Floor Statements

Madam Speaker, the Democrat budget raises taxes, plain and simple. You can cite all of these other groups that say one thing or another, but the group that counts is the Congressional Budget Office. That is the official scorekeeping agency that measures our budgets.

And according to the Congressional Budget Office, the Democrat budget provides for the largest tax increase in American history. Either that, or they don't balance the budget. They can't have it both ways. They are saying they balance the budget, and the only way they balance the budget is by raising taxes, cutting the child tax credit in half, bringing back the marriage tax penalty, bringing back the death tax, raising tax rates across the board on all income tax payers, repealing the 10 percent for low-income Americans, bringing back higher tax rates on capital gains and dividends which create jobs and help seniors save.

In fact, if their tax plan comes to fruition, if they actually accomplish what they are seeking to accomplish, they will tax the small businesses of America at higher tax rates than the largest corporations in America.

Madam Speaker, these tax cuts created jobs. They created 7.6 million jobs. Don't raise taxes.

Madam Chairman, I rise in opposition to the amendment.

Madam Chairman, at this time I would like to address why we are here today. We are here to balance the budget, and what is very good about this debate we are having here today is we are talking about not if we should balance the budget; we are talking about how to balance the budget.

So for that point we have come to a good part of this debate, where I believe, based on the numbers I have seen, all of these amendments we are going to experience today and the base Democrat budget balances by 2012. That is a good start. So now we here in Congress are agreeing, let us balance the budget. That is good.

The question then becomes how do we balance the budget. This is where there are enormous differences between the two parties.

The three budgets on the other side of the aisle, the Progressive budget, the Congressional Black Caucus budget and the base Democrat budget, all have one big thing in common: they raise taxes. They raise a lot of taxes, anywhere from $400 billion to $1 trillion just over the next 5 years.

What kind of taxes are we talking about? Well, let's look at the tax relief that occurred. In 2003, if you take a look at what happened to our country in 2001 with 9/11, with the Enron scandals, with the dot- com bubble bursting, the fact that we went to war and we went into a recession, we lost a lot of jobs. We were losing over 100,000 jobs a month at that time. We went into a recession. Three years of revenues declined. We had a big deficit. So while revenues went down because people lost jobs, we went into deficit and spending went up.

Why? Because we had unemployment. We had programs to help people who lost their jobs. We had war costs, and so what ended up happening was we needed to get people back to work. We needed to get this economy growing again.

So what did we do? At that time, we were in the majority. We decided we needed a package of reforms, of tax cuts to get the economy growing again, to get people working again. So we cut taxes on families, cut taxes on small businesses, cut taxes on business investment.

What happened? 7.6 million new jobs were created since those tax cuts in 2003. We went from growing our economy at an anemic 1.1 percent prior to the tax cuts to growing our economy at an average of 3.5 percent. We went to creating about 160,000 jobs per month since those tax cuts.

What also happened? Revenues went up. Revenues went up for double digits the 2 years following. This year so far the revenues are up about 10 percent. So revenues came in, why? Because we actually cut taxes. We have lower tax rates, but we have higher revenues because people went back to work. People went to work, to jobs and paid more taxes.

What happened? The deficit went as high as $412 billion. Now it is as low as $176 billion. I would like to say that it is because we did a great job on controlling spending. No, that is not the case. The reason the deficit for the most part went down is because revenues went up, because the economy grew, people went back to work, paid their taxes.

So, Madam Chairman, we do not have a revenue problem in Washington. Revenues are coming in fast. We have a spending problem in Washington, and this is the difference between our philosophies, our budgets.

We believe that the money people make really is their money, not the government's money. We believe that when someone starts a business, when someone goes to work, that is the fruit of their own labor and they ought to keep more of their hard-earned money, because at the end of the day, if government takes more money out of the person's paycheck, you are taking more freedom out of their lives. If you take more money out of a family budget, you are taking more freedom away from that family. That is the difference.

We believe that people ought to keep more of what they earn. We believe that small businesses, which are the engine of economic growth in this society, which create all these jobs, should not be taxed at tax rates higher than large corporations, but that is what will happen if any of these three budgets pass, if the Progressive budget, the Congressional Black Caucus budget, or the Democrat budget passes.

We believe that we need to focus on spending and not on raising taxes, because more important than that, I want to show you one chart, Madam Chairman. If you take a look at these revenue lines, even if we take the low line, the blue line, that is the line of revenues coming in if we don't raise taxes. That is the line the Republicans are using for our budget, and we balance our budget by controlling spending instead of raising taxes, and we control spending to the point where we stop the raid on the Social Security trust fund and we pay down $100 billion in debt in the fifth year alone.

The red line, not much higher, but the red line says, let's raise taxes by $400 billion. That is the smallest of the tax increases we are looking at of these budgets today. That still shows, but it is a lot lower than the green line, the spending line.

Spending is the problem. If we do nothing to control spending, by the time my children are my age, the Federal Government will double in size simply by growing on the current path that it is on.

This has to be dealt with, Madam Chairman. This has to be dealt with, and no matter how much you propose to raise taxes, no matter how much you want to raise taxes on small businesses, take away the per-child tax credit, bring back the marriage penalty, reinstate the death tax, raise taxes on businesses and capital investment and seniors and dividends and capital gains, no matter how much you want to raise taxes here, if you pass one of these other three budgets, we still will not have enough to meet the spending line, the spending appetite, the spending trajectory of this Federal Government. That has to be dealt with.

Why does that have to be dealt with? Because we do not want to pass onto our children and our grandchildren a mountain of debt. The debt has increased. Sadly, over the last 8 years, it went up $3 trillion. I think you are going to hear that from other people. I have got news for you, Madam Chairman, just Social Security alone by doing nothing to address this program

over the next 5 years, that debt will go up by $3 trillion.

Medicare, if we do not address Medicare's growth, if we do not reform and maintain and save Medicare, the debt to just Medicare will go up almost $20 trillion over the next 5 years by doing nothing.

So, Madam Chairman, let's not raise taxes. Let's work on spending, and let's reform these programs.

I want to reserve the balance of my time, but I want to say one thing before I do, and that is these three programs which we commonly refer to as our entitlements are the most important domestic programs in the Federal Government. Medicare helps people who are an older age get health care. Medicaid helps people who are low income get health care. Really, really important missions, Madam Chairman. And Social Security helps provide people with retirement security.

These programs are too important to let slip into bankruptcy. These programs are too important to go for five more years without any reforms designed to extend their solvency and make them work better and be more responsive to the needs of the American people.

I think that is where we should place our efforts.

Madam Chairman, I reserve the balance of my time.

Madam Chairman, I reserve the balance of my time.

May I inquire about the time allotment remaining between the two parties.

Madam Chair, this is an important moment for our time of fiscal responsibility in America. I would like to read from a few quotes. We have had great hearings in the Budget Committee. I want to compliment the gentleman from South Carolina (Mr. Spratt) for holding great hearings. In all of these hearings, we had fiscal experts coming to testify from both parties, from nonpartisan organizations like the Congressional Budget Office, the Government Accountability Office, from the Federal Reserve.

I would like to read a few quotes about the fiscal condition that is staring us in the face that this budget should be addressing today.

On the urgency of entitlement reform, we had Ben Bernanke, the chairman of the Federal Reserve, come in and say, ``Without early and meaningful action to address entitlements, the U.S. economy could be seriously weakened, with future generations bearing much of the cost.''

Then we had the Comptroller General, Mr. Walker, on 60 Minutes say, ``Health care is the number one fiscal challenge for the Federal and State governments. If there is one thing that

can bankrupt America, it is health care. We need dramatic and fundamental health care reforms.'' That's at a hearing.

On 60 Minutes, he said, ``The rising cost of government entitlements is a fiscal cancer that threatens catastrophic consequences for our country and could bankrupt America.''

Here is what Mr. Walker is talking about. If you take a look at this chart, it shows you that, consistently, our government has been taxing the American economy at about 18 percent of our gross domestic product. What that means is, basically, since about 1960, to finance our Federal government, we have had to tax the American economy, families, businesses, all those things, at about 18 percent of our economic output. It has been remarkably consistent.

Because of the unsustainable growth of government spending programs, of our entitlement programs, they are growing at such a quick pace that by the time my 5-, 3-, and 2-year-olds are in my age bracket, they will have to tax the American economy at 40 percent just to pay the bills.

Let me put it another way around. We have very important programs. We call them our entitlement programs. They meet critical missions of the Federal Government. When they were set up, they made sense at the time the way they were financed. They were called pay-as-you-go. Current workers pay taxes, particularly payroll taxes, to pay the benefits for current retirees, for current beneficiaries. It worked fine for many years.

Not now, though. Because as the baby boomers begin to retire, which begins next year, we will double the amount of retirees in this country; and we will only increase the amount of workers coming to this country by 17 percent. For all of those who had kids during that baby boom generation, they had a lot of kids; and it was wonderful. Our birth rates went up. But, since then, we haven't had as many kids.

Heck, in my own hometown of Janesville, Wisconsin, where I come from an Irish Catholic family, I had 65 cousins in just Janesville, Wisconsin. But I am a Generation Xer; and at my family level, we didn't have as many kids. That is what is happening across the world and across the country.

Why am I saying all of this? What did it mean? It means that these programs are going to double the amount of consumers to the programs and not double the amount of payers into the programs.

We have to reform these programs. We have to make them work better, and we have got to prevent our kids from having their taxes doubled. That is what this is about at the end of the day, Madam Chair. It is about our children and our grandchildren.

Now, this seems to be a cliche thing that everybody says when they get up to a microphone. But, quite honestly, if we don't get a handle on our fiscal situation, if we don't recognize the fact that if all you do is raise taxes to balance the budget in 2012, you are going to go right back into deficit soon thereafter if we don't control spending, if we don't reform government, if we don't fix our entitlement perhaps. If we don't do this, the debt we have today will pale, pale in comparison to the debt we are going to be passing on to our children and our grandchildren.

We have new economic challenges and threats unlike any we have ever seen before in this country. We don't have oceans that separate us anymore. We have broadband, Internet, digital technology. We have to compete with workers on a daily basis from countries like China and India overnight.

We have real economic challenges facing us, and we can't survive and thrive in this era of globalization. We can't continue to be America's economic superpower, the world's economic superpower, if we are going to double the taxes on future generations.

You can't tax your way into prosperity. We already today tax our businesses, our capital, more than any other country in the industrialized world except for one, Japan. They just finished two decades of recession.

We have got to wise up to the fact that we have to be lean and mean and compete with China and India and these other countries. We have got to make sure that the way we run our health care system works for patients, that the way we have our entitlement benefits gives us income security, retirement security, health security. We have got to make sure that it doesn't do it in such a way that it literally doubles the entire tax burden on the American economy, on the American family. If we do that, we will push more jobs overseas. We will lose our standard of living, the great gift of America of a generation to the next.

The legacy of the American Dream is that each generation bequeaths unto the next a higher and better standard of living. That is exactly what my parents and grandparents told me. We are at risk of severing that tie. We are at risk of discontinuing that legacy of giving our kids and our grandkids a better standard of living, a better economy, things better off than when we found them.

