this is the consequence of it. What the Republican budget resolution would have done had it been adopted is it would have extended again and again the policy of borrow and spend, leaving the tab to our children.
Here is what the tab looked like, in addition to the $8.8 trillion: You can cut taxes today, but what you leave in the wake of what you have done is a debt tax, the one tax that has to be paid because it is the amount of money we have to levy and raise every year to pay interest on our national debt, which is obligatory. It cannot be avoided. It has to be paid.
Here is the difference between interest on the national debt, which is well over $200 billion, headed to $300 billion within the foreseeable future, and look what it does to other priorities, things that are pressing and important like veterans health care, homeland security, and education. All of those things are dwarfed by the increase in interest payments on the debt.
This is a debt tax we have to pay today. All Americans have to pay it. Our children will have to pay it because of our irresponsible fiscal policy. This is why we need to clear up this fuzzy math and put the country back on a firm path to fiscal responsibility.
For the clarification of Members, let me give you my take on what is before us right now. This motion to instruct conferees calls for us to recede, back off the revenue levels in the House amendment and insist on, listen to this, policy statement in section 401 of the House amendment. That is our budget resolution, the Democratic budget resolution.
It is the place in our resolution where one time we have insisted, pledged our support for the extension of these middle-income tax cuts passed in 2001 and 2003. That is paragraph A. It is hard for us to disagree with the enforcement of the language that we put in the budget resolution in the first place.
Secondly, paragraph B, insist on the lowest possible levels of revenue within the scope of the conference.
It is hard to tell what that level might be, whether or not it is consistent with the one above, but we certainly will give some consideration to that.
And finally, set forth a unified surplus of at least $96 billion in fiscal year 2012. I hope we can do it, but you have heard me go through the arithmetic out here, and I think it is a reach to even imply that these three variables can be integrated and solved in this one multi varied equation.
If you can do it, fine. If you can come out of all this still having these tax cuts and still having a $96 billion surplus, great. But I have to tell you, I think it is fuzzy math.
But we are wholeheartedly in support of the middle-income tax cuts that are enumerated here. Indeed, they have been lifted straight out of the Democratic budget resolution, and that is why we are supportive of them.