Floor Statements

Mr. Speaker, I thank the gentlewoman for yielding me this time.

Mr. Speaker, this is an outrage. This resolution shows nothing but contempt for the deliberative processes of the House. More than a month has passed since the House passed the Republican budget resolution by a narrow margin on this floor. In the House and in the Senate the budget resolution this year was on a fast track. We had minimal witnesses, fewer than any time I can recall; all, ostensibly, to get the work done by the Easter break.

Well, it has been a case of hurry up and wait. More than a month has passed. Only 2 days ago, after wasting a month, were conferees finally appointed; and yesterday we had our first and only conference committee meeting which essentially was a formality, a gesture taken to bless a done deal, because as we met, a conference report, without a conference committee, had been negotiated over the last 30 days and was coming close to agreement. All we met for was to give some semblance of collaboration to the budget process, but there has been absolutely no collaboration and no transparency.

We have second-hand reports as to what may be in this budget resolution coming here today which provides for the expenditure and the taxing of $2.6 trillion. That is what we are treating with such haste today. We have a little bit of insight into what it may contain, but we will not know until we can examine the budget resolution. And I was told last night by the chairman of the committee that we could not expect the conference report to come to the floor before midday because numerous changes had been negotiated into the agreement. I understand that. I simply would like the opportunity to examine the changes and weigh the bill in its entirety. This is no way to do the people's business. It is not the process that we all agreed upon.

When we laid down the House rules, we said when Members want to bring a conference report of consequence to the floor, it has to lay over for 3 days. That is being waived here today. This is not some inconsequential piece of legislation. We are not naming a Federal building here, we are deciding how we do the people's business with respect to the allocation of $2.6 trillion. It comes to this floor minutes after it has been filed, maybe an hour or two. This is no way to deal with something so consequential.

We have only minutes to flip through this conference report and find out what does it do to Medicaid. We had a very impassioned debate on the House floor just 2 days ago. We showed 44 Republican Members who had written a letter to their leadership saying do not whack into Medicaid. It is the health care of last resort for the neediest among us. If we are going to make changes, be careful.

Mr. Speaker, 44 Republican Members and an overwhelming majority voted that sentiment on the House floor, just as the Senate did when they eliminated the Medicaid cuts that were in the resolution that passed the House. What does it do to Medicaid? My strong suspicion is we will find that the will of this House and Senate has been ignored and that substantial cuts have been made in not just Medicaid but in Medicare, and in student loans and veterans health care, supplemental security income, the earned income tax credit, and other programs for the working poor. We will have minutes to find out what this resolution does.

It will be argued here on the House floor that all of these cuts are necessary because we have such a big deficit. Therefore, we have to cut the spending of this country, including entitlement programs on which people depend, in order to diminish the deficit. But the truth is this budget resolution, I fully expect, will be like the House resolution that passed a month ago and like the Senate resolution and like the President's budget, it will add to the deficit. It will not diminish the deficit. These cuts will not go to the bottom line. They will be used to offset tax cuts that are being proposed, once again knowing full well that these tax cuts will go straight to the bottom line and swell the deficit and make it larger. They want to do some tax cuts that will offset, at least partially, the effects of these tax cuts on the bottom line. But this budget resolution will make the deficit worse, not better. There is no question about it.

We do not have the opportunity to get here on the House floor and examine and explain that to people. I think it is fair to ask, for example, how do we justify a budget with a deficit of $427 billion this year and every year that this budget covers, all 5 years, how do we justify additional tax cuts that add to that deficit? And how do we run the government when we continually cut taxes?

One answer which is adopted and used in this budget resolution and on which we should debate closely on this House floor is you dip into the Social Security trust fund which has a surplus of $160 billion and use payroll taxes to make up for the income taxes that you are cutting and diminishing, and that is exactly what this budget resolution does.

So why is it not coming to the floor in the deliberate processes as prescribed by the House rules? Because they do not want the public or the House to see that this conference report does not reduce the deficit, it adds to the deficit. They do not want the House or the public to see that this conference report raids Social Security once again. It does not make Social Security solvent, it is a step backwards from solvency. They do not want the House to see or the public to see that this conference report will cut help to the working poor, it will cut inner-city and rural hospitals that depend on Medicaid, it will cut students loans and EITC. They do not want them to see that this is a budget resolution in name only. There is no plan and there is no process for reducing the deficit. That is why they are overriding the process of this House and showing such contempt for the deliberative procedures that we have laid down.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I have not been to a conference meeting where

we discussed the contents of this. This is not a collaborative process, this is a unilateral process which makes it all the worse, to bring the conference report to the floor and cram it down, giving us no time to examine its contents.

Mr. Speaker, I thank the gentlewoman for yielding me this time.

Mr. Speaker, it has been more than a month since the House and Senate both passed budget resolutions on a fast track, but it was only Tuesday of this week that the House finally got around to appointing conferees. We had the first and only meeting of the conference yesterday amid reports that a conference report was almost a done deal.

The meeting was a formality, to give some semblance of collaboration to the budget process. But there has been no collaboration. There has been no transparency. This conference report was prepared by Republicans and their staff behind closed doors, at times and places unknown to me, even though I am a conferee. So not surprisingly, this conference report does not reflect the resolution that we would have passed had we been full partners in this process.

Let me tell you what this conference report is not. This is not a budget that follows the will of the House as expressed 2 days ago in the motion to instruct conferees. Two days ago, 348 Members of the House voted emphatically against Medicaid cuts. The conferees disdained the instruction and whacked Medicaid anyway for $10 billion.

So this is a budget with spending cuts, and the Republicans will tell you that these are necessary to reduce the deficit. But in this budget, the spending cuts do not go to the bottom line and reduce the deficit dollar for dollar. They will be used to offset tax cuts so that they will at least partially offset their impact on the bottom line of the budget, because, you see, this budget does not make the bottom line better. It does not make the deficit better. It makes it worse.

The government faces a deficit this year of $427 billion. Now, you would think that with deficits of this size, that the budget would be used to make the bottom line smaller not larger, but not this budget. It does just the opposite. This will make the budget $167 billion worse on the bottom line over the next 5 years than the CBO baseline budget.

I have right here what we could put together as quickly as possible, given the short amount of time we have had, a back-of-the-envelope analysis. Let me go through it bullet by bullet. The House-passed budget produced deficits of $127 billion above the deficit in CBO's current services baseline forecast.

This report, this conference report produces deficits that are $40 billion greater than the House-passed budget; $167 billion above the CBO baseline. This does not improve the deficit problem. It makes it worse.

The conference report calls for $35 billion in reconciled spending cuts, compared with $69 billion in reconciled spending cuts in the House budget resolution. That $35 billion difference accounts for most of the $40 billion difference in total deficits.

In the conference report, there are cuts in nondiscretionary spending, big cuts, $150 billion over 5 years. But they are virtually offset with defense discretionary spending increases, so these two accounts in discretionary spending are basically a wash. And as for the tax cuts, they remain at $106 billion.

So what we have here is a budget that does not help the situation. This is a budget that hurts the situation. And let me mention one particular aspect where harm is done that is wholly unnecessary.

Everybody knows that we have a problem with Social Security, looming insolvency. Call it a crisis, call it a problem. You would think that a budget of this kind would at least, if it did not have a grand solution, would at

least do no further harm. But instead, this budget, in order to pay for the reduction in income taxes, reaches into the Social Security trust fund, takes out $160 billion and spends that entire trust fund surplus for the operation of the government, not for Social Security benefits.

This is not a step forward for Social Security. This is a step backward. And it is just another reason that we should all, all of us, oppose this bill. It is bad in substance. It's bad process.

Mr. Speaker, let me respond to the gentleman's contention about taxes. When the Bush administration presented its tax package, they told us that the revenues produced by the individual income tax in 2004 would be $1,118,000,000,000. In fact, in 2004 revenues produced by the individual income tax were just over $810 billion. There was a $300 billion shortfall in revenues beneath the projection of the Bush administration, which accounts for three-fourths of the deficit, $412 billion deficit in 2004.

Mr. Speaker, I yield myself 5 minutes and 15 seconds.

Mr. Speaker, basically, the budget before us is the President's budget sent to us a couple of months ago, subject to a few puts and takes. Unfortunately, neither the President nor the Republicans in the House nor the Republicans in the Senate have done what was done for years in good budget practice, and that is run their numbers out for 10 years. They simply give us a 5-year display of their numbers and that conveniently avoids showing the effect, the enormous effect, on the budget of having the renewal of the tax cuts after the year 2010.

But if Members want to see basically where this budget will take us, they can look in CBO's analysis done in the early part of March required by law of the President's budget because it basically is the same as the President's budget. They do not have to read past Page 2 in this analysis of the President's budget. And when they do, they will see that if we follow the path that the President is proposing, we will add $5.135 trillion to the national debt to the United States between now and 2015, over the next 10 years.

But that calculation does not include anything for fixing the AMT, which CBO tells us will cost $642 billion in revenues; and it includes nothing for deployment of our troops in Iraq and Afghanistan after 2005, which CBO calculates at $384 billion; and it includes nothing for partial privatization of Social Security even though the President estimates it will cost $774 billion.

When we add all of those things in and calculate their effect on the budget, here is what happens. I have sat here for the last hour, heard Member after Member on the other side saying we have got a budget that will cut the deficit in half over the next 5 years. Here is what happens: take it from CBO, make these two or three noncontroversial adjustments to their number, and see what happens. The deficit never gets below $362 billion. At the end of the time frame, it is $621 billion, $7 trillion of additional debt. That is where we are headed. That is where this train will take us if we adopt this budget resolution today.

Do the Members believe me?

Let me show which side should be regarded as credible. Let us just look back at the recent past. When Bill Clinton came to office, the deficit was $290 billion. Awaiting him was the biggest deficit in our Nation's peacetime history. We passed the Clinton budget, and every year thereafter the bottom line of the budget got better for 8 straight years until in the year 2000 we had a surplus, 5 years ago, of $236 billion. Every year since, the bottom line of the budget has gotten worse.

And I have got a much simpler, more emphatic way to describe the effects of it. This chart right here shows us how much we have had to raise the statutory ceiling on the permissible amount of debt that the United States can incur, the debt ceiling, over the first Bush administration. And guess what. In this budget resolution too. Over the first Bush administration, in 4 years there were three increases in the debt ceiling that totaled $2.234 trillion. It is a matter of record. That is where the budget took us over the last 4 years. And this budget, vote for this budget resolution and buried in it is a provision which will increase the debt ceiling of the United States by another $781 billion. Members are voting for that if they vote for this resolution tonight, a total over 5 years of $3.015 trillion increase in the national debt of the United States. Incredible.

But as I said, that is not all. Read chart two, Page 2 in the CBO report, and they will see it goes on and on and on. We stack debt on top of debt.

I have heard people come out here and say we are flush with revenues in the aftermath of these tax cuts, we have had a rejuvenation of revenues. Here is the truth if Members want a very simple back-of-the- envelope form: this is where the Bush administration told us we would be if we passed their tax cuts. We would have, in the year 2004, $1.118 trillion in individual income taxes. And here is what the actual take was last year: $811 billion. That $300 billion shortfall in revenues accounts for three-fourths of the $412 billion deficit last year.

People may ask, and I think it is fair for all of us to ask, how do we run a

$427 billion deficit and still have room for additional tax cuts which the Republicans are pushing in this budget resolution, another $106 billion of tax cuts pushed in this budget resolution? There is one short answer, a simple step: when we do not have the income taxes because we cut these taxes, we go to the Social Security trust fund, and there is a surplus there of $160 billion. We reach into the surplus not this year but next year and every year for 10 years to come as far as the horizon can see, and this is what happens: every year this budget resolution will result in the consumption of the Social Security surplus. With the problems we have got in Social Security, surely we should have one rule until we finally find the grand solution, that is, do no harm. This bill does harm year after year after year because it raids the Social Security trust fund.

Mr. Speaker, I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to the gentleman from New Jersey (Mr. Menendez), the distinguished chairman of the House Democratic Caucus.

Mr. Speaker, I yield 4 minutes to the gentleman from Maryland (Mr. Hoyer), the distinguished whip.

Mr. Speaker, I yield 30 seconds to the gentlewoman from California (Ms. Pelosi), the distinguished minority leader of the House.

Mr. Speaker, I yield 1 minute and 15 seconds to the gentleman from Alabama (Mr. Davis).

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Ohio (Mr. Brown).

Mr. Speaker, I yield myself 15 seconds to respond to the gentleman.

This chart clearly shows, Mr. Speaker, where the increases in spending have come. They have been supported by the Bush administration and supported by both sides of the aisle because they have gone to national defense, homeland defense, and response to 9/11. Ninety to 95 percent of the spending increases in the discretionary accounts over and above current services have gone to these programs in these 4 fiscal years. You supported it, the President sought it, and we have done it because we had to do it.

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Illinois (Mr. Emanuel).

Mr. Speaker, I yield a minute to the gentleman from Wisconsin (Mr. Kind).

Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from Texas (Mr. Edwards).

Mr. Speaker, before yielding to the gentlewoman from California (Mrs. Capps), I yield 30 seconds to the gentleman from Texas (Mr. Edwards) to respond to the last speaker.

Mr. Speaker, I yield a minute to the gentlewoman from California (Mrs. Capps).

(Mrs. CAPPS asked and was given permission to revise and extend her remarks.)

Mr. Speaker, before yielding to the ranking member of the Committee on Agriculture, I yield 30 seconds to the gentleman from Texas (Mr. Edwards) to respond.

Mr. Speaker, I yield 15 seconds to myself.

Mr. Speaker, the numbers that the gentleman from Texas (Mr. Edwards) was citing come from a document that we have prepared that compares the conference report with the Congressional Budget Office's current services baseline. And by that comparison, this conference report falls $13.504 billion below current services over the next 5 years.

Mr. Speaker, I yield 1 minute to the gentleman from Minnesota (Mr. Peterson), the ranking Democrat on the Committee on Agriculture.

Mr. Speaker, I yield 1\1/4\ minutes to the gentlewoman from Pennsylvania (Ms. Schwartz).

Mr. Speaker, I yield 1 minute to the gentlewoman from California (Ms. Lee).

