Floor Statements

Mr. Speaker, looking forward to 2005, there are few more important issues for government than overspending and overpromising. Unless we get spending under control, government will lose the ability to do much of anything else except manage our indebtedness. Already we pay nearly $300 billion a year, approaching 12 percent of our total expenditures for interest on the debt. That is $300 billion a year on interest. And interest rates are going up, our debt is going up, and that cost is rising very rapidly.

This fight will influence the kind of lives that our kids have. Why do we not pay attention to the problems of the insolvency of Social Security and Medicare? Why do we not look at the problems that this kind of overpromising and overspending are going to have on the economy of the United States? The challenge facing Congress will be to restore our reputation for fiscal restraint.

The Federal Government is now running the largest budget deficit in our history, which is estimated to be $574 billion for the fiscal year that just ended September 30, and we will soon have to increase the $7.384 trillion statutory debt limit in order to accommodate this borrowing, which our children and our grandchildren are ultimately going to have to assume the responsibility for.

I cannot think of harsher words than maybe unconscionable, maybe too interested in our political futures to do what is necessary to deal with these tough problems. This overexpenditure, the debt, is only a small part of the total problem. Overpromising is the larger issue, and that deals with the chart I have before us tonight, and that is this massive unfunded liability.

The deficit and debt, unfortunately, are only the beginning of our financial

problems. These figures come from Dr. Tom Savings, who is a professor of economics at Texas A&M and also a trustee for both Social Security and Medicare. He has calculated that the total unfunded liabilities for the three programs of Medicare, Medicaid, and Social Security are now $73.5 trillion.

That means to accommodate our promises we are going to have to come up with $73 billion, put it in our savings account, and that is going to draw interest, at least to accommodate inflation, to keep the promises. There is no way we can do this. We are headed for a reality of the financial sky is falling on the United States Congress.

The issues of changing the programs have been demagogued so that Republicans can accuse Democrats when they suggest any change, and Democrats can accuse the Republicans of ruining Social Security and Medicare.

In conclusion, let me briefly run down through the unfunded liabilities of the different parts. Medicare part A, which is mostly the hospitals, is a $21.8 trillion unfunded liability, the amount you would have to put in an account today. Medicare part B, $23 trillion. That is mostly doctors. Medicare part D, the new prescription drug program, adds to the unfunded liability $16.6 trillion. Social Security is running at about $12 trillion.

We have got to deal with these problems. Maybe next year, after the election, whichever President is elected, we will have the guts, we will have the intestinal fortitude to move ahead in trying to solve and make changes to these programs so that we can continue what we have promised the American people. They are important programs. There is going to be dramatic changes. The longer we wait, the more drastic the changes will have to be. That was the conclusion of the bipartisan task force on Social Security that I chaired.

The challenge is great for this body, the Senate, and the White House; and I ask, Mr. Speaker, that the electorate of this Nation ask those candidates running for office, for the Congress, for the Senate, for the Presidency what they are going to do about these huge problems facing our kids and our grandkids.

Mr. Speaker, I rise today to congratulate Northwest Community School District in Jackson, Michigan as it celebrates fifty years of educational excellence in the Jackson community. Our current superintendent, Dennis Desmarais, as well as the other administrators, teachers, support personnel, and the 25,000 residents and parents of the school district should all be proud of the lasting contribution they have made in shaping the lives of the young people in the Jackson area.

Northwest School District is one of Jackson County's largest school districts, and was established in 1954 when nineteen tiny districts consolidated to become Northwest Rural Agricultural Schools. By the time R. Willard Kidder became superintendent in 1955, more than 1100 students were enrolled in the district, and were transported to 23 buildings on nine buses. The next year, the school's student council chose the Mounties as the district's mascot, a name which was taken from the Royal Canadian Mounted Police, symbolizing fairness, devotion, duty, and exemplary service. It was also at this time that red and black were adopted as the official school colors.

Mr. Kidder took over as Northwest's superintendent in 1956 when the original superintendent, Dr. Warran Randall, accepted a position in Hudson. Under Kidder's leadership, the school grew, the Northwest Junior-Senior High School, now R.W. Kidder Middle School, opened for students in grades five through nine in 1956. Enrollment continued to grow, and peaked at 4,200 when Mr. Kidder retired in 1972. In 1960, Flora List Elementary School opened for 700 students in kindergarten through sixth grade, and three years later, Parnall Elementary School opened on Lansing Avenue to accommodate another 900 students. In 1966, Mr. Kidder hired Mr. Joe Koziol to teach driver's education, and Mr. Koziol continued to serve the district for nearly four more decades as assistant principal in the 1970's and then as the district's superintendent from 1998 till 2002.

On behalf of the United States Congress, it is with great pleasure that I rise today to extend our highest praise and congratulations to the Northwest School District for its awards and academic honors as it marks the 50th anniversary of its founding.

Mr. Speaker, I rise today to honor the achievements of a good friend. Mr. Gregory Moore of Emmett Township, Michigan, was recently elected the Chairman of the Calhoun County, Michigan Board of Commissioners.

A Western Michigan University alumnus and graduate fellow of the prestigious Michigan Political Leadership Program, Greg has accomplished many good deeds with his extensive local, civic and political involvement. For 14 years, he worked in the Radiology Department in the Battle Creek Health System. He also co-owned and operated a small recycling business in Calhoun County. Greg is currently serving his third term on the Calhoun County Board of Commissioners and his 10th year as a member of the Emmett Township Planning Commission. He is a former neighborhood council president and George Award honoree for outstanding service to the community. Greg currently serves on a number of local boards and committees including: Character Unlimited, International Festival of Lights, Battle Creek Area International Relations Committee and the Substance Abuse Council of Greater Battle Creek, just to name a few. He has also been a Congressional District Director for five years.

He has been married for 15 years to his wonderful wife, Becky. Mr. Speaker, I am proud to call Greg Moore a great American.

Mr. Speaker, I think it was in The Music Man where the seller of that musical equipment says, ``We have big trouble right here in River City.'' We have big troubles here in Washington, D.C., and in America, for a couple of reasons.

The competition from other countries as they try to copy our techniques of production means that the competition is greater than it has ever been. Our future generations are going to be much more challenged than we have been. Actually, the baby boomers are a generation that is going to start retiring in the next 4 or 5 years; 73 million baby boomers will start retiring, probably the richest retirees that this country has ever had, probably the richest retirees this country will ever have.

We have some challenges in Washington as politicians tend to solve more and more problems, saying, somehow it must be Washington's responsibility rather than the individual's responsibility to solve some of these problems. What we have done is ended up, for example, with a tax system where now, today, 50 percent of the adults in the United States only pay about 1 percent of the income tax. So, of course, there is a lot of that 50 percent who are suggesting that maybe government should solve more of their problems because they do not have a stake in it.

The flat tax or the consumption tax, the sales tax are some suggestions that say, everybody has to have a stake in

the way this country operates and the services that Federal Government provides.

This first chart shows some of the problems of over-promising. What the economists with the green eye shades call unfunded liabilities means the amount of today's dollars that would have to be put in a savings account drawing interest that equals inflation and the time, value of money to come up with the dollars necessary to pay for these programs, over the next 75 years in this case.

If we add up Medicare, part A Medicare; part B Medicare; part D, the drug program; and Social Security, it comes to $73.5 trillion, according to Dr. Saving, who is the trustee for both Social Security and Medicare, $73 trillion that would have to be put in a savings account today to earn the revenues in addition to the money coming in from the FICA tax, the payroll tax, to accommodate today's promises. A huge challenge for this government to try to develop the kind of discipline of stopping the overpromising and, for that matter, stopping the overspending. If we add the unfunded liabilities to the debt, the $7 trillion debt that we have today, added to the $73 trillion in unfunded liabilities, it means that it is almost insolvable without dramatic cuts in benefits or drastic increases in taxes.