Budgets matter, and the budget that we have before us today, whether it's the CBC budget, the Progressive budget or the Democrat budget, raises taxes by anywhere from $400 billion to $1 trillion over the next 4 years and does absolutely nothing, nothing, nothing to control spending, to reform government, to prevent this mountain of debt going onto our children's backs.

Madam Chair, I reserve the balance of my time.

Madam Chair, how much time do I have remaining?

Madam Chair, I reserve the balance of my time.

Madam Chair, I reserve the right to close, and I think that they still have more speakers, so I will just reserve my time.

Madam Chair, I will address the House for the remainder of my time from the well.

Madam Chair, I wish to compliment the Congressional Black Caucus with their budget today because they are bringing a serious budget to the floor. They are bringing a budget that does achieve balance. They are bringing a budget that reflects their philosophies and their policies, and that is important. I commend the Black Caucus under the leadership of Ms. Kilpatrick for that.

This is what we do. We come to the floor with our budgets to encapsulate our priorities and what are the visions we have for the future of our country.

This budget does raise taxes. You simply can't get around the fact that it calls for $711.9 billion in additional tax revenues over the next 5 years to make the budget balance. But that is fine.

I wish to talk, at this time, about the underlying Democrat budget. And let me just quote from The Washington Post this morning. The article in The Washington Post this morning, in talking about the Democrat budget says: ``And while the House Democrats say they want to preserve key parts of Bush's signature tax cuts, they project a surplus in 2012 only by assuming that all of these tax cuts expire on schedule in 2010.''

Now, we understand that people say, on the other side of the aisle, they don't want to raise taxes. I hear those words. I even hear that they say they have these sort of mythical reserve funds, which is really nothing more than a wish list.

So we had all these votes in the Budget Committee. We said, okay, if you really don't want to raise these taxes, then let's put it into the budget. Let's make it clear. Let's put it into the numbers of the budget so that we clearly can tell the American people we are not going to raise your taxes.

So we had a whole series of votes in the Budget Committee to amend the budget to make sure taxes weren't being raised. We had an amendment to make sure that we didn't increase marginal tax rates. We had an amendment to make sure we didn't eliminate the $1,000 per-child tax credit. We had an amendment to make sure we didn't eliminate marriage tax penalty relief. We had an amendment to make sure we didn't eliminate the capital gains and dividends tax relief. We had an amendment to make sure we didn't eliminate the State and local sales tax relief which applies to States like Texas and Tennessee and Florida. We had an amendment to make sure we didn't bring back the death tax. Amendment after amendment after amendment, which would have made this clear and simple that we weren't going to raise taxes was defeated, every single one of them, by party-line votes. The Democrats defeated every single amendment in attempts to stop these tax increases from coming into this budget.

Now, let's take a look at what kind of tax increases we are talking about. The Democrat budget only reaches balance because of this. This is how their budget achieves balance.

They have $32.5 billion in higher taxes coming from higher tax rates on dividends and capital gains. They have $40 billion in higher revenues because they cut in half the per child tax credit. They bring back the marriage tax

penalty, which makes people pay taxes simply because they are married. They get $91 billion in extra tax revenues by bringing the death tax back in full force, and they gain another $78 billion by taking away the lower 10 percent bracket for low-income Americans. They bring into the government an extra $104 billion by raising all other marginal tax rates, and that is also the tax rate that small businesses pay.

So small businesses, which are the engine of economic growth of America, and most jobs come from small businesses, under their plan small businesses will pay a tax rate at about 40 percent, when we are going to actually be giving a tax rate to the largest companies in America, IBM, Exxon, Microsoft, at 35 percent.

This is how their budget balances: Raise taxes on businesses, raise taxes on small businesses, raise taxes on investment in seniors' pension funds, raise taxes on people with children, raise taxes on people who get married, raise taxes on people who die, and raise taxes on low-income Americans. That is the only way, the only reason, the only ability that the Democrat budgets actually achieve balance.

We can do better, Madam Chairman, and the reason we can do better is because we have to attack out-of-control spending.

Washington does not have a revenue problem, Madam Chairman. Money is coming in as fast as it ever has. Money is going out too fast. Both parties are to blame for this. I am not going to be here and sanctimoniously say that our party has been wonderful on spending. No, we have not. What I am saying is we have to agree spending is out of control. That is the problem. Let's control spending.

The budget we are bringing to the floor later on does just that. We give the tools to get rid of pork. We give the tools to let the American people see exactly how their tax dollars are being spent. We bring more accountability and transparency to the Federal budget process. We reform our entitlement programs so we can extend their solvency, so we can make sure that people can better count on Medicare and Medicaid. These are the things that we have got to do so we don't crank up our debt, raise our taxes, and put a huge burden on our children and grandchildren.

Madam Chairman, I demand a recorded vote.

I thank the gentleman for yielding, and I want to thank the gentleman from Texas for his wonderful expertise on budget issues. He has been a leader on this issue.

I also want to compliment the Progressive Caucus for coming to the floor with an earnest budget and for putting a budget together. These are not easy things to do. The Progressives have put together a budget that embodies their philosophies, their opinions, and I think that is good.

I completely disagree with the direction of the budget, deep cuts to defense, incredible increases in spending across the board, and a $949 billion tax increase. I think it is the wrong recipe for our economy, but I compliment the Progressives for bringing a budget to the floor that actually achieves balance, albeit by raising taxes.

Madam Chair, I want to give a little foreshadowing of our next budget. You are going to hear the word ``cut'' and the words ``drastic cuts'' and things like that. I think we are going to hear that from the other side of the aisle because they propose to control no spending. Those chose to cut nothing, not even controlling the growth of spending. Rather, they choose to raise taxes.

On Medicaid, our budget will propose, yes, to increase spending, albeit not as fast as it is going right now. This will extend the solvency of Medicaid. We propose to increase spending even faster than medical inflation.

What about Medicare? Again, our red line below the blue line, we propose to increase Medicare spending and reform the program.

What will our budget achieve? It will achieve savings that will extend the life and solvency of Medicare.

What does the Democrat budget achieve? An exacerbation of the problem.

Here is what our budget proposes to do on all entitlements. I don't even know if the viewer can see the difference between the blue line, which is the current trajectory of entitlement spending, and the red line.

We propose to increase entitlement spending each year at 4.1 percent a year, instead of 4.7 percent a year. Is that a drastic cut? Is that a terrible, awful cut to programs? Let me repeat it one more time. We are increasing entitlement spending 4.1 percent a year, instead of 4.7 percent. That is above inflation.

Here is the legacy of the Democrat budget. Right now, today, according to the Government Accountability Office, the current unfunded liability of Medicare and Social Security is $37 trillion. That will go to $62 trillion of money that we would have to set aside today to make these programs work for the next two generations, my generation and my children's generation, by 2012. By doing nothing to save Medicare, Medicaid and Social Security, the Democratic budget is actually increasing the liability of these programs. The Democrat budget is making matters worse by postponing the necessary reforms that must occur.

But there is one thing the Democrat budget does, and it was very well described in the Washington Post this morning. Let me quote: ``While the House Democrats say they want to preserve key parts of Bush's signature tax cuts, they project a surplus in 2012 only by assuming that all of these tax cuts expire on schedule in 2010.'' That means cap gains, dividends, income tax rates, per child tax credit, marriage tax penalty, all of those tax cuts go away.

Let me make it very clear. We use the Congressional Budget Office by law to develop our budgets, and this red line shows you that, in 2010, tax cuts go away, taxes increase, and revenues go up. That is the line that the Democrats are writing their budget based on. Their budget requires, assumes, legislates, needs these tax increases for them to balance the budget.

The green line is the line we use to write our budget. We balance the budget without raising taxes, and they raise taxes.

Mr. Chairman, I offer an amendment.

Mr. Chairman, we are coming to the end of 2 days of debate on how to organize our Nation's finances; how do we want to prepare the budget for the next 5 years for our country.

This is a big debate. It is a debate that really underscores the different philosophies between our two parties.

The Democrats have chosen the path of higher spending and a lot higher taxes. The three Democrat budgets we had before us here on the floor today, one raised taxes by $400 billion, another raised taxes by $711 billion and a third one raised taxes by $949 billion.

The last tax increase we had was the last time the Democrats had the majority, and that was a $241 billion tax increase. Now, 3 months into their new majority, they are proposing anywhere from a $400 billion to a $1 trillion tax increase.

We don't believe that we should take more money out of the pockets of hardworking Americans. We don't believe we should tax, tax, tax and then tax more the American economy and the American family and the American workers.

We believe Washington has a spending problem, and that is why we are proposing to control spending, and that is how we achieve the balanced budget. Not only do we achieve a balanced budget, but we stop the raid of the Social Security trust fund and pay down $100 billion in debt in the fifth year of our budget.

Now, here is the difference. The blue line is our line, the revenue line, where we keep the tax cuts intact. The red line is the line where the Democrats raise the taxes. The green line is the current trajectory of spending.

We have to control spending if we are going to ever fully balance the budget. Even if we accept the Democrats' tax increases, the balance they achieve in 5 years will only last for a couple of short years because we will go right back into deficits if we do nothing to control spending.

Now, you are going to hear a lot of words about our budget in the next few minutes. Cut this, cut that, we are savaging this, we are taking a chain saw to that. We are pitting Medicare and Medicaid.

Let's be really clear. Medicare, spending goes up every year from here to the next to the next. Medicaid spending under our budget will go up faster than health care inflation. But we are going to reform the program so that it works better, doesn't cost as much, and extends its solvency so that it is there for people.

Medicare. Are we cutting Medicare? No, we are not cutting Medicare. We are growing Medicare. We are growing Medicare, not as fast as it is currently scheduled to grow because we are reforming Medicare. And what do we do? We extend the solvency of Medicare.

Overall, if you take a look at the difference in spending we propose over the next 5 years, on entitlement spending we propose growing, increasing, adding entitlement spending at 4.1 percent a year for the next 5 years, instead of 4.7 percent a year.

Now, at the end of the day, it is about how we get our fiscal house in order. Here is the devastation of the Democrat budget. And I am just going to pick one program.

Medicare, the unfunded liability of Medicare is $32 trillion. $32 trillion is how much money we would have to set aside today in current dollars to make sure that Medicare is there for my children when they receive Medicare.

Under the Democrat budget, the Medicare unfunded liability will go to $52 trillion. That means doing nothing to reform Medicare. Doing nothing to reform Medicare at all will actually lead to adding a huge debt onto the problem. It will mean that our children and grandchildren will have another $22 trillion in debt thrown onto them if we decide not to do a thing for the next 5 years to reform our entitlement programs. But that, in fact, is what the Democrat budget does.

The actual household burden today on Medicare is $282,400. That is what we would have to set aside today, per household, to make sure Medicare is there for my children when they retire. If we do nothing for the next 5 years, as the Democrats propose, that goes up to almost $476,000 a household.

We have got to fix these programs. We have got to reform these programs. We have got to reform them so that they work better. They were written in the 1960s. We are now in the 21st century. We can make these programs work better. We can better meet the mission of Medicare, Medicaid and Social Security, income security, health security; and we can do it without bankrupting our children.

The problem is, we can't put our heads in the sand for 5 years and do nothing. That is what the Democrat budget proposes to do. Absolutely no savings, no spending control, no reform.