Mr. Speaker, I yield 1 minute to the gentleman from Washington (Mr. McDermott).

(Mr. McDERMOTT asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield 1\1/4\ minutes to the gentlewoman from South Dakota (Ms. Herseth).

Mr. Speaker, I yield 1 minute to the gentleman from Mississippi (Mr. Taylor).

Mr. Speaker, I yield 1 minute to the gentleman from Washington (Mr. Inslee).

(Mr. INSLEE asked and was given permission to revise and extend his remarks.)

Mr. Speaker, I yield myself the balance of my time.

Mr. Speaker, this is not a budget that follows the will of the House. That is the first problem with it.

The will was expressed 2 days ago. Two days ago, 348 Members voted emphatically against any Medicaid cuts. The conferees disdained that instruction and whacked $10 billion out of Medicaid.

This is a budget that does contain spending cuts, but in this budget the spending cuts do not go to the bottom line and reduce the deficit dollar for dollar. Basically, what they do is offset partially the tax cuts that are also called for. Consequently, this budget is not a budget that will bring the deficit into balance. We have a deficit of $427 billion this year.

I said earlier, do not take it from me. Take it from CBO. Read their analysis of the President's budget. This is basically the President's budget with some puts and takes. They project that over the next 10 years, if you follow that budget, we will incur $5.130 trillion.

This budget resolution, if Members vote for it, includes an increase in the statutory debt ceiling of almost $800 billion. That is the course we are on, stacking debt on top of debt.

Now, one would think with all the problems we have got we would do something about the deficit in this budget, but this budget does not make the deficit better. It adds $167 billion to the CBO baseline deficit over the next 5 years and worse in the second 5 years. We are just kicking the can down the road, and this budget very conveniently avoids the huge mountains just over the crest of the horizon.

So if you want to vote for a balanced budget, vote down this budget resolution. If you want to vote against accumulating debt on debt and leaving our children with mountains of debt, vote against this budget resolution. Send the budget conferees back to work with something that is respectable and deserving of our vote.

Mr. Speaker, more than a month ago, the House and Senate passed budget resolutions both on a fast track. Our hearings were minimal, ostensibly to finish up for the Easter break.

But this year's budget has become the classic case of hurry up and wait. Only yesterday, a month after finishing the budget resolution, did the House finally appoint conferees, and today we held the first and only meeting of the conference committee. We held that meeting amidst reports that agreement on the conference report was almost already a done deal. So the meeting was a formality, a gesture to lend some sort of collaboration to the budget process. But there has been no collaboration, and the budget resolution said to be emerging from conference does not reflect the resolution that we would pass if we were full partners in this process.

This year the Federal Government faces a deficit estimated at $427 billion, the third record deficit in a row. With deficits of this size, $427 billion, rising and never ending, the budget should be used to make the bottom line better, not worse. But the budget coming out of this conference does just the opposite. The President's budget, the House Republican budget, the Senate budget all make the deficit larger, not smaller.

The House budget makes the deficit $127 billion worse than current services. The Senate budget, Republican budget, makes the deficit $217 billion worse than current services.

I acknowledge, I will give the Republicans their due, both houses. They have searched the budget for programs to cut, and they have come up with some significant cuts. Medicaid, $20 billion; student loans; pension benefit guarantee premiums; probably the earned income tax credit, food stamps, maybe veterans benefits.

But these cuts do not go to the bottom line. That is the dirty little secret. They do not go to the bottom line and diminish the deficit. What they do, partially at least, is offset their tax cuts because even though the budget is $427 billion in deficit, Republicans are still pushing for more tax cuts, knowing full well that it can only make the bottom line worse, the deficit larger.

I think it is fair to ask can we fund the government if we have massive deficits and yet keep on cutting taxes? Obviously one way is to use the payroll taxes in the Social Security surplus to make up for the income taxes that are lost to tax reduction. And, in fact, that is just what the Republicans do. They use the payroll taxes that are accumulated in the Social Security surplus to make up for the income taxes lost to tax reduction.

As the next chart shows, the chart I have right here shows, they spend 100 percent of the Social Security Trust Fund surplus not on benefits but on everything in the Federal budget, 100 percent of it not just this year, 2005, 2006, but every year in their 5-year budget. I know that a government bond is placed in the trust fund for every dollar that is taken out of it, but I also know that President Bush went to West Virginia a couple of weeks ago and disparaged these bonds as mere IOUs, just scraps of paper.

Mr. Speaker, I do not believe that Social Security is in what one would call a crisis, but I do believe the actuaries at Social Security when they tell us that it may be faced with insolvency as early as 2041, and I believe we should do all that we can, as soon as we can, to remove that risk. But until we have a solution in place, a grand solution that returns the program to assured solvency for 75 years, surely we should do no further harm. Yet in raiding the Social Security Trust Fund of $160 billion this year and more in subsequent years, the Republicans' budget does just that, considerable harm. This is not a step towards making Social Security solvent. It is a long step backwards.

This budget is also a long step backwards for programs that Americans depend upon: education, veterans health care, environmental protection, medical and scientific research, and on and on down the list. On the discretionary side, the money we are appropriating, 13 bills every year, the House resolution cuts nondefense discretionary spending, domestic discretionary spending, by $12 billion in 2006 and by $150 billion over the next 5 years below inflation. The Senate's resolution is a bit lighter. It cuts spending next year by $6.3 billion and by $128 billion over the next 5 years.

On the mandatory spending side, which some call the entitlement side, the House budget resolution directs nine committees to come up with mandatory spending cuts and reconciliation procedures that will total $69 billion over 5 years. The Senate, more moderate, calls for $17 billion in reconciled cuts.

These reconciled cuts that our committee issues to different committees of jurisdiction in the House and Senate do not designate or specify how they shall be achieved, but the jurisdiction of each committee suggests exactly what is likely to be cut. The House resolution, since it is directed to the Committee on Energy and Commerce, for example, will likely fall on Medicaid; and since it is directed to the Committee on Agriculture, it will likely fall on food stamps; and since it is directed to the Committee on Education and the Workforce, it will likely fall on student loans or other income security; and since it is directed to the Committee on Veterans' Affairs, on veterans benefits. It is also directed to the Committee on Ways and Means. That means it is likely to fall on something we call the earned income tax credit, which is tax relief for the working poor, the people who need it the most. Or it could fall on welfare for the most disabled, those who have nowhere else to turn and rely upon a program called SSI, Supplemental Security Income.

These cuts are likely as a result of the reconciliation instructions in the budget resolution, even though the President did not call for them in his budget resolution and they are not included in the Senate budget resolution.

The Senate also, enough Senators got their backs up and said the Medicaid program is too important to people for whom it is health care of last resort and we simply cannot blindly whack $20 billion or even $10 billion out of the program. If we want to reform it and

restructure it and try to achieve some savings, fine, but let us not have an arbitrary budget savings number that drives reform and restructuring. So enough Republicans in the Senate voted that the Medicaid provision calling for cuts in Medicaid was deleted from their resolution.

And yesterday on the House floor we did exactly the same thing. A large majority of this institution, Democrats and Republicans, voted not to have the Medicaid cuts included in the bill. Mark my words, however, notwithstanding a majority in this House and a majority in the Senate, those cuts in Medicaid are likely to emerge in the budget resolution that is likely to come forth tomorrow.

These budget policies continue the course that was set when President Bush came to office. At that time the budget was in surplus by $5.6 trillion dollars over 10 years. Democrats warned then and there on the House floor and in committee that these were paper projections, they could disappear in the blink of an economist's eye, and we said let us seize this opportunity. Having years and years of deficits, now that we have a surplus or what appeared to be a huge surplus, we said let us pay down some of our long-term liabilities like Social Security and build up the Social Security program.

President Bush decided to take a different tact. It is true, terrorists, recession, and war have all taken a toll on the budget. But the Bush administration has adopted the attitude that we can have guns, butter, and tax cuts too, and never mind the deficits. As a result, the budget has moved from record surpluses to record deficits, as this next chart shows.

The President's 2006 budget, the budget for next year, like the House budget, like the Senate budget, claims to cut these deficits in half over 5 years. That is the claim we hear repeated frequently. They imply that in another 5 years, the budget would be brought back to balance. Give us 10 years, we will get the job done. But their budgets give us no figures at all, nothing after the first 5 years, and by running their numbers out only 5 years instead of 10, they avoid recognizing the impact that 90 percent of the President's remaining tax cut agenda is going to have on deficits. They will add $2 trillion if passed, if implemented, $2 trillion to the deficits in those outyears from 2011 to 2015 if we include a fix to the alternative minimum tax.

CBO, our Congressional Budget Office, our budget shop, which is neutral and nonpartisan, has given us a 10-year estimate, something the Republicans have not supplied us in the House nor Senate, a 10-year estimate, at least with the President's budget, and they estimate that there is no progress whatsoever on the deficit. In fact, CBO estimates deficits totaling $2.6 trillion over the next 10 years if we implement, if we follow the recommendations and the requests in the President's budget. $2.6 trillion in additional debt.

As bad as this may appear, the realistic numbers are even worse, because CBO is simply taking what the President has requested and extended it forward over 10 years. If we add what the President has omitted, the numbers are far, far worse.

The President has omitted the cost of Social Security privatization, even though he is pushing hard for it and acknowledges that the cost will be $754 billion between 200 and 2015. He omits the cost of fixing the Alternative Minimum Tax, which CBO says is $642 billion over 10 years, even though everybody knows it is a political inevitability. And he omits any costs for our deployments in Iraq and Afghanistan after 2005. Nothing for 2006. Everybody knows we will still have troops in substantial numbers there. CBO suggests that the cost over the next 10 years could easily amount up to $384 billion. Not a dime of that is in the President's budget.

When these costs are included, the budget outlook, as the next chart shows, is much, much bleaker. Annual deficits never fall below $362 billion. The heck with this talk of cutting them in half. They never fall below $362 billion, and they eventually rise at the end of this time period to $621 billion in 2015. That is a CBO number, which we have adjusted.

We do not have a 10-year projection of the House or Senate budget, but both are broadly similar to the President's budget, and that means that these estimates are roughly the same, basically in the same ballpark.

They say that the past is prologue, and we should not forget in that sense the impact of Bush budget in the first term between 2002 and 2005. To accommodate the Bush budgets between 2002 and 2005, we in the Congress, Republicans in Congress, on three different occasions have had to raise the debt ceiling, the legal ceiling to which we can borrow in the United States, first by $450 billion, then by $984 billion, then by $800 billion, by a total of 2.234 trillion in a period of 4 years.

In the House when we considered the budget, Democrats offered a better plan. We offered a better plan to reduce the deficit and eventually, believe it or not, to balance the budget again in the year 2012. The numbers added up. The Republican budget never achieved balance.

A real bipartisan conference, not like the one we had today, a real bipartisan conference, with everyone at the table and everything on the table, would give us a chance to consider a conference report like the budget resolution that we offered the floor which put the budget back in balance and actually achieved balance in the year 2012. Unfortunately, such a conference and such an outcome will not occur.

Unlike last year, there probably will be a Republican budget this year, but there be no plan, no prospect, for reducing the deficit.

I yield to the gentleman from Tennessee.

Every 18 months we are adding $1 trillion to the national debt, to the statutory debt to the United States. Nobody in his right mind thinks this is something that can be sustained.

Roughly that. Even the CBO tells us that another substantial increase in the debt ceiling will be necessary by at least January or February of next year.

This is past history. What I was giving you is a projection. You can look at the last three increases over the last 4 years, and the bottom line is $2.234 trillion. As Yogi Berra liked to say, you can look it up. It is a matter of record.

That is correct.

Reclaiming my time, that is correct.

This chart shows the percentages of our debt that are held by foreigners. As you can see, they have steadily increased to the point where in 2004 the share of foreign-owned debt rose to 44 percent. One of the reasons that it is difficult to get this message across to the American people is that they are not really feeling the effects of it, since foreigners are buying for now a lot of our debt. But when and if they cease buying it in

huge quantities as they have been, we have got a problem.

Reclaiming my time, in the meantime, they are accumulating claims against the United States that could some day be called.

Well, we have to probably inflate our currency. But let us not get into that. We are still not in that bad of shape, and I do not want to get into dire predictions. But we are forewarned. We all know there are limits to which anyone can go, governments, individuals, households, companies, corporations, there are limits to which you can go in borrowing money. It is a function of what your income is, and we are beginning to approach those limits.

Mr. Speaker, I yield to the gentlewoman from Nevada (Ms. Berkley). I traveled to Las Vegas to spend the day with the gentlewoman from Nevada (Ms. Berkley) a couple of weeks ago, and we went all over the City of Las Vegas, from three different editorial boards, to television, to a town meeting, and we found people there very much concerned about Social Security and about the shape of the budget.

Mr. Speaker, I thank the gentlewoman for a very effective presentation.

I yield to the gentleman from Portland, Maine (Mr. Allen), a former mayor who understands what Federal grants and aids and other projects mean to cities and small towns all over this country.

Mr. Speaker, that is the point I was trying to make at the opening. While these cuts may seem to be necessary to deal with the deficit, in truth, the deficits and their budget resolution are bigger than they would be under current surpluses. What they really do, to some extent, is use these entitlement cuts and discretionary spending cuts to offset the tax cuts so they will not grossly enlarge the bottom line. But they still have a huge deficit that is bigger than would otherwise be the case, because they are, notwithstanding these deficits, are making more and more tax cuts.

Mr. Speaker, I yield to the gentleman from North Carolina (Mr. Price).

Mr. Speaker, we have a chart to prove that point. I need to get it up here. We have a chart that shows how over the last 4 fiscal years, the increases in discretionary spending and, once again, that is the money we appropriate in 13 different bills each year. We call it discretionary because each year we decide how to spend it, it is defense, it is national parks; if we look at those accounts in discretionary spending, we will find that 90 to 95 percent of the increases in discretionary spending over and above current services, just running in place, are attributable to 3 different factors.

Here we go. Here is the chart. Defense, Homeland Security, and the response to 9/11. Those three factors account for 90 to 95 percent of the growth in discretionary spending. Now, the President says we are spending out of control but, in truth, the House is controlled by Republicans, the Senate is controlled by Republicans, the White House is controlled by Republicans. It is a self indictment, if anything.