If we do not make some changes, what we see happening in other countries can very well happen in the United States. And that means, Mr. Speaker, take a guess, and I ask my audience to take a guess of what the payroll tax is in France to accommodate their senior population. It is over 50 percent. The payroll tax in Germany to accommodate their senior population has just gone over 40 percent. Of course, that makes them much less competitive. And I am just suggesting, Mr. Speaker, let us not let that happen in the United States by continuing the tendency, the political tendency, because the more we overpromise, traditionally the likelier we are to get a few more votes and get elected to Congress, and if the people that elect us to Congress want somebody there who is going to spend more, promise more, borrow more, tax more, then that is the kind of government we are going to end up having.

Let me just briefly go through this chart of unfunded liabilities. Medicare part A, which is mostly to hospitals, is estimated to have an unfunded liability of $21.8 trillion. Medicare part B that doctors charge, mostly doctors, is $23.2 trillion. Medicare part D, the new prescription drug bill that we passed recently, adds another $16.6 trillion unfunded liability to the cost of Medicare. Social Security is just at 11.9, $12 trillion unfunded liability for Social Security. That is more than a quarter of a million dollars of unfunded liabilities for every man, woman, and child in America.

How do we shout long enough, hard enough, aggressive enough to get the Congress to pay attention? I think probably the secret is that Americans have to start paying attention to what is happening in their United States Congress, what is happening in their State legislatures, what is happening with their counties as governments at all levels are called on to solve more and more of the problems of individuals.

Let us take a look at the fact that we are going to have a strong economy. I mean, regardless of what we do and the solutions to Medicare and Social Security and stopping the overspending and trying to balance the budget, and, by the way, hopefully in the next several weeks we are going to take up the Balanced Budget Amendment that will add a little more pressure to us to stop our overspending, regardless of what we do, if we do not have a strong economy in America, we are not going to make it. We are going to start going downhill relative to other countries.

The interest on the debt is now over $300 billion a year, and the interest rate is continuing to climb. In fact, we are still at a very low interest rate; but it is still using up 14 percent of the total Federal budget, and that is growing rapidly for two reasons: interest rates are going up and our propensity to overspend because people do not like taxes, borrowing is sort of putting off the tax increase for a later time, and usually what we are talking about is a later generation.

So we continue to overpromise, overspend, and overborrow. And what that means is a tremendous obligation to future generations, not only coming up with the promises, overpromises, and the unfunded liabilities, but coming up with the additional amount of the budget that is sucked up paying the interest on their debt.

I would suggest that if we are going to have a strong economy, we have got to change our tax system. Our tax system in the United States puts our businesses at a competitive disadvantage. It discourages savings and investment, and that is why I have introduced H.R. 3060, which is a flat tax that ends up taxing at the rate of 17 percent. After the deduction, it taxes at 17 percent across the board. So, number one, everybody has a stake. Number two, it puts our businesses in a more competitive position with other countries in terms of the selling of our product.

Let me talk about our current Tax Code: 7,000 Tax Code changes have been made just since 1986, 74 percent increase in the tax rules since 1986, and they are growing every day. Taxpayers spend 6.1 billion hours, 6.1 billion hours, preparing their tax returns, 8 billion pages of returns every year, and it is becoming more complicated. So people, individuals, taxpayers, do not totally understand how the tax system works. I have heard young people say, Well, I am looking forward to tax day because government sends me a check. But the fact is they have been taking money away from them on every paycheck, and so the government owes them much more money than they are getting back.

Government estimates of tax compliance costs reach $183 billion every year. Compliance costs approach 20 percent of the total income tax revenue. Extremely complicated, difficult, takes a lot of time. Businesses adjust their business decisions to lower their income tax often more than the commonsense, logical, market-based decisions they would otherwise make, which makes them more inefficient in terms of being competitive.

I thought it would be fun to just review the total pages of Federal tax rules. As lobbyists and special interest groups come in to lobby Members of the House and Members of the Senate and lobby the White House, they are interested in having special provisions in our complicated tax system that are going to benefit their particular clients. And what this has resulted in is more and more complications, more and more rules, and more and more pages of tax returns that if one is going to understand the system, they have to hire an accountant that is going to spend full time almost on the tax policy.

In 1913, we had very few rules and very few taxes. In 1945, we approached 10,000 pages. By 1984, we approached 30,000 pages. Now we have about 50,000 pages of Federal tax rules that go into detail explaining the laws that this Congress has passed often to benefit some particular interest group.

Just briefly on the flat tax, the flat tax bill I have introduced starts at 19 percent for the first year and then drops to 14 percent the second year and thereon. It is a 17 percent flat rate after the deduction. The deduction is $36,600 for a family of four. So they do not pay any tax on the first $36,600 if they are a family of four; 25,000 if they are a couple. It ends the double taxation on savings, ends the double taxation on dividends and capital gains. That means there is going to be a greater incentive to invest and to save. And that is what makes our economy and our productivity grow: the savings investment is the seed corn of the research and development that develops the kind of research and technology that result in better products produced more efficiently.

That is what is going to keep us competitive.

Just as a footnote, I would urge every parent to encourage their kids to make a special effort in science and math. Science and math achievement in the United States is one of the lowest in the world, and probably as technology becomes more an integral part of how we develop more efficient ways to produce products and actually the development of those products, students that have a good background in science

and math are going to be the ones that are going to find it most easy to get a good-paying job.

I think I am down to the fact that it allows individuals to file their returns on a simple postcard form. I printed up that postcard form of what I see as the kind of tax form that is going to make taxpaying very simple and very easy. It increases confidence that everyone pays their fair share.

The flat tax is pro-growth. It is pro-freedom. I think most people in America are sick and tired of the rhetoric that says, well, we are going to make some adjustments here and there. They would like to get rid of the IRS. They would like to have the kind of tax system that encourages them to work and to produce and to save and invest.

Look, when we started this country, that is how our forefathers wrote the Constitution. They said in effect those that work hard, that study, that use that knowledge, that save and invest and try, end up better off than those that do not.

Of course, what we have done in the last 30 or 40 years is we have tended to divide the wealth and take away from those that are successful and give it to those that are less successful. In so doing, we have taken away some of the incentive that has made this country great, and that is the rewards for achievement and the rewards for trying and saving and hard work.

This is the flat tax postcard form. You put down your wages and your salary and your pensions. The personal allowance is $25,580 for married filing jointly, $12,790 for a single, $16,330 for a single head of household. Number of dependents on the next line. Line 4 is the personal allowance. Multiply $5,510 by each dependent.

What you have left after you subtract those deductions from wages, salary and pension is what you pay your 17 percent tax on. If you paid ahead of time, you subtract the taxes that you have already paid and figure out what government now owes you or what you owe the government.

We are having a lot of debate. Everybody agrees that we should change our complicated Tax Code because of its preferences that have been built in over the years to special interest lobbyists, because of its complication, and because it discourages effort and it discourages learning and it discourages savings.

Should we have a flat tax or sales tax? On the flat tax or sales tax, let me suggest that they both have the same type of tax base and they accomplish the same kind of results as far as encouraging business expansion, good jobs, a fair way to tax.

However, the tax base of a true national sales tax and a flat tax in the fashion of Dick Armey's or Steve Forbes' proposal will be the same. The tax base of a true national sales tax and a flat tax are going to be the same. In both cases, the tax is on consumption and not on investment, which is a superior tax for economic growth that is going to benefit our competitive position with other countries and certainly benefit the general public.

The question then really is on which tax is going to be administratively most feasible, and the flat tax is the winner hands down. At least 20 years ago, two economists, Hall and Rabushka, laid out the case for the flat tax in detail. The second edition of their book on the flat tax in the mid-1990s is called The Flat Tax. In the book they make it clear why the tax base of a national sales tax and the flat tax are the same.

What I am trying to point out, Mr. Speaker, is both the flat tax and the sales tax have the same tax base. They both accomplish the same goals. So now we are trying to decide which one is more possible to replace this complicated Tax Code that we have now. Let me give you a little intuition on why both of these taxes are essentially both the same.