We have to reform these programs, Mr. Chairman, because if we don't, our debt gets higher. We go back into deficits, and there isn't another tax you can raise to get out of that hole.

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

At this time, Mr. Chair, I would like to yield 2 minutes to the distinguished gentleman from California, a member of the Budget Committee, Mr. Lungren.

Mr. Chairman, at this time, I would like to yield 2 minutes to the ranking member of the Ways and Means Committee, Mr. McCrery of Louisiana.

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

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

Mr. Chairman, I yield 2 minutes to the distinguished gentleman from Indiana (Mr. Pence).

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

Mr. Chairman, I yield 2 minutes to a member of our leadership, the gentleman from Virginia (Mr. Cantor).

Mr. Chairman, isn't the gentleman supposed to address the Chair, not specific Members?

Mr. Chairman, may I inquire as to how much time is remaining on each side.

Mr. Chair, I yield myself 10 seconds, as I yield to our minority leader, simply to say the gentleman from Maryland comes from a State which under their budget will see an average household tax increase of $3,238 per household. This will affect 2,259,000 Maryland taxpayers.

At this time, Mr. Chairman, I would like to yield 3 minutes to the distinguished gentleman from Missouri, the minority whip (Mr. Blunt).

Mr. Chairman, as I yield to my friend from Michigan, I will note that Illinois taxpayers will pay $3,282 higher every year. That hits 4,731,000 Illinois taxpayers budgets under their budget.

I yield 1 minute to the gentleman from Michigan.

Mr. Chairman, I yield myself the remainder of the time.

Here it comes, Mr. Chairman, the closing of this debate. We have heard it all. We have heard the quotes: these cuts are so deep, so extreme about the Republican budget.

Well, let's just see how deep and extreme these cuts are. Instead of spending over the next 5 years $14.976 trillion, our budget proposes $14.928 trillion over the next 5 years. Instead of growing entitlement spending at 4.7 percent a year, we will grow it at 4.1 percent a year.

What do we accomplish with this? What do we do with that? We balance the budget without raising taxes. We stop the raid on the Social Security trust fund and we pay down debt. That is what we accomplish with our budget.

What do the Democrats accomplish? No matter how they spin it, no matter how they duck it, no matter how they hide, they are raising taxes. Don't ask me. Just look at The Washington Post that said: ``And while the House Democrats say they want to preserve key parts of Bush's signature tax cuts, they project a surplus by 2012 only by assuming that all of these tax cuts go away.''

Meet the new Democrat majority, Mr. Chairman, the same as the old Democrat majority. And the last time they had the majority in 1993, what did they do? They passed the largest tax increase in American history, $241 billion. Now, 3\1/2\ months into the new majority, what are they planning to do? Passing the largest tax increase in American history, about $400 billion. Is that to control spending or something like that? No. They are engaging on a gorge of new spending. $50 billion is already being thrown out the door just this year, and it is not even April into their new majority.

Mr. Chairman, this is a direction. This is a choice between two visions. Do we or do we not let people keep more of their own hard- earned money? Or do we just keep taxing them more and more and more and spending more and more and more? That is the choice.

We believe in the people. We believe people should keep more of their own money. We believe people should keep their child tax credit. We don't want to tax people for being married. We believe small businesses should be taxed no more than large corporations. We believe seniors ought to be able to enjoy their retirement savings. We believe in preserving, saving, and enhancing our entitlement programs by extending their solvency.

What are they going to do? They are hastening the demise of our entitlements, they are accelerating the bankruptcy of these programs, and they are giving us the largest tax increase in American history.

Like it or not, the numbers are clear. You can reserve fund everything you want, you can put any wish list you want in a piece of legislation, but numbers don't lie. And the numbers are crystal clear and they tell the truth: this budget, the Democrat budget, gives us the largest tax increase in American history, and the Republican budget keeps taxes low, and it balances the budget by controlling spending and it stops the raid on the Social Security trust fund and it pays down debt.

Pass the Republican budget. Defeat the Democrat budget.

Mr. Chairman, I demand a recorded vote.

Mr. Chairman, I yield myself 12\1/2\ minutes.

Mr. Chairman, first off, I would like to start off this debate by paying a compliment to the gentleman from South Carolina (Mr. Spratt). The gentleman from South Carolina is just that. He is a gentleman. He is a good man, he is a man who has a tough job, and he is a man who I enjoy working with.

The key to this year's budget debate is not whether Congress should balance the Federal budget. Republicans and Democrats this year are agreeing that we need to balance the Federal budget. The key is about how we are going to get there.

Today, as this House debates both the Democrats' and the Republicans' budget proposals for fiscal year 2008, it will become clear that this is much more than a simple discussion about numbers and how they add up over the next few years. Instead, this is going to be a bigger debate about our different governing philosophies, about what kind of society we envision, about what kind of country we want to leave to future generations.

The budget that the Democrats have proposed is true to their philosophy. I give them credit for that. They believe that more government is better government and that the best way to solve the myriad problems we face in this country is to spend more and more and to tax our people more and more to pay for that spending.

The Democrats' budget reflects this philosophy by calling for the largest tax increase in American history. I will make this irrefutably clear throughout the course of this debate: They call for immense new spending and postponement of critical entitlement reforms for another 5 years.

If Congress passes this budget tomorrow, this will enshrine the raising of taxes to the tune of $400 billion on the American family, worker and business. And we are not just talking about raising taxes on the rich, as they would like to have us believe. We are talking about raising taxes on every single American income tax payer. This means raising marginal income tax rates on all taxpayers; eliminating the 10 percent bracket that has benefited numerous low-income individuals; raising the tax on capital gains and dividends and discouraging investment in our economy and saving for our seniors; slashing the child tax credit in half; reinstating the marriage tax penalty; reimposing the death tax; and eliminating the State and sales tax deduction for States like Texas and Florida.

Let me just show you where the lie is. It is not in the numbers. The lie is in the so-called reserve funds. They can give you all the words they want. They can say they put all these fancy words in this budget that says we don't want to raise taxes, we want this new spending. But what a budget resolution is is a bunch of numbers, and numbers don't lie, Mr. Chairman.

This budget requires, banks on, plans for, assumes, insists upon the largest tax increase in American history. Otherwise, they don't balance the budget.

So my friends on the other side of the aisle can have it one way or the other, but not both. They can say they are balancing the budget. But, according to their budget, they therefore have to raise taxes. Or they can say they are not raising taxes, at which hand they then are not balancing the budget. They can't have it both ways.

The line, the red line, which is the revenue baseline, does not lie.

Now, their revenue numbers show it. And they can bring in all the left-leaning think tanks that have been in favor of tax increases in the past and in the present to say that this isn't a tax increase, but come December 10, January 31, that is the last day people have a $1,000 tax credit. It is the last day married couples won't be taxed for being married. It is the last day the death tax isn't at zero. It is the last day income tax rates don't go up across the board. That is what happens.

They have also made more than $100 billion worth of additional spending

promises in this budget, if they are offset. That's what all these reserve funds are about; more money for this program, more for that program, more money for this program, maybe some tax relief for the middle class. We have a reserve fund for it. My friends, a reserve fund is worth less than the paper it's printed on because all it says is we have these priorities, these ideas, these things we would like to do, we have no money for it; middle-class tax relief, more money for SCHIP, farm programs.

But if we did come up with the money to pay for these programs, we would like to do it; but we don't have the money, so we're not doing it. That is basically what a reserve fund is.

What we really have here, Mr. Chairman, is a huge tax increase, a tax increase that will have the effect of significantly increasing the burden on individual taxpayers and small businesses and will completely ignore the positive growth impacts that these tax cuts encouraged since 2003.

Let's review some of the effects that low tax burdens have had on economic growth, on jobs. Before we provided tax relief in 2003, we were losing an average of 100,000 jobs a month. Since then, we have added 7.6 million new jobs; about 170,000 new jobs have been created per month since the tax relief.

The economy. Before tax relief occurred in 2003, the economy grew at an average rate of 1.1 percent. Now it has been 3.5 percent since then, faster than it has grown in the last three decades, on average.

Unemployment. When we passed tax relief, the unemployment rate was at 6.1 percent, now it's all the way down to 4.5 percent.

Business investment. When we passed tax relief, business investment had been down for nine straight quarters. Since then, business investment has been up for 15 straight quarters. That is where the 7.6 million new jobs got created. Unfortunately, the Democrat budget would ignore all of this, with immense tax increases that threatened to put us right back where we were in the recession of 2001.

And now on revenues. What they will tell you is that the revenues are the reason why we are in deficit. What they will tell you is that the tax cuts drove us deeply into deficits. That is completely untrue. On the contrary. If you take a look at this chart, the tax relief actually had the effect of increasing job creation and revenues coming into the Federal Government.

We had 3 straight years of revenue decline during the recession. The tax cuts kicked in. What happened? Revenues went up exponentially, to the point where we have had double digit revenue gains for the last 3 years, and as a consequence, the deficit has been going down. These surging revenues have been a key factor in reducing this deficit.

Mr. Chairman, the wrong way to balance the budget is to raise taxes. The right way to balance the budget is to control spending. We do not have a revenue problem in Washington. Money is coming in very quickly from taxpayers. What we have here is a spending problem. And the Democrats are making it worse because they are calling for all this new spending.

For all of their talk about reducing the deficit, all they have done since they came into the majority is to spend more and more money, and we are only into the end of March. First they passed the omnibus bill that added $6 billion in new spending. Next came the supplemental for the warfighters in Iraq and Afghanistan; they added $21 billion in unrelated and unrequested spending. And now their budget resolution adds another $24 billion in new spending next year alone.

For all the additional spending and gimmicks, the worst thing about this budget is not just the tax increases and the new spending, it's about what it does not include. This budget does nothing, absolutely nothing, to address our entitlement problem. This is what needs to be fixed, Mr. Chairman.

We had all these eyewitnesses, all these experts come from the left and the right that the majority called, from the GAO to CBO to other groups, all talking about the fact that our Nation is facing a fiscal crisis, that entitlements are growing out of control, that our primary responsibility in crafting our budget should be to address entitlement spending. Let me read some quotes from the Democrats' own witnesses.

The Comptroller General of the GAO has called the rising costs of government entitlements a fiscal cancer that threatens catastrophic consequences for our country and could bankrupt America. The Chairman of the Federal Reserve came to testify. He said, ``Without early and meaningful action to address the rapid growth of entitlements, the U.S. economy could be weakened, with future generations bearing much of the cost.'' Even the Democrats' own witnesses from the Concord Coalition testified to the same.

They've heard all of these witnesses, they've heard all these warnings, and they have chosen in this budget to do nothing. There is not a single reform, a single dollar of savings from entitlements. Obviously, they seem to be unconcerned with the $4.6 trillion in liability that Social Security has, which grows every year by $600 billion; or the $32 trillion in liability that my children are facing that gets larger and larger every single year.

With this budget, they have simply accepted that we are going to continue to pile up massive amounts of debt to our children, and we are going to force them to pay double what we pay in taxes today to sustain these programs.

This brings me to my final chart, a chart by the General Accounting Office. We know that if we fail to reform entitlements, the Federal Government will double in size by the year 2040. When my kids reach my age, this budget would leave them with the choice of either paying double our current tax rate, or accepting the fact that we just don't have enough money to spend on health care, defense, national security or education.

