Floor Statements

Mr. Speaker, on Friday of last week there was more bad news about the economy. The unemployment rate hit 6.1 percent, the highest rate in more than a dozen years. Since this recession started in March of 2001, we have lost 3.1 million jobs in the private sector. That is a loss of 2.8 percent of all the jobs in the private sector; and in percentage terms that makes this one of the worst recessions in the postwar period. That is one of the problems we have got; 6.1 percent does not sound alarmingly bad compared to prior recessions, but it does not begin to tell the story of what is happening in this economy.

First of all, this unemployment rate, 6.1 percent, does not indicate the persistence of this recession. Unemployment is not only up at 6.1 percent, but it has been stuck in this range for more than a year.

As you can see from this particular chart, this graph, this recession is not following the pattern of previous recessions. In previous recessions, the red curve, the U-shaped curve, plots the path that unemployment has taken. It reaches a peak, as it did in March of 2001, typically reaches a trough in about 12 to 18 months and then starts back up again. It takes awhile for recovery, it takes awhile for employment to get back on its feet, but eventually things come back to normal.

There may be a lot of people in this country and in this Congress who think, well, this is your regular postwar recession, it is not a depression, it will come back. But what we trouble about is it is not following the pattern of the postwar recessions of the past, because this black line plots the path the economy has taken. It has not headed back up.

Employment has not headed up, even though we have had signs of a recovery. It feels like a recovery. This is a jobless recovery. Worse still, the job situation is actually getting worse, as this line plots, because, if you follow that line, if you can see the bottom index, this means that jobs should have recovered 12 to 18 months ago, at the very least. We should have seen an up-tick, an upturn in jobs; and it should have been at this level by now. Instead, we are still way down here below the trough of the recession. So this is not a recession like any we have had before, particularly when it comes to jobs. Twenty-five percent of all the people who are out of jobs have lost all of their unemployment benefits. They are ``exhaustees,'' we call them.

Second, the unemployment rate we are looking at does not count the 2 million people who have dropped out of the job market. It may be more than that, but at least that number. They have given up the search for a job because they flat cannot find one.

If they were counted in the labor force, the unemployment rate would be in the range of 6.6 percent. But even this figure, 6.6 percent, would not reveal the number of workers who have lost their jobs and found another, typically with lower wages and lower benefits. I see that all the time in my district, anecdotally, and I suspect it is happening everywhere in America.

These folks do not show up in the employment statistics because they are working, but they are working at much less favorable terms than before this recession started. One indication of that is the loss of manufacturing jobs, 53,000 in the month of May alone. Every month for 12 months we have lost at least 50,000 of these jobs, which are the best jobs in industrial America. Manufacturing jobs are hemorrhaging right now.

These workers do not show up as unemployed. They are industrious workers. They have found a job somewhere else, but not at the same terms they once enjoyed. In truth, they are underemployed; but we do not have a number to reflect their status.

Third, this unemployment rate does not say anything about household income. But when you consider the fact of unemployment, which is prevalent, and underemployment, you have to believe a toll is being taken on household income. Rising unemployment has to mean declining household income.

In real terms, in fact, after inflation, the median household in America has seen its income fall by 2.2 percent, or $934. This is serious in itself for the individual household; but it is serious for the economy as a whole, because it means cutbacks in consumption, and it is consumer demand that drives two-thirds of the economy when it is at full employment. If you have weak household income, declining household income, you are not going to have the restoration of demand that is necessary to get this economy up and running.

Fourth is another indicator. Look at real wages of full-time workers on a weekly basis. Let us take the median worker, the person who makes more than half of the workforce and less than the other half of the workforce, the guy who is stuck right in the middle.

Over the last four quarters, the real wages of median workers has fallen every quarter. That is a fact. Now, that may not sound catastrophic. The rate of decline was just 1.4 percent, but it is catastrophic if it is your pocketbook, your household, your median wage. And these widespread weaknesses, moreover, are what are causing our economy to lag and drag and remain mired in a jobless recovery. We saw evidence of that in the numbers we saw last Friday; more evidence of it still, the latest data. We have been seeing this for weeks now, for months now.

Last December, when the Republicans left here and did not extend unemployment benefits and gave a very, very backhanded present to those who are out of a job over the Christmas holidays, we started looking hard at the circumstances and asking what can we do to ameliorate this economy.

On January 6, 6 months ago, we offered a solution. We offered a package of short-term stimulus and long-term balance. We proposed to give all American workers, working families, a tax rebate, $600 at least, based on their 2002 incomes. We proposed to speed up depreciation for all businesses, large and small, to encourage them to invest. We proposed to give the States $36 billion of fiscal assistance, going to Medicaid and highway construction and homeland security, all of this to get the economy up on its feet and running.

But we proposed these remedies for 2003 alone so that the budget would recover when the economy recovered. We did not want to be mired in debt, long-term debt, because we recognize that long-term deficits and deeper national debt would only mean higher interest rates and, therefore, less growth and fewer jobs.

It took our Republican colleagues almost 6 months to do anything. We were about to leave here for the Memorial Day holiday when they finally acknowledged our prodding and agreed to extend unemployment benefits, but not by merely as much as we would have, not for as long and not for the same people, particularly those who exhausted their benefits already.

They have now come up with a package, mainly tax cuts, 62 percent of which go to the top 5 percent on the income scale; they provided some help for the States, and I think that is good, but I think they took that page from our book, not as much as we proposed, though. They proposed tax rebates, again, not as much as we proposed and not to those that we proposed to give the tax rebates to, because we think they should go primarily to the unemployed, to working families with children who need the money and who also will spend the money. We were told today and have been told before by Macroeconomic, by Economy.com, that it is their rule of thumb that for every dollar of unemployment benefit we extend, we generate about $1.73 in economic activity in the economy over the ensuing year.

Well, our Republican colleagues claim that the package that they proposed and passed now will create 1.4 million jobs over the next year. We had an important effort, which the gentleman from Virginia (Mr. Scott) saw this morning when Lawrence Michel testified before our small ad hoc committee of Senate and House Democrats and pointed out that the economy itself, if you believe the Council of Economic Advisors and what they are putting on their Web page and what they have been projecting and testifying to, the economy itself, if it recovers as they project over the next 12 months, will generate over the next 12 to 18 months 4 million jobs.

So Michel proposed a yardstick. He proposed we will be able to tell whether or not the President has succeeded, the Republicans' package has achieved its goal if it creates 5.5 million jobs over the next 16 months, between now and November of 2004. Mr. Speaker, 1.4 million for the package itself, and 4 million for the economic growth that the economy is supposed to generate in any event.

Now, is this fair? Is it fair to hold the administration to this kind of test? I say it is fair, because I think what we are going to see as a result of this test will be hard to meet, but it is fair in comparison to what the first Bush administration achieved and also what the Clinton administration achieved. It should be recalled that Mr. Clinton took office in a recession, too, and notwithstanding that, in the first 4 years of his administration, more than 10 million jobs were generated by this economy. Among other things, at that point in time, we raised taxes, but we also cut spending and we started working down the deficit so that every year for 8 straight years the bottom line of the budget got better, the Federal Government literally got out of the capital markets and started paying off debt; $400 billion in debt was retired, paid off between 1998 and 2000. And, in the year 2000, we were in balance without counting Social Security for the first time in 40 years, the first time since the year 1960.

So we believe it is fair to hold the Bush administration to this account, to release 5.5 million jobs. The President says that he wants every American who wants to work to be able to find a job. Well, there are 8 million unemployed Americans waiting for that promise to be fulfilled, for that goal to be attained. We are saying here, at least 5.5 million of those jobs ought to be generated if this package comes true over the next 16 months.

But there is another problem that is seldom talked about when the effects of this stimulus jobs and growth package, so-called, are discussed. And that is that unlike the package we proposed last January, what the Republicans have proposed and put in place right now will have such a huge tax revenue impact or cost, that going out into time, we will accumulate, it is our expectation, as much as $4 trillion in additional debt over the next 10 years. And every economic advisor who has looked at this projection and found it reasonable has said, if that happens, we cannot help but lose jobs and lose economic growth, because the additional credit demands of the Federal Government are bound to drive up interest rates; and when interest rates go up, the growth in the economy will go down, and jobs will go down with it.

So that is the dilemma we face here. That is the problem we face here. The President's package which was proposed and passed just a couple of weeks ago bore a price tag of $350 billion. The problem is, every tax concession in that package has a sunset date, an expiration date, and not a Member of this House, nor a Member of the other body, the Senate, believes that those sunset dates will ever stick. We all believe that when those dates are reached, sooner or later, they will be repealed. The expirations will be relieved, and, therefore, when we take out all of the sunset dates in the tax package that passed here as a stimulus package, the cost of it in revenues is not $350 billion, it is $1 trillion.

Furthermore, to make permanent the tax cuts that were passed in the year 2001 will cost another $600 billion. And, to deal with the problems of the alternative minimum tax, the AMT which the Treasury tells us will affect more and more taxpayers, rising from affecting 2 million taxpayers today to 30 million in 10 years, when we take care of that, try to limit the number of taxpayers whom we never intended for it to apply to, what will happen? It will cost at least $600 billion in revenues over the next 10 years.

So that is the tax cut agenda, and the built-in tax cuts that are bound to unfold here, and that is our concern; that even if the package the administration offered, given its size, does something for the economy, if you raise spending and cut taxes, you are bound to stimulate the economy to some extent. Number one, it is questionable about how much it will do, since 62 percent of it goes to the top 5 percent who probably will not change their behavior in response to it; but in addition, in the long run, it can have a real downward drag on the economy, because it is bound to increase interest rates and bound to slow down the growth of this economy, job creation, stifling growth and stifling job creation. That is our concern. We are not trying to be Cassandras, we are not trying to dump discredit on every proposal that comes forward that we do not happen to agree with 100 percent, but we have deep and real concerns about the long-term direction of the budget that is being given here by Mr. Bush.