The tax base of a flat tax is income, but people only do two things with income. They either spend it or they save it. Since there is no tax on savings, this means the flat tax is on consumption. But this is the same as a sales tax.

Let me try to be a little more technical. I started trying to work out an alternative to Michigan's sales tax as a flat tax when I was chairman of the senate finance committee back in Michigan. Under the national sales tax, business is taxed on its sales minus what it purchases from other firms minus what it pays on investment and capital. That is on the sales tax.

On the flat tax, individuals pay taxes only on their wage income and not on the income from savings, such as interest or dividends. Business actually pays the taxes on savings, interest and dividend, because they are not allowed to deduct it. Businesses pays taxes on its sales minus what it buys from other firms minus investment in capital minus wages.

Now, between the business income tax and the individual income tax, what is taxed then is sales minus what business buys from other firms minus what it pays on investment and capital. So the two tax bases are the same.

Now, when it comes to administration, the flat tax is much simpler. The individual and business both fill out a short form and it is clear what is going to be taxed.

Under the sales tax, lots of things will be difficult to determine. First, there is going to be political pressure, as there is in every State that has a sales tax, not to have that sales tax on such things as food and prescription drugs, not to tax medical services or dental costs. As was the case in Michigan and in most every other state that has a sales tax, we have done this. As this happens and you reduce what is going to be taxed on food, prescription drugs, health benefits, services, what that means is the tax rate for the sales tax is going to go up.

For example, to raise the revenue that is equivalent to our 17 percent flat tax is going to require a sales tax that is much higher. In initial calculations it could be as high as a 28 percent sales tax. If it is a 28 percent sales tax, this is certainly going to lead to all sorts of incentives to hide sales, which will be easier to do than to hide income, and this will lead to an even higher sales tax. You can call them free riders or whatever you want.

But I would suggest in the sales tax effort to get rid of the IRS, in its place what we are going to do is have a new Federal police force examining what is produced so we can determine how much production is being avoided on paying the sales tax. Where you tend to say that individuals consuming are paying the sales tax, what we have done in Michigan and most other states that charge a sales tax, to simplify it, we say well, you can add the tax if you want to, but who is responsible for the sales tax are the businesses that are selling the product.

Let me just briefly show the difference in what an individual taxpayer ends up with that earns money and decides to save the money.

First, under the current system, for example, let us say after you have your income, after you spend what you are going to spend, you are fortunate enough and diligent enough that you save $10,000, and then you end up paying 28 percent tax on the $7,200, now on $7,200, so what you have left, out of what you have saved and minus your tax, what you have left is $7,200. Let us say the interest rate, or your returns on investment are maybe around 6 percent; that means I think that that money would double in about 10 years. So after 10 years, that $7,200 that you have left after taxes doubles to $14,000. And then what do we do under the current system? We tax you on the interest rate you earned. So if you tax on the interest on the $7,200, as the money doubles, you end up having $12,384.

With the flat tax that encourages savings because we do not tax savings, after expenses, you end up with $10,000, you pay the 17 percent, and that leaves you $8,300. In 10 years, it doubles to $16,600, but we do not have any tax on that increased earnings of the dividends or interest, so that leaves you with a net of $16,600. So the point that I am trying to make is you are much better off and it encourages savings and investment, which is key to the kind of discoveries that we can have for businesses to be more competitive in a world market.

I think a problem with the sales tax is determining what is a final retail sale. In trying to change our sales tax in Michigan to take in some services, the overwhelming problem is what is the final retail sale that you charge a sales tax on? For example, say I am an accountant and I do your books, I am going to charge you a sales tax on it as the final user. But what if I am the same accountant, but I am doing the

books for a local retail store, and that retail store is going to take the increased cost that they pay for that bookkeeper and add it to the price of their product; the sales tax is going on the price of their product, so you do not charge sales tax when you are an accountant doing work for a firm or a retailer that can pass that tax on in a product that is going to be taxed on the sales tax. It is complicated. It is complicated, figuring out what you are going to tax sales tax on.

Because of the fact that the advocates of the fair tax and the sales tax suggest that we want to change the 16th Amendment to the Constitution, a political complication of talking this chamber into having a two-thirds vote that is going to change the Constitution, and then after that, you have to have three-quarters of the States agree to ratify what has been suggested as a constitutional change.

Pretend for a moment that you are back in that State legislature, and here is the Federal Government saying, look, we want to change the system to get rid of the income tax and have a sales tax. We would sort of like you as the State to collect that money for us, for the Federal Government because, look, you are going to have a sales tax anyway in your State because you cannot copy the Federal income tax any more because we are going to have a sales tax, but we would also like you to collect the sales tax for the Federal Government, State legislatures and governor. We also are suggesting that you have this sales tax that we are going to pass into law and that it be on services and drugs, that it be on medical supplies. It is going to be a tough getting three-quarters of those States to ratify the Constitution with that kind of threat that they are going to have to be the instigators of that sales tax in their State.

I think what is likely is that all of the problems of a sales tax, how it is going to be administered, what do you calculate as the final sale that is going to be taxed for the sales tax, and the complicated effort of convincing States that they have to be a part of this effort to now expand their sales tax and maybe even start collecting it for the Federal Government.

A third problem has to do with purchases, for example, over the Internet. You might make purchases from another country over the Internet, and that is more and more available. How are these going to be taxed? What is likely is that they will not be and, thus, U.S. retailers will be at a disadvantage compared to foreign retailers. I think these are just a few of the problems in implementing a national retail sales tax.

The fact that no State has successfully managed to put in place a true retail sales tax that captures all final goods and services should tell us that it will be very difficult to do at the national level also.

Okay, back again, reviewing. Implementation, the flat tax is just going to be a bill passed by a majority and signed by the President. The sales tax, it is the bill, plus the constitutional amendment. The burden on States on the flat tax: none. On a sales tax, the States must collect the Federal taxes, often new ones on services; and for those States that do not have a sales tax, implementing that kind of a tax structure in those States.

The burden on the taxpayer. We have seen the simple form for a flat tax. On the sales tax, there is no form for individuals, but it is going to end up with much more business monitoring to know how much is being produced to determine what is being avoided in the sales tax, and the risk of tax evasion. The risk of tax evasion with a flat tax is the same as the current tax system. But with a sales tax, the high tax on goods increases the incentives for invasion. It increases the incentives to trade with your neighbor instead of paying a very high sales tax that I have estimated will go to 28 percent, maybe even higher.

In conclusion, let me just suggest that getting back to our predicament of over-spending, over-promising, the challenges that we face with medicare and Social Security, the challenges we face with paying our veterans' benefits, the challenges we face coming up with retirement benefits for Federal employees, means that we need to make the kind of changes in government that is going to help make sure that this country stays on the cutting edge of competition in the new challenging world market. And one of the tools that we can use to do this is getting rid of the IRS, getting rid of the complicated Tax Code that has preferences based on the strength of PACs and lobbyists that have influenced this and the other chamber and the White House over the last 50 years, and come up with a tax system that is going to be better for individuals, it is going to be better for the long-term competition that future generations are going to face.

Mr. Speaker, I move that the House do now adjourn.

The motion was agreed to; accordingly (at 11 o'clock and 48 minutes p.m.), the House adjourned until tomorrow, September 22, 2004, at 10 a.m.

Mr. Speaker, I rise today in honor of the birth and life of Madison Ainsley Knapp, born born September 10, 2004. She weighed 7.6 pounds and is 18\3/4\ inches. Madison was born to my Legislative Director Alan Knapp and his wife Jennifer Knapp. Madison was also welcomed into this world by grandparents Larry and Carol Knapp of St. Joseph, Michigan and Virginia McNees of Benton Harbor, Michigan.

Madison is fortunate to be born to such a great family. We welcome Madison to the world with open arms and congratulate her parents and grandparents on the occasion of her birth.