I believe this is an enormous missed opportunity by the Democrats. Yes, the Democrats balance the budget in 2012, and they should be commended for reaching that goal. But at what price are they balancing the budget? They hit balance only because they are imposing the largest tax increase in American history. We still will have all of the same problems though.

They are not reforming anything in government. They are not reforming any program. They are just calling for the American taxpayer to send more money in Congress so we can continue to spend too much money. And because of the path of big government and the tax-and-spend policies that the Democrats have chosen, this is going to be a very short-lived success. As soon as we get back to this balanced budget on paper in 2012, the year where their budget gets balanced on the backs of taxpayers, it won't be long before entitlement spending drives the Federal Government right back into deficits as far as the eye can see.

This is not a Republican and Democrat issue. The fact is every independent expert in America that watches fiscal issues knows that government is growing out of control. We have really important programs that need our attention, Medicare, Medicaid, Social Security, the three most important programs, in my particular opinion, in the Federal Government. Important programs, and programs people depend on, organize their lives around. We have to reform these programs in order to save these programs, yet they are doing nothing to do that. And because their budget does nothing to save these programs, they are hastening the day at which they go bankrupt. That is an abdication of responsibility.

No matter how you put it, Mr. Chairman, this is a tax increase. No matter how you put it, Mr. Chairman, a reserve fund, no matter what flowery language you can attach to it, no matter what left-leaning think tank you can have to say whatever you want, a tax is a tax.

In our budget, we make sure that these tax increases don't hit American families. We make sure the marriage penalty stays away. We make sure the child tax credit stays up. We make sure tax rates are down. We make sure the death tax goes away. What do they do? They insist upon, they require, they depend up all these tax increases. If they don't, their budget doesn't balance. They can't have it both ways.

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

Mr. Chairman, for the purpose of rebuttal, I yield myself 1 minute.

I think we may set a record today on the floor on charts.

But, first, let me say, if you really don't want to raise taxes, if you are telling us that you have these words in your budget that says you don't want to raise taxes, you want middle-class tax relief, then why didn't you put it in your budget?

The fact is, Mr. Chairman, we gave the Democrats ample opportunity to put it in their budget to make sure that these taxes wouldn't increase. We had amendments in the Budget Committee to prevent the increase on the marginal tax rates, to prevent the elimination of the $1,000 per child tax credit, to prevent the elimination of marriage penalty, cap gains, dividends, State and local tax, bring back the death tax. We had all these votes to say, let's make it clear in the numbers: Don't raise taxes.

What happened? Party line vote after party line vote after party line votes, Democrats voted on every one of these amendments which put in the numbers the prevention of these tax increases.

Mr. Chairman, I yield 5 minutes to the distinguished gentleman from California, a member of the House Budget Committee, Mr. Lungren.

At this time I yield myself 20 seconds to say, the gentleman from Virginia who just spoke, Mr. Chairman, according to the numbers in this budget, that State will have an average household tax increase of $3,119; and this will hit another 2,958,000 taxpayers in the State of Virginia.

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

Mr. Chairman, I yield myself 1 minute.

The gentlewoman from Oregon who just spoke, the tax increase in this budget would hit the average Oregon household with an annual tax increase of $2,751 which would affect 1,336,000 taxpayers in that State alone.

I would like to take a moment to compliment my colleagues on the other side on the veterans' portion of the budget. They do add more resources for veterans, to veterans' health care. They do meet the President's numbers on defense. This is a part of their budget that I would like to compliment them on. We, too, in our substitute, will add additional resources to veterans and veterans' health care. This is an area where I think they have made some improvements over the President's budget in their budget.

Mr. Chairman, I yield 3\1/2\ minutes to the gentleman from Alabama (Mr. Bonner).

Mr. Chairman, I will take a little time on our side to try and catch up. I yield 2 minutes to the gentlewoman from Tennessee (Mrs. Blackburn).

Mr. Chairman, if I may just interject, may I just inquire as to how much time is on each side remaining?

I thank the Chair.

Mr. Chairman, I yield myself 1\2/3\ minutes.

I would simply say the gentleman from North Dakota represents a State that pays a lot of capital gains tax and farm income, death taxes. Under this bill, the average household of North Dakota will see a tax increase annually of $2,613, which had 244,000 taxpayers. In the State of Georgia, the gentleman just spoke, that State will see an average household tax increase per year of

$2,743, which will hit 3,132,000 taxpayers.

If this budget doesn't raise taxes, then why is it that the Democrats shot down every single amendment that was offered to prevent all of these tax increases?

If you really believe it doesn't raise taxes, then why would you prevent us from adjusting the numbers to make sure it didn't raise taxes? You can read any word you want.

You can read any word you want of these so-called reserve funds. At the end of each of these reserve funds, it says, well, we got to come up with offsets to pay for these priorities. We don't want to raise these taxes. We want to extend the child tax credit, but they are not paid for. Actions are louder than words.

More importantly, numbers are louder than words.

Announcement By the Acting Chairman

Mr. Chairman, the numbers are very, very clear. The numbers, equivocally, have the largest tax increase in the American history.

Mr. Chairman, I yield 2\1/2\ minutes to the gentleman from Florida (Mr. Mario Diaz-Balart).

Mr. Chairman, at this time I yield myself 1 minute just to read some clarifying language, which is in the Democrats' budget.

At the end of these reserve funds, so called, for middle income taxpayers, it says we want to provide this tax relief, but only to the extent that such bills or joint resolutions in the form placed before the House in the Committee on Rules would not increase the deficit or decrease the surplus for fiscal years 2007 through 2012.

Then, in section 401, where they talk about these tax extensions as a statement of their policy preferences, they assume that the cost of such a policy is offset. What does that mean? That means they are not covering the tax cuts. That means if you want to extend these tax cuts, they would have to pay for them on top of raising these taxes.

What this budget resolution also does, if you simply merely want to extend this tax relief, that is past 2010, you would have to come up with more tax increases to do so. This prohibits the ability of Congress to simply extend this tax relief, thereby bringing these tax increases to a curve.

Mr. Chairman, I yield 3 minutes to the gentleman from South Carolina (Mr. Barrett).

Mr. Chairman, I yield 3 minutes to a distinguished member of the Budget Committee, a member who has great financial expertise, the gentleman from California (Mr. Campbell).

At this time, Mr. Chairman, I would like to yield 3\1/2\ minutes to the chairman of the RSC, a distinguished member of House Budget Committee, Mr. Hensarling from Texas.

At this time, Mr. Chairman, I would like to yield 3 minutes to the gentleman from the House Budget Committee, Mr. Smith from Nebraska.

Mr. Chairman, at this time, I would like to yield 3 minutes to the gentleman from New Jersey (Mr. Garrett).

Mr. Chairman, I yield 3 minutes to the gentleman from North Carolina (Mr. McHenry).

Mr. Chairman, I yield 3\1/2\ minutes to the gentleman from Michigan (Mr. McCotter), a member of the Budget Committee and the distinguished chairman of the Republican Policy Committee.

I yield myself 30 seconds, Mr. Chairman, only to say that I can't understand how you can say that their budget lowers taxes, let alone doesn't raise taxes.

You can't have it both ways. Either you are raising taxes and balancing the budget or you are not raising taxes and not balancing the budget. It is mathematically impossible for the other side to say they are balancing the budget and not raising taxes.

With that, I yield 6 minutes to the distinguished ranking member of the Veterans' Affairs Committee, Mr. Buyer of Indiana.

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

Mr. Chairman, may I inquire as to how much time is left on each side?

At this time, Mr. Chairman, I will yield 3 minutes to the gentleman from Indiana.

At this time, Mr. Chairman, I would like to yield 3 minutes to the distinguished gentleman from Arizona (Mr. Flake).

Mr. Chairman, I yield 2 minutes to the distinguished gentleman from the Budget Committee, Mr. Hensarling from Texas.

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

Mr. Chairman, I yield myself 1 minute to simply say, you can get every left-leaning think tank to say whatever you want, but the Congressional Budget Office is saying: This raises taxes. Plain and simple.

We can reinvent new words and come up with new language. We can put reserve funds that are meaningless into the budget.

The CBO says that their baseline, which the gentleman is using for his budget, if the tax cuts expire, the baseline goes up, that is what they are using.

Let me put it another way. According to the Congressional Budget Office, their budget does not balance if they don't raise taxes. Their budget does balance, which they are claiming it does, by letting these tax cuts expire and raising taxes across the board.

Mr. Chairman, I yield 3 minutes to the gentleman from Pennsylvania (Mr. English).

Mr. Chairman, I yield to myself 1\1/2\ minutes.

I want to go to the point that I mentioned a minute ago about who says what about what this budget does. Let me talk about the Congressional Budget Office. By law, that is what we use.

Here is what the Congressional Budget Office says: The year 2010, all of these tax cuts expire. I think we all agree with that. All of these tax cuts expire in 2010. But we are talking about marriage penalty, per child tax credit, death tax, capital gains dividends, income tax rates across the board, they all go up.

That is the red line. That red line shoots up because all of those taxes are increased. That is the line the Democrats are using to run their budget. That is the line the Democrats are using to finance their new spending. That's the line the Democrats are using to show that they get to a balanced budget.

The green line, the dotted line, that is the CBO line that says here is what revenues will be if you extend the tax cuts. That's the line we are using in our budget. We are balancing the budget by controlling spending.

So reserve fund, shmerve fund, that means nothing. What matters are the numbers. And the numbers, not by the Center For Budget and Policy Priorities, not by the Brookings Institution. The Congressional Budget Office. The Congressional Budget Office shows us very clearly, black and white in the numbers, in the numbers in your budget resolution.

Announcement by the Acting Chairman

Mr. Chairman, what I am saying, the red line shows all the tax increases kicking in and hitting American taxpayers. That is the line that the Democrats are using to run their budget, to balance their budget, to pay for their new spending.

You can use any word you want, you can't escape the fact that they are imposing, banking on, planning on, assuming, legislating the largest tax increase in American history.

They want to smoke screen it with reserve funds and cute language. The fact is the fact, and the fact is underlined by the Congressional Budget Office.

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

Mr. Speaker, I yield myself 30 seconds.

As a representative from the State of Wisconsin, each of us represents about 670,000 people in our congressional districts, and in my home State of Wisconsin, the average tax increase on the average household in the State of Wisconsin will be $2,964, and this will hit 2,164,000 taxpayers. Numbers do not lie. The CBO certifies it. If we pass this budget and it comes into being, that is what will happen. Mr. Chairman, I think that is wrong.

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

Mr. Chairman, I yield myself the remaining time.

Mr. Chairman, this is a very important debate. It is an important debate about our priorities as a country. It is an important debate about how we run the fiscal ship of state, but it is more important than that. It is an important debate about our future.

I related a story the other day in committee that I want to share again with my colleagues.

When I first ran for Congress in 1998, I was a 28-year-old young guy, single, no children. I remember at a Kiwanis Pancake Day, we have a lot of pancake days in Wisconsin. It is how we raise money for charities. I remember going up to a woman in line, not much older than me, and she had three little children. I asked her for her vote. I asked her to support me in my race for Congress.