But here is the actual truth: discretionary spending is going up, but it is going up in accounts and for reasons the President has requested and sought money for, and we have given it to him. Having put an Army in the field in Iraq, we are going to support them and see them through, we hope to a successful conclusion. But this is policy that he has originated and we have supported in one way or another and now support, and this accounts for the main increase in spending.

So number one, it is spending he has initiated; number two, it is not likely to fall off substantially to abate by any significant amount in the near future. That is a fact we have to live up to, a fiscal fact we have to live up to. But the administration is in a state of fiscal denial. They will not acknowledge that this is a fact, and that the remaining wedge out of the budget for discretionary spending, domestic, nondefense discretionary spending constitutes maybe $380, $390 billion. You cannot squeeze enough out of that sector to begin to wipe out a $427 billion deficit.

Ironically, there is about $20 billion there for roads, bridges, oil wells and other infrastructure in Iraq.

Well, as I acknowledged, terrorists and war and recession have all taken a toll on the budget. But the President has basically taken the attitude that we can have guns, butter, and tax cuts too, and never mind the deficits. The tax cuts keep coming every year. The President has an unfinished tax agenda of at least 1 trillion 400 billion, and that does not include everything, because he does not put on his agenda anything, anything to fix the alternative minimum tax. I paid it this year, I paid it last year, more and more Americans are going to be paying the AMT until it rises, Treasury tells us, to 30 million tax filers in the year 2010, not far away.

The political truth of the matter is, we will have to do something about that. That means that the President's tax agenda, tax cut agenda calls for another $2 trillion beginning in 2011. They conveniently stop their budget projections in 2010, so we miss the outyears, but here is what happens in the outyears when you add AMT to the President's other requests, principally to make permanent the tax cuts adopted in 01, 02 and 03. This is what happens to the baseline projections of the deficit; it gets worse and worse and worse. There is no end in sight, and it is aggravated by this fact, the tax cut agenda.

I yield to the gentleman from Virginia (Mr. Scott).

I yield to the gentleman from Tennessee (Mr. Cooper), who I believe has a question he wants to put forth.

$2.6 trillion budget, which no one has seen.

The gentleman mentioned what they told us about repayment of the debt. If the gentleman recalls, they said if you pass our budget, including these tax cuts, $1.5 trillion, $1.6 trillion in tax cuts, with interest even more, we will not be back until 2008, if you implement our budget, to ask you for an increase in the debt ceiling. We will not need to come back because we will have ample room beneath that ceiling.

In the Clinton administration the last 3 years we paid off over $300 billion of national debt. That is the first time that has happened for a long time. So they said that trend is going to extend and we will not need to come back and ask for an increase in the debt ceiling in 2008. History shows in 2002 they were back, hat in hand, saying we need $450 billion. The next year, 2003, they needed 984.

As the gentleman from Tennessee (Mr. Cooper) pointed out, that was equal to the entire debt of the United States in 1980. And then only 16 months later, they were back asking for another $800 billion which was provided in November of last year; and as a consequence, the total increase in the debt ceiling of the United States to accommodate the Bush budget from 2001 through 2005 is $2 trillion 234 billion. That is simple arithmetic, back-of-the-envelope analysis, but it is truly astounding to me, given the fact that they told us we would not need to raise the debt ceiling until 2008.

That is correct. This time next year they will need another increase, probably in the range of $800 billion.

$5.6 trillion.

It is more like $3.3 trillion deficit. We have had a swing in the wrong direction of nearly $9 trillion.

That is correct.

Yes. It is a serious problem. It is a result of policies. It did not just fall off out of the sky. It is not terrorism necessarily. It is not war, even. It is the fiscal policies of this administration.

Now, one thing we did, as the gentleman will recall, in 2001 we did not do it, I did not vote for that budget; but in the Senate in particular, they said these tax cuts will have to sunset at the end of 2010 because, one reason, there may not be the surplus that we think there will be. This is a blue-sky estimate. It may not obtain it. If it does not, we do not want to be committed to these tax cuts only to find out that the surplus that they are predicated upon does not actually happen. And so they were all made to expire or terminate by December 31, 2010.

Now, we know that the surplus projection was wrong, grossly off, vastly overstated. And we have huge deficits in the place of huge surpluses now. But the administration is still pushing the same fiscal policy, asking, insisting, scheduling these tax cuts to be extended, all of them, almost all of them, after the year 2010, even though they can only do one thing at that point in time and that is go directly to the bottom line and vastly, hugely, expand the deficit of the United States.

Here is one good chart that does just that. The gentleman can see it better than I can from his vantage point. We can see what they projected.

In the year 2002 they projected a surplus of $313 billion. That was with the implementation of their policies. It turned out to be a deficit of $158 billion. In the year 2003 they projected $359 billion. At least that was the January 2001 projection. I beg your pardon. That was without policy. That was the projection before Bush policy. A $359 billion surplus turned into a $377 billion deficit with Bush policies.

Most of the numbers that we have quoted, as the gentleman well knows, are net of the Social Security surpluses.

That is correct. We had a deficit last year of $412 billion. But that was after deducting $150, $160 billion surplus in Social Security. If that Social Security surplus had not been offset, there was a deficit in the general account of the Federal budget equal to nearly 600.

That is correct.

Mr. Speaker, the gentleman has just examined one of the reasons that this deficit, these deficits which are structural deficits built into the budget, not cyclical and resulting from the economy, but structural, will not go away of their own accord, will not self-resolve but will be with us on and on and on until we take significant action.

The sad part about it is the budget resolution that comes to the floor tomorrow will not take significant action. We will have a budget that appears, but we will not have a plan to reduce the deficit, and we will not have any prospect of reducing the deficit, not under this budget. We will just kick the can down the road and leave it to the next Congress.

I thank all of the gentleman here for participating tonight.

Madam Speaker, let me say in response to the last speaker that this party proudly presented a budget resolution that brought the budget to balance in the year 2012 and did not do it on the backs of the most deserving in our country, the sick and the elderly who depend upon Medicaid.

And lest there be some misunderstanding, this budget makes the deficit worse, not better, because it calls for $106 billion in additional tax cuts. And the primary purpose and function and reason for these Medicaid cuts is to diminish the $106 billion so it does not swell the deficit any more grossly out of proportion than it already is. This does not go to the bottom line and reduce the bottom line at all. It leaves us with a bigger deficit because it only partially offsets the $106 billion in tax reduction that the resolution also calls for. So it is not necessary. And that is recognized by the 44 Republican House Members who signed the letter urging that this resolution not contain any cuts in Medicaid.

Madam Speaker, I thank the gentlewoman for yielding me time.

Madam Speaker, the House and the Senate passed their own versions of budget resolutions on March 17. That was more than a month ago. I am glad that we finally are going to conference because that will bring the deliberations on the budget at least a bit out into the open. And if there is any aspect of the budget resolution that needs to be brought into the open and resolved with a public debate, all the stakeholders included, it is this provision that we have been discussing, and that is a provision that would cut Medicaid, over 5 years, by $20 billion.

This motion to instruct conferees protects Medicaid from those spending cuts. Let me explain how those spending cuts would come about. The House-passed Republican budget resolution directs the Committee on Energy and Commerce to cut spending on programming within its jurisdiction by $20 billion. But the Republican leadership has made it clear. The resolution calls for $20 billion in cuts within the jurisdiction of the Committee on Energy and Commerce, but the Republican leadership has made it clear that those cuts should not include Medicare. That only leaves Medicaid.

It leaves Medicaid subject to $20 billion in cuts over 5 years, per the language of the resolution passed by the House.

On our side of the aisle, all Democrats oppose unanimously the House budget resolution which included the Medicaid cut. Now, 44 Republicans have signed a letter urging that the Medicaid cut be dropped in the conference report. As a result, it appears that a majority of the House Members are on record against the Medicaid cuts. Medicaid cuts, therefore, should not be included if the conference report is to reflect the will of the majority in the conference report.

In the other body, the Senate, a majority also opposed the Medicaid cuts, with 52 Senators, including every Democrat and 7 Republicans, voting to strike the Medicaid cuts from the Senate budget resolution and, instead, to set up a bipartisan commission.

So the purpose of this motion is to formalize the fact that both houses, a majority in both houses, are formally on record as opposed to the cut in Medicaid of $20 billion. And this motion simply instructs the conferees, it does not suggest, it does not tell them to consider, it instructs the conferees to follow the Senate's lead and strike the reconciliation instructions that target Medicaid for funding cuts and, instead, put up $1.5 million so we can have a fair bipartisan Medicaid commission to make these decisions.

I am glad that the chairman of the Committee on the Budget, the gentleman from Iowa (Mr. Nussle), has said that he will recommend to his members to vote for this resolution. I am disturbed to hear him emphasize that it is nonbinding.

Given the fact that the majority in both houses support the dropping of this $20 billion cut in Medicaid, I think this should be, as the gentleman from Maryland (Mr. Hoyer) put it, a moral mandate for the conferees. If it will bring back a conference report that reflects the will of the House, it should not include $20 million in cuts in the Medicaid program.

Mr. Speaker, all of us who go out into the field to see our troops, and particularly overseas, bring back many conclusions and various impressions; but to a person, we all come back impressed, inspired, and thankful for the men and women who serve in the Armed Forces of the United States. In hard, dirty, and dangerous circumstances and often thankless deployments like Iraq and Afghanistan, they not only serve but they have had to adapt and improvise and tackle tasks they were never trained to handle. They have risen to the occasion, they have risen to the challenge, and at significant cost, in terms of those who have been wounded or injured or killed in action. These troops are the finest that any country has ever fielded, and they deserve not only our admiration but our support, and not just for them and their roles, which are vitally important, but for their families back home, for they sacrifice dearly.

There are three levels in which our support should come: first, to those on active duty, and their families, and particularly those who are deployed for long tours of duty in harsh environments and under hazardous conditions; second, to the Guard and Reserve who leave their civilian occupations and are now serving in numbers and percentages we have never seen since the all-volunteer force was created some 30 years ago. Almost half of those in Iraq come from the reserve components. More than 300,000 have been called up over the last 2\1/2\ years; 45,000 have had their tours extended. Many are on their second tour, some on their third. They are answering the call, they are doing their duty, and they are proving that the total force works and works well. But they have families back home and jobs and businesses and obligations and debts to pay and health care needs, and they need our unstinting support as never before. They not only need it, they deserve it. Next come the veterans and the retirees, those who have put, in many cases, much of their adult lives into serving their country. They have served and they now look to their country to keep the promises that were made to them at the time they were serving and when they reupped and when they joined again and when they stayed in for 20 and 25 years, promises about retirement benefits, about veterans benefits, about health care and education and many other things.

When the needs of these three groups are put together, all together, they make up a long bill of particulars, more than we can do, in all candor, in 1 year or even 2 years; but every time we take up a supplemental appropriation bill or a defense authorization bill or a defense appropriation bill, we should frankly, candidly, and honestly, searchingly, ask ourselves, what are we doing in this bill, on this occasion, to meet the needs of our service men and women who are serving gallantly in places like Iraq and Afghanistan and what are we doing in particular for their families?

What are we doing to help them out in their combat circumstances, with flak vests and personal protective gear and up-armored vehicles? But what are we also doing for their children back home for their health care needs? Have we provided adequately, I do not think we have, for family separation centers, the one place dedicated to helping them resolve their problems while family members are overseas? And for Tricare, health care, critically important in our society, particularly for Reservists and their families, Reservists leaving their job, what have we done to provide and see to it that they do not have to sacrifice in terms of health care for themselves and their families not only while they are on duty but in the months after they are deactivated and come back home?

And how about servicemen's life insurance? For years it had been inadequately funded. Many troops because of the premium, modest though it seems, have not elected to take it. What are we doing to see to it that every American soldier who goes into combat, hazardous duty has at least several hundred thousand dollars of servicemen's group life insurance? And what are we doing about our veterans, our category 7 and 8 veterans for over 2 years now, if they have not previously registered and are not able to

get admitted to veterans health care facilities? There are 50,000 veterans waiting in line as we speak for an appointment to a veterans health care facility. The President's budget for this year provided $106 million, not much over last year which itself was inadequate to meet their needs. Over the next 5 years, this budget request is $18 billion below what is needed for current services. We can do better than that.

We have got promises to keep to our veterans and these promises, above all, should be kept. Given the sporadic, unpredictable violence and the harsh, hard circumstances, it is not surprising that many of our troops come back, some have said as many as 17 percent, from places like Afghanistan and Iraq with difficult mental problems. This, too, is something we could do.

Mr. Speaker, we have to follow up the gentlewoman from California (Mrs. Davis) who not only is a member of the Committee on Armed Services but also formerly a military spouse and speaks knowledgeably about this subject.

Mr. Chairman, I offer an amendment in the nature of a substitute.

Mr. Chairman, I yield 4 minutes to the distinguished gentleman from New York (Mr. Rangel), the ranking member of the Committee on Ways and Means.

(Mr. RANGEL asked and was given permission to revise and extend his remarks.)

Mr. Chairman, I yield myself 7 minutes.

Mr. Chairman, 5 years ago, the budget was in surplus. Hard to believe, but it was in surplus by $236 billion. We are here today grappling with a deficit of $427 billion, the deficit expected this year, basically because of policy choices that were made since 2001, made since President Bush came to office.

The Bush administration bet the budget on a blue sky estimate and went for huge tax cuts that left no margin for error. I stood here in the well of this House in 2001 and warned that those projections of $5.6 trillion surplus could disappear in a blink of an economist's eye. When the surpluses of $5.6 trillion failed to materialize, the budget sank into deficit: $375 billion in 2003, $412 billion in 2004, and an expected $427 billion this year and on and on and on.

I know there have been random events that no one foresaw, terrorism, and recession, but that is part of budgeting, reserving for such contingencies. The Bush Republican budgets of the last 4 years not only failed to provide for such contingencies, by budgeting right to the margin, but when deficits replaced surpluses, nevertheless they kept coming with tax cuts, tax cuts after tax cuts. This budget has $106 billion in additional tax cuts included in it, knowing full well that all of those tax cuts will go straight to the bottom line and will add dollar for dollar to the deficit. That is one reason that the CBO says, in yesterday's production of the President's budget, that the President's budget makes this deficit worse, not better, by $1.6 trillion. In other words, if we left it on autopilot, at current services, it would be $1.6 trillion more in implementing the President's budget.