Mr. Speaker, today I will vote against legislation that would create federally funded youth suicide early intervention, prevention, and treatment programs authorized at $82 million over three years.

At a time when we have the largest deficit spending in history, I'm reluctant to start yet another federal program. Additionally, the states that are having problems, rather than the federal government, should be making the decisions of how much help and what kind of help should be initiated to reduce the problem of youth suicide.

Mr. Speaker, I submit for the Record my friend Grandmaster Jhoon Rhee's Open Letter of September 10, 2004 to the Honorable George W. Bush, President of the United States.

President George H.W. Bush named Jhoon Rhee the 721st ``Point of Light'' for his voluntary work to help others and served as a member of the White House Commission on Asian Americans and Pacific Islanders until June 2004.

His letter is as follows:

Dear President Bush:

On the tragic event of September 11, 2001, I wish to thank

you for your efforts to defend our Nation and our freedom.

All Americans should join in prayer for you as you certainly

have one of the most challenging jobs in the world.

God bless the Forces of Might for Right, the soldiers,

sailors, airmen, Marines, and National Guard who serve in

harm's way, far away from their loved ones, to safeguard and

defend us. God bless the policemen, firemen, border patrol

officers, emergency first responders, and all those who work

here at home to safeguard and protect our Nation.

The martial arts community joins you in thanking all of

those who serve and protect us as a Nation and a people. The

terrorists assaulted our country on 9/11, but they didn't

destroy our spirit.

Mr. President, your seal of office shows an eagle grasping

both the arrows of war and the olive branch of peace. We in

the martial arts have always taught these twin precepts. We

believe, and practice, that it is best to be prepared and

capable to defend yourself, while seeking the path of peace

and love.

In remembrance of the terrible tragedies surrounding the

date of 9/11, the martial arts community is taking action on

the philosophies of peace and respect. Our plan is to both

help heal our old wounds and turn around the ongoing battle

to maintain the positive spirit of America. Beginning today,

as every day is a new beginning, American martial artists

have declared 9/11 to be ``Acts of Kindness Day,'' and will

go forth doing Acts of Kindness on 9/11--and year-round--to

demonstrate to the world the American spiritual tradition.

This year's goal among America's martial artists is to

perform one million acts of kindness between September 11 and

October 11, 2004.

More on our ``Acts of Kindness'' initiative, launched by

martial arts teachers Tom Callos, Fariborz Azhakh, Ken

Carlson and myself, can be found at www.911aok.com. We would like to ask you sir, as President of the United

States, to declare 9/11 to be an annual Acts of Kindness Day,

urging all Americans to perform unselfish acts to help

others, to answer hatred and terror with kindness and love.

That is the American spiritual tradition we are proud of and,

we think, the ultimate way to offer tribute to the men,

women, and children who perished that day. We ask you to help

us carry this message from the martial arts community to all

Americans and to the world. Thank you. God bless you.

Mr. Chairman, I chaired the bipartisan Social Security Task Force, and we talked about this so-called totalization, which is pretty much a reciprocal effort between countries to earn and get payments for retirement benefits, for three reasons. One is the oversight of Congress would result in maybe 60 days delay, but not a real opportunity to turn this around. I support the amendment, but because I think we need sort of a cooling off period of at least a year to look at the consequences, a couple of consequences.

One is the solvency of Social Security. So as we look at the potential cost to Social Security, the actuaries are already estimating that Social Security is going to be insolvent by 2018, this provision lowers the date of insolvency because of the cost. Let me just quote what the Social Security Administration estimates. Number 1, it is going to cost approximately $105 million per year over the first 5 years, like the chairman suggested; but, further, the GAO found that a lack of consideration to the estimated millions of current and former unauthorized workers and family members from Mexico who are already residing in the United States who could qualify under various amnesty and guest worker proposals make the cost of such an agreement highly uncertain and could have a measurable impact on the long-range actuarial balance of the trust fund. This is what the GAO said.

So the potential benefits are to 3,000 workers in Mexico, American workers, and what we are looking at is potentially millions of Mexican workers in the United States.

Now, there is a huge difference in the totalization agreements that we have with Europe. The differences, I think, are substantial in two ways. Number 1, in addition to the vastly greater number of new beneficiaries claiming claims to this entitlement from under the Mexican agreement, the other nations, mostly in Europe, that we have these reciprocal agreements with involve a relatively small or few number of people, and there is closer economic parity. So because of the wage differences between Mexico and the United States, it could be very costly to the Social Security system.

I just suggest to my colleagues that as Social Security looks at a $12 trillion unfunded liability, to add these potential large costs to Social Security without thoroughly examining the consequences of what it is going to do to our solvency of our system in the United States, without the kind of changes that we need in Social Security, should be put off for a year.

Mr. Speaker, those that have tuned into the previous presentation I think understand that there are many challenges facing the United States of America. There are many needs, whether it is health or education or welfare or more money for transportation or more money for national security. I think we need to pause for a moment sometime and ask ourselves how far and how much money should be spent by the Federal Government in solving an unlimited array of problems. National security certainly is important, and we have upped our stakes and upped our expenditures for national security.

I came to Congress 12 years ago; and when I came in, I said I was going to serve six terms. So this is my final term in Congress. Several priorities I set for myself that I thought were important for the Federal Government to deal with, and one was balancing the budget and the other was trying to change Social Security so it becomes solvent, so it stays viable for so many of our senior Americans that need that money to stay out of the poverty level.

I am going to talk for some minutes tonight about overspending, and predominantly I am going to concentrate on what I have been very interested in, and that is keeping the solvency of Social Security.

The overexpenditure of Federal funds this year is now $574 billion. We are spending $574 billion more than what is coming in in revenues to the Federal Government. Some people have bragged in the last several weeks that the new budget analysis says that we have lowered the deficit spending for 2004. The fact is that we have lowered it some. Some use the figures $422 billion, and I want to explain, Mr. Speaker, why that is misleading and technically untrue. 422 billion is the money that we are borrowing to pay for our overspending, not including what we borrow from Social Security. So if we, I think, were fair with the Social Security Administration and the trust fund and future generations, then the real amount that we are overspending this year is $574 billion. The estimated overexpenditure for next year again is over $500 billion. Last year it was over $500 billion. The year before that it was over $500 billion.

How do we put that money into perspective? Well, the Federal budget in 2004 is $2.4 trillion approximately. We are a country that is now 228 years old. It took the first 200 years to amass a debt of $500 billion. Now we are going deeper into debt $500 billion every year. What does that mean? I do not think it takes a genius economist to understand the implication that that has for future generations. Somebody is going to have to deal with that debt.

This is a pie chart. And one of the areas on the pie chart, just around the 3:30 to 5 o'clock area, the purple section on the pie chart, is interest which represents 14 percent of total Federal spending. Fourteen percent of total Federal spending is what we are paying in interest, and this is at a time when interest rates are relatively low; and it does not consider how much we are going deeper and deeper into debt every year. So the implication of what we are paying in interest, roughly $300 billion a year, becomes a responsibility of our kids and our grandkids. If we are a family, if we are a business, we do not simply continue to go deeper and deeper into debt without any plans of ever paying it back. And the Federal Government does not have any plans of paying it back.

What we found out politically is that if Members of Congress, Members of the House, Members of the Senate, the White House, promise more solutions to more of the problems that we have in this country, in this world, they are more apt to get reelected. So what we have been doing is in two areas putting a tremendous burden on our kids and our grandkids. One is the overspending that we just talked about. The other is overpromising and overpromising means that we are making promises that we do not have the money to pay for. And the economists with the green eyeshades call that unfunded liability.

Let me just briefly go around the pie chart of expenditures. Social Security is the largest expenditure of the Federal Government. Some people say why do we put Social Security as part of a Federal expenditure in the budget? It is a separate program. The reason is that the Supreme Court on two occasions now has said that Social Security taxes are simply another tax, benefits are simply another benefit program passed by the Congress and signed by the President. So 21 percent of the Federal budget is now spent for Social Security benefits, roughly $500 billion a year. Medicare is 12 percent, but it is growing rapidly with the addition of the prescription drug bill.