She said something to me. She said, I do not think I am going to vote for you. I said, well, why not? She said, because I do not think you can relate to me. I said, well, why can I not relate to you? She said, because you do not have children and you do not know what it is like to have children; you do not know what it is like to think about their futures. I said, well, I was in a family. I know what it is like to be in a family. And you know, I did not understand what she was saying to me at the time.

You know what? Now that I have a 5-year-old daughter, a 3-year-old son and a 2-year-old son, I understand exactly what that woman was telling me. I understand exactly what it feels like to really, really, really care about the next generation. It is like your heart is walking around in someone else's body. I can only imagine what grandparents feel like.

So this debate is about numbers. It is about priorities, how much for the Pentagon and how much for veterans and how much for this program and that program. But it is also about what is that horizon we are looking for, what is that vision on the horizon and what are we doing for our kids and our grandkids? What legacy are we putting in place for our country?

The great, beautiful thing about America, the American Dream is that one generation leaves a better standard of living for the next generation. That was drilled into me by my parents, that they were working and thriving so that we would have a better life than they had. That is what our job in Congress is to do.

We have big challenges and our country has faced big ones before, the Great Depression, World War I, World War II, the Cold War. We have got three challenges right now hitting us simultaneously, the global war on terror, globalization, and this entitlement explosion, the retirement of the baby boomer generation which we are not prepared for. This budget is about all of those things, but let me talk about two of them.

Globalization: We have got new kinds of competitive pressures against us unlike that which we have ever seen before. No longer do the oceans separate us from competitive pressures. We have broadband and digital technology. We have competition from countries like China and India unlike any we have ever seen before, and it is something we have to respond to so that our kids and our grandkids can have that higher standard of living.

At the same time, we have got entitlement programs that are exploding before us. We have an enormous debt on our horizon that we have to address.

Now, you heard this talk about taxes, tax increases. This budget does unequivocally raise taxes. I will not belabor that point.

Let me show you three lines. The lower line here, the blue line, shows you what revenues would look like if we kept those tax cuts permanent. That is what our budget will propose to do. Do not raise taxes, keep the marriage penalty down, keep the kid credit where it is, keep income tax rates where they are, get rid of the death tax, do not raise taxes. That is the blue line.

The red line right here shows you what happens if we let the tax cuts expire as this budget proposes to do if you increase taxes. It shows you a $400 billion tax increase.

What really matters here is not the red and the blue line at the end of the day for our children and grandchildren, matters a lot, but at the end of the day what matters is the green line, the spending line. This is the line that is occurring right now under our watch. This is the spending trajectory of the Federal Government because of Republicans and Democrats, both of us. We are all in this thing together. This is the line that happens.

So if you do not address the spending, you are not addressing the real problem. That is why I really have a big problem with this budget. Not only does it have the largest tax increase in history, not only does it raise taxes about $400 billion, it does nothing to control spending. It does not reform our entitlement programs. If you want these entitlement programs to succeed, to exist, to continue, you have to reform them.

Let me show you one more chart. This is the Government Accountability Office. This shows you the trajectory we are on when you take a look at Medicare and Medicaid, Social Security, interest on the debt, when you take a look at all the discretionary spending. It shows you this: By the year 2040, that is when my kids will be exactly my age, by the year 2040, our Federal Government will be doubled in size.

Let me put it another way. If we want to have no new programs whatsoever, keep today's government in place, no fewer programs, no more programs, just today's Federal Government, the cost of that Federal Government when my kids are my age will be double what it costs today.

Let us put it another way. We have historically run our government, the Federal Government, by taxing about 18 percent of GDP to fund the Federal Government. Since about 1960, the Federal Government has had to tax the American people at about 18 percent of the economy and its output to fund the Federal Government. When my kids are my age, to fund today's Federal Government at that time it will require us to tax 40 percent of GDP. We will literally have to tax our kids at twice the rate we are taxing ourselves today if we do nothing to reform spending and reform these entitlements.

You cannot survive globalization if you are going to double the tax rates on every man, woman and child in America at that time. We cannot win when we are competing against the likes of China and India if we are going to crank taxes up like that.

So the real problem with this budget is not what it contains, the largest tax increase in American history. The even larger problem with this budget is that it contains no reforms. It contains no spending control. It includes immense new spending.

You have 12 of these reserve funds which are worth less than this piece of paper. They do not pay for anything, but the one thing they do say is we want to spend $115 billion in more money. We do not have the money for it, but if we can have the money for it, we would do it. The other reserve funds say we do not want these taxes to go up, but we are planning on having them go up. We would stop them going up if we had money to do it, but we really are not stopping these tax increases.

You cannot have it both ways. You cannot say you are going to balance the budget and not control spending without raising taxes. In order for your budget to balance, in order for the Democrat budget to balance, Mr. Chairman, they have to raise taxes, especially since they are not only not controlling spending, they are increasing spending. That is the way mathematics works.

But more important than all of this, Mr. Chairman, is the fact that we have to get our kids and our country ready to compete in the global economy. We are not prepared for that. We have got to do more to help them compete, and we do not do it by doubling their taxes.

We tax our country, our businesses and our capital more than any other country in the industrialized world except for Japan, and they just finished two decades of recession. We can't tax our way out of this problem. We will tax ourselves out of being the leading economic superpower. We will tax ourselves out of a good standard of living.

If we don't tackle this problem, we will have severed that American Dream, that American legacy, that legacy that says each generation should leave on to the next a better country, a better standard of living. That is what is really wrong with this budget. We can't keep spending or taxing our way out of these problems. If this budget achieves balance on paper, which I will clearly, freely admit that it does, it will only do so for a short period of time.

Because if you don't fix these entitlement programs, it will drive us that much deeper into debt, that much more in the deficit, just around the corner. Social Security, Medicare and Medicaid are the big three entitlements. They are very important programs. Health care for low income, health care for people in old age, retirement security. We all agree with that. We think that is the right thing.

But you have got to reform these programs if you are going to save these programs. You have got to reform these programs if people are truly going to be able to count on these benefits. Because if you don't reform these programs, you are driving the debt even higher. You are driving taxes up on our kids and grandkids even more. Not only will we not have programs to depend on for our livelihood when we reach the age of 65, not only will we not be prepared for the baby boomers, we will hit our kids with the biggest tax burden this country has ever seen.

We will lose our greatness, and we will not pass on this legacy of a better country and a higher standard of living to our children. I urge a ``no'' vote on this budget.

Mr. Speaker, I thank the gentleman from California.

Mr. Speaker, this bill takes the cake. Let me tell you why this bill takes the cake. For all the talk about fiscal discipline we have received from the new majority, this bill represents an egregious violation of the budget rules that the Democrat majority set for itself just recently.

Last year in the 109th Congress, we decided to put in place a new tool of fiscal discipline, one that said if it is really an emergency, then it should be an emergency, but don't put pork and unrelated programs into emergency spending bills. So we set up a procedure, a procedure that set aside $6.45 billion to be reserved for domestic emergencies. If we had more money needed above that, the Budget Committee would meet, the Budget Committee would determine whether or not a particular program met the definition of a legitimate emergency, and then it would raise the corresponding amount, which then the Appropriations Committee could use.

Last night we met in the Budget Committee. We could have easily added a discussion or a vote on whether or not this extra $22 billion fit the definition of a legitimate emergency and raised the amount, but what did this new majority do, after putting in place these rules that we had from the 109th Congress to this 110th Congress? They waived them. They are gone. All of this talk about fiscal discipline, all this talk of PAYGO, of paying for things, what happened? Gone. Waived.

We added an amendment last night in the Budget Committee during the resolution markup to continue these rules next year so that we can't pork up emergency spending bills. Both parties have been guilty of this. Please note that I say that. What happened? They voted it down. So not only are we not living by the rules put in place just in January, we canceled the rules for next year.

So what happens? This bill puts $22 billion in unrelated, unrequested spending, having nothing to do with the war, in here. And the idea that we police emergencies, that we make sure that when you do an emergency spending bill with no offsets, that it really is an emergency, and that we police it and we look at it in the Budget Committee, gone.

The days of fiscal discipline have left. Last night in this budget, the

Democrat majority passed the largest tax increase in American history. The reason they passed the largest tax increase in American history is because that is the only way they can balance the budget to also accommodate all the new spending they called for, because this budget had zero savings, no controls on spending, nothing but tax increases. And now they are waiving the rules so that they can bring any emergency spending bill they want without checking as to whether or not it truly is a legitimate emergency.

Mr. Speaker, for this, and many, many, many other reasons, fiscal discipline, using the rules and obeying the rules and not handcuffing our generals, I ask for a ``no'' vote on this rule and a ``no'' vote on the underlying bill.

Mr. Speaker, I came to the floor to oppose the bill not on the merits of the FOIA policy, but on the grounds that this bill had a budget section 303 point of order against it and that it violated the new PAYGO rules we have before us.

This bill that we just now got 10 minutes ago, as we read it, we believe does not violate section 303 of the Budget Act or the PAYGO rules. But I think the point I would like to make is this: 10 minutes ago this bill did have a section 303 violation against it; 10 minutes ago this bill did violate the majority's own PAYGO rules they put in place less than 10 months ago. And it scores not just a $7 million, but a $63 million increase over 10 years. So $63 million over 10 years is a lot of money. And given the fact that this new amended bill, as it appears as we read it, does have the required language, subject to appropriations, that it is not out of order, it doesn't waive the PAYGO rules because it does pay for itself subject to appropriations.

I will withhold my objection, but I simply want to say to the majority this place would run a lot better if, when we put bills on the calendar and bring them to the floor, that they comply with the rules that the majority themselves put in place just 2 months ago with respect to PAYGO and with respect to the Budget Act. I just think the whole place would work a lot better if we do that. Then we get on to debating the merits of this legislation.

I think FOIA is an important tool. It needs to work better. I think there is a lot of merit to that point. But let's make sure that as we take a look at our budget problems, and they are enormous, our budget problems, if we can't make sure that bills that spend $63 million over 10 years can't comply with the Budget Act, can't comply with PAYGO, who is to say that bills that spend $2.9 trillion like our Federal budget can comply with it? So if we

can't get the rules right on small bills, who is to say we are going to get the budget discipline rules right on the big bills?

Fiscal discipline starts one step at a time, starts one bill at a time. We have got to get fiscal discipline rules in place and right on small business, especially if this Congress is going to get our arms around our larger fiscal problems.

That is simply the point I want to make to the chairman.

I yield to the gentleman from California.

I appreciate the gentleman.

Mr. Speaker, this was the product of a bipartisan compromise in the Ways and Means Committee. That is a good thing. I am not here to talk about the merits of the bill.

I am here to talk about the fact that this is a suspension of the rules. Among the things that this rules suspends is the Budget Act, and this bill has two budget points of order that lie against it, section 303 and 311. So we are, in the early days of this majority, bringing a bill to the floor that violates the Budget Act. We haven't written the new budget, and we are violating the current one we have.

As to the new PAYGO system, if the PAYGO rule were in place that we had before, or the PAYGO rule that was advocated by the Democrat minority last year would be in place, this would violate their PAYGO rule. It is convenient that this new, more-watered-down PAYGO doesn't apply to this, but I think the facts should be known that this bill does violate the Budget Act in two important ways.

Madam Speaker, I thank the gentleman for yielding.