So let us be clear. We are here because of policy choices that Republicans have made, the White House and the Congress, over the last 4 years, and you were forewarned and took the risk. Given the thrust of this budget that is before us, we will be back grappling again for years to come with deficits as far as the eye can see.

Sitting here for the last 2 days I have heard their budget praised warmly by Members on the other side, and there are features of it, frankly, that I would praise too. For example, it includes $50 billion, as a rough cost, for our forces in Iraq and Afghanistan for another year, which is more than one can say for the President's budget, which does not include a dime. But this budget excludes the likely cost, according to CBO, in 2007, 2008, 2009, 2010, which CBO estimates to be $384 billion. This budget stops abruptly in 2010, running out 5 years of numbers instead of 10 years of numbers. That is a convenient place to stop because it avoids recognizing the cost of Social Security privatization, which the administration acknowledges will be $754 billion between 2009 and 2015, but which it omits from the budget altogether. And while it calls for renewal of the 2001 and 2003 tax cuts, with the revenue impact of $1.6 trillion, not a dime of that revenue loss is included because it falls after 2010, but it clearly affects the outyears. Add back these omitted items, and it is clear there is no way, no way, that we are going to cut the deficit in half in 4 years, 5 years, 6 years. Indeed if we pass Social Security privatization, as the President proposes, it will add $4.9 trillion, as this chart shows, to the deficits of the United States over the next 20 years. In that case we will not see the budget balanced again in our lifetime. That is an undeniable fact, but it is a fact that this budget avoids acknowledging.

Sitting here for the last 2 days, I have also heard the claim that this budget takes on entitlements. In fact, the gentleman who was in the well just before me emphasized this as one of the sterling features of this amendment. But let us be clear. It does not take on Social Security. I do not think it should, but it does not. It does not take on Medicare. It does not do anything to the farm program.

The chairman here has made it clear that these are not to be the objects of reconciliation savings. Reconciliation will mainly fall on Medicaid and on other programs like Medicaid, Medicaid being the health care program of last resort for the least among us. The President has proposed cutting Medicaid over 10 years by $60 billion, but when the Congressional Budget Office scored his savings and said we cannot find $20 billion of savings here, maybe 13, maybe 14, but not $20 billion in these proposals, nevertheless, the committee has said to the Committee on Energy and Commerce to cut $20 billion anyway. Three Governors were here to speak with the gentleman from Iowa (Mr. Nussle) and me and to plead with us, ``Please do not subject us to an arbitrary budget savings number. This program needs to be reformed. It needs to be restructured, but do not let reform be driven by an arbitrary number.''

That is exactly what this budget resolution does. It lets reform be driven by an arbitrary savings number. It cannot tell us what, where, or how those savings will be achieved. When what is off limits in the $68 billion of reconciliation is made clear, we can see where the cuts are likely to fall. Medicaid for sure, big-time cuts, but also the earned income tax credit, the child care and development block grant, food stamps, TANF, veterans benefits. In other words, the safety net. These cuts will shred the safety net. They are not intended for the major entitlement programs but for the smaller ones that are for the least of these who need the help, the most vulnerable among us.

It will be argued, I know, that this is necessary to balance the budget, but, in truth, none of the $68 billion in reconciliation savings goes to balance the budget. That is because it is more than offset by the $106 billion in additional tax cuts. When we net these out, there is no spending reduction to put on the bottom line. There is no net reduction to the bottom line. The bottom line actually gets worse. Instead of using these mandatory spending cuts in Medicaid to reduce the deficit, as they would have us assume, these cuts actually are used to offset tax cuts. For whom we do not know, but, nevertheless, we do know they do not go to the bottom line and they do not mitigate the deficit.

So there are major problems in this budget, particularly when it comes to the key objective, and that is reduction of the deficit. And I will return to that in a minute.

Mr. Chairman, I yield 4 minutes to the gentleman from Maryland (Mr. Hoyer), the distinguished whip on the House Democratic side.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, before yielding to the gentleman from Texas, I would simply like to say that I have here a copy of the CBO's report on the budget, January 2005, which shows that in the year 2000 we had revenues of $1,004 trillion under the individual income tax. Last year, in the year 2004, revenues were $809 billion. That is not an increase. That is a $200 billion decrease.

One of the big differences between us and them is that we provide more for veterans health care and for veterans benefits. And now on that point, I recognize and yield 1 minute to the gentleman from Texas, Mr. Edwards.

I yield to the gentleman from Maryland.

Mr. Chairman, the opportunity is certainly theirs, having run the government for 4 years and having direct hands-on opportunities to reduce waste, fraud, and abuse.

Mr. Chairman, I yield 1 minute to the gentleman from Texas (Mr. Edwards).

Mr. Chairman, I yield 30 seconds to the gentleman from Texas (Mr. Edwards).

Mr. Chairman, I yield myself the balance of my time.

Mr. Chairman, before voting on this budget resolution, everyone should ask, what does it do to education, what does it do to the development of our communities, what does it do for veterans health care, and what does it do to the bottom line?

In seeking an answer to those questions, I would recommend that you look no further than a publication which came to your offices yesterday from the CBO, fresh off the press. Read table 1.1, page 2, and look in the far upper right-hand corner, and you will see the amount of debt we will incur over the next 10 years if this budget, which is essentially the President's budget, is adopted and implemented: $5.135 trillion in additional debt.

But that is without funding the war in Iraq after 2005. It is without fixing the alternative minimum tax estimated to cut revenues by $640 billion. And it is without reflecting one cent for Social Security privatization which the administration acknowledges to be a cost of $754 billion between 2009 and 2015.

Adjust for these additional costs and this budget will add $7 trillion to the national debt over the next 10 years. It will double the debt.

If that is the legacy you want to leave your children and your grandchildren, then vote for this bill. But if you want to put the budget back on a path to balance as it was in the year 2000, if you want to avoid the accumulation of that mountain of debt, then vote for the Spratt or Democratic alternative.

Our budget resolution gets to balance by the year 2012. It accumulates $1.7 trillion less in debt over the next 10 years than the Republican budget base bill.

Ours also protects priorities, our children's education, our veterans, health care, our communities' development, and it supports defense, fully funds it at the same level as theirs, and it applies a rule proven to work called the pay-as-you-go rule.

This rule rigorously applied will do more for deficit reduction, exponentially more than the Republican resolution for all its huffing and puffing can ever purport to do. The right vote here is for the Spratt amendment or substitute, the Democratic substitute, and against the base bill, the Republican budget resolution.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I demand a recorded vote.

Mr. Chairman, I yield myself 4 minutes.

Mr. Chairman, during much of this debate, as I noted earlier, my Republican colleagues have taken the attitude that today's deficits were unforeseeable, unavoidable, beyond their control. But we warned here in 2001 and in every year thereafter when this resolution came before this House that the other side of the aisle was betting the budget on a blue sky forecast and leaving no margin for error. It is their policy choices made in the face of our objections that have brought us to the point we find ourselves today.

In deficit this year by $427 billion, last year by $412 billion, the year before by $375 billion, each year has broken a record for a bigger and bigger deficit.

You control the House, you control the Senate, you control the White House; but you have not been able to control the budget, and you cannot escape responsibility for its dismal condition.

As we stand here at the threshold of passing another budget resolution, I want to forewarn you, you will not take the deficit away, this resolution will not. You will not move the deficit down. It will only move it up and out, year after year after year to come.

But do not take my word for it. I am partisan. I am the Democratic ranking member on this committee. Read what our neutral, nonpartisan budget shop, the Congressional Budget Office, has to say in a report that we request every year as a matter of law, analysis of the President's budgetary proposals for fiscal year 2006. Every Member has one of these in his or her office. You only have to read to the second page and look in the upper right-hand corner, and you will see there that the Congressional Budget Office says if the President's budget is passed and implemented over the next 10 years, it will accumulate $5.135 trillion in additional debt of the United States. Table 1.1, it is laid out there.

But as you all know and understand the way CBO does these estimates, they do not include all the costs. Since the President does not have costs in his budget for Afghanistan and Iraq after 2005, this resolution, this estimate does not assume it, even though CBO estimates that the additional costs will be $384 billion. It does not include a dime for fixing the alternative minimum tax, even though we are warned that by 2010 there will be 30 million taxpayers paying it rather than the regular tax schedule. And CBO says the cost of fixing it over 10 years is $640 billion.

It includes nothing for the President's signature initiative, the one he is pushing hardest and first and that is to partially privatize Social Security. The President has indicated himself that the cost of doing that, the additional deficits we will add if we do that between 2009 and 2015 will be $754 billion.

When you add all of these additional costs into the mix, then the debt incurred through 2016 will be $7 trillion. We will double the debt of the United States. If indeed we do what the President is proposing and allow workers to peel 4 percentage points off FICA and put those payments into a private account, we will incur $4.9 trillion in debt over the next 20 years. We will not see the budget balanced again in our lifetime.

CBO is our forecaster, our neutral, nonpartisan budget shop. They are warning us this budget will not bring the deficit down. This budget will not do away with the deficit. It will make the deficit worse. Indeed, they tell us in this report, same page, page 2, that the President's budget, basically your budget, the President's budget, makes the situation $2 trillion worse than if we just left things on automatic pilot for current services.

I would simply close by saying, vote against this resolution. Let us go back to the drawing board. We can do better.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield the balance of my time to the gentlewoman from California (Ms. Pelosi), the minority leader of the House.

Mr. Chairman, I yield myself such time as I may consume.

(Mr. SPRATT asked and was given permission to revise and extend his remarks.)

Mr. Chairman, it is hard to believe that just 5 short years ago we were sitting on a pinnacle of surpluses totaling $236 billion. And it did not come easily. It was not the fallout from some fantastic economy, some serendipitous result.

Democrats, beginning in 1992 and 1993, made the hard choices that moved the budget to surplus in unprecedented fashion. $290 billion was the deficit inherited by President Clinton when he came to office, as this chart will show. $290 billion was the largest deficit in our Nation's peacetime history.

The President, as his first legislative act, sent us a budget to cut that deficit by more than half over the next 5 fiscal years. I will never forget the day we passed it here on the House floor by one vote, and in the Senate by the Vice President's vote. I will never forget the taunts, the claims that we were cutting the economy off at the knees, buying ourselves a one-way ticket to a recession, and ballooning the deficit instead of resolving it.

Well, Mr. Chairman, every year thereafter, after adoption of the Clinton budget in 1993, every year the bottom line of the budget got better, to the point where in the year 2000 we had a surplus of $236 billion. We made the hard choices to make that happen. And that was the surplus inherited by President Bush when he came to office in the year 2001.

No President in recent times has enjoyed such an inheritance, and he squandered his inheritance. We warned against it. We warned against going for deep tax cuts and relying upon the projection of surpluses at that point in time, which was $5.6 trillion.

We told the President then that while we may seem to be sitting on an island of surpluses, we were surrounded by a sea of red ink, a sea of debt; and we needed, now that we could, to attend to our long-term needs, our obligations to Social Security in particular.

He defied and ignored all those priorities and went solely with the budget whose primary thrust and emphasis was the biggest tax cuts we have passed in the history of this Congress.

Unfortunately, the prophecies and predictions we made have come to pass. The boost to the economy imparted by those tax cuts did not replenish the revenues to the Treasury of the United States. As a consequence, today we have the largest deficits in our Nation's history. Not just this year. It is not just something episodic. Two years ago we had a deficit of $375 billion. This past year we had a deficit of $412 billion. This year, according to OMB, we can look for a deficit of $427 billion. Each of those deficits, 375, 412, 427, each of those deficits is a record deficit.

And now what do we look at for the long-term future? The President tells us he is going to cut the deficit in half. And he sends us a budget which purports roughly to do that. But he conveniently omits from his estimation of what will be incurred in the way of cost over the next 5 years major items such as the cost of the war. We have 140,000 troops in Iraq and Afghanistan. More in Afghanistan. That war cost is not going away or tapering off any time soon. And any budget that is straightforward should include some estimation of the likely cost now that we have been over there for 2 or 3 years and know what the costs should be based upon.

Secondly, there is nothing in the President's budget to account for fixing the Alternative Minimum Tax, which we all know is a political inevitability. His own Treasury Department has told us if we do not fix it, it will go from four million tax filers to 30 million tax filers by the year 2010. It will have to be fixed in the near term. There is not a thing in the President's budget that accounts for that. Even though he asks for additional tax cuts, he leaves out that $640 billion item.

And then the cost of fixing Social Security, privatizing Social Security. The President says he would like to allow workers to take 4 percentage points off their FICA payments and put it in a private account. Well, if you do that, you are taking money out of public trust funds, putting them in private trust funds; and, therefore, money will have to be borrowed to meet the obligations of Social Security; to wit, $754 billion beginning in the year 2009 and extending to the year 2015. That is not my number. The White House gave us that estimate. And yet they did not put it in their own budget.

When you add all of these things together, what you get is not a deficit that is going to be cut in half over the next 5 years, or the next 10 years, for that matter. What you get is a deficit that moves from $427 billion next year to $621 billion in the year 2015.

Let me just show you in three simple lines what this means looking backward over the immediate last 3 years.

When my Republican colleagues passed the President's budget and his tax cuts in the year 2001, his offices at OMB told us in earnest, we will not be back here hat in hand to ask to increase the debt ceiling of the United States, the legal limit on what we can borrow, again until 2008. So confident are we that these tax cuts will be replenished, we do not think we will be back here until 2008.

They were back here in the year 2002, asking for an increase in the debt ceiling of $450 billion.

The next year, 2003, they came and asked for a debt ceiling increase of $984 billion. Let me tell my colleagues for reference purposes how big that is. The entire debt of the United States when Ronald Reagan came to office was less than $984 billion. In one year, in one year, the Bush administration asked and the Republicans in the Congress, both Houses, acceded to a debt ceiling increase of $984 billion. That was May 26, 2003. Within 15 months, Secretary Snow from the Department of Treasury was back and said, we need more; we need more. And consequently, before we adjourned last November, the Congress again, with Republican votes, increased the debt ceiling by $800 billion.