Medicare and Medicaid will overtake Social Security within the next 15 to 20 years. Other entitlements, 10 percent; domestic discretionary spending, 16 percent. We have 13 appropriation bills. We have now filed, by the way, the 12th appropriation bill. Hopefully we can complete the appropriation process before the election so the people of the country know what we are doing in terms of spending instead of coming back in a lame duck session, which I consider dangerous with the temptation of overspending. Twelve appropriation bills are represented by the 16 percent. One of the appropriation bills, defense, is 20 percent. We spend most of the year arguing about the 16 percent of the Federal budget that we spend in those 12 appropriation bills.

I want the Members to take a quick look at the overpromising that we mentioned. This is one of the trustees of Medicare and of Social Security. These are his estimates of unfunded liabilities, the amount that we have promised over and above the revenues coming in in a payroll tax, the FICA tax. The Social Security and Medicare trustees have calculated that we have $73.5 trillion in unfunded liabilities. Medicare part A, which is mostly the hospitals, 21.8 trillion; Medicare part B, 23.2 trillion; Medicare part D, the new drug program, $16.6 trillion. So the prescription drug program that we recently passed adds $16 trillion to unfunded liabilities that somehow, some way, sometime our kids or our grandkids or our great grandkids are going to have to figure out a way to come up with those revenues to pay the interest on this huge amount of borrowing.

Let me just mention what I consider another serious ramification of this overspending, that is, where we are getting the money. Whom do we borrow the money from when we overspend $574 billion this fiscal year 2004? Seventy percent of that net increase that we need in borrowing comes from foreign interests. So here are foreign countries, foreign individuals that are lending and buying our Treasury bills because they figure it is a fairly good investment for the time being.

What if some of these countries, such as China, which is amassing one of the largest, fastest-growing trade deficits that has extra U.S. dollars that is buying our Treasury bills, not to mention the equities in the United States that they are buying, what if they say some day, We think you are treating us unfairly in this trade agreement and we just might have to pull our money out of the United States? Economically it would be a disaster if this large amount of money that we depend on coming from foreign countries and foreign interests were pulled out of the United States. They are investing in the United States. That is a good sign. They are investing in the United States because they figure it is a good place to invest their money. What if someday, sometime that we continue to overspend to the extent that our economy is no longer the strongest, the best economy in the world, they decide to invest elsewhere?

I am just suggesting, Mr. Speaker, that not only is overspending bad, but it makes us more vulnerable as these Treasury bills are bought up by foreign interests.

Again, an unfunded liability is the amount of money that we would have to put in a bank account that is going to return, at least with inflation and the time value of money, to accommodate what we are going to owe for the next 75 years in these programs.

The next chart shows what we have to take out of the general fund, out of the money that we spend for health, welfare, transportation, military. This is the amount of money that we are going to have to take out of the general fund to accommodate the entitlement programs of Medicare, Medicaid, and Social Security over the next 75 years. And as we see, simply 16 years from now, it is going to be 28 percent of the general fund budget that is going to have to be contributed to accommodate the needs of these entitlement programs. That is probably not realistic.

So what are we going to do? We are either going to increase borrowing, where we have talked about the disadvantages of simply continuing to borrow more and more money, or we are going to have to dramatically increase taxes. One of these days we are going to have to increase taxes.

I will not go through the whole chart, but if we do not increase taxes and get additional revenues from someplace else, and already there is a suggestion by the trustees that we could increase the payroll tax now by 15 percent to accommodate our needs, and the fact is that most working Americans now pay more in the payroll tax than they do in the income tax. But by 2030 without an increase in tax, we are going to have over 50 percent of the general fund budget that is going to have to be contributed to these entitlement programs.

This is a quick birds-eye view of the Social Security problem. Surpluses coming in until about 2018, they diminish. The surpluses are coming in from

Social Security simply because the Greenspan Commission in 1983 increased taxes and reduced benefits so much that there was extra surplus money coming in. And what of course has happened to that surplus is this Chamber and the Senate and the White House has spent all of that extra money coming in from Social Security for other government programs.

It is not there anymore. So the trustees are guessing that by 2018 there is going to be less revenues coming in from the payroll tax than can accommodate the promises for Social Security. Then a huge future of deficits, and nobody is guessing where the money should come from.

We are talking about a lot of things in this election, as you decide who your next Congressman is going to be, as you decide who your next President is going to be. What we are not talking enough about is what we are going to do about these huge challenges that are facing us in these programs, especially Social Security and Medicare.

Senator Kerry has said on his Web site, and let me quote that, that he will not raise taxes on Social Security, he will not raise the retirement age, he will not cut benefits for those that rely on Social Security, he will not in any way privatize the program. I really do not know what else Senator Kerry plans to do.

There are only a couple of ways to solve Social Security, or a combination. You either bring in more revenues, or you cut benefits, or it is a combination of both. It is not complicated. So why are people not talking about solutions for Social Security? Why have the Republicans not come up with a proposal for solving this tremendously important program for so many seniors? Why have the Democrats not?

I have introduced a Social Security bill every session since I have been in Congress. The attacks on me for my first Social Security bills were, ``Do not vote to reelect Nick Smith. He is trying to ruin Social Security and take your Social Security away.'' Social Security solutions have been demagogued to the extent that most Members of Congress, most politicians, are afraid to come out with a proposal to solve Social Security.

I was chairman of the Social Security Task Force. We held hearings for about a year. We ended up with both the Democrats and Republicans on that task force agreeing to the fact that Social Security was going broke, and that the longer we put off a solution to solve Social Security, the more drastic that solution would have to be. Of course, that has been my experience over the six Social Security bills that I have introduced that have been scored by the Social Security Administration to keep Social Security solvent.

My last Social Security bill that I introduced last year is much more drastic. It requires additional borrowing from the general fund that we pay back 60 years from now simply because of, if you remember the chart, the surpluses coming in from Social Security are diminishing, and those are going to run out. Then we are going to have to come up somehow with the money to pay back Social Security.

Social Security works this way: Benefits are highly progressive and based on earnings. That means that lower-income people, they get back 90 percent. If you are low-income, you get back 90 percent of the wages you were making on the average during those working years. If you are a high-income person, then you get back as low as about 15 percent of the income you were receiving from Social Security. So that is why it is highly progressive. The lower-income people get back a much higher percentage of their working years' benefits.

At retirement, all of a worker's wages up to the tax ceiling are indexed to present value using wage inflation. In other words, they do not average in what you were making 20 years ago or 30 years ago, they average in, in effect, what that job would be paying today. That is what they add up for your best 35 years to decide what your average earnings are, and therefore what your benefits are going to be.

Here is how benefits are calculated: Ninety percent of earnings up to $7,344 is going to be what the low-income earner gets back; 32 percent of the earnings between the $7,344 and $44,000; and then 15 percent you get back of your earnings above $44,286. Early retirees receive adjusted benefits. In fact, if you delay retirement over 65, then you get an increase in benefits for those years that you delay benefits.

I put this last blip in, because so many people complain about the abuses of the Supplemental Security Income that is administered by Social Security, but does not come out of the Social Security Trust Fund.

When we started Social Security in 1934, Franklin Roosevelt started it, people during the Great Depression were going to the poorhouse. His idea was if there can be some forced savings during your working years, you will have a program that gives you more social security in your retirement years. So in 1934, we started the Social Security program.

It was created not to be the sole income of retirees, but to be one of a three-legged stool. As I visited the Archives, in fact, they have the brochures back in those years of the three-legged stool; one being your pension benefits from work, one being what you save yourself, and the other Social Security programs. But now more and more people are depending on Social Security as their main source of retirement income.

Social Security was supposed to be one of the legs of the three- legged stool to support retirees. It was supposed to go hand-in-hand with personal savings and private pension plans.