Friends and colleagues, I am glad we are having this debate. It is good to debate the most important issue facing our country, the most important issue facing the world. I am glad we are talking about Iraq. We need to have a debate about Iraq.

I have grave concerns about the conduct of this war. I look back at the last 3 or 4 years and I think to myself, boy, I would have done that differently, I would have done this differently; they should have done that, they should have done this. I think we all can look at hindsight and see how things should have been done differently.

Well, here is where we are. The question is, is this the right resolution to pass? I for one don't know if this strategy is going to work or not. I believe our troops are going to do exactly what we ask them to do. I have perfect confidence that the U.S. soldiers, airmen, Army and Marines are going to do exactly what we ask them to do and they will do their jobs.

Where my doubts lie are with the Iraqi Government. Will the Iraqi Government do what we are asking them to do? Will the Iraqi Government do what is needed to do to hold up their end of the bargain? I don't know.

But what I do know is this: If we pass this resolution, this resolution, while our troops are in the middle of implementing this mission, while our troops are over there right now implementing this strategy, and we pass this resolution which says, you know what, we don't think you can succeed; we don't think you can do the job; we don't think you can do what you are being asked to do right now, that is a slap in the face. It is a killer of morale. This is the wrong message to send our troops.

We have to think about the alternatives. We have to think about the consequences of failure. We have to think about the message this sends our troops. We have to think about the message this sends our enemies.

Madam Speaker, by telling the world, by telling Americans and by telling our enemies and our troops we don't think this is going to work, we don't think this can succeed, what message does that send?

And for those who say this won't work and I am voting for this resolution, it is your obligation to tell us how better you can do this, what is your plan, what is your strategy. Because we have to think about the consequences of failure. We have to accept and know that if we just pull out we will have sectarian genocide. We will have a safe haven for terrorists with oil money. We will have a Middle East power struggle that will be very, very ugly, where countries that are very hostile to us, like Iran and Syria, will have the run of the region. We have to look at those consequences.

But more important than anything else, Madam Speaker, is the fact that I just cannot look our soldiers in the eyes, and I am traveling to this region in a few days, I cannot look them in the eyes and tell them that when I was in the comforts of Congress, I sat there high open my pedestal and I told the American people and you that the mission you are about to engage in, the job you are trying hard to do for us, you can't complete it. You are incapable. It won't work. Why bother trying? I can't send that message to our troops.

With that, Madam Speaker, I urge a ``no'' vote. This is the right debate to have, the wrong resolution to pass.

Mr. Speaker, I thank the gentleman for yielding.

We have heard all this talk about the vote that 203 Democrats took in H.R. 4680, motion to recommit; it is apples to oranges; it doesn't compare. Let me read the language so it is black and white and not a lie:

Noninterference by the Secretary. In administering the prescription medicine benefit program established under this part, the Secretary may not require a particular formulary, institute a price structure for benefits or in any way ration benefits, interfere in any way with the negotiations between benefit administrators and medicine manufacturers or wholesalers, or otherwise interfere with the competitive nature of providing a prescription medicine benefit using private benefit administrators except as is required to guarantee coverage of the defined benefit.

Mr. Becerra voted for it. Mr. Stark wrote it; 203 Democrats voted for it. Now it is the wrong thing to do.

Let's be really clear. This is a bumper sticker bill that doesn't work. The policy idea here that 92 percent of Americans want to see happen is that we do it just like the Veterans' Administration does. I wonder if those 92 percent Americans were told; at the VA you can't choose your doctor, you can't choose your pharmacy. Two thirds of the top named brand drugs that seniors use aren't even offered by the VA. You can't get them. Do you think 92 percent of Americans want that to happen for Medicare? Medicare beneficiaries ought to be able to choose their doctor; they should be able to go to their neighborhood pharmacy.

So why are we doing this? CBO, HHS, they all tell us this will do nothing to lower prices. This will do nothing to save the government money.

What has the current program done? It lowered the premium 40 percent in one year. It lowered the prices so much beyond our expectations that this new law which came into law in 2003 is $189 billion less than we expected it to be. That is real savings.

The next argument we hear is, well, we want the Secretary to use the negotiating power of Medicare, get the bulk of negotiations going. How many people would he conceivably be able to negotiate on behalf of? All the people in the PDP, 16.5 million.

Well, what are the prescription drug plans doing right now? You see, they don't just negotiate on behalf of Medicare; they negotiate on behalf of everybody they cover. Caremark, 70 million people they are negotiating on behalf of, including Medicare. Medco, 54 million people they are negotiating on behalf of, including Medicare. Express Scripts, 51 million. Wellpoint, 36 million. These plans have more negotiating power and leverage and strength than Medicare could possibly have. That is why they are getting better discounts.

With that, Mr. Speaker, I urge a ``no'' vote.

Mr. Speaker, after careful consideration of H.R. 2, it is with great regret that I announce my opposition to this version of a minimum wage increase.

I believe an increase in the minimum wage should be accompanied by small business relief to offset the burden placed on U.S. employers, so these businesses can absorb the costs of an increase.

Last year, I supported an increase in the minimum wage because it also included tax relief measures for employers to offset the cost of the proposed minimum wage increase. It is unfortunate that House leadership, rather than bring this balanced approach to the floor for a vote, instead introduced what basically amounts to an unfunded mandate on our Nation's small businesses.

According to a 1999 study by the Small Business Administration, approximately 54 percent of our Nation's minimum wage earners are employed by firms who have less than 100 employees. This minimum wage increase will force our Nation's small businesses to make tough cost- cutting decisions in order to stay in business. When coupled with health care cost increases they are already facing, which the National Federation of Independent Businesses estimates at 15-20 percent, many employers will be forced to either increase the costs of their products or lay-off lower skilled workers. Both options would have detrimental effects on the substantial progress our economy is making.

This legislation also hurts job creation. Economists widely agree that an increase in the minimum wage without an offset for small business relief will result in much higher unemployment for workers. This is because an increase in the minimum wage also represents an increase in the costs faced by employers around the Nation. When our Nation's businesses face increases in their total cost per employee, they must often face the tough decision of either cutting jobs or reducing employee benefits such as health care, day care or vacation time as they struggle to pay for the new wage requirements.

In short, it is essential that any increase in the minimum wage be accompanied by tax relief or health care savings for our Nation's small businesses. Because this legislation does not include any provisions that may offset the costs it levies on our Nation's employers, I cannot support it.

Mr. Speaker, I would like to discuss this title IV part of the package. And I learned, when we were in the majority, watching the minority speak and criticize virtually every move we made, I thought it would be wrong if you thought there were good elements of a package to criticize it. There are good elements in this package, and I want to start off by talking about those good elements that are contained in this package before I start my criticism.

First, the earmark reforms. I am an earmark reformer. I was one of the parts of the team that reformed earmarks, that negotiated the earmark reforms we passed last fall. I think these earmark reforms in this package that the majority created are very good. They are very commendable. They work. So I want to compliment the majority for their serious earmark reform package that they have in here.

I think it is high time that when a Member of Congress requests an earmark, that that Member's name be associated with that earmark, that that Member's justification be associated with the earmark, and that we, as Members of this body, have the opportunity to vote on whether or not that earmark should be funded or not. We need more transparency and more accountability in the way we spend taxpayer dollars.

I am very pleased that in the last Congress, in the 109th Congress, we in the House passed those rules, and I am very excited that the majority has decided to continue those rules and build on that success by improving the package of earmark reforms we passed in the last Congress. So that part of this package, I want to compliment the gentleman from South Carolina and the others who put this together.

I want to direct my comments on the PAYGO part of this. I had high hopes for this part of the package. I had high hopes that the PAYGO rules that we are about to vote on would provide much needed fiscal discipline to Washington and to the way we spend taxpayer dollars. Unfortunately, this package just doesn't cut the mustard. I see this as a timid, weak, watered down, paper tiger PAYGO. What I mean when I say that, Mr. Speaker, is I believe this will have the practical effect of simply raising taxes.

Let me be very clear, Mr. Speaker. We don't have a tax revenue problem in Washington. We have a spending problem in Washington. Tax revenues have been coming into the Federal Treasury at double digit rates over the last 2 years. That is not the problem. We are getting plenty of money from workers' paychecks, from families in their taxes. It is leaving the Treasury too fast. That is our problem, and that is where the budget discipline ought to be placed, on spending.

The problem with this PAYGO is it will have the practical effect of simply having higher taxes to chase higher spending. It does absolutely nothing to address the deficit we have today. It does absolutely nothing to address today's level of spending. It does not address the uncontrollable and unsustainable rates of spending that we have with our entitlement programs today.

Now, I realize that the last majority wasn't perfect on spending. I will be the first to note that because many people saw me coming to the floor saying that in the last Congress. But when we enact spending discipline, and when we are telling the American people that we are now going to get tough on spending, we are going to be fiscally conservative, that is what we should do; and this does not do that.

More importantly, Mr. Speaker, I believe that this PAYGO regime, if it does actually work, will make it clear that the tax relief of 2001 and 2003, which got us out of a recession, which brought new revenues into the Federal Government, which created seven million new jobs, will go away. This is putting the American taxpayer on a collision course with higher taxes. And why is it doing that? Because this system, this PAYGO system, will make the pressure toward raising taxes to pay for new entitlement spending. And so for that reason, I am opposed to this PAYGO regime, Mr. Speaker. There are many others I would like to speak about.

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

Mr. Speaker, I yield 2 minutes to the distinguished gentleman from North Carolina (Mr. McHenry).

Mr. Speaker, may I inquire as to how much time remains between the two parties?

And the gentleman from Florida?

I reserve the balance of my time.

Mr. Speaker, I yield myself 1 minute.

First of all, I want to start off by saying I appreciate the gentleman from South Carolina. He is a good man, knows his stuff, and I very much look forward to working with him. I just want to respond to a couple of points.

In fact, we attempted to put PAYGO in place, PAYGO on spending. So if you try to increase spending somewhere else, you should cut spending elsewhere and not raise taxes. That went down in 2004, largely because of the minority opposing it.

Second point. The reason PAYGO worked well in the 1990s is because it was statutory. If you did not comply, an across-the-board sequestration would take place, and the threat of that was one of the reasons why PAYGO was successful.

The third point I simply want to make is, you are going to hear a lot of talk about we had a surplus, we handed it to the Republicans and they squandered it. What was the surplus? The surplus was projected. It was projected. And in those economic projections they did not foresee the Enron scandals, they did not foresee the dot-com bubble bursting, and they did not foresee 9/11. Of course, they did not foresee that. They did not see the perfect storm of economic calamity, and that is what evaporated the surplus.

Mr. Speaker, I yield 2 minutes to the gentleman from Washington (Mr. Reichert).

Mr. Speaker, I would like to yield 1 minute to a new Member, the gentleman from Ohio (Mr. Jordan).

Mr. Speaker, I yield 1 minute to the gentleman from California (Mr. Campbell).

Mr. Speaker, I would like to yield 3 minutes to the distinguished gentleman from Indiana (Mr. Pence).

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

Mr. Speaker, I yield 2 minutes to the gentleman from Texas (Mr. Conaway).

Madam Speaker, I yield 2 minutes to the chairman of the Republican Study Committee, Mr. Hensarling of Texas.