That means in 3 fiscal years, 3 of the 4 fiscal years represented by the Bush administration's first term, the debt ceiling of the United States had to be raised by $2.234 trillion in order to accommodate the budgets of the Bush administration.

Today, we have before us a budget resolution which was crafted by the Republicans and by the gentleman from Iowa (Chairman Nussle). Very little collaboration. A lot of civility. We have a great relationship, but little collaboration. They did their thing; we did our thing. Basically, what they have done is a take-off on the President's budget. It is very similar to the President's budget.

So instead of taking my word for what the consequences of this budget are, let me show something that every Member has in his or her office right now. It came yesterday, March 15: an analysis of the President's budgetary proposals for the fiscal year 2006, prepared by the Congressional Budget Office, which, as everybody knows, is neutral and nonpartisan. Members do not have to read the whole thing, although I would commit it to their reading. They just have to read to the second page. Table 1.1 on the second page, if they read there, they will see the implications of what they will be putting in train if they vote for this budget resolution, which is basically the President's budget request.

And that is, according to CBO, we will add to the debt of the United States $5.135 trillion over the next 10 years. Another $5 trillion on top of the $2.2 trillion that I have just shown will be added over the next 10 years as a consequence of passing this budget. That is not cutting the deficit in half. That is letting the deficit soar and soar and soar.

To mitigate the problem, the gentleman from Iowa (Mr. Nussle) and his colleagues on the Committee on the Budget have prepared some cuts in domestic discretionary spending. The irony here is they and the President both go to one sector in the budget that has not been growing over the last 3 to 4 years, and they take their cuts almost exclusively out of these domestic programs, programs like education and veterans health care and the environment.

Yet where the real cost increases, spending increases, are coming is not in those accounts, which constitute about $350 billion and have basically been flat for the last 3 years. As this chart shows, over the last 4 years, 90 to 95 percent of the spending increases have come from defense, understandably, the reaction to 9/11, post-9/11, and to an account in the budget that did not exist 3 years ago, Homeland Security. That is where the growth is coming.

But in instead of going to this growth, instead of going to these items in the budget, they are concentrating on domestic discretionary spending, and I tell my colleagues while we can take a hit this year, $150 billion over 5 years, a significant reduction, and maybe some more next year, pretty soon we are going to reach the tolerable limits of what we can do in the way of cutting education, law enforcement, infrastructure improvements, and things like that in the United States.

So there are limits to where we can go and the methods they are choosing, and that is why I say this is the path we are taking. Here it is when CBO sends us their report: $5 trillion. And, by the way, that does not include anything for the additional cost of the war past the year 2006, and that is because the President does not have it in his budget. The gentleman from Iowa (Mr. Nussle) to his credit said we know we are going to be there in 2006. We know basically what it costs, we should put something in our budget to reflect that cost. And he put $50 billion in his budget. The President did not. If we adjust his budget, as represented here in CBO, for the likely cost of being in Iraq and Afghanistan for some years to come, it adds another 300 to $400 billion to the tally. It pushes it on up even more.

So that is what we have before us, a very tough, almost intractable problem. And I wish I could say that for all of this arduous effort I thought that we were beginning to get our hands around the problem. I do not think so.

We have offered a substitute that we think is better fiscally and better in terms of our core values, the values

that we support and we think the American people share: the education of our children, for which we do more; the health care of our veterans, for which we are committed and do more; the development of our communities; and the quality of our environment. We do that simply by bringing spending in the domestic discretionary accounts back to baseline, that is, to current services, enough to prevent them from being eroded away by inflation, but not by any significant increase.

Those changes plus the plan we lay out will bring our budget to balance by the year 2012. We think that ought to be the effort and aim of every budget that is presented here in the well of the House, getting back to balance as soon as possible and will incur less debt than the budget resolutions being offered to us.

So we have got plenty to debate here today, but we have got an alternative on our side that protects our core values and priorities, the education of our children, the health care of our veterans, the development of our communities, the quality of our environment, and one also that is fiscally responsible. One also that will move us to balance sooner in time more assuredly than the Republican resolution.

We look forward to the debate. We believe that we have the better choice, the better resolution; and we will be presenting in the course of the day the reasons why.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield for the purposes of a unanimous consent request to the gentleman from Virginia (Mr. Moran).

(Mr. MORAN of Virginia asked and was given permission to revise and extend his remarks.)

Mr. Chairman, I yield 2 minutes to the gentleman from Tennessee (Mr. Cooper).

Mr. Chairman, I yield 2 minutes to the gentleman from Hawaii (Mr. Case).

Mr. Chairman, I yield 2 minutes to the gentleman from California (Mr. Cardoza).

Mr. Chairman, I yield 2 minutes to the gentleman from Kansas (Mr. Moore).

Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Tennessee (Mr. Tanner).

Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Tennessee (Mr. Ford).

Mr. Chairman, I yield 1 minute to the gentlewoman from California (Ms. Pelosi), the minority leader.

Mr. Chairman, I yield myself such time as I may consume.

To respond to the gentleman, I would say that Mr. Greenspan has told our committee three times that we should borrow from the experience of the 1990s, reinstate the so-called pay-as-you-go rule, and apply it both to entitlement spending increases and additional tax cuts, including renewal of expiring tax cuts as a means of diminishing the deficit and improving the bottom line.

In the interest of full disclosure, we ought to acknowledge that advice was given to us three times, and it is in our budget resolution. We recommend it in two places in our budget resolution. The one discipline proven to work that we ought to institute at the very least is PAYGO and apply it both to entitlement spending increases and to additional tax cuts, per the recommendation of Chairman Greenspan.

Mr. Chairman, I yield 2 minutes to the gentleman from New Jersey (Mr. Pascrell).

Mr. Chairman, I yield 3 minutes to the gentlewoman from California (Mrs. Capps).

Mr. Chairman, I yield 3 minutes to the gentleman from Maine (Mr. Allen).

Mr. Chairman, I yield 5 minutes to the gentleman from Wisconsin (Mr. Kind).

Mr. Chairman, I yield 2 minutes to the gentleman from Washington (Mr. McDermott).

(Mr. McDERMOTT asked and was given permission to revise and extend his remarks.)

Mr. Chairman, I yield 2 minutes to the gentlewoman from Michigan (Ms. Kilpatrick).

Mr. Chairman, I yield myself such time as I may consume to respond to the gentleman.

I would point out that when the Bush budget summit agreement came to the floor of this House in the fall of 1990, after many arduous months of negotiation with the Bush administration and the Democratic leadership and the Republican leadership in the House, only 88 Republicans supported the passage of that bill, which had the President's support behind it.

In 1993, when we passed the Clinton Budget Act and began the unprecedented march towards lower and lower deficits, eventuating in a surplus of $236 billion in the year 2000, not a single Republican in either House voted for that deficit reduction effort.

Mr. Chairman, I yield 2 minutes to the gentleman from Texas (Mr. Gene Green).

Mr. Chairman, I yield 1 minute to the gentlewoman from California (Mrs. Capps).

Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Missouri (Mr. Skelton), the ranking member of the Committee on Armed Services.

Mr. Chairman, I yield 3 minutes to the gentleman from Texas (Mr. Edwards).

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, I would like to thank the gentleman for his kind remarks.

Mr. Chairman, I yielded to myself to clarify what is in the budget proposal we are proposing versus the budget resolution reported by the committee and sponsored by the Republicans.

Our budget, let me make this clear, matches dollar for dollar their budget on national defense and international affairs, there is not a dime's worth of difference over a 5-year period of time. But our budget does single out veterans as one group deserving of more spending, more than just a current services budget, because the demands are clearly there. So our budget provides $1.6 billion more than theirs, than the Republican resolution, for veterans health care in 2006. And between 2006 and 2010 we provide $17 billion more for veterans health care.

Our budget resolution contains no reconciliation instructions to the Committee on Veterans' Affairs. What does that mean? Their resolution calls upon the Committee on Veterans' Affairs to report savings out of mandatory programs that will save $798 million. There are only two places those savings can come from: either cutting disability benefits or raising the fees that veterans must pay to use veterans facilities.

Our budget resolution contains special provisions for our troops to make sure that the increases in life insurance to $400,000 for combat fatalities voted up in the supplemental for 1 year will be extended for future years, and that the death gratuity raised to $100,000 will also be continued for future years. And we will provide more funding for family separation centers, for deployed troops, and more community- based health care for returning troops and their families, two things that have been critically noted.

Our resolution recommends that the funds be taken from the Missile Defense Agency and advanced satellite programs to pay for these personnel benefits. We think it is a good trade-off.

Our resolution also contains more in the four functions that fund homeland security and make special provisions for increasing the budget for cooperative threat reduction, so-called nonproliferation, by $200 million.

So in summary, for our veterans, for our troops and for the emerging threats facing us, terrorists armed with WMDs, our budget is not only better funded, but better focused than theirs.

Mr. Chairman, I yield 30 seconds to the gentleman from Texas (Mr. Edwards) for a response.

Mr. Chairman, I yield 2 minutes to the gentlewoman from Florida (Ms. Corrine Brown).

(Ms. CORRINE BROWN of Florida asked and was given permission to revise and extend her remarks.)

Mr. Chairman, I yield 3\1/2\ minutes to the gentleman from New Jersey (Mr. Menendez), the House Democratic Caucus Chairman.

(Mr. MENENDEZ asked and was given permission to revise and extend his remarks.)

Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Illinois (Mr. Evans), a veteran of the United States Marine Corps, the ranking member of the Committee on Veterans' Affairs.

Mr. Chairman, I yield 2\1/2\ minutes to the gentlewoman from Pennsylvania (Ms. Schwartz).

Mr. Chairman, I yield 2\1/2\ minutes to the gentlewoman from Georgia (Ms. McKinney).

Mr. Chairman, I yield 3 minutes to the gentleman from Alabama (Mr. Davis).

Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from North Carolina (Mr. Price).

Mr. Chairman, I yield 3 minutes to the gentleman from Oregon (Mr. Blumenauer).

Mr. Chairman, I yield myself such time as I may consume to amplify on what the gentleman from Oregon has stated.

Our budget would be $2.9 billion above theirs for the year 2006 for resources and the environment. That

makes a big difference when it comes to EPA, safe drinking water, the Land and Water Conservation Act; and over 5 years, our budget is $23 billion in resources and environment better than their budget.

Mr. Chairman, I yield 2\1/2\ minutes to the gentlewoman from California (Ms. Waters).

Mr. Chairman, before yielding to the gentleman from Texas (Mr. Cuellar), I yield myself such time as I may consume because he is going to address education. I would like to make it clear that education is one of those areas in our budget where we have made a decided improvement and have a notable advantage over the Republican resolution.

Our budget resolution rejects their education cuts. Our budget resolution provides $4.5 billion more for next year, 2006, and over the next 5 years $41 billion more than their budget resolution. This kind of funding, this level of funding, cannot only preserve current education programs such as vocational education, funded at $1.3 billion which the President and their resolution would simply exterminate, wipe out, it can also support increases in priority programs like special education. The additional funding we are providing can also help close the gap in funding for No Child Left Behind, $12 billion below this year and next year below where it was authorized to be when the act was passed.

Our budget rejects the reconciliation instructions to the Education Committee calling for $21 billion in savings over 5 years. We do not know where that is coming from. We do not include the President's student loan proposals that would raise loan fees. We do not end the students' ability to consolidate their student loans at fixed interest rates. We do not eliminate Perkins loans, for goodness sake, and we do not force colleges to repay prior Perkins contributions. We do provide the funding to raise the Pell grant, not just $100 every year for 5 years but $100 every year for 10 years. The Bush administration and the gentleman from Iowa (Mr. Nussle) and the Republicans claim that is provided for, but that can only be funded in their budget through reconciliation; that is, through taking it out of other student loan programs.

We have a decidedly different approach to education, a much greater emphasis on education. It is one of those things in our budget which we have singled out as deserving of additional funding. Even though we keep everything at the level of current services, a few things we plus- up to the detriment of other things, but education is one of those things we emphasize and plus-up.

Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Texas (Mr. Cuellar).

Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Wisconsin (Mr. Kind).

Mr. Chairman, I yield 3 minutes to the gentleman from Massachusetts (Mr. Neal), a former mayor, to talk about community development programs in our budget resolution versus theirs.

Mr. Chairman, I yield myself such time as I may consume.

I take the chairman of the committee, my good friend, at his word; but I have to point out the language of the resolution does increase the allocation for Community Development and Regional Development programs by $1.1 billion more than the President requests. But it is still $1.5 billion below this year's level adjusted for inflation.

What we have done in our resolution is to make amply clear that the CDBG will survive intact and will be fully funded, not suffer some crippling cut, as we have provided $9 billion more than their resolution for Community Development programs over 5 years. That will guarantee, virtually, if the committees are willing, that the CDBG and other important Regional Development and Community Development programs will not have to be cut.

Mr. Chairman, I yield 3 minutes to the gentleman from Illinois (Mr. Emanuel).

Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Texas (Mr. Doggett).

Mr. Chairman, do I have 18\1/2\ minutes remaining?

Mr. Chairman, I would like to yield 15 minutes to the gentleman from North Carolina (Mr. Watt), chairman of the Congressional Black Caucus, for purposes of control.

Mr. Chairman, I yield 3 minutes to the gentleman from North Carolina (Mr. Watt), the chairman of the Congressional Black Caucus, so he can discuss the alternative that the CBC is offering.

Mr. Chairman, I yield 5 minutes to the gentleman from South Carolina (Mr. Clyburn).

Mr. Chairman, I yield 3 minutes to the gentlewoman from California (Ms. Lee).

Mr. Chairman, I yield 4 minutes to the gentlewoman from Texas (Ms. Jackson-Lee).

(Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Mr. Chairman, I yield myself the balance of my time for the purpose of closing general debate.

Mr. Chairman, we have put before the House a substitute resolution as an alternative to the resolution supported by the Republicans and reported by the committee.

What does our resolution do? First of all, in the realm of fiscal discipline, we would reimpose a rule found to work and work well during the 1990s, a rule that was first implemented by a bill signed into law by President Bush, the first President Bush, in 1990 as part of the Bush budget summit agreement, which laid the foundation for the phenomenal success in the 1990s when we finally moved the budget out of intractable deficits into a surplus in 1998 and into a monumental surplus of $236 billion in the year 2000.