I will wrap up my remarks and yield to my colleagues after noting this: The numbers that I have just described, $4 trillion in additional deficits and in additional national debt over the next 10 years are not fabricated or invented by us on the Democratic side, not by our own staff on the House Committee on the Budget. If we look at the budget resolution which our Republican colleagues brought to the floor, and look on page 93 of it in particular, we will see that on that page they summarize on one chart, one table, the effects of their budget and they show that gross Federal debt, all the debt of the United States, will grow from about $6.5 trillion today to over $12 trillion 10 years from now. If we go to CBO's analysis of the President's budget issued in March of this year, and look at it, look at the top line on table 1, the very top line, it shows that $4.4 trillion in additional deficits would be generated if those budget proposals were fully enacted. And, in fact, we are on that course right now, and that is our concern tonight.

Mr. Speaker, I yield to the gentleman from Tennessee.

Mr. Speaker, there have actually been job losses in the private sector, gains in the public sector, but the net job loss is somewhere

around 2.2, 2.3 million people. The private sector job loss number is 3.1 million jobs since the peak of this recession, which was March 2001, shortly after the President took office.

Private sector jobs. Private sector jobs.

The Clinton administration, which inherited an economy just coming out of a recession and had to deal with the credit crunch and other problems that were dragging the economy then, nevertheless generated more than 10 million jobs during its first 4 years and more than 10 million jobs during its second 4 years. The first Bush administration was marred by a recession for the second half of it and had a poor performance. The Reagan administration had an adequate performance, but it did not come close to the performance of the Clinton administration.

And what happened in the Clinton administration? This chart shows it. The gentleman is absolutely right. When he came to office, the deficit was at a record high: $290 billion and headed up. The President left his economic report on the desk for Mr. Clinton to pick up on January 20 when he came to office. On page 69 of that report, they showed that they expected the deficit to hover in the range of $300 billion or $330 billion for the next 5 years.

The gentleman from Tennessee was here, I believe, and the gentleman recalls well what happened. The President sent down his budget on February 17. We passed it with one vote in the House and the Vice President's vote in the Senate, and for every year thereafter, the bottom line of the budget got better. It went from 290 to 255 in 1994, to 203 in 1995, on down to 164, and finally to the point where, in 1998, as I said, we had a surplus of $236 billion, more than any surplus in the postwar period. Without counting Social Security, it was the first time we were in surplus in 40 years. That happened at the same time, at the same time, as opposed to hindering growth, we saw the economy boom as we had never seen it since the 1960s.

That is our concern. That is what we are talking about tonight, the future as it looms ahead of us. And each time we pass one of these mammoth tax bills, we take another step down this road and it becomes all the more irreversible for us, and that is our concern.

Mr. Speaker, we said we wanted to go to everybody who filed a return in the year 2002 and who earned up to $6,000 in income and give them 10 percent of what they had earned, up to a ceiling of $600, and send them a check for it right away. That way we would have reached 17 million American families who did not get a rebate in the year 2002. We would have put money in the pockets of people who were most likely to spend it, $60 billion to $70 billion for that purpose alone.

We also said we want to go to the States and help the States because what they are doing is contractionary, and if we do not counteract that to some extent then they will undercut what we are doing and there will not be any effect on our economy. Medicaid, a shared State-Federal program, we said we wanted to give the States $15 billion to $20 billion to help them meet the extraordinary cost of the Medicaid program. We also said as to businesses, we wanted to give them an incentive to invest; for small businesses, we said $75,000. You buy that new equipment or new computer or new desk, you can write it off the year you buy it, the year you purchase it.

And as to large businesses, we said, we will give them a bonus if you go invest it in 2003.

Now, the Republicans have been into bonus depreciation before, but they wanted to stretch it over a 3-year period of time. We said to give the economy a real jolt, let us say to American industry, do it this year when we desperately need it and we will give you a reward, 50 percent write-off in the year of purchase. That was our package. The net cost of it was about $100 billion and $100 to $136 billion. Over time, some of that washed out.

The key thing was after 2003, 2004, there were no net effects on the economy. As the economy recovered, ours faded out and faded away and did not constitute a long-term drain on revenues.

The gentleman is absolutely correct. The Council on Economic Advisors put on their Web page their estimate of what the President's proposal would do and the methodology they were using. They had a model developed by macroeconomic advisers who were retained by them to give them macroeconomic econometric advice. They gave the methodology of how they estimated their jobs.

We took the same methodology and applied it to our proposal and we got, for a fraction of the impact on revenues, twice the impact on jobs. Our program would have created 1\1/2\ million jobs. Theirs would create around 600,000 or 700,000.

Which is critically important, because this is a demand- deficient economy which we are living in today. Two-thirds of the demand that typically drives the economy at full employment is a consumer demand, and that is why we are trying to boost consumer demand.

Let me now yield to my friend, the gentleman from Virginia (Mr. Scott), also a member of the Committee on the Budget, who has a whole battery of charts he would like to talk about.

Mr. Speaker, will the gentleman suspend just a minute? That is the chart I was looking for just a minute ago. The gentleman had it. I am glad to see it.

The two tall bars right there beside the bar below the X axis are Clinton administration job gains. Is that correct?

What are the numbers there?

What is the number below the line so far for the Bush----

I yield to the gentleman from Florida.

In 1990, when the first President Bush was in office, we prevailed upon him to sit down and negotiate with us a 5-year budget, a so-called budget summit deficit reduction plan. The negotiations went on for 4, 5, 6 months at Andrews Air Force Base; and they culminated in a budget agreement which, frankly, only about 60 Republicans voted for the first time it hit the House floor, failed then because there was no support there for it. It was modified and passed by the House mainly with Democratic votes. It was eclipsed by the recession.

It was an important piece of work because it established a ceiling for discretionary spending, that is the money we appropriate every year in 13 different appropriation bills. It also took on the Medicare entitlements, Medicare and Medicaid; and it addressed revenues. It increased revenues; and, of course, that caused Mr. Bush a lot of trouble in his own party.

In 1993 when Mr. Clinton came to the White House, because the results of that had been aggravated by recession, it was not evident; but he proposed a second 5-year plan that would have taken us until about 197. That plan was designed to cut the deficit by a bit more than half. Once again, it extended a ceiling on discretionary spending. It actually cut the rate of growth in some of the health care entitlements, and it raised revenues. The revenue increases went largely to upper tax bracket taxpayers. And as it so happened, the boom of the 1990s resounded more to their benefit than any other income class; and so they paid more taxes. Capital gains taxes went up from $40 billion a year in 1995 to $120 billion, by a factor of three, over a period of 5 years.

We finally got that budget passed here by one vote, the Vice President's vote in the Senate. Everyone said it would cut the economy off at its knees. We had bought ourselves a one-way ticket to recession, said Phil Graham over in the Senate. And what happened? The economy got up and ran. It took off like never before. For 10 straight years we had a phenomenal economy, partly because we were paying off our debt for the first time in years, adding to the pool of capital in this country, driving down interest rates and the economy prospered like never before to the point where we got to a $236 billion surplus. It is a matter of record. It is hard to believe now because it was just 3 short years ago, but that is where we were when President Bush came to office.

Now, we do not have those rules that limited the growth of entitlements before the so-called PAYGO rule. We do not have the PAYGO rule that says for every tax cut it has to be deficit neutral. It cannot impact the bottom line. You have to have offsetting spending cuts or offsetting revenue increases. We do not have the ceiling on discretionary spending anymore. None of those rules that we put in place in 1993 and 1997 with the balanced budget agreement any longer applied. We have a budget in free fall, an ad hoc budget.

$984 billion.

How is the tax cut funded? It was not funded at all. It simply goes straight to the bottom line.

Something very significant happened this year. This year when the Office of Management and Budget sent us the President's budget, they sent with it an analysis and a forecast which said, the surplus we have projected in the year 2001, for 2002 through 2011, that 10-year surplus we projected back then, was $5.637 trillion over 10 years. We made a mistake, said OMB.

Looking at the economy as we see it and understanding it today, according to OMB, the true surplus today for that same time period, 2002 through 2011, is really about $2.492 trillion. We were off by that much, $3.2 trillion.

They went on to say that of that $2.4 trillion, $2.5 trillion, more than that amount, about 2.6, has already been committed to tax cuts, spending increases, national defense, homeland security, and other things. Already committed. As a consequence, you start the process this year with no surplus. So if you have additional tax cuts or additional spending, it will go straight to the bottom line. There is no mitigation; no offset. It adds dollar for dollar to the deficit. And what did Mr. Bush propose? He proposed $2 trillion, 1 trillion 990- something billion dollars in additional budget actions that would add that much to the deficit over the next 10 years.

It is a matter of record; OMB acknowledges it. So there was no PAYGO rule, which in the past would have required that all of these things be offset by some spending cut or revenue increase. Instead, they proposed $2 trillion in additional budget actions, all of it going to the bottom line and swelling eventually to a deficit in 10 years of about $4 trillion cumulative deficit over that period of time.

Of course they do pay a payroll tax on their gross earnings, not on net earnings, on gross earnings up to a ceiling of about $86,000. And for the lower- and moderate-income people, that payroll tax which essentially is about 16 percent when you include the employer's share is a big percentage of their income.

Of course they pay a sales tax. They pay property taxes on the homes they own, on the cars they drive, all of these taxes they pay; and we are trying to give them some tax relief, because let us face it, they need it more than anybody else.

No more than 1 to 2 percent of all estates.

Exactly. That is the complete and full point, namely, that we have got an economy with deficient demand. It is lagging. It is mired in a jobless recovery. And to get it up on its feet and running, you have got to put money in people's pockets to spend so that they can go buy things, work down inventories, and get the economy running at full speed again.

I yield to the gentleman from Tennessee.

Mr. Speaker, we have talked about the economy. We have talked about fiscal policy and budget propriety.

We have not talked about the moral question of intergenerational burdens. That is a fancy way of saying what we are doing here, if we continue down the path we are on right now, stacking debt on top of debt, building $4 trillion in deficits and debt over the next 10 years, is take the tab of these tax cuts, the defense build-up and everything else that we are doing now but not fully paying for, and leaving it to our children. We are leaving them a legacy of debt.