Let me tell you something interesting in terms of the debate and arguments between the House and the Senate when we formed Social Security. The Senate actually passed a bill that it would be privately owned bank accounts by the individual workers, but that they could not take out that money until they retired. But it would be their money, and if they died before age 65, then it would be passed on to their heirs.

The House, on the other hand, passed legislation that said the government should take in all of this money, control it, and then promise a fixed benefit at retirement. So if a person died before age 65, they would not get anything.

It worked very well in those early years. But the compromise between the House and the Senate, with some of the concerns about the investments of the great stock market crash of the late 1920s and early 1930s, the compromise was that we have the Social Security plan that we have today, which means that government takes in all of the money, and if there is any extra, government spends it on something else and still continues to promise benefits.

What we have done, because it is politically popular, we have expanded the Social Security benefit program to include spouses and then to include early retirement. In 1965, we amended the Social Security Act to start the Medicare program that now is going to overtake the base Social Security program as a cost item.

The fact is that Social Security is a system stretched to its limits. Seventy-eight million baby-boomers begin retiring in 2008, Social Security spending exceeds tax revenues in 2017, and Social Security Trust Funds go broke in 2037.

The Social Security Trust Funds, however, there is going to be less money coming in from Social Security than we need to pay in benefits starting in 2017 and 2018, so where is the government going to come up with that money? I suspect the easy way will be borrowing more money. Of course, that means enticing more foreign investors to invest in our Treasury bills.

We are going to pay it back, but the fact is the $1.4 trillion the government now owes in Social Security does not accommodate the $12 trillion unfunded liability for Social Security. Again, let me repeat that we would have to put around $11.8 trillion in a savings account today drawing the interest that would reflect inflation and the time value of money to accommodate what is going to be needed over the next 75 years to keep our Social Security promises.

We know how many people there are and when they will retire. This is what the Social Security trustees do. We know that people will live longer in retirement. We know how much they will pay in and how much they will take out. Payroll taxes will not cover benefits starting in 2017, and the shortfalls

will add up to $120 trillion between 2017 and 2075.

This is all sort of downer news. But the good news, Mr. Speaker, is more and more people are aware that Social Security is a huge problem. We are talking about it a little bit in some of the campaigns.

Alan Greenspan, Chairman Alan Greenspan on several occasions now has said, look, do not put it off any longer. You have got to do something to keep Social Security solvent. It is not fair to future retirees to simply let them go on thinking that they are going to receive these benefits, and then the money is not going to be there when they retire. So, hooray for Alan Greenspan.

But when Alan Greenspan, the Chairman of the Fed, said that in committee, both Republicans and Democrats jumped on him, saying, look, no way. We are going to protect our seniors. We are not going to reduce benefits, and we are not going to increase taxes.

Well, you cannot do it that way.

This is a quick picture of the demographic problems we are running into. People are living longer, and the birth rate is going down. Therefore, when you have a program that is pay-as-you-go, that depends on current workers to pay in their payroll tax that within 5 days goes out to pay benefits, if you do not have a growing working population, then you are in trouble. That is the problem with Social Security.

In 1940, we had 28 people working, dividing between them what is needed for each retiree. In the year 2000, it went down to three people working, dividing between those three one person's Social Security benefits. By 2025, in the United States there is going to be two people working paying in benefits for Social Security.

Here is the danger. Here is what I tell the business community, the National Association of Manufacturers, in encouraging them to be more aggressive in supporting Social Security reform: That if we do nothing, the danger is increasing the payroll tax. And what does that mean? That means we become less competitive in this country.

Look at France. Guess what the payroll tax is in France to accommodate their senior retired population? It is over 50 percent. So no wonder France is complaining and demonstrating and striking to try to get better returns on their wages, and no wonder their economy is tremendously challenged.

Germany just went over 40 percent of their payroll tax to accommodate their senior population. If we do not do anything and we simply keep putting off the problem, then we are destined to have the kind of tax increase that is going to make us less competitive in a world economy that is challenging us more and more every year, and that is a huge challenge.

I chair the Subcommittee on Research of the Committee on Science, and what we are looking at is a lot of our talent is moving overseas. As we become more and more restrictive on homeland security, for example, it means that it is tougher and tougher for foreign students to get into our universities to do their graduate work in math or physics or chemistry, in the sciences. That is what we have depended on. Half of our research in the United States that is government-funded, that is, most all of our basic research, has been done by foreign students. The other part of that problem is that our seniors in high school have scored very low on international tests in science and math.

So our challenges are huge, to do a better job in education; to do a better job in our homes, with parents encouraging their students; to do a better job to encourage more students to achieve in science and math if we are going to start holding some of these foreign students out of our country.

Some people have suggested, in fact I wrote a letter to the editor of the Wall Street Journal when there was an op-ed saying if our economy grows, that is going to fix Social Security. Here is why that is not true. Social Security benefits are indexed to wage growth.

In other words, if the economy grows and more people are working and wages go up, that means that your benefits are going to also go up eventually. When the economy grows, workers pay in more in taxes, but also will earn more in benefits when they retire. Growth makes the numbers look better now, but leaves the larger hole to fill later. The administration has used these short-term advantages for the last 16 years to say, well, maybe the economy will work us out of this problem.

I have incorporated in the bill that I introduced last year, I have incorporated some of President Clinton's ideas on how to deal with the Social Security problem. I have incorporated some of President Bush's ideas, and it has now been scored by the Social Security Administration that it will keep Social Security solvent. A lot of people, and I have given maybe 200 speeches around my district and the United States on Social Security, a lot of people say, well, if Congress would keep their hands off the surplus coming in from Social Security, everything would be okay. I wanted to show this chart to show what is needed versus what the trust fund is.

The trust fund now, with interest that has accrued every year, is $1.4 trillion. What is needed for the unfunded liability for Social Security is $12.2 trillion. So we are going to pay the trust fund back, but it is not even going to come close to accommodating the need of up until 2075, what is needed in Social Security. Shortfalls will add up to $120 trillion in future dollars, but that means right now the unfunded liability, $12 trillion, would have to go into a savings account, returning at least interest that accommodates inflation.

Social Security as a total unfunded liability of $12 trillion. The Social Security trust fund contains nothing but IOUs. To keep paying promised Social Security benefits, the payroll tax will have to be increased by nearly 50 percent, or benefits will have to be cut by 30 percent.

Hang on, everybody. Hang on, Mr. Speaker. This is tough going. This is sort of a 35-minute tutorial on Social Security, and if everybody knows everything on these charts, they probably know more than most Members of the House and the Senate and many of the economists. But what is satisfying is that more and more people are talking about it. And I think it is good to ask the Members of Congress and the candidates for President what their plan is for saving Social Security and Medicare.

But on the other hand, a campaign year is probably not a good time to force a solution, simply because it is so easy to scare half of the retirees in this country that depend so much on Social Security. So you can understand how they can be swayed in their vote of who they vote for, and just the suggestion that the opposing candidate is going to take away their Social Security benefits. So I think our best chance is in the first year of a 4-year term of the President. So I am hoping, whether it is Kerry or Bush, that they will not dig a hole so tight that it limits real solutions to keep this program solvent for a long time, hopefully forever.

Social Security is not a good investment. That is what this chart shows. The real return of Social Security is less than 2 percent, and that compares to over 7 percent for the market, on average. So if you invested in equities and keep them at least 12 years, your average return is 7 percent.

This shows that minorities get less, a negative return from their investment in Social Security. That is because the average return, the average life span of a black male is 62 years old, and it is interesting that that was the average life span when we started Social Security. Up until about 1940, the average age of death was about 62; but even from the very beginning, the benefit entitlement did not start until age 65. So you can see Social Security worked very well in those early years, because most people did not live long enough to start collecting benefits.