Part of the budget process changes that helped us achieve those impressive results was a rule called pay-as-you-go, which simply stipulates that before anyone can increase an entitlement or mandatory spending program, add to its benefits, they have to either pay for the benefits by an identified revenue source, or they have to offset the increased expenditure by decreasing expenditures elsewhere.

In addition, it provides when anyone wants to cut taxes, when we have a deficit, must offset the tax cut so it will not contribute to the deficit; it will not further enlarge the problem on the bottom line. So we first of all would reinstate the PAYGO rule. As I said earlier, this is not just some notion we have concocted. Three times Chairman Alan Greenspan of the Federal Reserve has testified before the Committee on the Budget that he would reinstate the PAYGO rule and he would apply it to expiring tax cuts that are renewed.

On the spending side of the ledger, we have brought spending back to current services, in many cases restoring deep cuts made by the Republicans. We have brought it back to current services, but we have held it at that level. Current services is basically today's spending level carried forward with inflation.

What do we do by instituting those two practices? What do we accomplish? Well, our budget moves to balance in the year 2012, which the gentleman from Iowa (Chairman Nussle) cannot say with respect to his budget resolution.

Secondly, we incur less in deficits each year and over the 10-year period of time that we run out our numbers, even though we provide current services funding.

Thirdly, we protect Medicare and Medicaid. The Republicans would cut Medicaid by $60 billion. I met with Governors, Republicans and Democrats, who have told us a cut of that magnitude would be devastating and we should not cut Medicaid by any significant amount so that when the program is revised, it has to be revised in pursuit of some arbitrary savings number.

Finally, we match funding for defense, function 050, dollar for dollar the same as their resolution. We match funding for international affairs, function 150. There is no difference between us there, but we have made some changes in our budget resolution which recommends that resources within the defense budget be shifted to personnel benefits and in particular to see that the $400,000 life insurance increase just

provided in the supplemental will be carried forward and that the $100,000 increase in death gratuities will also be carried forward and funded in the future.

So we have a budget resolution with many positive features to it, but also with fiscal discipline. A signature element is that in the year 2012 it gets to balance, but it gets there with balanced priorities.

Mr. Chairman, when Lem Keyserling wrote the Full Employment Act of 1946, he was an ardent Keynesian, and he believed that the government had a major role to play in stimulating an economy, in seeking to maintain full employment. And if he believed that theoretically, he believed it even more deeply after the war when the enormous demand generated by the war for once made this a full employment economy. The whole country supported the concept.

Keynes believed in deficit financing when the economy was stuck in a liquidity trap and could not get loose. But he did not believe in the kind of deficit financing that we are running today. I think he would be appalled both by the current account deficit which we are running, $618 billion, more than most economists thought was sustainable. It exceeds 5 percent of the GDP. And certainly I do not think he would find at all pleasing to his understanding of economics a budget deficit expected this year to be $427 billion. Not even Maynard Keynes would look approvingly on that.

We have come so far from the year 2000 when after 6 or 7 straight years of

fiscal discipline, we finally put the budget in surplus, a surplus of $236 billion. We had a meeting on the Democratic side of the Committee on the Budget with Mr. Greenspan about what is the best approach we should take to this surplus that we find ourselves enjoying. And it was agreed among everyone there and among Democrats and Republicans in the House that one thing surely we should do since we now have the resources to do it is no longer borrow and spend the Social Security trust fund, the surplus in it.

Indeed, our proposal was that we use this surplus in the future instead of funding new debt and buying new government bonds, instead going into the open market, buying outstanding Treasury bonds and that way reducing the Treasury debt held by the public, increasing net national savings which woefully deficient and lowering the cost of capital and boosting the economy.

It was the first and best step we could take towards shoring up Social Security and making it solvent. It was a truly conservative idea, and we urged it upon the Bush administration when they came into office. But they took a much, much different, almost opposite, path, and that is, big tax cuts tilted toward wealthy Americans.

We did not deal then with our long-range liabilities to Social Security as we could have for the first time in a long time, and today we are suffering the consequence of that. We are dealing with second- best proposals.

What do we have instead? Well, instead of being here on this pinnacle with a $236 billion deficit surplus, we are down here with a $427 billion deficit this year, according to CBO.

Now, the President has told us he has plans and a budget that will cut this deficit in half over a period of about 5 years. But when we put back into his budget everything we know is likely to be incurred as a cost, whether it is the costs of Iraq and Afghanistan, whether it is the cost of fixing the AMT, the deficit that we are dealing with today does not get better. It does not go away. It does not go down; it gets bigger. And by the end of our timeframe, 2015, we have a deficit of $621 billion.

Read the CBO analysis of the President's budget. By the end of that timeframe, we accumulated 5.135 trillion additional dollars as part of the national debt. That surely cannot be the kind of economy that Lem Keyserling or Maynard Keynes had in mind.

Look at this very simple table here, and it tells you a world of facts about what has happened over the last 4 years. Three times in 4 years this Congress at the request of President Bush in order to accommodate his budget had to raise the debt ceiling of the United States three times by $2.234 trillion.

At the present rate, we are adding $1 trillion to our national debt every year, every 18 months, $1 trillion every 18 to 20 months to our national debt. Nobody in his right mind thinks that that course can be sustained. And yet look at the Bush budget again. It only promises in our estimation more and more debt, not less debt.

How do we get away with this? No country in the world could have the kind of current account deficit we have or certainly have the kind of budget deficit that we mitigate the effects of it. Do not feel, do not see the consequences, and therefore do not feel compelled to do anything serious about it. We sell much of our debt to foreigners and that mitigates the effect.

These are not good vital signs for the economy of the United States. And surely one of the things we should be about now is the adoption of a resolution which will take us back to where we were in the year 2000, back to surpluses because we need to be saving, not spending as the baby boomers begin to retire.

Mr. Chairman, I yield 5 minutes to the gentlewoman from California (Ms. Millender-McDonald).

Mr. Chairman, I yield a minute to the gentlewoman from Texas (Ms. Jackson-Lee).

(Ms. JACKSON-LEE of Texas asked and was given permission to revise and extend her remarks.)

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, I want to respond to an observation the gentleman from Texas (Mr. Hensarling) made that this was the most fiscally responsible budget since the Reagan years. I was surprised, first of all, that he chose the Reagan years as a frame of reference. Those are the years that the mushroom deficits first appeared. We had deficits of $200 billion, 5.6 percent of GDP in the early 1980s. It took us 15 years to get to those deficits. That would not be the kind of model that I would choose. If you want something to model a budget after, then there is a much more recent and much more valid model and that is what we did in 1990, 1993 and 1997.

In 1990, both sides sat down, President Bush took part in the negotiations through his staff and we came to the first agreement for the settlement of the budget deficit. The Bush balanced budget agreement of 1990 and 1991, laid the foundation for what we accomplished in the 1990s. In 1993, we did the Clinton budget. In 1997, we finished it up with the Balanced Budget Act. All of those acts contained three elements, the PAYGO rule which we are proposing to reinstate, caps on discretionary spending backed up by sequestration, and a multiyear 5-year budget, not just a 1-year budget but a 5-year budget with goals to attain each year. That is what is lacking here, the budget process, the budget discipline, the budget plan.

If you want to see where this budget is likely to lead us, I would like to say once again that everybody should look in his mail and he or she will find an analysis of the President's budgetary proposals for fiscal year 2006. This is essentially the President's budget with a few changes to it, but it is basically his budget. As I have said, you only have to read two pages. You come to table 1.1 and you look in the far right-hand column and you will see the total debt accumulation according to CBO that will be incurred if we follow the President's budget through 2015. That total is $5.135 trillion and that is before anything for fixing the alternative minimum tax which CBO tells us is going to cost at least $640 billion, and before anything is added to the cost side of the ledger for the war in Iraq. This is where we are going if we adopt this budget, right back where we were in 1980 with the budget that the gentleman from Texas (Mr. Hensarling) said he admired so much as fiscally responsible.

Mr. Chairman, I reserve the balance of my time.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I thank the gentleman for yielding.

The gentleman from South Carolina (Mr. Clyburn) and I had an amendment that we filed yesterday to forgive the debt owed by the Pee Dee Regional Transit Authority to the Federal Transit Administration. We are not going to bring this amendment up for a vote, but I would like to engage my colleague, the gentleman from Alaska (Chairman Young) in particular, in a colloquy on this issue if agreeable.

Mr. Chairman, the Pee Dee Regional Transit Authority, PDRTA, is responsible for transportation and transit services in an area which encompasses 20 percent of South Carolina, more than 5,300 square miles in some of the most poorest, most rural areas of our State.

In the year 2000, the Federal Transit Administration's triennial review found that PDTRA had incorrectly used revenues from contract services as local match for operating assistance grants. The PDRTA finance director at that time determined that PDRTA owed an amount of $895,083 to the FTA, although this number has not been verified by audit by the FTA.

PDTRA has completely replaced their management, reformed their business practices, and begun quarterly payments on the debt of around $20,500. With an overall budget of $3.5 million, these quarterly payments have crippled their ability to expand services and to improve access to jobs and medical facilities in this underserved region.

For this reason, the regional administrator of the FTA expressed in a January 31, 2001, e-mail to me that he supports PDTRA's efforts to obtain debt forgiveness. The gentleman from South Carolina (Mr. Clyburn) and I both support the regional PDTRA administrator's position in favor of debt forgiveness. I am just asking the chairman and ranking member for help in trying to resolve this matter in conference.

Mr. Chairman, if the gentleman would further yield, I thank both gentlemen and look forward to working on this issue as the conference committee begins its deliberations. I thank the gentleman very much for this opportunity.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I would ask if my friend from California expects the rule to be on the floor Wednesday of next week?

Mr. Speaker, will the deadline for filing proposed substitutes or amendments be 5 o'clock on Monday?

Mr. Speaker, I thank the gentleman very much.

Mr. Speaker, we received last week the budget of the United States, as requested by President Bush, for fiscal year 2006. And having looked at it to some extent, I have to say we regret that it continues the same bad choices that have led to huge deficits and mounting debt during the last 4 years.

For the third year in a row, the Bush administration's budget sets a record level deficit, $415 billion, and offers no plan to put the budget back in the black again.

Unfazed by these deficits, the Bush administration proposes tax cuts on

top of them which can only go to the bottom line and make the budget's bottom line worse. To offset a small portion of these plans, the Bush administration calls for cuts in services to students and veterans, small business and law enforcement, environmental protection and urban and rural development. And although most of these cuts are significant to those who will be taking the hit, they barely make a dent in the bottom line of the budget.

Let us start and look at where we have been in order to appreciate where we are today. Just to show the Members that the budget can be balanced, this chart shows that in the year 1992, the United States had a deficit of $290 billion. This was the deficit inherited by President Clinton when he came to office January 20, 1993. By February 17 he had on the doorstep of Congress a plan to cut that deficit by more than half over the next 5 years. That plan was ridiculed here on the House floor, only passed by one vote here, only passed by the Vice President's vote in the Senate, but look at the results. Just to show that it can be done, the budget can be balanced, under the administration of President Clinton over 8 years, the bottom line of the budget got better year after year after year.

Starting with a deficit the year before of $290 billion, the President lowered that to $255 billion; $164 billion a couple of years later; then $22 billion; and, finally, in the year 2000, due to the Clinton budget passed in 1993 and the Balanced Budget Act of 1997, the budget was in surplus by $236 billion, 5 short years ago. The year before President Bush came to office, the budget was in surplus by $236 billion.

President Bush came to office committed to substantial tax cuts. We warned him at the time to be careful about assuming that these surpluses would continue indefinitely and keep rising. He nevertheless pushed through his substantial tax cuts and his other spending policies, and we can see what has happened every year since. The bottom line of the budget has gotten worse and worse to the point where 3 years ago, it was $378 billion in deficit, a record amount. That was 2003. In 2004 it was $412 billion in deficit, another record level. And this year the Office of Management and Budget, the President's budget shop, tells us recently that they expect a deficit this year of $427 billion. A dubious record, but that will be the third year in a row that the bottom line of the budget has registered a worse deficit than the year before, $427 billion.

Now, the President set a goal last year looking at these dismal results for improving the bottom line of the budget. He said over 5 years we are going to cut that deficit in half. In my book, 5 years is not good enough. Nevertheless, that was the goal he set for himself, and he claims that the budget he submitted this year will achieve that result. But in truth, the budget he submitted this year is more notable for what it omits, excludes, than for what it includes.

The President has not included in his budget for 2006 sent up last week any reasonable allocation of likely expense for the deployment of our troops in Iraq and Afghanistan in 2006. I would like to think they would not be there, but we have to be realistic. We know from 3 years' experience approximately what it has cost to maintain those deployments. They should be recognized in the budget, but they are not.

The President proposes to privatize or partially privatize Social Security and he gives us a likely cost for the first few years of implementation of those privatization plans between 2009 and 2015. His cost, OMB's cost for that time period, is $749 billion. That is nowhere to be found in these numbers. Even though it falls within the 10-year time frame of the budget, it is not included in the numbering.

The President asks for additional tax cuts. He asks for the tax cuts that he passed in 2001, 2002, and 2003 that expire for the most part on December 31, 2010, to be renewed and made permanent. Even though we now know that given the bottom line of the budget, the red condition, the fact it is a historic deficit, $427 billion, the bottom line can only get worse if those tax cuts are extended and made permanent. The President says, ``I want to do that.'' In addition, there is another $383 billion of expiring tax cuts that will have to be handled as well.

But there is one big item called the Alternative Minimum Tax. Over the next several years, this tax will affect more and more tax filers. Last year, to buy us a little time so we could repair that particular formula of the Tax Code so that it does not hit middle-income taxpayers, for whom it was never intended but is hitting now because it is not indexed to inflation, we built a little patch in last year's budget to at least leave the effect of it in constant status for 1 year.

Mr. Speaker, reclaiming my time, the deficit is worse, and the gentleman makes an excellent point. When the surplus, and Social Security is running a surplus next year and this of $150 billion to $160 billion, that amount is actually offset against the gross deficit in the regular budget of the United States. So if you remove that offset, the surplus in Social Security, which is netted out against the deficit, that number becomes $687 billion instead of $427 billion.