On top of the responsibility of maintaining and sustaining the Social Security program, which is underfunded and will be significantly underfunded with 77 million baby boomers, doubling the number of beneficiaries in a matter of a few years; Medicare, same situation, the same increase in benefits that is looming in the future; they will have to sustain both of those promises, both of those programs, the benefits promise. And on top of that, if that were not enough, we are telling our children, the next generation, that they are going to have to bear as much as $12 trillion in gross statutory debt subject to limit.

It is just totally immoral, not just bad fiscal policy, not just bad economic policy. It is immoral and the wrong thing for us to do to our children and their children.

The gentleman made a very significant point a minute ago, namely, in 2001, we stood at the fork of the road. Prior to Mr. Bush coming to office, we were on the cusp of adopting a very conservative economic policy which would have called upon us to forswear ever again spending anything in the Medicare or Social Security Trust Funds except for those benefits, and using the funds in the meantime solely to buy up outstanding debt, not newly issued debt, but outstanding debt so that over a period of about 10 years we could have just about paid off the debt held by the public, and therefore, Treasury would have been interest free, would have had no interest obligation to pay to the public at a time when the baby boomers began to come to the Treasury or at least assert their demands for benefits which they had been promised and draw down their benefits. The Treasury would be in a more solvent situation than it has been in since the Second World War.

More than dipped into it. For every year that we forecast, all 10 years to get to the right-hand edge of the paper, cannot see anymore, we will fully expend the Social Security surplus, fully draw it down and spend it for non-Social Security purposes.

Mr. Speaker, if I can reclaim my time, we are about to be gaveled down. Basically what we have said tonight is we are not opposed to a tax cut. We have proposed them before. We will propose them again. We recognize they can stimulate the economy if they are directed in the right manner. But we are deeply concerned about deficits and debt, and of course, we are primed for stacking deficits upon deficits and building the debt ever bigger every year. We simply do not believe that is the right prescription for our economic future.

Mr. Speaker, I rise today in support of legislation that I have just reintroduced to provide relief to municipal utilities who issue tax exempt bonds. This legislation would permit these utilities to take advantage of a process known as ``advance refunding,'' which allows the bond issuer to take advantage of favorable market conditions by refinancing their debt at a lower interest rate. The bill is identical to legislation I introduced in the 107th Congress that was cosponsored by the entire South Carolina Congressional delegation.

Advance refunding works just like refinancing your home. If interest rates have dropped since you purchased your home, then you can refinance, or ``advance refund,'' that home at the lower rate. This can save the average homeowner thousands of dollars in foregone interest payments.

This same refinancing has, in the past, been allowed for municipal utilities who use tax exempt bonds to finance their facilities and equipment. Because of the large capital costs associated with power generation and distribution, the debt incurred from these issues is often substantial, and debt service payments end up being one of the largest expenses for the utility. These higher costs are then passed on to the consumer in the form of higher electric rates. If these companies are allowed to refinance, they can save millions of dollars in foregone interest payments, which translates into lower rates for the average consumer.

Under current tax law, these municipal utilities have been able to advance refund their debt only once since 1986. Many of these utilities companies still face staggering debts. For one utility company in my state, these debt payments have become particularly burdensome, and all of its customers are suffering from the resulting high rates. With interest rates so low, this utility is convinced that if it is allowed to advance refund one additional time, it will be able to stabilize its debt service and significantly lower these rates.

That is what my legislation does. It allows municipal utilities to advance refund one additional time if they have already advance refunded since 1986.

Municipal utilities are by no means the only issuers of tax exempt bonds. I have limited the scope of this bill to municipal utilities because they face substantial debts and are subject to limitations that state and local governments are not. The bill is open to modification for others who might benefit from advance refunding of their debt.

During consideration of the most recent tax bill in the Senate, Senator Lincoln offered an amendment that allowed for additional advance refunding for Arkansas schools. While I am sure that Arkansas schools need such relief, other sectors need similar relief, and especially municipal utilities. I am pleased to see Senator Lincoln reopen the advance refunding debate, and would welcome the opportunity to discuss inclusion of my bill in tax reform measures taken up by the House in the future. The benefits to my state, and others, would be significant, and they would ultimately be enjoyed by consumers.

Mr. Speaker, during the floor debate yesterday, the Committee on Rules chairman, the gentleman from California (Mr. Dreier), addressed our complaints by saying, what are you arguing about? We have another rule coming up. Your complaints are premature. As if to suggest we would have another day.

Well, that day has come. Rule number two has arrived; and just to show you how much bipartisanship there is, my amendment which deals with an important project, cooperative threat reduction, destroying weapons of mass destruction in Russia, the former Soviet Union, the Dingell-Rahall amendment which would correct outrageous grants of authority over environmental laws granted to the Department of Defense under this bill, the Cooper-Davis-Van Hollen amendment which goes to the most radical revision of the civil service in the last hundred years with respect to the Department of Defense, all of those substantive amendments are not made in order.

So what we will have here is a sterile, almost pro forma, debate because what is left in contention, really challengeable, is not what is really at fault in this bill at all. We cannot have that debate. We see that substantive alternatives which we are offering, not controversial, not partisan gotcha bills, substantive alternatives simply cannot be brought up here.

What the Republican majority is doing is using procedural devices which they control with a thin majority to deny us fair consideration on substantive issues of the utmost gravity. They may not agree with it, but they cannot dispute the fact that all of these are grave and significant issues.

Let me tell you what my amendment would have done. My amendment would simply have taken this bill and removed from it all kinds of encumbrances, fences, conditions that the President did not seek, request, and does not want with respect to a program called Cooperative Threat Reduction, known better to some as Nunn-Lugar, and with respect in particular

to one project, Shchuch'ye, which is the largest repository of the deadliest chemical weapons that the Soviet Union ever produced. After years of negotiating, years of preparation, we are finally at the threshold of beginning a facility that will destroy those weapons.

I was there last May. I have got two posters here that show you what those facilities look like. Wooden roofs. Look at the windows over here with the makeshift bars on them. That is the kind of security they have got. And on the racks, rack after rack, sitting on dirt floors, wooden racks, what you find are little chemical warheads like that, literally thousands upon thousands of them, gathering dust like bottles of wine, barely secured, any one of which could wipe out the population of a soccer stadium, all of which could poison the entire world. Nerve gas, sarin. The deadliest stuff you could possibly imagine. Do we not want to get rid of this?

Is there any reason to wait. Can we not have at least here in the well of the House a debate on whether or not we need these conditions that the chairman of this committee have imposed? I do not think we do. All I ask is with the 21 years of experience that I have had is the opportunity to make that case in the well of the House. You have diminished the House and diminished this process by denying me that opportunity.

Mr. Chairman, the rule did not make in order an amendment that I sought with respect to cooperative threat reduction, but it does make in order an amendment offered by my good friend, the gentleman from Pennsylvania (Mr. Weldon), and I am here to offer my support for his amendment, which is included in the en bloc amendment.

This amendment is drawn from legislation introduced earlier this year by the gentleman from Pennsylvania, the Nuclear Security Initiative Act, which I was proud to cosponsor. As the gentleman from Pennsylvania said, this bill was in the works for a long time, and I can attest to that. In fact, parts of it come from provisions I introduced in prior years.

I commend the chairman of our committee for allowing this to be made in order, including it in the en bloc. I think it is a positive addition to the bill, and I encourage support for the en bloc amendment.

The rules governing debate on this defense bill did not make in order an amendment I offered with Rep. Schiff that would have restored the President's request on Cooperative Threat Reduction (CTR) programs by striking several provisions in the committee bill. Like the Administration, I believe these committee-added provisions will hamstring the program unnecessarily.

I was disappointed not to have the chance to debate the amendment, and I plan to work to strike those provisions in conference. And if I may, Mr. Speaker, I'd like to enter into the Record an excerpt from today's Statement of Administration Policy on the committee bill.

The rule did, however, make in order an amendment offered by my friend from Pennsylvania, Mr. Weldon, and I am here to offer my support. This amendment is drawn from legislation introduced earlier this year by Rep. Weldon, the ``Nuclear Security Initiative Act,'' which I was proud to cosponsor. As Mr. Weldon likes to say, the bill was in the works for a long time, and I can attest to that--in fact, it includes some provisions I introduced in prior years with my colleague Rep. Ellen Tauscher.

Like the bill, the Weldon amendment calls for enhanced cooperation between the U.S.

and Russia to reduce the threat posed by weapons of mass destruction, and establishes what should be useful tools for improved collaboration toward that end.

It calls for some important studies, too, including an examination by the National Academy of Sciences of the effect on CTR and other non- proliferation programs of the myriad congressional oversight measures that have been established over the past several years.

I must confess I have mixed feelings about reducing the President's request for CTR, even by the modest amount contained in the Weldon amendment, but as the funds are proposed to be shifted into the Department of Energy's companion threat reduction program, I can support it. And the amendment on balance, like the Weldon-Edwards- McHugh-Spratt bill it is drawn from, should strengthen our threat reduction and non-proliferation programs.

I urge support of the Weldon amendment.

Mr. Chairman, I provide for the Record the statement of administration policy with respect to cooperative threat reduction.

From the Statement of Administration Policy issued May 22,

2003 Executive Office of the President Office of Management

and Budget Page 3:

``Nonproliferation and Cooperative Threat Reduction The

Administration appreciates full funding of the CTR budget

request, but is very concerned about requirements imposed by

the Committee that would hinder DOD's and DOE's ability to

implement more rigorously and effectively Cooperative Threat

Reduction (CTR) and Nuclear Nonproliferation activities.

Furthermore, H.R. 1588 would limit the President's

flexibility to apply CTR resources to the most pressing

nonproliferation challenges in support of the Global War on

Terrorism and would not clarify that DOE has the authority to

carry out such activities outside states of the former Soviet

Union.''

Mr. Speaker, I have to wonder if our good friend from New York, when he tells his constituents about their benefits, will tell them that the child tax credit will expire in 2004, that the 10 percent bracket expansion will expire in 2004, that the AMT exemption and that the marriage penalty negation provision will expire in a year. We give with one hand and take away almost immediately with the next. The sun rises and the sun sets.