The average return that the average Social Security recipient gets is just under 2 percent. This is what the market pays on average, 7 percent. However, the Wilshire 5,000 actually earned 11.86 percent, and that was over and above inflation, over the decade that ended January 31, 2004. So even in the slump years of equities, these 5,000 stocks of the Wilshire average still was over, almost 12 percent return on investment. Again, that compares to an average of 7 percent for the average retiree, for the money they pay in in Social Security.

This is how long you have to live after retirement to break even on the money that you and your employer sent in on Social Security. In 2005, you have to live 23 years after you retire; and as you see, it goes up to 26 years after 2015. That is because we keep increasing the amount that you pay in.

Here is the danger. Here is maybe the most important chart I think of why we need to do something with Social Security. And that is historically, every time we have had a problem with less money coming in than what we need to pay benefits, we have increased taxes and reduced benefits. Here is the history of tax increases. In 1940, it went up to 2 percent from the 1 percent, to $3,000. In 1960 we ran a little short of money, so we tripled the tax rate up to 6 percent, and we increased the base to $4,800. In 1980, we increased the tax rate to 10.16 percent, and increased the base to $25,900. In the year 2000, we increased the tax rate to 12.4 percent of the first $26,700. In 2004, we did not increase the tax; but the base has gone up to, it is now $89,000 base that you pay Social Security taxes on. I think I mentioned most all working Americans, 78 percent of families pay more in the payroll tax than they do the income tax.

So to increase taxes I think is a bad idea; it is a wrong idea. It is bad for the economy. Let us encourage the kind of changes in Social Security that are going to tend to help the economy by helping more money in investing.

I am going to briefly run through my Social Security bill. It is scored by the Social Security Administration actuaries to restore the long-term solvency of Social Security. There is no increase in the retirement age, no changes in the COLA, the cost of living annual payments, or, there is no changes in the benefits for any senior or near-term seniors. Solvency is achieved through higher returns from worker accounts and slowing the increase in benefits for the highest earning retirees.

So what I do is I add another ben point. Remember earlier when we talked about the high income gets 15 percent of their wages. I add another ben point that is 5 percent that results in slowing down the increase in benefits for high-income retirees. I mean, somehow it is going to take money. That is one of the benefits.

The Social Security trust fund continues. Voluntary accounts would start at 2.5 percent of income and would increase to 8 percent of income by 2075. And the personally owned worker savings account is voluntary, number one. And number two, we guarantee that they are going to have as much return and revenue and retirement benefits from that personally owned retirement account as they would from the traditional Social Security. So with that guarantee, we assume that everybody under 50 years old at least is going to have that kind of personally owned account where they own the money. If something happens to them before they reach retirement age, it is going to be passed on to their heirs instead of the Federal Government. Investments would be safe, widely diversified, and investment providers would be subject to government oversight. The government would supplement the account of workers earning less than $35,000 to ensure that they build up significant savings.

This is one of President Clinton's ideas. I think it was the USA account he called it, as I recall. It simply says, for those lower- income workers, so that they can experience the magic of compound interest, we will add a little bit to their personally owned savings account so that even modest workers can retire as much wealthier retirees.

All worker accounts would be owned by the worker and invested through pools supervised by the government, something like the Thrift Savings Plan that all Federal employees have now. Regulations would be instituted to prevent people from taking undue risk, and workers would have a choice of three safe index funds with more options after their balance reaches $2,500. And even then, it has to be an investment determined by the Secretary of the Treasury that is a safe investment.

And for my last three charts, accounts are voluntary and participants would receive benefits directly from the government, along with their accounts. Government benefits would be offset based on the money deposited into their accounts, not on the money earned; and workers could expect to earn more from their account than from traditional Social Security.

These are some things that have concerned me a little bit in terms of fairness. To be politically correct, maybe I should say fairness to spouses; but, in truth, it is fairness to women. So these are some provisions that I have included in the bill. For married couples, account contributions would be pooled and then divided equally between husband and wife. In other words, everything that the husband is allowed to invest in his private account would be added to the amount that the wife is allowed to invest in her private account. They would be added together and divided by two, so both the husband and the wife would have identical investments in their personally owned account. It would increase surviving spouse benefits to 110 percent of the higher earning spouse's benefit.

Right now, if the husband dies, the wife is entitled to 100 percent of the husband's benefit, and then she loses whatever benefit she was getting.

It is important that we look at ways to keep more and more people in their own homes, rather than going to nursing homes and going on Medicaid. So increasing this benefit 110 percent is estimated to keep a lot more people in their own homes rather than going to nursing homes. And the last change is stay-at-home mothers with kids under 5 would receive retirement credit in the way their Social Security benefits are calculated.

Here is some additional provisions in the bill, just briefly. Increased contribution limits for IRAs and 401(k)s and pension plans to increase more personal efforts at savings. A 33 percent tax credit for purchase of long-term care insurance up to $1,000, $2,000 per couple per year. Low-income seniors would be eligible for a $1,000 tax credit for expenses related to living in their own home, and households caring for dependent parents would also be eligible for a $1,000 credit for expenses.

Back to the beginning of my presentation. We are faced with a lot of challenges, a lot of problems. And what we have to face up to is how many problems should the Federal Government, through increased taxes or increased borrowing, solve. And somehow, people that go to the ballot box and elect Members of Congress and elect their President are going to have to make eventually that decision: How much do we want to go in debt in this country? How vulnerable do we want to be to the foreign investments that are now buying up more and more of our equities and our Treasury bills?

So I just plead with, Mr. Speaker, through you to all America, as we go through this election year in November, consider some of the ramifications of the huge challenges, in addition to national security. How much should we be spending in addition to the programs that we just debated earlier this evening that we are going to be voting on tomorrow, a program that it is hard to object to, but it is a new $80 million program that sets up a Federal Government fund in schools to try to reduce suicide rates.

To me, I am still debating how to vote on that bill because I am concerned about that increased borrowing and expanding government programs at a time when we are going so deep in debt and when the interest on that debt is eating up a larger and larger share of our Federal budget.

Mr. Speaker, on May 29, 2004, members of the Greatest Generation gathered for the unveiling of the World War II Memorial on the Mall in Washington, D.C. It is right that we, as Americans, commemorate the men and women who selflessly gave their lives on foreign shores to halt the march of tyranny during the darkest days of World War II.

Roger Durbin was a young man and father when he enlisted in the U.S. Army in 1942. After the war, the former tank mechanic went on to work, raised a family, and lived a normal life, but he never forgot what he had seen and experienced in the War. At the Jerusalem Township Fish Fry in 1986, Roger Durbin approached Congresswoman Nancy Kaptur about a memorial to commemorate the sacrifices made by the Greatest Generation. That conversation would be the beginning of a 17-year quest for Roger Durbin, which culminated on May 30, 2004 with the dedication of the World War II Memorial on the National Mall in Washington, DC.

Roger Durbin would not live to see his dream become a reality; he passed away in February of 2000. It would fall to his son, Peter Durbin, and his granddaughter, Melissa Growden, to continue to advance the memorial through to completion. From maintaining Roger's collection of letters and war memorabilia to serving on the Battle Monuments Committee, Peter and Melissa have kept Roger's dream alive.

I rise today to honor the dedication of the Durbin family to the World War II Memorial. Their hard work and determination to honor those who have fallen in service to their country is a testament of what can be accomplished when we persevere in a task to honor not ourselves, but others.

Mr. Chairman, I rise to oppose the bill and ask that my ``no'' vote be submitted in the Record at this point because of the uniqueness of the intrusion of the Federal Government in demanding accounting principles.

I oppose H.R. 3574 for two reasons. First, it would set a precedent of Congress interfering in accounting minutia. According to CRS, Congress has never passed a law telling the private sector how to do accounting other than taxes. Second, if this bill were to become law, it would require different accounting standards for the United States and the rest of the world. It would, in effect, require two different accounting numbers for international companies, one with U.S. standards and one with international standards, as set by the International Accounting Standards Board (IASB). FASB, Federal Reserve Chairman Greenspan, SEC Chairman Donaldson, and many others have said that this type of rule change may harm the transparency of American accounting rules.