That is correct. I had another chart up which the gentleman is familiar with which shows you on the back of an envelope in a simple form the net effect of the three Bush budgets sent up in 2002, 2003, and 2004.

When the President sold his tax cuts to the Congress, his Treasury Secretary and his Director of OMB both said, We will not need to come back to you until 2008 to ask for the debt ceiling of the United States to be increased. They were back the next year, 2002. They said, We have incurred so much debt, despite our intentions, that we need to raise the legal ceiling on the debt of the United States by $450 billion.

The next year, 2003, they were back again. The tax cuts were beginning to be fully implemented, taking a toll on the bottom line, with other effects like a recession, like increased military expenses. But all of this added up to a need to increase the debt ceiling by $984 billion.

Let me put that in context. The entire national debt of the United States before Ronald Reagan took office was less than $984 billion accumulated since the beginning of the Republic. Then last November, before we could adjourn, Treasury was back, the administration was back, and they said, Before you can leave here, unless the government is going to shut down, the ceiling on the debt of the United States has to be raised again by $800 billion.

That means that this $984 billion increase made on May 26, 2003, lasted only 16 months. We are in effect adding $1 trillion to our national debt every 18 months. Nobody in his right mind thinks that that course can be continued.

This is the net total by which Congress had to raise, Republicans for the most part voting for it, had to raise the debt ceiling of the United States in order to accommodate Mr. Bush's budgets for the first 4 years, $2.234 trillion. That was the amount we had to raise the debt ceiling over 3 years in order to accommodate his budget.

Let me go back to the things that were left out of the President's budget, because, as I said, it is more notable for what it excludes than what it includes. As I said, there was nothing in the calculation of the taxes that he wanted to make permanent to fix the AMT, though all know this is a looming problem that politically has to be addressed in the next several years. There was not even money to patch it over for another year to study how to fix it.

Secondly, there was not a dime for Social Security privatization. Ten years of budget, not a dime for Social Security privatization, even though the President has made it his number one agenda initiative.

Thirdly, there was nothing for the cost of the war in Afghanistan, the insurgency there, nothing for the cost of our deployment in Afghanistan or Iraq or enhanced security in North America. The Congressional Budget Office, recognizing that that is a number that is there and has to be somehow or another estimated and included in the budget, captured, in order to have the budget be a complete and full account of what we are likely to spend, did a model.

They said, assume we can reduce our forces beginning in 2006, between 2006 and 2010, down to 40,000 troops in the theater, the CENTCOM theater, not necessarily Iraq, but in the CENTCOM theater, with 18,000 troops remaining in Afghanistan. What is the cost over the 10-year period of this budget? The cost to do that is $384 billion. Let us hope we do not have to incur that, but some significant number has to be included in this budget to make it a realistic budget.

Finally, when you add those three items, then we have less surplus. When you have less surplus, you have a bigger deficit, you have more debt service, because you borrowed more principal on which you have to pay interest. You add all of those items together, you get a $2 trillion adjustment to the budget.

This, therefore, is what we see, adjusting for the four items that I have just outlined, the budget path that the Bush budget will take over the next 10 years. $427 billion, third year in a row, it sets a record level, a deficit of $427 billion for the year 2005. It goes up the next year and levels off in the range of $400 billion, and then comes out at the end of 10 years at $566 billion.

We are not reaching to make this point; we are simply putting back in the budget costs we think are realistic and need to be captured in order to have a truthful portrayal of what the budget looks like.

This is the course that the Bush administration is plotting for us in the budget they have just submitted, and most people think that this is not a sustainable course.

I yield to the gentleman from Virginia (Mr. Scott).

Mr. Speaker, reclaiming my time, first of all, the gentleman is absolutely correct. When the President came to office, he had an advantage that no President in recent times had enjoyed, a surplus projected to be $5.6 trillion between 2002 and 2011, over a 10- year period of time; $5.6 trillion. That surplus is now gone, vanished. In its place there is a deficit over the same time period of $3 trillion to $4 trillion. This shows you how the $3 trillion to $4 trillion accumulates over that period of time.

We have had a swing of $8.5 trillion to $9 trillion in the budget over a 4- to 5-year period of time, a swing in the wrong direction of $8 trillion to $9 trillion.

The big red bar is the amount of interest, or debt service, that we pay, first in 2004, and then to its right, 2010.

The gentleman is correct. When the President came to office, we had before us in Congress a novel idea, which would have been truly a conservative fiscal proposal, namely, that we would take the surplus in Social Security alone and instead of buying up new debt and funding new spending, we would use that surplus to buy old debt, retire that debt. We would add that money, $3 trillion-plus, to net national savings, bringing down the cost of capital, boosting the growth of our economy; and then in 2020, when the Social Security beneficiaries, the baby boomers, begin to press their claims for benefits, Treasury would be more solvent than ever to meet those obligations.

That would have been the first long step we could have taken toward Social Security solvency. There was support for it on both sides of the aisle. The President rejected that in preference for his own budget, which has led us to the deficit which appears there now.

Mr. Speaker, reclaiming my time, the gentleman is right on the mark. When you have an enormous increase in debt service like this, what it does is crowd off, trade off, other things that would normally be purchased, defense and non-defense goods and services.

Instead, the one thing that is truly obligatory in the budget is interest on the national debt. We cannot fail to pay it, or the credit of the United States collapses. So it takes precedence over everything else. You can see it has become the big boy on the block. It eclipses other non-defense spending priorities. From education to health care to veterans health care, you name it, interest on the national debts will be crowding out these other priorities, and the American people will pay substantial taxes to service this debt and wonder why they get nothing in return.

Mr. Speaker, we had two rules in the 1990s that applied from 1990 through the year 2000, really until 2002, and those rules effectively said, number one, the pay-go rule, if you want to increase an entitlement, liberalize the benefits of an entitlement program, you have to pay for them with an identified new source of revenues, or you have to cut some other entitlement somewhere else of the same amount.

Secondly, if you want to cut taxes, you have to have another tax to offset the revenue loss, or you have to cut entitlements enough so the bottom-line effect is neutral. Those two rules, with a discretionary spending cap, those rules that helped us put the budget in surplus for the first time in 30 years to a $236 billion surplus, what the Bush administration did was let those rules lapse, expire.

That is correct.

That is correct. The Budget Enforcement Act of January 1991, President Bush.

That is correct; and in the Senate.

Mr. Speaker, let me turn to the gentleman from Virginia, but if I could briefly demonstrate, before I yield. This chart right here shows something else that is left out of the budget for 2006. The President, acknowledging that he has a deficit in 2005 of $427 billion, and it is likely to be at least that large in 2006, nevertheless asked for renewal and making permanent tax cuts that total 1 trillion, 7 billion dollars.

As for the effect of these tax cuts, this chart right here is pretty simple, but pretty instructive. This blue line at the top indicates the level that the administration told us projected the individual income tax revenues would follow if their tax cuts were passed. As my colleagues can see, it projected that revenues for last year would be 1 trillion, 118 billion dollars from the individual income tax. In truth, they were $804 billion. That is more than $300 billion short of what was projected. Do it on the back of an envelope. It is simplistic accounting.

But we cannot avoid the conclusion: that is three-fourths of the deficit in the year 2004. This is the effect, undeniable effect that tax cuts have had on the bad bottom line that we are looking at now.

Mr. Speaker, we discussed this a bit earlier, and the gentleman is absolutely right. The numbers we are talking about are the unified deficit numbers. That is to say, we consolidate all of the accounts of the budget. Social Security is actually in surplus now and will be for some years to come, so the surplus of about $160 billion in Social Security is offset against the deficit and the rest of the budget, making that deficit appear smaller than it truly is.

Mr. Speaker, I have just put up a chart to show exactly what the gentleman was just saying. Privatization means that tax funds that are now put in a public trust fund will instead go into private accounts that will cause the government to borrow more and more and more over time. The Bush administration acknowledges that between 2009 and 2015, when it first implements this particular proposal, that the cost will be $754 billion. We have obtained, using the Social Security actuary numbers, the true impact for the first 10 years of implementation and for the second 10 years of implementation, fully implemented. The cost right there, that little blue bar chart, bar on the graph there, the plan that the President is proposing adds $4.9 trillion to the unified deficit of the United States by 2028.

But we are only halfway up the slope at this point. The borrowing in the trillions goes on and on and on until the year 2055 to the mid- 2050s, an enormous increase in the national debt.

So we even if the budget were to be cut in half, the deficit were to be cut in half by 2009, which it will not, the numbers simply will not support that outcome, there is a huge change in the budget deficit looming on the horizon at that point in time which means that the deficit will not be balanced again or anywhere close to it in our lifetime when this debt is added to it.

Your debt service goes up, too.

In 4 years.

No, it is not included. And what I am saying here is this additional debt will be stacked on top of what is already monumental statutory debt of the United States growing every year because of the deficit in our regular budget, growing every year.

No.

When those adjustments are made, the numbers the gentleman just gave will only get worse.

No question about it. When you add this on top of it, it becomes almost irreversible. I do not see how you can add this and ever expect to see the budget close to balance again.

Absolutely correct.

The gentlewoman from Pennsylvania (Ms. Schwartz).

The gentlewoman has touched upon major impacts. One of our problems is the President's budget is lacking in detail as to all of the program, project and activity cuts that they would actually propose in the years after 2006. It is hard to tell. We have a chart here that shows what we know about the reduction in what is called nondefense domestic discretionary spending. And we can see here that we expect a reduction below purchasing power of about $180 billion over a 5-year period of time. That is education. That is veterans health care. That is highways. That is the government as we know it. Everything that people tend to identify the government with is included in these accounts. They have only come all together to $350 billion.

So you can, of course, out of $350 billion achieve some cost reduction, but there is only so much that can be achieved there. And keep in mind, this is not the source of the problem. These accounts have not increased in the last 3 years, but this is where the administration is going to squeeze as much as they possibly can, but there will never be enough in these accounts to eradicate a deficit of $427 billion next year.

Nevertheless, there will be deep pits, student loans, Pell grants, all of these things that matter to American families, kitchen-table issues.

This is before the private accounts. When the private accounts are layered on top of this, they add so much to the deficit it is hard to predict what will be left of the accounts and items and projects that were just referenced.

Exactly.

Mr. Speaker, I yield to the gentleman from Texas (Mr. Cuellar).

There is no other individual in the Congress I could point to who is a better testament to that principle than the gentleman from Texas (Mr. Cuellar), who I believe has four degrees. Am I correct?

We can balance the budget and also balance our priorities. In 1997 when we did the Balanced Budget Agreement of 1997, we had the biggest plus-up in education in 15 or 20 years. We will have a budget resolution, a Democratic budget resolution on the floor, and it will adequately fund education. That will be the last thing that we will cut. Certainly we will not have 38 educational programs eliminated in our budget.

Now, in the time remaining let me recognize the gentlewoman from Georgia.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on the subject of my Special Order today.

Mr. Speaker, I rise with heavy heart to pay tribute to a dear friend, an exemplary Member of this institution, and a great American. Bob Matsui did more than represent the Fifth District of California. He represented the best in American politics. Indeed, if one asked me to describe an ideal Congressman, Bob Matsui would be Exhibit A. In an institution that is sometimes short on comity and civility, Bob was mellow and civil by nature. He had a first-class temperament as well as a first-class intelligence.

But make no mistake about it: he was a fighter for what he believed in. He was a politician of principle and passion and prodigious energy as proved by the way he stumped the country for Democratic candidates, even as he suffered from the blood condition that finally claimed his life. Whether the issue was taxes or trade or Social Security, the earned income credit, he always had an arsenal of facts at his disposal. On whatever the issue, your issue, you were always better off if you ran your arguments by Bob and sought his support here in the well of this House. He became a leader in this House and an influence, not so much because of seniority or position, but because everyone liked him, respected him, and knew his intelligence.

When Bob spoke, he knew his stuff. He spoke with authority. He spoke substance and sense. I was last with him on December 15 for the better part of the day. We had a teleconference with 36 reporters calling in. It lasted for more than an hour. We literally had to cut it off. Afterwards when I spoke with Bob, he was on the ceiling, just delighted with the response we had gotten, and ready to suit up, ready to do battle over Social Security. It was this sort of zest that made Bob Matsui a delight and a joy to work with.

On our side we have a deep bench and we will fill his committee position with a competent successor, but no one can surpass Bob's mastery of the subjects which were his domain on either side of the aisle. The Congress has lost a great leader and the country a true patriot, a citizen, a third generation American who was interned as a child with his family who suffered an awful, terrible, unforgivable injustice. But he loved his country nevertheless and committed his life to making it better.

We do not ask today for whom the bells toll. They toll for all of us, but especially for those of us who served with Bob Matsui, loved him as a friend, and wonder if we will ever see his like again. To Doris and to Brian and Amy and little Anna, our hearts go out. But just as Bob lives on in all of you, he lives on in all of us who worked with him for years and years. His legacy is one that will last in this institution. Indeed, this great old institution of the Republic is a better place because he served here sacrificially for 26 years.

Mr. Speaker, I am honored to salute two radio stations that have brought years of broadcasting excellence to the citizens of North and South Carolina. On December 14, 2004, WRHI marks its 60th anniversary, and its sister station, WRHM, joins in celebrating its 40th anniversary.

WRHI, 1340 AM, serves much of York County, South Carolina, including my hometown of York. I was two years old when it first went on the air in 1944, and, I'm proud to say; its been a part of my life and a bedrock of our community ever since.

WRHM, 107 FM, covers 15 counties, from the Upstate to the State Capital, and from Rockingham to York.

WRHI and WRHM have prospered all these years because of people like Manning Kimmel and Allan Miller. Together, they make up the leadership of Our Three Sons Broadcasting. They acquired WRHI in 1984 and WRHM in 1987, and along with their cracker jack staff, they have spent years making sure the stations were top-notch facilities. But above keeping pace with technology, they've kept pace with their community. As Manning says, ``We have an obligation to be its voice, to discuss

the issues which affect us, and to ensure we keep our sense of community and the qualities which make this such an exceptional place to live. This is where we live, work, play, and pray. York County is just a great place to live.''