Madam Speaker, I yield 2 minutes to the gentleman from California (Mr. Bilbray).

At this time, I would like to yield 2 minutes to the gentleman from Arizona (Mr. Flake).

Madam Speaker, I yield 2 minutes to the gentlewoman from Illinois (Mrs. Biggert).

Madam Speaker, I yield 2 minutes to the gentleman from Georgia (Mr. Kingston).

Madam Speaker, I reserve the balance of my time.

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

First off, I want to start off by congratulating the majority on the very commendable earmark reform legislation that is contained in this title. I just want to emphasize that. But this PAYGO package is woefully inadequate. It is a paper tiger.

Three quick points. Number one, this protects all current spending, even the programs that are scheduled to expire. However, it assumes that expiring tax relief will lapse; and, thus, require offsets to continue. This is a double standard that reflects their preference, protect higher spending but not lower taxes. It is a recipe for tax increases.

Number two, it contains a huge loophole. Spend now, save later. You can enact new spending now and come up with savings down the road, which we know never really happens. Big loophole.

Number three, this is a weaker version of PAYGO than what the majority was proposing just last year. They were not allowing points of order to be waived when you violated a PAYGO rule in their earlier version. But now when they are in the majority, you can simply waive it with a majority vote upstairs in the Rules Committee.

This is a much weaker version of PAYGO. But I want to address a few other things.

Number one, you are going to hear this all year: They gave us a surplus. We inherited a surplus; we squandered the surplus.

Madam Speaker, what was the surplus? The surplus was a projection. It was a projection by economists at OMB and CBO that said we are going to have all of this money coming in.

You know what they didn't project, they didn't project 9/11. They didn't project war. They didn't project the dot-com bubble bursting or the recession or the Enron scandals. What did that do? It was a fiscal train wreck for America, and our numbers went down and we had to spend more money when we went to Afghanistan and Iraq.

Where are we today? The budget deficit went down 40 percent. In 1 year, the budget deficit went down 40 percent off projections. Why, Madam Speaker? It went down that much because revenues increased. Why did revenues increase, because we let the American people keep more of their own hard-earned dollars. They were able to keep more of their tax dollars.

There is a very deep difference between our two parties on principle and on philosophy. We believe that the money in America in the Federal Government is the people's money. That the money we spend is not our money, it is the money of our constituents. It is their money.

When you see rules like this, which I want to quote from the Wall Street Journal: PAYGO, by contrast, gives the appearance of spending discipline while making it all but impossible to let taxpayers keep more of their own money. It should really be called spend and tax as you go.

This bill does nothing to control current spending. It does nothing to reduce the current deficit, and it puts us on a path to raise taxes.

We believe the priorities ought to be different: That we ought to control spending and reduce spending to balance the budget, not raise taxes because after all, the money that comes to the Federal Government is not our money. It is the people's money. It comes from the paychecks of working Americans, men and women, small businesses, farmers and businesses. By letting people keep more of their own hard-earned dollar, our economy grows, revenues grow. We have to watch spending. That is where the priorities ought to be placed. This does not deliver that.

Hopefully we can work together in the future to have a real spending

mechanism that actually controls spending rather than puts us on a pathway to higher taxes.

Madam Speaker, I reluctantly oppose this legislation because of the honorable earmark reforms.

Madam Speaker, I yield back the balance of my time.

Mr. Speaker, I offer a motion to commit.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I rise today to introduce legislation on behalf of SC Johnson, a company located in Racine, Wisconsin, who manufactures a broad range of well known consumer household brands including Windex, Raid, Glade, Pledge, Edge shaving gel, Ziploc and Scrubbing Bubbles. I am proud that SC Johnson has its headquarters in my congressional district and employs over 2,500 hard- working Wisconsinites.

I believe that Congress must do all that it can to help companies like SC Johnson remain competitive in the global marketplace so that good, high-paying manufacturing jobs are retained in. Wisconsin and throughout the United States. Over the past few years, our state has lost thousands of manufacturing jobs. We must bring down the cost of manufacturing at home so that we can stem the job loss and create new opportunities for the state's workers.

The bill that I am introducing will help achieve this purpose by reducing the import tariff on bath and shower cleaning appliances from 4.2 percent to 2.1 percent. No comparable products are produced in this country. Reducing these tariffs will bring down SC Johnson's costs of doing business at home and benefit the SC Johnson employees who live and work at the company's world headquarters in Racine and at other locations throughout the United States.

I look forward to working with my colleagues in Congress to pass this legislation.

Mr. Speaker, I am sitting here listening to this debate and I am wondering, what bill are they talking about? Are they talking about the bill that 70 Democrats voted for earlier in the year that got 294 votes? Are they talking about the bill that is endorsed by the United Auto Workers, by the building trades? Are they talking about the bill that was negotiated between Democrats and Republicans, between the House and the other body? Because that is the bill we are talking about right here. This bill was written with the input from labor, with the input from management, with the input from employees and employers.

What is wrong? What needs to be fixed? Well, you know what needs to be fixed? If an employer promises their employee they are going to fund their pension, by golly, that is exactly what they should do. That is what this bill does. It makes sure they do in fact fund that pension 100 percent.

If an employer wants to prefund their employees' pension, wants to do good by helping them ahead of time, we want to change the rules so they can do that. And you know what, if an employer wants to exploit loopholes and rip off their employees, shortchange their pension, as the current law allows employers to do, we have got to stop them from doing that. And that is what this bill does.

That is why this bill is supported by unions, by management, by Republicans, by Democrats, by the House and the other body. This is a bill that is a good bill that has been negotiated for a year, and I urge its passage.

I appreciate the gentleman for yielding.

Mr. Speaker, what this is about is finding peace and security in the world. The future of peace and security in the world largely rests upon the future of peace and security in the Middle East. The question is what we are as Americans going to do to help Middle Eastern countries, moderate Middle Eastern countries, be more open, be more fair, be more free, be more democratic, be more peaceful. This agreement does that.

Now, for one reason or another, Members here, I believe, have decided to oppose this agreement and then look for reasons to justify that opposition. They have raised two big red herrings, labor and ports. We asked the Congressional Research Service to look at this port issue, to look at this red herring issue.

I want to read from the nonpartisan Congressional Research Service that did two studies this month on this issue. Upon close inspection of the language in this agreement, it appears that this claim is misleading because it appears that Omani companies are already presently able to perform these port services. Phrased another way, the United States has reserved the right to maintain our existing legal restrictions with respect to those aspects of maritime transportation in which we already have limitations, as well as adopt new measures in these categories that may be more restrictive.

In some ways, it imposes new opposition and new restrictions that don't currently exist with respect to management of ports.

In conclusion, report number two: while it is theoretically possible for Oman to bring a legal challenge to the actions of the United States before a third-party tribunal, the United States would appear to be on solid legal grounds for asserting not only that the panel does not have the legal authority to determine the validity of such a matter, but also that the inconsistent measure is permitted and justifiable, given the broad self-judging language of the national security exemption.

This means we decide unilaterally, we decide if any of these transactions are not in our national security interest, it doesn't happen. There is nothing the WTO can do about that.

Now, what about labor? This is another agreement that we have had, the labor standard invoked. This is the strongest labor agreement of any trade agreement we have brought to the floor in this Congress and in previous Congresses.

Now, in an effort to be bipartisan, in an effort to work with the other side of the aisle, we have had an exchange of letters and agreements between the Omanis, Democrats and our government USTR.

In November 2005, the ranking member of the Ways and Means Committee asked Oman to clarify six areas of law and asked for nine concessions in labor law. In January, Oman responded in detail to all of those concerns. In February 2006, the Democrats forwarded another set of demands and questions, raising new issues. In March, in response to those concerns, Oman made eight commitments to the United States and agreed to enact all of these reforms.

It goes on and on: new demands being requested, new demands being met, to the point where the Omanis have, by decree, already implemented many of these higher labor standards. Any of those that they didn't already decree just a couple of weeks ago, they have promised to put them into law by October 30.

What did we do with Bahrain? With Bahrain they promised to introduce legislation to raise their labor standards.

That was the Bahrain standard. With Oman, no, they did not promise to implement legislation. They promised to implement law by a date certain this year.

So we have increased labor standards. We have put into place core ILO standards. We are rising the tide, but what it all gets down to is this.

Because of this agreement, the Omanis are raising labor standards for their workers. Because of this agreement, Omanis are making their country more free and more transparent for their people. Because of this agreement, we are saying thank you to an ally. Let us continue to move toward peace and prosperity.

Why do I care so much about this? Because I do not want my kids to face the war on terror that we are facing right now. And how do we do that? We do that by making sure that these countries, from which many terrorists come, have opportunities for their young people.

I do not want a young person, the next generation, growing up in tyrannical dictatorships susceptible to the whims of al Qaeda, appealing to the madrassas. I want young people in these countries growing up, reaching their dreams, reaching their potential, having freedom, having the ability to determine where they want to go with their lives, being creative, being able to channel their energy in a positive direction so our children do not have to face this war or on terror.

We must pass this trade agreement because it is vital to our national security interests.

I thank the gentleman for yielding. I just want to congratulate the gentleman for all his leadership on this issue. And I too want to come to the floor of the House of Representatives to talk about how important this Oman trade agreement really is and how it fits in the whole scheme of things with respect to our strategy for the Middle East.

Now, a lot of people are paying attention to the Middle East. We watched over the weekend all of the awful things that are happening in Israel and southern Lebanon, and we realize that if we are to win the war on terror, we have to look at a short-term strategy and a long-term strategy. And when I think about the things we want to accomplish with the Middle East and with moderate Arab countries, democracy. Democracy and freedom and individual rights are the ultimate, the ultimate weapon against terrorism. When a young person grows up into a closed society with no opportunity to reach his or her destiny or his aspirations or dreams, they are going to be more susceptible to the likes of al Qaeda. They are going to be more susceptible to joining into some kind of a perverted ideology that can convince a young man or a young woman to strap on a suicide belt and go into a pizza parlor and blow themselves up. But people growing up in free societies, in democracies, are people who have a chance to reach their aspirations, to channel their energies to better themselves and their families. By growing up in a free society, that is how we can ultimately make sure that our children aren't fighting the war on terror that we are fighting, aren't confronting the kind of awful terrorism we are confronting.

Why does anything that I just said have anything to do with the Oman trade agreement? Well, here, Mr. Speaker, is what it has to do with the Oman trade agreement. With these trade agreements, we don't get just lower tariffs for corn and soybeans and cars and plastics; with these trade agreements, we get good government. With these trade agreements, we get these countries who voluntarily change their rules and their laws to be more free and open to their own people. By engaging in a trade agreement with the United States of America, a country in the Middle East such as Oman, embraces the rule of law, embraces enforceable contracts, individual rights.

Let me just go through a few of the things that Oman has agreed to as a consequence and as a part of this free trade agreement.

Political reforms. Oman has enacted reforms to increase public participation in government, extending voting rights for its consultive council to all citizens over the age of 21, and appointing women to key positions in its government, including the first female Ambassador from an Arab country appointed to serve in the United States. Oman is a leader in women's rights. Oman is a leader in suffrage so that women are treated more equally in the Arab gulf.