Let me dispel, first of all, one myth about this tax bill, the myth that the President is putting out that this is an itty-bitty tax bill. $350 billion by itself would not be itty-bitty, particularly when you have a deficit as we do. But this is not a $350 billion tax bill. If you assume, as we must, that these sunsets are a sham, and why should we not, because the architects of this bill are all saying, they will be extended, we just put them in there to shoehorn this thing into the budget. If you assume that, then this is what this total tax cut will be, not $350 billion but, in the next 10 years, $1 trillion. That is the result. And since the budget is now in deficit, all of this amount, all $1 trillion, will go to the bottom line and will swell the deficit. That means we will have a deficit this year, a record deficit of $425 billion and the deficit will hover in that range, ratcheted at that range, of 3 to $400 billion for as far out as we forecast.

But we do not stop here. Because Republicans have told us, proudly, that they are going to make tax cuts an annual event. If you look in their budget, you will see there are more unreconciled tax cuts still on the back burner yet to be brought forward. If you look in the President's budget, you will see that there are a lot of tax cuts left on the cutting room floor waiting there for next round.

Here are three known tax cuts that are yet to come off the agenda.

First of all, we all know the tax cuts passed in 2001 have to be made permanent, will be made permanent by the majority if it stays the majority in this House. That will cost 6 to $650 billion in revenues.

Second, there is another 2 to $300 billion of various tax cuts lying on the cutting room floor waiting for the next round.

Third, there is the alternative minimum tax. We all know that politically it has to be fixed in the next 10 years or else 25 million Americans are going to pay much higher taxes than they now pay. They will pay the alternative minimum tax. The cost of fixing it is reasonably 650 to $680 billion.

If you add all of these tax cuts together and make a few modest adjustments for the likely cost of defense and homeland security and Medicare/prescription drugs, here are the results. I have got a piece of paper. I am going to leave it here on the desk. We have calculated them on this sheet of paper. If anybody takes exception with them, come down here and refute it.

Here are the results per our reckoning of what is going to happen to the budget.

First, from 2004 until 2013, deficits will total, get this, deficits will total $3.959 trillion. Without Social Security, deficits will total $6.527 trillion. Debt held by the public will increase from $3.5 trillion to $7.9 trillion. Total statutory debt will go up to $14 trillion.

You can overlook and dispute a lot of these facts, but there are two facts you cannot dispute. They will not go away.

First of all, 77 million baby boomers are marching to their retirement, and they are going to double the number of beneficiaries on Social Security and Medicare, and those programs will not sustain their benefits in their current situation.

Secondly, what you sow, our children and their children are going to reap. They will have to support the underfunded Social Security program, the underfunded Medicare program, and they will have to bear the burden of $14 trillion in statutory debt that you are incurring as you move down this path tonight. That is the course you choose. That is the moral decision you make tonight if you vote for these tax cuts.

If you do it in the name of creating jobs, I do not think this is going to create that many jobs, with one exception, I will grant you. It is going to create a lot of jobs for tax lawyers and accountants. This bill will be a bonanza for those who specialize in tax avoidance; and the real cost, believe me, is going to be beyond calculation.

Mr. Speaker, I include the following for the Record:

[GRAPHIC] [TIFF OMITTED] TH22MY03.003

Mr. Speaker, when the President sent his budget up this year, OMB sent with it a message in which they said that the surplus of $5.6 trillion, which they projected just 2 years ago, was a mistake; that now, from 2002 through 2011, they revised downward that surplus from $5.6 trillion to $2.4 trillion. They made an egregious mistake.

We warned our colleagues then not to bet the budget on a blue sky estimate, but they did not take our warning. Now you can blame that on 9/11, you can blame that on this sluggish economy, you can blame it on lots of things, but tonight the buck stops here. The blame rests right there in the well of this House and these meters where you push your card. Because tonight, when you vote for a trillion dollars in tax relief, it goes straight to the bottom line. There is nothing to offset it. It creates a deficit this year which will be a record deficit in the fiscal history of this country, $425 billion, and the deficit stays ratcheted in that range for as far out as we forecast.

Those are the consequences of the policy choices you make tonight. You cannot blame it on 9/11. You cannot blame it on the economy. It will be attributed to what you do tonight, unless some economic miracle happens as a result.

Here is a chart in which we have calculated this tax cut, the tax cuts to come, other likely actions to be taken, Medicare, prescription drugs, a bit more for defense; and we think it is a fair and honest and even conservative statement. I will leave it here for anybody to refute, but this is what we see as a consequence of what you are doing tonight.

We foresee deficits of $3.959 trillion over the next 10 years. Back out Social Security, and those deficits come to $6.527 trillion, a consequence of what you are doing tonight. The debt of this country today, held by the public, is at about $3.5 trillion, $3.6 trillion. This will increase it to $7.9/11 trillion. The total statutory debt will go up to $14 trillion.

That is the course you choose to take tonight if you vote for this tax cut. You cannot blame it on the economy. You cannot blame it on 9/ 11. You can only blame it on yourself.

Mr. Speaker, there were 99 amendments filed to the defense authorization bill. Nine were made in order: six for Republicans, three for Democrats. Among those not made in order was an amendment that I offered along with the gentleman from California (Mr. Schiff) which would simply have restored this bill so that the President's request for cooperative threat reduction, our efforts better known as Nunn-Lugar to get rid of Russian nuclear materials, chemical weapons and biological weapons, could be fully funded and fully expressed, freed of some encumbrances entered into the bill in the committee mark and allowed to go forward basically and only as the President has requested.

That is all we sought to do. But this is critically important because it addresses a particular facility in Russia called Schuch'ye which has maybe 75 percent of the deadliest chemical weapons, sarin and VX and other nerve agents, contained in Russia. We are right now at the threshold of beginning a project that would destroy those weapons, and this bill as now written without my amendment would hamstring and hinder the undertaking of that project.

Mr. Speaker, I have served in the Congress for 21 years, and all these years I have served on the House Armed Services Committee. I am the second ranking Democrat on the committee. I do not suggest that time served or rank necessarily entitles a Member to be heard on the floor, but when a Member has a serious and substantive provision, there should surely be some deference, some comity. We have always extended it in the past. In the 20 years I have served there, it has been done. I think it has been understood in the past if we are to have good policy, we have to have good debate on the House floor. And when you stiff-arm good proposals, worthy ideas, when you shut us out, you do not just diminish me, the individual Member who would offer the amendment, you diminish the House of Representatives. That is exactly what you are doing here.

My amendment is not as important as Nunn-Lugar, as the other amendments which have been addressed here, but it is important. We should have a right to be heard on this amendment, and we are diminishing the House. Every Member who respects this institution and has any sense of comity and fair play should vote against the previous question and against this rule.

Mr. Chairman, I thank the gentleman for yielding me time.

Mr. Chairman, we are going through what is basically a pro forma debate here, because this bill is off limits to serious debate. When you cannot offer an amendment you are only shadowboxing about the provisions of the bill, if you are not really putting in the well the issue itself and letting the House work its will on the bill, and that is the situation we have here.

We are seeing procedural devices employed by virtue of this rule which keep us from having substantive consideration for the most contentious parts of this bill.

This bill runs rough-shod over two major environmental laws. No recourse. This bill dis-establishes the civil service as we have known it for almost 100 years. Virtually no recourse on the floor. This bill takes a provision that the President of the United States requested for funding a very important project under the Nunn-Lugar Act, Cooperative Threat Reduction, in Shchuch'ye, Russia, where some 75 percent of the deadly chemical weapons in the arsenal of the former Soviet Union are stored in makeshift buildings with porous roofs under woeful conditions that, in my opinion, are security risks.

We have finally gotten everything together so we can move forward with a facility here. The funding is requested by the President of the United States to move forward with this facility. And guess what? We are right at the threshold of a significant undertaking that matters to our security and the rest of the world, and this bill hog-ties the

President's request, hamstrings everything that is carefully laid in place, so we cannot begin. We cannot use the money that the President has requested.

This bill takes $28 million out of that project and puts it in offensive arms elimination, which is fully funded. It then fences another $100 million until they can show us that every permit needed over the lifetime of the project is procured, which is an impossible hurdle to clear.

So that is what is at stake here. That project, in my opinion, is not as important as the substantive decision to disestablish the civil service, but it is important. It sets a model for how cooperative threat reduction will proceed in Russia. It is the single most important thing we are doing in that realm in terms of ridding that country of chemical weapons which could one day show up in our subways, on our streets, used by terrorists and rogue states against us.

But we will not be able to have a free, full, and fair debate about that because the rule that now prevails prevents us from doing that.

What I would say, Mr. Chairman, as one last plea, is that we need a rule that allows us to work the will of the House on this highly important bill. This bill will increase defense spending to $400 billion, makes major allocations within our budget. That is a $110 billion increase over the last 3 years.

On a matter of this gravity, of this importance, we need to have full and free and fair debate here in the well of the House. This should be America's forum, a crucible where we work out important issues like this. The rule they have adopted diminishes the stature of the House of Representatives.

Mr. Chairman, the rule governing today's debate on the fiscal year 2004 defense authorization act, we are told, is just part one of two. I hope that in part two we are allowed to debate an amendment I offered, together with Adam Schiff, on behalf of scores of Members supportive of the President's request for Cooperative Threat Reduction.

When I testified at the Rules Committee yesterday, I filed and sought consideration of only one amendment, which I offered with Representative Schiff, who has been active on these issues. I can describe our amendment in very simple terms: it seeks to restore the President's request for the fiscal year 2004 program. Let me elaborate.

The President's request for the Department of Defense Cooperative Threat Reduction (CTR) program from fiscal year 2004 totaled $450.8 million, and the Armed Services Committee authorized that amount. But don't be fooled: the committee bill makes substantial changes to the President's request for CTR.

First, the committee bill transfers $28.8 million from chemical weapons destruction activities in Russia--work at the Shchuch'ye facility--to strategic offensive arms elimination. The cut of nearly $30 million from the Schchuch'ye project will slow construction of this critically needed facility and postpone the day we begin to destroy chemical weapons there. My amendment restores these funds to Shchuch'ye leaving funds for both strategic offensive arms elimination and Shchuch'ye at the requested level.