Mr. Speaker, I am pleased to submit for the Record the proud history of WRHI, written by Haney Howell, of Winthrop University. And I encourage all of my colleagues, who find themselves in the York County area, to tune in to 1340 AM or 107 FM and hear some of the best in news, talk, sports, and country music. Happy Birthday, WRHI and WRHM, and thank you, together, for giving the Carolinas ``100 Years of Broadcasting Excellence.''

WRHI Radio: Broadcast Pioneer Continues to Serve Rock Hill

(By Haney Howell)

December 1944 was a time to dust off dreams. Allied forces

were pushing at the Germans from both sides, the Normandy

invasion a success. The Japanese were retreating toward the

home islands in the Pacific, setting the stage for their

final push. People could again afford to pursue their dreams,

to think of a life without war.

In the Carolinas, another delayed dream came true. WRHI

Radio in Rock Hill, South Carolina, broadcast for the first

time, becoming the ninth station in the state and one of the

first 600 in the nation.

Few stations signed on in the United States during the war,

first because of a freeze on building permits then

restrictions on equipment purchases.

WRHI made it on the air despite overwhelming odds, wartime

restriction and one of the dreamer's deaths at Normandy. The

250-watt signal on 1340 was as much a bureaucratic miracle as

a technological one. The story of WRHI is also the story of

one strong-willed individual with a dream of community

service. While the forces of war delayed plans for radio in

Rock Hill, the efforts of this man brought it to reality.

James S. ``Jim'' Beaty, Jr., was a young broadcast engineer

who believed in community broadcasting. He felt that Rock

Hill needed more than a newspaper and regional broadcast

stations. He was a sick child, almost dying of pneumonia in

the second grade. He quickly ruled out physical activities

and searched for areas he could conquer with his mind. He

witnessed the phenomenal growth of radio during the 30s,

listening to stations across the nation late into the night.

``I was interested in radio since the time I was old enough

to recognize a radio crystal set.''

He started in radio as an amateur, building receivers and

transmitters from scratch. An aunt promised him a kit radio

while in high school if he made A's. Not only did he receive

the kit, he located a man who was an expert builder to teach

him. Friends were amazed at his skills with building

electrical circuits and other detailed work. Beaty

overcame the slight shaking of Parkinson's Disease and

became a master builder. However, he avoided work with

high voltage and high gage wires, fearful that he'd have

an accident.

Beaty grew up in Greenville, South Carolina, while part of

the family remained in Rock Hill. He attended Clemson

University for one year in the mid 1930s before his

Parkinson's Disease and the Depression forced him to drop

out. He loved electronics courses and asked more questions of

his professors than most. His health would play a major role

in the history of the station, forcing him to stay behind

during World War II.

He soon turned his skills to broadcast engineering,

building and maintaining equipment for stations. His first

job was at WMRG in Greenville, and he vividly remembered that

job interview 50 years later. ``I walked into that station--a

combination transmitter and studio building--and there was

this fellow leaning on the carpet putting a mike receptacle

in, and I asked him, `How about a job?' and he said, `What

field? Announcing or engineering?' I said engineering, and he

said, `Hand me that pair of pliers over there and get on the

other end of this wire.' ''

Beaty learned the basics of putting a station on the air.

When the Greenville station changed management, he followed

the man who originally hired him to Burlington, North

Carolina. That is where he spent most of the war, and pulled

together his hometown radio station. As he gained experience,

he planed for a station of his own. He gained another

supporter when he married Anne in the late 30s.

Rock Hill was covered by WBT and other regional stations.

What Beaty sought was a voice for his own community, a

station that represented the people of Rock Hill and South

Carolina. While only 25 miles separated Rock Hill from

Charlotte, North Carolina, those miles and a state line

created a major gulf.

In the early 1940s, Beaty convinced his older brother,

William, that a radio station was both needed and wanted in

this textile mill and farming community south of Charlotte.

No county in the upper tier of South Carolina had a station

and the Beatys did not feel that the local newspaper

fulfilled the need for more instant news and live local

entertainment.

The brothers approached Ernest Carroll, a local soft drink

distributor and a founding member of Rock Hill National Bank.

His son, Ernest Carroll, Jr., had an intense interest in

theater and performing. The elder Carroll thought the radio

station would give his son a challenge, and he also agreed

with the Beaty's for the need for a station in Rock Hill.

Carroll put up $10,000 in seed money, and offered them space

in the new Rock Hill National Bank building downtown. Jim

Beaty's dream was now moving forward, and as with other

challenges in his life, he wasn't about to give it up.

By late 1941, plans were well underway and an application

was filed with the FCC. There were others seeking to put a

station in Rock Hill. It was the largest of a number of small

to mid-sized towns which dotted the Carolina Piedmont. A

large part of the economy was based on textiles and cotton.

It was a town dominated by a handful of powerful people, and

Ernest Carroll was one. Jim and Bill Beaty's father, Dr. J.S.

Beaty, was a local physician who rapidly established himself

in the community. Their reputation and Carroll's financial

backing greatly influenced the Federal Communications

Commission. Jim Beaty memorized the rules and regulations,

closely monitoring the application each step of the process.

It seemed only a matter of time. Then came the Japanese

attack on Pearl Harbor. The application was frozen and the

lives of the dreamers changed. Bill Beaty became an Army

officer, serving in the Pacific. Ernest Carroll, Sr., became

a Marine officer, and his son later entered the Army. Only

Jim Beaty, with his physical deferment, was left to tend the

dream.

Jim Beaty correctly guessed that a license might be granted

long before the freeze was lifted on equipment. Commercial

and even amateur production was taken over for military and

war related communications. Amateurs were off the air, and

many basic parts were in short supply. It was ``somewhat like

the used car business. There's plenty of used equipment, and

I started making friends with different stations and with the

chief engineers and finding the surplus equipment.''

Beaty started collecting spares from various stations,

putting together the needed pieces for a transmitter. He

purchased metal trunks from the YMCA to use as cabinets. A

used tower found in Roanoke, Virginia, wound up stored in

sections in his mother's back yard. Earnest Carroll, Sr. kept

up his interest from afar, providing Jim Beaty with a large

room in his home to store the needed equipment. Ernest

Carroll has no doubts about how the station got on the air.

``The reason we were able to get on the air was that Jim

shopped around everywhere he could find pieces and parts and

he got lockers from the YMCA, old lockers, and he built the

equipment into those lockers . . . That's the way we got on

the air. There were several groups . . . at least two that I

know of . . . who were planning on attempting to put a radio

station in Rock Hill, and planned and talked about it for

several years, but they couldn't . . . they didn't have Jim

Beaty . . . they would have to buy new equipment, so they

were stalled while we went ahead . . . and Jim got it on the

air.''

Bill Beaty remembered the first time well. ``Jim . . . a

first class engineer . . . who knew everything about building

and maintaining equipment, started assembling parts for a

radio station wherever he could find them. All the stations

have certain parts, duplicates so to speak, and he was able

to find a lot of pieces of equipment, which he was able to

buy. He built the first transmitter from scratch. It was not

a commercially built transmitter.''

Others watched the process with amazement. ``Jim Beaty, who

was great at this sort of thing, put the thing together with

haywire and whatever he could find, and got it on the air . .

.''

By mid-1943, some of the restrictions on licenses were

lifted by the FCC. Jim Beaty pushed the paperwork and

continued gathering needed equipment and parts. His

application won out over the others, and on August 2, 1944,

Beaty received a construction permit. It specified direct

crystal control on 1340 kilocycles, 250 watts output with two

RCA 805s in the modulator for high-level modulation. The

antenna would be 177 feet tall with 120 copper wire radials

buried in the ground. ``That was when the FCC ruled that

anyone who had the equipment or could get it and could show

cause for the need for a station . . . Rock Hill didn't have

a radio station and there wasn't one in the Fifth

Congressional District.''

The FCC regulation on the types and quality of equipment

used at broadcast stations was, and continues to be, strict.

Not only did Jim Beaty construct the first transmitter from

spare parts, it passed muster with the field inspector as

well. The original control room console was constructed in a

steel YMCA trunk, and early announcer Buddy Fields remembers

having to give the board ``a kick from time to time'' to free

up the relays.

Jim Beaty located and purchased a lot for the tower and

transmitter, and Ernest Carroll sent a couple of hands from

his family farm to Rock Hill with a mule to plow the ground

and lay the radials for the tower.

The source of the wire for the tower radials is still a

mystery. Copper was in very short supply, and it's thought

that the ground radials Beaty was forced to use have a high

steel content (they are still in use). Whatever the source

and composition, the wire arrived by train and was taken to

the transmitter site in a mule-drawn wagon.

Choosing the call was left up to Jim Beaty. He later told

Carroll that he wanted Rock Hill reflected in the letters,

and said that the ``I'' on the end was simply available at

the time. His choice was good. The station still uses the

same call.

While Jim Beaty moved toward the fulfillment of his life

goal, fate stepped in and

shook the original group to the core. Ernest Carroll, Jr.

died in combat during the invasion of Europe. His father was

serving in the Marines in the Pacific, and was sent home and

eventually discharged following the death of his son. Bill

Beaty was in the Philippines, fighting not only the enemy but

tropical diseases which would plague him for the remainder of

his life. He would not join the station until 1946.

Jim Beaty said that the next six months seemed like an

eternity. ``It was slow. First we had to get a building . . .

we had to get a fellow to modify the building to house the

transmitter.'' Once the station was transmitting, it was time

to build a staff. Jim Beaty brought in Al Drew from Roanoke

Rapids, Virginia, to help him set up the station and train

the announcing staff.

First hired was Bob Carroll, a local high school student

and assistant manager of the local theater who had singing

experience. One of his teachers contacted Drew, who

auditioned Carroll and gave him the job. Carroll's only

previous radio experience was singing with the Winthrop

College choir as a boy soprano on WSOC during the late 1930s.

Jim Beaty was concerned about more than just getting a

signal on the air. Before the official sign on, the station

ran numerous test programs from midnight until 6 a.m. to test

the equipment and more. ``We ran full occupational capacity,

we ran 15 minute shows, 30 minute shows, the widest diversity

you could think of, everything from disc jockey shows to

religious shows to interview shows, anything you could think

of to give us the background experience before we went on the

air.'' Carroll felt that Al Drew was a key element to the

success of the basics of good radio broadcasting.

Despite the death of his son, Ernest Carroll continued to

help with the station. ``When I got back and had not been

discharged from the Marine Corps, I would drive up here from

Beaufort--Paris Island--and for several months I kept

listening when I'd come up . . . I knew what the frequency

was going to be and hoping to hear it on the air. Actually,

it was several months after I got up here (after my

discharge) before we signed on.'' If his son could not be a

part of the station, at least Ernest Carroll could see his

son's dream come true.

December 14, 1944 was a bitter cold day. The staff arrived

by 5 a.m. and awaited the 5:30 a.m. sign on. Al Drew asked

Bob Carroll if he'd like to sign the station on for the first

time. ``I was so thrilled. He was so gracious to do that, to

have a young greenhorn come in and sign the station on was

just prodigious. When Al signaled me, I threw the switch and

said, this is WRHI in Rock Hill, South Carolina, 1340 on your

radio dial, signing on for the first time.''

The staff understood that they were making history, but

they also kept in mind the times. ``It was a very poignant

sign on, because at that time there were still troops all

over the world, and we were telling the listening population

that we were remembering the men that were fighting on

foreign shores all over the world, and wishing the best for

them, and that the war would soon be over and things would

come back to normal.''

At sign on, Jim Beaty was at the transmitter, and in the

control room that morning was Al Drew, Fred Lowery, and Bob

Carroll. As soon as they signed on, they started their normal

schedule.

Ernest Carroll remembered the first day of broadcasting.

``I remembered the dedication ceremony quite well. We had

special programs . . . had a good friend of mine from Fort

Mill who was an expert pianist, and he played `Danny Boy' for

me. The station was dedicated to the boys who had lost their

lives in the Second World War. That was the theme of it. Of

course to me, that was really important. We got a lot of

comment, publicity, and a good many people were kind enough

to complement me on my dedication address . . . which I made

over there and dedicated the station . . . The war was fresh

then, you know . . . to those loss of lives. We had a good

many here in Rock Hill who lost their lives in the Second

World War.

``You know how wars are, like the little boy sliding down

the roof and saying, ``God, don't let me say it, don't let me

fall . . .'' People are very much that way, you know . . .

they forget very quickly and for several years now . . . they

don't believe George Washington slept here and all that kind

of thing, then when the war comes against the military people

are very prominent . . . right now they are held almost in

contempt.''

When the station signed on, WRHI was independent, and

filling the air time ``ran us ragged''. Later the station

joined the Mutual Network before switching to CBS and finally

ABC. Most of the programming was live and local, since

transportation was expensive and rare. Most important were

the early morning programs, focused on the listeners in the

then predominately agricultural and textile community.

``It was a wonderful proving ground for a young man

starting in radio, because you did get such a wide diversity

of programs. You had to learn to do a little bit of

everything.''

Fifty years later, WRHI continues to serve the community.

In an age of AM stations loosing focus and going under, the

current ownership took a hard look at Jim Beaty's original

dream and realized that he was right. WRHI has remained a

station that focuses on Rock Hill and serves the community.

He understood his home town then, and made certain that the

staff understood as well.

Bob Carroll spent his career in broadcasting, both radio

and television. Yet one of the things he learned at WRHI

stayed with him. Jim Beaty told him, never underestimate your

audience. This is really true, and I think today that too

many people do that.

Jim Beaty remained involved with WRHI until it was sold in

the mid 1970s. Brother Bill returned from the war and handled

the business side of the operation. Ernest Carroll and his

wife, Virginia, sold their interest in 1947 to Harper Gault,

a local newspaper writer. Years later, Carroll still regrets

selling out, and considers his involvement with establishing

WRHI as one of his significant achievements in a life filled

with success in business.

1While WRHI ranks as a pioneer broadcaster, it represents

more than just another radio station. It is the fulfillment

of one man's dreams and a community's needs. The technology

and programming have changed, but the basic thrust of serving

the community has not. What made WRHI a success in 1944

continues to carry the station into its second half-century.