Mr. Chairman, I add to my ``no'' vote explanation, comments by some financial experts:

The Honorable Alan Greenspan, Chairman, Federal Reserve

System, April 21, 2004

With respect to stock options, I think it would be a bad

mistake for the Congress to impede FASB in this regard. And

in this regard, as best I can judge the FASB changes in

recommendations with respect to accounting procedures strike

me as correct, and it's not clear to me what the purpose of

Congress is in this particular procedure. I think the

Congress would err in going forward and endeavoring to impede

FASB in its particular activities:

William H. Donaldson, Chairman, United States Securities

and Exchange Commission, May 3, 2004

For the policy reasons described above, recently

underscored by the Sarbanes-Oxley Act, I strongly support an

independent and open standard-setting process for

establishing accounting principles for U.S. public companies.

Accordingly, I believe that the process established by the

FASB to consider the pending stock option proposal should be

allowed to run its course:

The Honorable Paul A. Volcker, Chairman of the Trustees of

the International Accounting Standards Committee Foundation,

and former Chairman of the Federal Reserve System, April 20,

2004

I suggest that, before acting, Senators and Congressmen ask

themselves two simple questions: Do I really want to

substitute my judgment on an important but highly technical

accounting principle for the collective judgment of a body

carefully constructed to assure professional integrity,

relevant experience, and independence from parochial and

political pressures? Have I taken into account the adverse

impact of overruling FASB on the carefully constructed effort

to meet the need, in a world of globalized finance, for a

common set of international standards?

Warren Buffett, Chairman and CEO, Berkshire Hathaway, May

1, 2004

Write your congresspeople giving them your views on whether

options should be expensed. . . . It was a disgrace 10 years

ago when Congress bludgeoned the SEC and the [Financial]

Accounting Standards Board to override FASB's decision to

expense options. It accelerated the anything-goes mentality

of the 1990s.

The Honorable Richard C. Shelby, Chairman of the Committee

on Banking, Housing, and Urban Affairs, United States Senate,

June 30, 2003

I don't think we should make those rules in the Banking

Committee or even in Congress. . . . [FASB] understands the

implications. There are economic implications here, but it

also gets into corporate governance and honesty in financial

statements.

In conclusion Mr. Chairman, options clearly have a value and failing to expense them, despite the difficulty of doing so, distorts financial statements and is misleading and unfair to the casual investor.

Madam Speaker, I thank the chairman for yielding me this time, and I think there is going to be unanimous support for this resolution.

I think it is appropriate to mention the only reason this really came to the forefront and has become an issue is because the Election Assistance Commission Chairman, DeForest Soaries, proposed a possibility of a policy for allowing the alteration of the schedule for Federal elections in the event of an unspecified emergency. He said maybe we should be looking at that possibility. I think it was never the intention of Congress or the administration or anybody else for the reasons that have been presented from both sides to ever alter our election schedule in the United States of America.

I would like to add some of the whereases in the concurrent resolution that I introduced earlier in July, on H. Con. Res. 474.

And it says: ``Whereas the United States has never postponed or delayed a Federal election for any reason, even during the Civil War'' and ``Whereas Condoleezza Rice, the Assistant to the President for National Security Affairs, has stated that the administration has no intention of altering the schedule for Federal elections and expects the elections to occur as scheduled'' and ``Whereas the American people have a longstanding and legitimate expectation that regularly scheduled Federal elections will continue to be held in accordance with Federal law'' and ``Whereas keeping the schedule of Federal elections is necessary to maintain confidence in the legitimacy of the Presidency and Congress both in the United States and around the world: Now therefore be it resolved'' it is not going to happen and this Congress is never going to permit the alteration of law that would be required to have a postponement of our Federal elections because of terrorist threat.

I compliment both sides of the aisle for moving ahead with this resolution.

Mr. Speaker, I rise to honor and remember H. Morley Fraser, a wonderful friend of mine and the beloved Albion College coach and mentor to generations of students, alumni and colleagues, who lost his struggle with cancer June 28, 2004 at the age of 82.

A native of Milwaukee and a graduate of Washburn University in Topeka, Kansas, and Michigan State University, Morley was a Navy captain during World War II. He began his coaching career in the high school ranks in 1947, coaching for 2 years in Kansas prior to moving to Newberry, Michigan in the Upper Peninsula. At Newberry High School, he compiled a 22-0-1 record in football and had 3 conference championships in 3 years. His Newberry track team earned the 1951 conference title and regional championship. Morley then moved to Lansing and in a 2-year stint at Lansing Eastern High School, he moved a last-place team to a second-place finish in the school's 5-A conference. He moved to Albion in 1954.

As Albion College's head baseball coach for 18 years, Morley won 6 Michigan Intercollegiate Athletic Association championships. But he will be best remembered for the 14 years he prowled the sidelines as Britons' head football coach. During that era, Albion won 5 MIAA championships, compiled an 81-41-1 record, had 5 MIAA Most Valuable Players, recorded 2 undefeated seasons, and had a winning streak of 15 consecutive games. The school's football field is now named after him.

After leaving coaching, Morley joined Albion's administration and was executive director of the Albion College Conference Center from 1973- 1989. He was chosen for the National Fellowship of Christian Athletes Hall of Champions, the Upper Peninsula Sports Hall of Fame and received the Lifetime Leadership and Athletic Hall of Fame award from Albion College.

Although he was best known for his work at Albion, Morley was also known throughout the State as a motivational speaker, routinely giving 200 speeches a year. Among his many engagements, University of Michigan football coach Lloyd Carr invited him to speak to his team before a game every season. He was a mentor to generations of athletes and coaches throughout the Great Lakes region.

Morley was also involved in several organizations locally and nationally. In addition to the Fellowship of Christian Athletes, he was a member of the Albion Rotary, the Jackson Kiwanis, and served as the longtime Sigma Nu fraternity adviser at Albion College. He was also a member of the Albion First United Methodist Church for 50 years. Morley Fraser loved people, his community, and his country.

Coach Fraser was a man whose dedication for coaching was only exceeded by his love for his players themselves. He demanded nothing less than the best and he always saw the best in everyone. Morley had a preternatural ability to not only teach offense and defense, but also responsibility, loyalty, civility, and virtue. Most importantly, he lived the values, virtues, and lessons that he taught. To balance his tenacity on the athletic field, he was a gentle, compassionate, and loving husband, father, and friend.

On behalf of the United States Congress, we offer our condolences to Morley's beloved wife of 57 years, Elizabeth, his daughters, Diane and Kathy, his sons, Morley Jr. and Douglas, his 11 grandchildren, and his 2 great-grandchildren. Morley was passionate for his causes and was a role model for all of us who seek to improve our communities and our country. We offer our thanks to Morley for all he did for countless students, alumni, colleagues and his community.

Mr. Speaker, I rise to honor Dale Koroluck, an exceptionally bright young man who has been awarded the President's Award for Educational Excellence for 2003.

Dale is an inquisitive, high energy, intelligent student who will be entering the. eighth grade at Amelia Earhart Middle School in the fall. He excels academically among his peers and also consistently demonstrates the motivation, initiative, integrity, leadership qualities and exceptional judgment that set him apart from his fellow students.

Although Dale's favorite subjects are math and science, he truly enjoys engaging in debate and public speaking. He hopes that his budding litigation skills will someday prove useful while attending law school. Dale also likes to play football and basketball, and he has trained to earn his first degree-black belt in Taekwondo.

On behalf of the United States Congress, we offer our congratulations to Dale for earning this prestigious academic award and applaud him for his tenacity to learn. Dale is passionate in all of his endeavors and serves as a fine role model for his peers.

We also extend our compliments to Dale's wonderful parents, Kay and Daryl, and his brother Dillon. I suspect that it is very likely that Dale and Dillon will follow in the family tradition of being involved in public service and possibly someday run for public office.