Shchuch'ye represents a wake up call as to urgency of the problem of proliferable chemical weapons. In a building that is little more than a fortified barn, chemical munitions are lined up like wine bottles.

Shchuch'ye is home to a majority of Russia's weaponized stocks of nerve gas and sarin. While security there has been upgraded by the CTR program, the munitions at Shchuch'ye remain portable, and the security almost certainly penetrable. None of us that visited left without believing the United States should accelerate the destruction of these munitions, and I was pleased to see the President recommended exactly this course in his fiscal year 2004 request.

At Shchuch'ye, the United States has complete access to a critical WMD storage site, where some of the deadliest and most portable chemical munitions in the world are housed with minimal security, and the Russians are saying, come on, we'll work with you to build a facility to destroy the weapons. The bottom line is this: the chemical weapons stored at Shchuch'ye represent a critical threat to U.S. security, and a cut to the President's request for this project is both unwise and unwarranted.

My amendment also strikes several new restrictions imposed on the CTR program by the committee bill, found in sections 1303 through 1307.

In section 1303, the Chairmans' mark creates an impossible hurdle for the work at Shchuch'ye or any other CTR project, by requiring that all permits ever needed over the lifespan of a CTR project be presented to Congress before more than 35 percent of the cost of the project can be obligated. There is literally no way for a planner or program manager to reliably envision each and every permit that might ever be needed to complete that project. Yet the committee mark says funding for any project, new or incomplete, stops at 35 percent of total cost until every permit is not only identified, but obtained. Our amendment restores the President's request by striking section 1303 and replacing it with a common sense proposal.

I agree with Chairman Hunter that the Department of Defense needs to do a better job planning for the uncertainties that come with doing business in Russia. DOD testified on March 4 to the Armed Services Committee that they have taken specific measures to address the issue. Assistant Secretary J.D. Crouch told the committee DOD has ``instituted a program of semi-annual executive reviews with Russia to re-validate project plans, assumptions, and schedules on a regular basis,'' and noted that OSD has asked the DOD inspector general to review how CTR is organized, more broadly. The first phase of the IG review is already complete.

That said, I understand that Congress needs visibility into potential problems, like the one at Votkinsk, and I have a proposal that will give us just that. My amendment would require annual notice to Congress of all permits ``expected to be required'' for completion of a project, and an annual status report on DOD efforts to obtain them. To ensure we get this information annually, with the budget submission, only 35 percent of funds for CTR projects would be available each year until DOD submits the report. This information will enable Congress to make wise decisions about specific CTR programs, without grinding important work to a halt, and is in keeping with the administration's request to Congress.

Section 1304 of the bill adds another new restriction: it requires on-site managers at any Department of Energy nonproliferation project in the former Soviet Union. The administration opposes the requirement, and has noted that the cost, both in dollars and in diplomatic capital, of such a requirement could be prohibitive. In fact, DOE has noted that it already has strong oversight of its program activities in place, which includes frequent visits to sites, stringent contract access and work-performance requirements, and close cooperation with the U.S. Embassy and DOE Moscow Embassy Office.

Section 1305 of the bill is not a fence, but it would undo an important administration request that the DOD be allowed to spend up to $50 million in prior year unobligated balances on WMD destruction outside the FSU, if such work becomes necessary. The committee bill mandates that if any such work is to be done, it be done by the State Department, with funds transferred from DOD to State. This is misguided policy, at odds with both the administration's request and a bipartisan effort last year to create such authority. Our amendment strikes section 1305 and restores the President's request.

Another fence can be found in section 1306, which establishes new requirements for any work at biological weapons sites. The administration did not request oversight at this point, and new restrictions will likely only slow progress.

Finally, section 1307(b) fences $100 million of the President's request for chemical weapons destruction at Shchuch'ye--that is, of what's left after the $29 million cut in the base bill--until Russia, or some other nation, puts up one-third of the total cost of the project. But our agreements with Russia for construction at Shchuch'ye require no such percentage-based contribution. Our agreement specifies a functional division of labor: Russia builds the infrastructure needed to manufacture a city next to nowhere in the Urals; we construct the chemical weapons destruction facility.

According to DOD, Russia is meeting its financial obligation at Shchuch'ye, and further, is contributing a significant resources elsewhere to destroy other chemical munitions, including blister agents no housed at Shchuch'ye. The Congress already gets regular updates on funding and international contributions to Shchuch'ye. And the administration testified earlier this year before this committee that it does not need new oversight measures. Now, with Russia on board and the administration asking to accelerate work at the facility, is not the time to add new and unwarranted hurdle.

Let me just conclude by saying again, the intent of our amendment is simply to uphold the administration's request. In terms of policy and funding, that is what the amendment does, with the modest exception the accountability provision I mentioned, which should equip Congress a good tool to enhance its already vigorous oversight of these programs.

This amendment should win bipartisan support, and I hope rule No. 2 for this defense bill

will make the Spratt-Schiff amendment in order.

Mr. Speaker, first of all, let us be clear, this is not a $550 billion tax cut. Take out the phony sunsets, the false expiration dates, and it is easily over a trillion dollars. By our calculation, the total impact of this tax package, of these tax cuts is $1 trillion 123 billion.

Now, what happens when you force feed another $1 trillion 123 billion to the budget we have got, which is already in deficit? The surplus is gone. It adds dollar for dollar to the bottom line, and here is what happens to the bottom line. This is what you are doing if you vote up this budget, this tax cut today.

The deficit this year in 2003 will go to $426 billion. The deficit next year in 2004 will go to $494 billion. Here is the calculation of it. You cannot see it from there, but come look at it and contest it if you disagree.

From 2004 to 2013 the total amount of deficit that we will incur, this budget will incur over the next 10 years goes to $3 trillion 953 billion, and that is offsetting the deficits with the surpluses in Social Security. If you back out Social Security, if you put it in the lockbox, remember the lockbox, you know what happens. The total debt of the United States, the accumulated deficits over the next 10 years go to $6 trillion 521 billion. That is the legacy that you are leaving your children, our children, and this country if you vote for this tax cut today. That is the course you are putting us on.

Now, here it is stated a different way. The bottom line on this curve shows you that the deficit drops to 3 to $400 billion and never comes out for the next 10 years. There is no recovery. It gets worse and worse if you put the country on this math.

Now, you have to ask yourself is there a better way? Is there some way to do it better?

Mr. Speaker, when I was last up here on the rule, we had this chart here which shows what happens, the damage done to the deficit, to the bottom line. It is $426 billion this year, $494 billion, totalling $4 trillion over 10 years. I ask the question: Is there not a better way? Indeed, we had a better way. We had an alternative which, for no impact on the deficit long term, we could have added, according to the macroeconomic economic adviser's model, the same one they are using, 1 million new jobs stimulating the economy to that effect in calendar year 2003 for seven times the amount of money.

For the $550 billion tax cut here, we only get 600,000 jobs. Why would they not at least allow us to come here in the well of this House, this free market, this forum for America, and present what is manifestly a better plan if we want to create jobs, twice as many jobs as their proposal will create, and it has no long-term effect on the budget? That is because what we are going to do here is start up the economy, but we are not going to increase the deficit and the idea is because that will stifle growth and kill jobs. We had a better plan, and they would not let us offer it. The question is why.

Mr. Speaker, as my colleagues can surmise, we are here tonight because my Republican colleagues have put another round of tax cuts on a fast track. In fact, by next week, early next week there may be what we call a markup of a bill we have yet to see in the Committee on Ways and Means. Within 24 hours after that markup, that bill may be on the House floor for fast track consideration, probably not amendable. And, in the blink of an eye, we could very well adopt another round of tax reduction equal to $500 billion to $600 billion even more, a reduction in the budget rammed through this House.

We have already seen taxes cut by $1.35 trillion. That happened in June of 2001. That was a historic tax cut, given its size. Let us just ask, what are the results of that tax cut?

Well, let us look at the economy today, barely eking out positive growth at 1 percent to 1.3 percent annual growth, barely growing, 2.5 million jobs in the private sector lost since January of 2001, 4 million Americans have literally quit looking for jobs, the unemployment rate is between 5.8 and 6 percent; but that is only because 4 million people since 2001 have dropped out of the job pool, quit looking for a job. All of this, and we had a tax cut which the administration said we needed to boost the economy. Where is the boost? Where is the economy? What were the effects?

The main effect was on the bottom line of the budget. We had the budget, when President Bush came to office, in the best shape in a generation. In 2000, the year 2000, the budget ran a surplus of $236 billion. It is hard to imagine today, 3 short years later, 2003, because today, all we have are debts as far as the eye can see. In 2001, when President Bush came to office, his Office of Management and Budget, his budget shop said we foresee surpluses equaling $5.6 trillion over the next 10 years. And on the basis of that estimate, despite our warnings that it was an inflated estimate, that there were storm clouds gathering over the economy that made us a blue sky estimate at best, he went ahead with a tax cut of $1.35 trillion; and today, the surplus is gone.

Do not take my word for it. When the President sent his budget up this year, this year, OMB, the Office of Management and Budget said, the surplus over the same period that we projected 2 years ago, 2002 to 2011, the cumulative surplus over that period is no longer $5.6 trillion as we thought back in 2001. Today, it is $2.4 trillion. Now, that is still a big number, $2.4 trillion; but here is the bad news. OMB went on to say, and of that $2.4 trillion, Congress and the President have already committed $2.5 trillion. So we start the year in the hole, despite the fact that we had a budget surplus in 2000, the year 2000 for the first time in 30 years, we are now back in the soup, back in the red, deep in deficit; and the deficits are getting worse.

So what does the administration order up for these dire circumstances? In the face of rising deficits, we no longer have a surplus. There is nothing that will mitigate tax cuts that may be offered now. In the face of these circumstances, the President is proposing more of the same: additional tax cuts, tax cuts in his proposal with his budget this year of $1.45 trillion and a budget, as I said, that is in deficit.

There is no surplus anymore out of which to offset or mitigate those tax cuts.

I yield to the gentleman from North Carolina.

Well, this administration is digging deeper and deeper and deeper. As I said, do not take my word for it. We have our own budget shop. As someone earlier said, it is now run by a very able economist who came from the Bush administration.