Economic reforms. Oman has enacted broad economic reforms to open itself to trade and investment and provide opportunities to its citizens. In fact, the economic freedom of the world 2005 ranks Oman 17 of 127 countries analyzed in terms of economic freedom. They are the second highest ranking among all countries in the proposed Middle East free trade area.

Labor reforms. This is where a lot of progress has been made. Oman has unilaterally, across all labor laws, through decrees and commitments, upgraded their labor standards for their workers, for their employees, for their citizens to at least the ILO core standards. This is the strongest labor agreement, trade agreement, we have ever had with the free trade agreements with the United States.

I would be happy to yield.

This exceeds the Bahrain agreement because, like Bahrain, Oman agreed not only to the core ILO, International Labor Organization standards and worker rights, but with the Bahrain agreement, Bahrain simply agreed to introduce legislation to their Parliament and then try to pass the legislation, upgrading their labor standards.

Oman went beyond that. Oman agreed to decree, to put these into law. So not only, with Bahrain we got the promise to propose legislation; in Oman we got the law. We got the changes. Changes are taking place right now as we speak. Some changes took place last week. All of the labor standard increases will take place by October 30 of this year. So the fact is with Oman, because of the negotiations of the free trade agreement, we are rising the tide of worker rights. We are

rising the quality and openness of this society. We are looking at an ally who has been a tremendous ally in the war on terror. They have ended their Israeli boycotts. They have opened up and are opening up trade with Israel. They are giving women unprecedented rights relative to other Arab countries. And all of this is being done because of trade agreements.

We didn't send a division of soldiers to Oman. We didn't parachute the 82nd Airborne into Oman. We didn't fire a bullet. We didn't put a boot on the ground. We engaged in trade negotiations and trade agreements, and this democratization, this openness, this free economic model, is being embraced by the Omanis because of these trade agreements.

So what we are accomplishing here is the single most important aspect of our war on terror, the single most important aspect of making sure that our children are safe from a world of terror when they reach our age group, when they come of age; and that is, making the Middle East more free, more democratic, more open, so that young people growing up in these countries will have opportunities to pursue their dreams, to pursue their aspirations, to determine the direction of their own lives.

That, in a nutshell is why these agreements are so important in the Middle East. That is why this particular agreement with Oman is so important to pass because of all of the wonderful things they are doing to help their own countrymen, to open up their society, to liberalize their economy, to give people individual rights in their economy so they can reach those dreams, all with an agreement that is in our best interest economically.

It is good for our jobs. We will sell more of American-made equipment. We will sell more American-made agricultural products. We will get more jobs out of the deal, and they will get closer to a much more open society. That, Mr. Speaker, is what I call a win-win situation. That is why I think it is so important that we take all of these wonderful reforms that they have enacted and pass the rest of these into law by implementing this Oman Free Trade Agreement, because it is good for Omanis, it is good for Americans, and it is, most importantly, good for keeping democracy alive in the Middle East, keeping freedom alive, and keeping terrorism at bay.

I would be happy to.

I will. And if the gentleman will yield, I just want to read a quote from the 9/11 Commission report which talked about these FTAs, and the 9/11 Commission which revealed what should America do to win the war on terrorism to make Americans safer again. They said a ``comprehensive U.S. strategy should include economic policies that encourage development, more open societies and opportunities for people to improve the lives of their families and enhance the prospects of their children.'' That is why we should engage in these FTAs, these free trade agreements in the Middle East.

This new breakthrough from Oman on all these higher labor standards that they are raising is precedent setting. It does encourage its neighbors just like Bahrain is now engaging in. It encourages their neighbors to increase not only their standards of labor for their citizens but to increase their citizens' access to prosperity, access to opportunity, access to bettering their lives for themselves. That is what is accomplished by seeing this dialogue take place. That is what is accomplished when we as Americans engage in mutual economic agreements like this.

The thing that also impresses me with the Oman Free Trade Agreement, just like we had with Bahrain and Morocco and others, is our governments are getting to know each other much better. Because we are involved in a global war on terrorism, it inevitably involves a strong level of dialogue between the United States Government and the United States Congress and the governments and the leaders of those countries. But what we are lacking is human-to-human interaction, people-to-people interaction, understanding of the American people, of the citizens of Oman, the citizens of Bahrain, the citizens of Middle Eastern countries.

That is what trade accomplishes. Trade brings people together. Trade brings people into engaging in mutually beneficial endeavors, the people of America, farmers, manufacturers. We make tractors, Case Construction Equipment in Racine, Wisconsin. We sell cheese. We grow corn and soybeans, General Motors cars. We want our people to go to these countries and understand them, know them, sell them their products and have people-to-people interaction. And if we have people- to-people interaction through trade, through business agreements, through business arrangements, then we have better understanding of one another. And better understanding of one another, better friendships will bridge the gaps between cultures. That will help us fundamentally understand what is going on in the Middle East, and it will help them understand us.

My biggest fear is that people in the Arab world, they call it the infamous ``Arab Street,'' that they will look at al Jazeera or VH1 or some distorted lens of what Americans stand for, of who Americans are, of what American culture is, and that is how they will frame their opinions. That is not what I want them to think America is all about. What I hope people in the Arab world think America is all about is by meeting an American, is by meeting somebody from America who can engage in an agreement of mutual economic behavior, who can engage in trade, who can sell corn and soybeans and things like that.

That is how we help bridge this gap, bring understanding of each other, and work together to fighting the war on terror. By bringing moderate Muslim countries in allegiance with us and growing our alliances and growing our strategic allies, we will help defeat the terrorists. The minority of Islamic fundamentalists in this part of the world that seek to do them and us harm, we can work together and defeat that. And what the best consequence of it at the end of the day is people become more prosperous. There are more jobs created at both sides of the ocean, both sides of the equation.

That is why I think this is such an important trade agreement, and that is why this is an important part of our continuing efforts to increase ties and economic engagement with countries in the Middle East. And this is, of all things, one of the most successful foreign- policy tools we have at our disposal, and it is a sign of respect. It shows these countries, Oman in particular, that we respect them. We respect their people. We respect their leaders. We respect the reforms that they are implementing to give their people more freedom. That is a sign of respect, and I think with respect you get better understanding, better allies, and better strategic alliances, and that is all to the good.

I just want to thank the gentleman from Pennsylvania for having this hour to discuss this. We will be voting on this in a couple of days, and this is yet again a very, very important piece of our foreign policy and our economic policy to create more jobs here and to make us more safe. And I just want to

thank the gentleman for having this discussion tonight.

If the gentleman will yield further.

I think it is important to note the bipartisan nature of these agreements in the past. We had the best vote count of this session of Congress on a trade agreement in the last Bahraini Free Trade Agreement. We passed with large bipartisan votes the Moroccan Free Trade Agreement. We passed with great bipartisan votes the Jordanian Free Trade Agreement. The Oman Free Trade Agreement already passed with a very large bipartisan vote in the other body, the Senate.

We, hopefully, will continue to pass these things with good bipartisan agreements because in this sense it is very important that as we go overseas on an issue that is so important that we speak with one voice, as Democrats and as Republicans, that we make these bipartisan. And I am very pleased with the fact that Congress has for large measure treated these important Middle East free trade agreements on a bipartisan basis. Our caucus includes three Republican cochairmen and three Democrat cochairmen. So I do believe that we will see support from the other side of the aisle. I do not know how big it will be, but it is very important that we speak with one voice, saying it is not just the Republicans who want to do this, it is not just the Democrats. It is that the Americans want to engage in trade with the Middle East countries we are talking about. We want to support their efforts to modernize, their efforts to open, to liberalize their economies. And that to me is a very important signal.

I see that we have been joined by the gentlewoman from Connecticut.

I thank the gentleman for yielding. I want to draw off the inspiration I just received from the gentlelady from Connecticut's comments.

As I listened to her give this excellent overview of not only the benefits of these trade agreements, but of this one in particular, of all the work that the Omanis have gone through to bring this up into shape, to increase their worker rights, to increase their transparency, to increase their participation in women's rights, I just couldn't help but thinking, What if we don't pass this? What if we say no? What if we here in the House of Representatives this week say, that is not good enough, sorry, no, to the Omanis?

The Omanis are taking a risk in their neighborhood. They are choosing whether or not to go down the path of the Iranians and the Syrians and others like that, or to go down the path of openness, of freedom, to be an ally with the U.S. in fighting the war on terror and giving people freedom.

What if we say no to that? I just cannot imagine the consequences of us working with this ally of ours, getting them to agree to all of these enormous amounts of reforms and concessions to make this trade agreement work, and then only to say no. That, in my opinion, Madam Speaker, would be a tragedy.

It would be a tragic mistake to say to this country, this ally, these people whom we have the utmost amount of respect for, to say, sorry, partisan politics. It is an election year. Didn't mean to have you as collateral damage, but no. That to me would be an outright tragedy if that happened.

So I want to conclude on a high note, and that high note is just as we helped lift the tide of freedom and economic engagement and economic freedom in Morocco, in Israel, in Jordan, in Bahrain, so too do I think we will do this in Oman this week. And all of that is going to increase U.S. jobs. Yes, it is going to help us sell more products to the region. But, most importantly, it is going to help the people in these countries have a better life. It is going to help them be more free. And that is going to help make sure that my children, my kids, who are 4, 3, and 1 year old, make sure that they live in a peaceful America, that they don't have to fight the fight against terror that we are right now engaged in. That is what this means to me when I put my card in the voting machine and vote on this agreement in a couple of days.

That is why this is so dearly important. That is why this is not just your rank-and-file trade agreement for widgets and corn and dairy or whatever. That is why this is an important trade agreement.

I really encourage all of my colleagues, put the partisan blinders aside for that day and vote with America, vote for your kids, vote for good economics and vote for freedom in the Middle East.

Madam Speaker, with that, I would be happy to conclude and say thank you to the gentleman from Pennsylvania, Mr. English, for all your leadership on this issue. Thank you for hosting this discussion tonight. I think it has been very helpful. I just look forward to making sure this actually occurs, I think on Thursday when we do this.

Mr. Speaker, it is my great pleasure to honor and welcome Pastor Michael Jackson here today as our guest chaplain. He has come all the way from my hometown of Janesville, Wisconsin, to lead us in prayer today, and we are blessed to have his guidance as we begin our legislative day.

Since November of 1999, Pastor Jackson has served as the senior pastor of New Life Assembly of God in Janesville, Wisconsin, and he has used his many talents to reach out to our entire community and help more and more people open their hearts to the Lord's grace.

While the church itself has grown and produced offshoots throughout nearby communities, as well as New Life Hispanic Church and the Korean Fellowship in Janesville, Pastor Jackson has not only served as a leader of a thriving church body, he has been a leader throughout our whole entire area.

Just one example of this is the annual Freedom Fest Patriotic Rally that the New Life Assembly of God has during the 4th of July. My wife and our kids enjoy this every single year. It is

simply one of the many gifts that New Life Assembly of God gives to area residents.

The church has also helped initiate a Day of Compassion in Janesville, which provides those in need with access to free food, health screening, spiritual counsel, and other assistance.

Pastor Jackson brings 36 years of experience as a pastor to his work in the church, the community, and to the House floor today.

Pastor, thank you so much for sharing your wisdom and praying with us this morning.