According to their projection of the President's budget, every year, if the President's budget is implemented, every year from 2003 through 2013 there will be a deficit. If we do not include the surplus in Social Security, there will be a deficit of over $400 billion.

The cumulative deficit over that 10-year period of time, 2003 to 2013, if Social Security is not included, is $4.398 trillion. That is the Congressional Budget Office speaking, a neutral, nonpartisan agency.

The gentleman will search the budget the President sent us in vain for any such direction or inclination. There is no plan and no process for ridding ourselves of these perpetual deficits. Back out Social Security, as I think we must, and we will find, according to the Congressional Budget Office, that every year from 2003 through 2013 there is a deficit over $400 billion a year.

When the Republicans brought their budget resolution to the House floor the night before we adjourned for the Easter break, 2 o'clock in the morning, we scrambled to go through it and understand it as much as we could.

I never will forget finally coming upon page 93, page 93. It was a table summing up in their own figures the impact of the budget they were about to ram through the House in the early hours of that morning. It showed that the gross Federal debt this year will be $6.4 trillion. That is what it is today, because it is limited by statute at that level.

By voting for that particular budget resolution, they voted automatically to raise the debt ceiling by $893 billion, and they voted to put in train a budget with tax cuts that will lead to a debt accumulation of $6 trillion over the next 10 years.

The national debt, the gross national debt, subject to statutory limit, will grow from $6.4 trillion this year to $12.40 trillion in the year 2013. That is absolutely astounding, absolutely frightening, in my opinion, because I do not think the economy can possibly sustain that kind of increase in debt.

Not only do we see additional tax cuts proposed in the face of rising deficits, deficits, once again, as far as the eye can see. But if the White House would simply call next door to the Treasury, they would find that we are right now at this moment experiencing a tax cut, a revenue reduction. Let me give the numbers, because last year we had one of the biggest fall-offs in revenues we have seen in recent history. This year we are seeing that trend repeated.

Our budget office, the Congressional Budget Office, which is neutral and nonpartisan, projected the budget over the next year, next 10 years. They said this year in fiscal year 2003 they expected income taxes to be about $38 billion over last year, 2002. If we look at where we are thus far since April 15, or if we look at just until March 1, excuse me, we do not know April yet, we will find that the total tax take thus far this year is running $54 billion below last year, which means it is $92 billion below what CBO, the Congressional Budget Office, is projecting.

Even though we are having this follow-up of another year on the heels of last year where we have a natural reduction due to the economy and the Tax Code, a realignment of revenues, the administration is still ignoring that and pushing ahead with a mammoth tax cut which can do only one thing: it will make the budget deficits that we see here projected on paper virtually engraved in stone. They will become so difficult to unwind, resolve, work out, that they will become all but intractable. I have seen that happen.

I came here in 1983 when we were deep in deficits. The deficits were getting worse and worse and worse. But there is one factor now that is dramatically different from the 1980s. That is something called the baby boomers' retirement. Seventy-seven million baby boomers are marching to their retirement as we speak tonight. The first of them retires in 2008. By the time the peak retirement period is reached, the number of baby boomers on Social Security and Medicare will swell to 80 million, twice today's level of beneficiaries. It will change the budget demographically in ways we have only begun to imagine.

What we should be doing now is saving, not dissaving. That is what deficits are, it is dissaving, reaching into the private capital pool and spending that money that should be saved in preparation for facts, demographic facts that are going to occur when the baby boomers retire.

We have a package which we have presented since January and will present again next week which would stimulate the economy. If there is any case to be made now for cutting taxes, it would be to try to give this economy, this sluggish, slumping economy, some kind of a kick, some kind of a boost so we can put people back to work. Once they go back to work, it will make it easier for us to deal with some of these budget problems.

We have put forth a proposal which does that. But we do not need long-term, permanent tax cuts that have out-year consequences that mortgage the future. We can simply have a tax cut that is focused on 2003, the here and now, when we have the problem.

We have proposed such a tax cut: rebates to individual taxpayers, an immediate write-off of plant and equipment for businesses large and small, going after all sectors of the economy, trying to give the economy a boost. For one-seventh the cost we get, according to well- established economic models, twice the effect in resulting jobs in the first year from our economic proposal, and we do not have any out-year consequences. We simply do something on a one-time basis. We give the economy a boost, get it going again; and we do not have any out-year consequences. As a result, we accumulate about $1 trillion, 400 billion less in debt in the budget we propose than the Republicans propose.

What they are proposing is not necessary, by any means. It worsens our problem. That is why we are here tonight, to talk about a problem that very much needs to be understood by the American public.

Mr. Speaker, we have before us a conference report, but everyone should understand there has been no conference in which the House or Senate Democrats have had any role or any part whatsoever.

This conference report comes to the floor in the same spirit, under a cram-down rule. Take it or leave it, here it is, a conference report that will spend $2.2 trillion, one-fifth of our gross national product, which we have had less than 30 minutes to look over, 30 minutes to give the most cursory sort of examination to.

The rules of the House, Mr. Speaker, prohibit such unseemly haste when things are this important. The rules of the House require that a budget report of this kind lay over for at least 1 day before being called up. But our Republican colleagues, by this martial law rule, would take a chain saw to the rules of the House.

That is why this is called a martial law rule, it brooks no dissent. It mows right over the speed brakes we have set up to make sure that our decisions made here in the great House of Representatives of the United States are made carefully and deliberately and thoughtfully. This rule rips up those cautionary measures, those speed brakes, so that this budget resolution can be railroaded through this House.

Mr. Speaker, I choose my words carefully. That is what is happening here tonight in the cloak of darkness when this $2.2 trillion budget resolution is being brought up. This resolution shows a disdain, indeed a contempt, for the process of deliberative government which we are all sworn to defend. It says, essentially, the majority has made up its mind; the minority should get out of the way.

There is a reason for this unseemly haste. It is not that we are about to go on the Easter vacation and do not have enough time to get it done tomorrow. No, that is not the reason we are pushing this thing, railroading this budget through the House.

The real reason is that it will not bear scrutiny. Republicans do not want a lengthy debate because it would reveal that this budget will raise the national debt by $5 trillion, more than $5 trillion over the next 10 years. That is right, this budget will raise the national debt from $6 trillion to $11 trillion over the next 10 years.

Everybody who votes for it should understand that this budget entails deficits of that size, debt accumulation

of that amount. It raises the national debt of the United States from just over $5 trillion to over $11 trillion over the next 10 years. Those are the plain consequences of it. That is the arithmetic of this budget resolution. There is no way around it. That is why it is being railroaded through here.

There is another reason, I think, that our colleagues on the other side do not want this budget debated. This budget is their economic policy. Their economic policy will not stand scrutiny. The economy is sagging, the number of jobs is decreasing, and rather than propose a budget that deals with these problems, they are bending the rules, they are distorting the process, they are doing whatever it takes to pass another round of tax cuts almost as large as the last round, which will go primarily to the wealthy and will drive deficits out of sight.

The objective is obvious: it is to pass this budget as quickly as possible and cut off debate before people realize the contents and, even worse, the consequences.

When they adopt a rule like this, Mr. Speaker, they diminish the minority and the role we play as the loyal minority, adversaries, ferreting out problems, thoughtfully going through major decisions like this. They diminish our role.

When they diminish my role and my colleagues' role, they do not diminish us or our party, but they diminish this great institution called the House of Representatives. They take that well, which should be a forum for ideas, a crucible where we grind out great policies for the good of this country, and they stifle debate, they cut off debate, they truncate debate.

When they do that, they do not just cut us off, they stifle this institution, this great institution. They violate the Constitution of the United States.

Mr. Speaker, this resolution should be defeated by every thoughtful, respectful Member who respects the prerogatives of this House. We should not be taking this matter up in such haste and we should not be taking it up without an opportunity to see it. We should not be rushing this through, railroading it through to passage. This is the wrong way to deal with a matter of such gravity, a budget that will spend $2.2 trillion.

Some would say, spend it in such a fashion and provide for tax cuts that will leave us with deficits that are almost intractable for the foreseeable future, well into the future, and will accumulate nearly $6 trillion of debt over the next 10 years.

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I believe the correct number is $984 billion over the next 12 months. And under rule 27, if it applied, the debt increase would go up every year, staircase for the next 10 years, and the public debt subject to statutory limitation would increase from just over $5 billion to a bit over $11 trillion in 10 years, if the fiscal policies implemented by this rule are actually passed and carried out.

Mr. Speaker, for the record and for clarity, we only got this document minutes before coming to the floor. It is hundreds of pages long; but if you turn to about page 70, you will see just for clarity our debt limit now is $6.4 trillion. Vote for this resolution and you will raise that to 7.384 trillion, 984 billion in 1 year. Over the next 10 years, the deficits entailed by this budget resolution will require the debt ceiling to be raised to $12.040 trillion. Those are your numbers in your resolution, and that is what you will be voting for if you vote to adopt this budget resolution.

Mr. Speaker, let me put this budget in context. Two years ago we all hailed a projected $5.6 trillion surplus, and our colleagues on the other side of the aisle bet the budget on that surplus, that blue-sky forecast.

Two years later when the Office of Management and Budget sent us the budget for the next year, they acknowledged that was a vastly overstated estimate and that the surplus between 2002 and 2011 correctly estimated, accounting for the economy as we now see it, it is not $5.6 trillion, it is, according to the Office of Management and Budget, $2.4 trillion, and all of that has been committed.

Now, there is a serious consequence that flows from that finding. It is simply this: Everything that is done in the way of tax reduction or spending increases over and above current services goes straight to the bottom line. There is no surplus anymore to mitigate or cushion it. It goes straight to the bottom line and adds to the deficit.

Knowing this, knowing this, what do our Republican colleagues do? They call for $1.2 trillion in additional tax reduction, plus some big increases in defense and international affairs. What is the result? The result is that this year the deficit will be $347 billion. We will set a record. Back out Social Security, and the deficit is $512 billion.

Next year, in 2004, as a result of the policy choices about to be made in this budget resolution, the deficit will go to $385 billion. On-budget, excluding Social Security, it will be $558 billion.

Over the next 10 years, let me say it again, and, let me remind everybody, I am reading straight from your script, this is your budget, these are your numbers, over the next 10 years we will accumulate on- budget deficits of $4,006,130,000,000, your number.

The national debt, which today is $6.4 trillion, will increase over the next year by $984 billion. If you vote for this budget resolution, that is a direct consequence of it, using your arithmetic. Over the next 10 years, listen to this, the national debt ceiling will have to go to $12,040,000,000,000; from $6.4 trillion to 12,040,000,000,000 as a direct consequence of this budget resolution, according to your numbers.

You say we can grow out of it. We have to get this economy on its feet. Goodness knows, I agree, this wobbly economy needs help. But let me tell you, the underlying forecast upon which these numbers are based assumes that the economy will grow at 3.6 percent next year, real growth over and above inflation, and 3.2 percent over the next 10 years.

You have held out the prospect of dynamic scoring, saying these tax cuts could boost the economy and sort of replenish the revenues that they will be otherwise cutting out of the Treasury. CBO undertook to dynamically underscore the budget, and, guess what? Using nine economic models, in five out of nine, the deficit actually increases as a results of these tax cuts.

You say we have got to have spending cuts. Well, you have got them in this bill. This resolution would take domestic discretionary spending down by $168 billion below current services over the next 10 years. As for the other spending cuts, if that is what you say the prescription is and ought to be, where are they? Why not put them in your budget resolution?

What we have got here is a recipe for disaster, and I cannot overemphasize the results of this budget resolution using your own numbers. It takes us down a path of endless deficits and deeper and deeper into debt, so deep that this problem becomes almost intractable.

For those of us who were here in the 1980s and knew how long and hard and difficult it was to turn the budget around and put it into surplus again, we have an awfully forlorn, sinking feeling as we look at this budget, because we do not think, if you pass this budget resolution tonight, that we will be able to turn it around for a long time to come.

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

Let me make it clear to the gentleman, my good friend, the chairman of the committee, in the budget resolution we presented to the House, at the end of the year 2013, which is the last year in the 10-year time frame, our budget produced $1.3 trillion less debt than theirs, $1.3 trillion less debt. We laid it before the House. We got to a balanced budget, a unified balance in 2010. You do not get to one in this budget until 2012, and then it is only $9 billion. Any kind of turbulence in the economy would undo that.

There is a drastic difference between the two, and that is one of the reasons we were proud to present our budget resolution, to show there is an alternative.

This is not a necessary course of action. This is self-inflicted pain by your insistence on doing $1.2 trillion in additional tax cuts when there is no more surplus and that automatically increases the debt by $1.2 trillion.

Mr. Speaker, I yield 1 minute to the gentleman from Wisconsin (Mr. Obey).

Mr. Speaker, I yield 1 minute to the gentleman from Wisconsin (Mr. Kind).

Mr. Speaker, I yield 1 minute to the gentleman from North Dakota (Mr. Pomeroy).

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

Mr. Speaker, this is why legislation of this consequence should not be brought up at 1:30 in the morning with no prior notice.

I yield 2 minutes to the 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. Speaker, I yield myself such time as I may consume to respond to the gentleman.

First of all, when the budget resolution before us now left the committee, it provided for $30 billion in Veterans Administration cuts, as the gentleman well knows.

Let me have the time.

Thirty billion dollars. It was reduced to $28 billion when it left the floor. When it comes out of conference and comes to us tonight, it is $6.2 billion less than current services over the next 10 years. And I say to the gentleman from New Jersey that this is $8.2 billion lower than the amount that our budget resolution provided when we had it on the floor and offered it as an alternative, $8.2 billion lower in this resolution today, and $6.2 billion below current services. This is a cut.

Mr. Speaker, I yield 3 minutes to the gentleman from Maryland (Mr. Hoyer).

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

Mr. Speaker, I yield 1 minute to the gentleman from Georgia (Mr. Bishop).

Mr. Speaker, I yield myself such time as I may consume to respond that if my colleague will read closely, she will see that there is a function called function 920, and in it she will see $128 billion in undistributed cuts. So all of these adds, all of these gains she is talking about, could very well be wiped out, and probably will be, once those cuts are distributed.

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

Mr. Speaker, I yield 2 minutes to the gentlewoman from Connecticut (Ms. DeLauro).

Mr. Speaker, I yield 30 seconds to the gentleman from Texas (Mr. Stenholm) so he can set the record straight with respect to the Blue Dog budget, and I do not have enough time to correct all of that economic fiction.

Mr. Speaker, I yield 30 seconds to the gentlewoman from Oregon (Ms. Hooley).

Mr. Speaker, I yield 45 seconds to the gentleman from California (Mr. Sherman).

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

Mr. Speaker, I yield 1 minute to the gentleman from Virginia (Mr. Moran).

Mr. Speaker, I yield 1 minute to the gentleman from Massachusetts (Mr. Markey).

Mr. Speaker, I yield 1 minute to the gentleman from Texas (Mr. Stenholm) to straighten out the Blue Dog budget.

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 3\1/2\ minutes.

Mr. Speaker, let me respond to my good friend the gentleman from Connecticut (Mr. Shays) by saying in 1990 when we did the budget summit with President Bush and passed it, do you recall who put the votes on the board to pass that? It was not your side. In the second vote, only 80 Republicans voted for President Bush's budget summit agreement. That laid the foundation for what happened in the 1990s.

In 1993 we put every vote on the board by one to pass the Clinton budget, and every year thereafter the budget deficit declined for 8 straight years, to the point where in 2000 the budget was in surplus by $236 billion.

We also came together in a bipartisan way on the balanced budget agreement of 1997, with President Clinton solidly supporting it. It never would have worked otherwise. So three times with tough votes we bellied up to this problem.

And we took the deficit of $290 billion the last full fiscal year of the Bush administration and turned it into a surplus of $236 billion. I would say to the gentleman from Connecticut (Mr. Shays), we put the votes on the board to make that happen. That is a fact, an undisputable fiscal fact.

Let me in closing say how far we have come in the wrong direction in the last 2 years. We have got a chance tonight to turn this ship around by voting down this budget resolution.

Two years ago we were talking about paying off all the debt held by the public by the year 2008. Now we have raised the debt ceiling, with the passage of this resolution, twice since then. Vote for this resolution and you will vote to raise the debt ceiling $984 billion, and, between now and 2013, to raise the debt ceiling to $12,040,000,000,000. That is a fact that comes from your numbers. That is how far we have come, and that is where we are headed, unless you make a decision tonight to take a different course.

I would plead with you. I will say it again and again and again, what we are seeing here are decisions about to be made that will be awfully difficult to undo. Your own numbers forewarn you. They tell the tale. Your on-budget deficit will not get below $300 billion. It is as high as $500 billion. You accumulate $5 trillion to $6 trillion in debt and add it to the national debt over the next 10 years.

These are not my concoctions or fabrications. These are your own numbers that tell the tale of what is about to happen.

Two years ago you took a blue sky estimate and bet the budget on it. It turned out wrong. Unfortunately, you are not chastened by that experience. But I am willing to say you made a mistake, an honest mistake. But now you cannot claim that this is an honest mistake, because OMB and CBO both told you there is no more surplus, so any tax cut you pass tonight, and you are going for another $1.2 trillion, will go straight to the bottom line. It will add to the deficit.

Two years ago it was possibly negligence. Tonight, if you pass this budget resolution, it is willful, wanton and intentional. You are adding to the deficit by direct policy choice. This is your fiscal policy that leads us to the disastrous consequences that are set forth on page two of your tables and charts.

$12 trillion in national debt is where we are headed if we adopt this resolution tonight. Your numbers.

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

Mr. Speaker, will the gentleman yield?

Mr. Speaker, I thank the gentleman for yielding, and I would say that on both sides of the aisle the staff are the unseen players in this process. They make an enormous effort, and we have a good working relationship on this committee, which we prize because we have mutual respect.

I would like to pay tribute to my staff who put a herculean effort to get this budget resolution on the floor through all the processes it has to go.

First, to my very able and loyal and energetic chief of staff, Tom Kahn; to Joe Minarik, who is our chief economist and is widely experienced; to Jim Klumpner, who is also an excellent economist on our staff; to Sheila McDowell; to Kimberly Overbeek, who is super with the numbers; to Andrea Weathers; to Linda Bywaters; to Arthur Burris, who is indefatigable; to Sarah Abernathy; and to Pepper Santalucia. I am looking at Antonio Santalucia and Pepper would not come to me. To some new additions to our staff: Mike McCord, who does defense work; Jennifer Friedman, who came over from OMB; Diana Meredith and Andy Smallian, a great group of people, a great team effort and very professional staff.

And last but not least, Lisa Venus, who has been with us for several years who is assistant counsel and a very, very able staff member who was here on the floor with us tonight.

Mr. Speaker, I appreciate the chairman allowing me the opportunity to pay tribute to my staff and to the effort they put in to making the budget process work this year.

Madam Speaker, I would like to open up by saying when the President sent us his budget this year the Office of Management and Budget, OMB, acknowledged that the surplus of the $5.6 trillion which we all hailed 2 years ago is gone. It has vanished. In fact, OMB now says there never was such a surplus when they, the Office of Management and Budget, adjust the surplus to account for the economy as they see it now. The 10-year surplus is no longer $5.6 trillion. It is $2.4 trillion. And all of that $2.4 trillion has been committed, or I should say overcommitted, by policy action to the tune of $129 billion. That is what we would incur if we did not do anything else, mostly due to the tax cuts passed in June of 2001.

So any additional tax cuts and any additional spending beyond current services will go straight to the bottom line. There is no surplus anymore to mitigate or cushion or offset that deficit. It goes straight to the bottom line and adds dollar to dollar to the deficit. The arithmetic is simple.

Knowing that, the President of the United States nevertheless proposes $2 trillion in additional policy actions, legislative actions here, mostly, once again, in new tax cuts that will add $2 trillion to our national debt over the next 10 years.

Now, when the Congress Budget Office sent us their analysis of the President's budget as they are required by law to do, they saw deficits out as far as they forecast. As a matter of fact, when you back out Social Security as I think you should because I do not think we should be spending Social Security, and everybody on this House floor who was here just a couple of years ago foreswore the practice of ever again spending the Social Security surpluses, so when you back it out and look at what CBO portrays and depicts the President's budget to produce, you will see that over the next 10 years they forecast deficits, without a Social Security surplus to offset them, deficits of $400 billion at least every year for the next 10 years.

So when you remove the Social Security surplus from the equation, the accumulation of deficits is $4 trillion over the next 10 years. As a consequence of this budget that the President sent up here, in a way both Houses repudiated the President's budget. Both Senate Republicans and House Republicans rejected what the President sent. When the House Republicans saw the President's budget, they warmly embraced his tax cuts. They were ready for another round of tax cuts, despite our experience with the last round; but they at least acknowledged the responsibility to go find some offsets, some spending offsets that would help mitigate, reduce, cushion the impact of these huge tax cuts. The President was seeking another $1.4 trillion in tax cuts as much again this year as he did back in 2001.

They went back looking for some offsets; and they came up with $470 billion in what we call, in budget parlance, reconciliation tax cuts. These are reconciliation spending cuts. These are directives to the committees of jurisdiction that write legislation that deal with Medicare and Medicaid and school lunches, a whole array of entitlement programs, to go change that permanent law so that they can save a certain sum of money by a certain date.

In this case, as I said, the total of all those reconciliation instructions came to $470 billion. Our Republican colleagues wanted to cut Medicare over the next 10 years by $262 billion, Medicaid by $110 billion, veterans by $15 billion on the mandatory side, the entitlement side and 15 more on the veterans health care side, education by $9.4 billion on the mandatory side. That would have to come out of school lunches and student loans, government pensions $40 billion, the railroad retirement program, a vested benefit if there ever was one, $3.7 billion.

Well, those offsets had a short shelf life. They survived attack in the Committee on the Budget. They all voted for it on the Republican side of the committee; but during the markup, the chairmen of these different committees who were about to be the object of these reconciliation instructions came forth and they said, you have got to give us some relief. We cannot do it. So the number was cut from $470 billion to $265 billion.

Then when we got ready to go to conference, we came out here with a motion to instruct the conferees. And what we said is, even though you have cut this number from $470 billion in Medicare and Medicaid and education and veterans cuts, even though you shaved this somewhat, you are still taking $107 billion out of the Medicaid program in all likelihood. You could wipe out the children's health insurance program with the budget in the form you have got it right now.

So we said let us have a vote of the whole House on these and see if this really is the sentiment of the House. And guess what? By all of 300-and-some-odd votes, 22 nays, we said we do not want to cut Medicare and Medicaid and these other programs, education, veterans, by this amount. The Senate took a totally different tact, but they likewise repudiated the President's budget. The President in effect wants another $1.4 trillion dollars in tax cuts this year even though they all go straight into the deficit and swell the deficit. So the Senate said, no, the first half of your tax cuts, Mr. President, which would make the tax cuts you did in June of 2001 permanent, right now they expire on December 31, 2010, rather than make that permanent now, we will put them on the back burner. We will come back to that one. That will take at least $650 billion out of the tax package. And as for the rest, they said, let us cut it about in half. So they shaved it to $350 billion.

So the House rejected the President's budget request by seeking to offset it and failed. The Senate rejected it by coming up with a much, much smaller tax cut; but we have still got tax cuts looming. You have still got the problem of sunset of the 2001 tax cuts. You have still got something call the alternative minimum tax which 30 million tax payers will confront over the next 10 years, and it will have to be adjusted. There is no question about it. These two actions alone, making permanent the 2001 tax cuts and adjusting the alternative minimum tax, could take another 1 trillion, $1.3 trillion out of revenues over the next 10 years and make resolution of the deficit all but impossible.

So here we are talking tonight because this is a serious problem; and it has received very, very little attention. We want to call it to the attention of both Houses because, as we see it, we are positioned right now between two fatally flawed alternatives. The House and Senate resolutions, the one that passed the House and the one that passed the Senate, framed the conference such that there is no responsible way out. Both resolutions lead to large intractable deficits: $2 trillion in additional deficits if you back out Social Security, $4 trillion if you back out Social Security. And both lack any plan or process for wiping these deficits out.

This was not necessary, Madam Speaker. That is the first point to make. All of this pain, all of this confusion, all of this deviation from the straight and narrow path of fiscal responsibility we were following just a couple of years ago could have been avoided if we simply recognized that we could have tax reduction, but not the massive tax reduction that was passed in 2001 or that the President would have us pass again. All of these cuts in Medicare and Medicaid and veterans and education would not be necessary but for these tax cuts. They are made necessary to make room for the tax cut. If you simply left the budget alone and let current services be provided at the current level and left the tax cut alone, by the year 2008 the budget would be in unified balance including Social Security. Instead, under the budget alternatives we have now, we have the equally unpalatable choices of a budget that we hope gets to balance in the year 2012, that is so far out hardly anybody can validate it, or maybe 2013. That is how bad a situation we find ourselves in because we have not faced reality.

And we offered an alternative here on the House floor. The Democratic resolution would have adequately provided for education, would have provided $528 billion for Medicare prescription drug benefit, and would have provided some tax cuts. We wanted to put some money in the pockets of American consumers likely to spend it to give this economy a boost, a jump. We wanted to give some money to businesses to encourage them to invest, some tax cuts to businesses to encourage them to invest. We had tax cuts too, just not as massive as those included in the President's proposal. And we got to balance in the year 2010. We accumulated a trillion dollars less debt than the Republicans. We had a budget that was commendable. It was rejected. But we have not given up, and that is why we are here tonight.

To begin, we want to talk about veterans benefits, not the biggest item in the budget; but I would say one of the most important. If there is any promise we should keep, particularly in a time of war, it is the promises we made to our veterans. And those promises, under the two budget resolutions, one passed by the House, House Republicans, the other passed by the Senate, are in jeopardy.

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

I yield to the gentlewoman from Oregon.

I yield to the gentlewoman from Texas.

There are deep cuts that have been made in veterans programs on both sides, mandatory entitlement programs and the veterans health care service, which is discretionary. We fund it every year in appropriations bills.

By the way, we are talking about just getting them just up to the level the President provided. We actually provided more in our budget resolution. We have up to the level of current services, so there would not be any loss in purchasing power.

That is exactly the point. They claim they were actually allowing the veterans budget to increase. And in nominal terms it does go up. But of course a dollar today will not buy the same thing as a dollar tomorrow, number one. Number two, in all events if you want some sort of benchmark to determine how much their cut was, we used the President's request. And what we were saying is that they were cutting the budget first $30 billion below the President's request, and then they modified that a bit and reduced it to $28.6 billion. But they left it in that position until we had our motion to instruct here on the House floor.

Now, we all know how much regard those motions to instruct get when there is a conference, particularly a conference like the one going on now. We do not go to those conference meetings. We had a big photo-op at the beginning, where everybody got to make a passionate statement and pound the table. But it is the last time we will see the budget conference report making these critical decisions until it comes here on the House floor to be voted upon.

That, of course, is a time when everybody can take assessment of it; and if it does not do right by veterans and education, then, by golly, if we are true to what we said in the motion to instruct, we should vote it down.

Mr. Speaker, I thank the distinguished gentleman, and I wish to yield now to the gentleman from Washington (Mr. Baird) to talk about Medicare and Medicaid, which if anything serve even more people than veterans programs and involve even deeper cuts.

Mr. Speaker, I yield to the gentlewoman from Wisconsin (Ms. Baldwin).

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

Mr. Speaker, I yield to the gentleman from Washington (Mr. Baird).

Mr. Speaker, I thank the gentleman, and yield to the gentleman from Texas (Mr. Stenholm).

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

I thank the gentleman from Virginia.

Mr. Chairman, $74.7 billion seems sufficient to wage war for quite some time, but when it is broken down, there is less than meets the eye.

Of the $74.7 billion, $62.6 billion goes to DoD.

Of the $62.6 billion allocated to DoD, $30.3 billion goes to cover ``sunk cost,'' which the supplemental calls ``coercive diplomacy.''

Of the remaining $32.3 billion: $13.1 billion is allocated for a ``short, extremely intense period of combat operations''; $12 billion is allocated for post-war ``mopping up'' and phasing the combat force into an occupation force; $7.2 billion is allocated for redeployment, replenishment of munitions, and repair of weapon systems. Of the $7.2 billion, about $1.1 billion goes to Iraq's reconstruction.

In addition, $7.8 billion is allocated out of the $74.7 billion for aid and humanitarian assistance to Israel and Jordan and other nations as well as post-war Iraq. Out of this $7.8 billion, some $2.4 billion is identified for reconstruction and humanitarian aid to Iraq. Added to the $1.1 billion, this makes aid to post-war Iraq equal to about $3.5 billion.

One must conclude, therefore, that this supplemental is probably a first installment on the cost of this war. The supplemental will not cover (1) the cost of combat lasting more than 2-3 months, (2) the cost of prolonged occupation by a sizeable force, or (3) our likely share of the post-war reconstruction and humanitarian aid.

Mr. Speaker, I commend both sides for the bipartisan effort they have made here to restore a proud, proud tradition. I am just old enough to remember the Gold Star and Blue Star Banners. I am a war baby born in 1942. But I still have a dim recollection of that and a warm feeling of the pride that those who displayed these banners had, to let all the community know that they had a loved one who was serving abroad or serving in service at some place in time.

I spent this past weekend, Sunday afternoon, in the little town of Jefferson, South Carolina, where we had a memorial service for a staff sergeant in the Air Force, Jason Higgs, whose helicopter was on a rescue mission to pick up two Afghan girls, both of whom were in need of medical care, to bring them back and have them attended to by Air Force doctors. He did not make it back. The next day they sent for the girls, they had their surgery, that was successful. Sunday afternoon we laid him to rest.

All over America there are countless stories like this, about these folks who are laying their lives on the line for us and our freedom. This is a wonderful tradition to restore, and I wholeheartedly support this legislation.