Concurrent Resolution On The Budget For Fiscal Year 2006
Mr. Chairman, I thank the chairman of the Budget Committee for yielding me this time, and I am delighted to have the opportunity to talk about the importance of keeping the economy growing. And this budget certainly does that. But let me…
Mr. Chairman, I thank the chairman of the Budget Committee for yielding me this time, and I am delighted to have the opportunity to talk about the importance of keeping the economy growing. And this budget certainly does that.
But let me take a moment, if I could, and respond to some of the comments by the minority leader with regard to the Social Security system. First, to say the criticism that your budget, Mr. Chairman, does not include Social Security, is kind of an unusual one, given that as the gentleman from South Carolina (Mr. Spratt) knows, under the Budget Act of 1974, Social Security is off budget. And even if the Budget Committee, in all of its wisdom, decided we were going to reform Social Security, we would not have the ability to. You cannot do it in the budget.
And, secondly, although we heard a lot of criticism about some of the President's ideas and some of the other ideas to indeed modernize and save Social Security, we did not hear even outlines of a plan on the other side. So it is kind of hard to put a budget together, even if you could under the Budget Act, when there is no plan.
There is lot of denial about the problem we just heard. And there is a lot of criticism about those who would like to address the problem. I commend the President for addressing it. There can be no greater sense of leadership around this place, Washington, D.C., than someone who is willing to take on the third rail in American politics, Social Security.
Traditionally, it has been one that politically is very tough, hard to take on, referring to that third electrified rail in the New York subway system. You grab it and you are electrified. The President is taking it on, as are Republicans, because it is the right thing to do. It is the right thing to do for our seniors, to be sure they have strong Social Security. And as the President said repeatedly, anybody who is age 55 or older will not have their benefits changed one bit.
But more importantly, it is important for those succeeding generations. I have my 14-year-old son with me today. We want to be sure that his generation has an opportunity to have the same kind of peace of mind in retirement and the retirement security that we have all enjoyed.
And quite frankly, the math does not lie. The Social Security system was funded in a way that does not permit us to continue to provide those benefits to future generations because of the fact that we have people living longer, because we have more people who are about to retire, my generation, the baby boom generation, and because therefore we will have fewer people working to pay in those benefits.
We need to do something. We need to do it on a bipartisan basis. We need to put aside this notion that everything is off the table and criticism and denial and, instead, address the very real problem we have. And the very obvious solution is to do something sooner rather than later because the sooner we do it, the less impact it will be on our economy, on our budget, and on our young people.
The gentlewoman from California (Ms. Pelosi) talked about the reckless tax cuts that have driven us into debt. Well, what have we seen over the last 4 years? It is not tax relief that drove us into debt. Over the last 4 years we have seen remarkable changes in our Nation's economic picture after having endured the bursting of the stock market bubble, the corporate scandals, a recession, the terrorist attacks and their aftermath and, of course, the uncertainties of an international war against terrorism, including our conflicts in Afghanistan and now in Iraq.
These things have resulted in two things. Number one, because of the recession, less revenue. And of course that is the number one reason we find ourselves with a growing deficit over the last few years. And all the data supports that, from CBO, from OMB, all the nonpartisan actuaries looking at this issue. All those who analyze it say the same thing. When you have less revenue coming in, lower capital gains, lower corporate income tax, lower individual income tax because of recession, that is the number one reason.
The second reason is increased spending. And, yes, this Congress has increased spending, and in a few areas as has been talked about earlier today, it was necessary. One, of course, is Homeland Security. Once again, this budget provides for substantial increases in our Homeland Security budget because we need it to protect our country against the terrorist threat.
Second is with regard to defense. We inherited not only a recession over the last 4 years, but also a deficit in terms of our defense. We needed to rebuild defense. And again today we will vote on a budget, or this week on a budget, that will increase substantially our commitment to the defense of our country. So some spending has been increased, and some other areas as well.
Tax relief is specifically focused on growing that economy, getting us out of that recession, moving us to a point where we have increased revenues coming in. And you know what? The strength and resilience with which our Nation has responded to the challenges I talked about earlier, the recession, the terrorist attack, the stock market bubble, the corporate scandals, has been incredible. And it has been because of the tax relief. The tax relief, as opposed to the less revenue from the recession, as opposed to the increased spending, the tax relief has actually enabled us to move out of a recession into economic times where we see good economic growth.
We have acted together to address those deficits in our Homeland Security, our national security, and also put in place through tax relief the necessary incentives to grow our economy. Because of that, we are in a very different position today than we were 4 years ago.
In fact, the general consensus of both public and private forecasters is that the US economy is in a sustained expansion growth period, with real solid GDP growth over the last year and going forward, real growth and payroll jobs, low unemployment and very low historical inflation.
This chart shows the GDP growth. Starting in 2003 going up, real GDP growth has increased for 13 consecutive quarters. In 2004, our real growth was 4.4 percent. That makes us the envy of the developed world. It is the strongest growth we have had in 5 years and one of the strongest in 20 years.
The Budget Committee recently heard from Chairman Alan Greenspan from the Federal Reserve who said the U.S. economy delivered a solid performance in 2004 and thus far activity appears to be expanding at a reasonably good pace. The Fed projects we will have real GDP growth this year of between 3\1/2\ and 4 percent, and again good growth in the proceeding year.
This growth is because, again, the tax relief is beginning to work. This includes real business investment, increasing at a rate of 15 percent over the last year and a half. The best performance in real business investment and equipment over the past 7 years, shipments of nondefense capital goods, which is a key measure of private business investment, has rebounded very strongly.
Homeownership has also increased dramatically. We are now seeing the best homeownership rates that we have seen in our country's history. Housing construction is at its best in 20 years. This shows a record high in homeownership, including among minorities.
Unemployment is also a good story. If we look at what has happened since the tax relief was put in place, payroll employment has increased by 3 million jobs over the past 21 months. Just last week we saw job gains of 262,000 new jobs, more than a quarter million new jobs in February. Again, that is something that we should be proud of as a Congress, something we should be very pleased about. Significant improvement in jobs and labor markets has occurred and is expected to continue as new claims for unemployment insurance are at their lowest level in over 4 years.
Even the stock market is rebounding. Despite all the problems we have gone through with the markets we talked about earlier, the Dow-Jones Industrial Average has been at its highest level in 4 years. The Dow has nearly tripled in value over the last 4 years. These are not just figures or abstractions; these mean real jobs for real people we represent. It means we have higher investment in plants, in business, and equipment. We have higher business income; we have higher wages, higher take-home salary. This is happening in America right now. We need to be sure that continues.
Expanding job opportunities and solid income growth is what this budget is all about so every American who wants to work can work and find a job. That is what makes this a Nation of opportunity and prosperity. Today, because we have an improved economic picture, things are better; but we are not finished. We need this momentum to continue. We need to be sure we continue to see the kind of economic growth we have seen, and that means we need to continue the tax relief we passed in 2001, 2002, and 2003.
The minority leader earlier talked about the reckless tax cuts that caused the deficit. We talked about what caused the deficit. Here is what has resulted from those reckless tax cuts: 3 million jobs in the last 21 months. There are a lot of factors in the economy; but the one we can control is the
fiscal side, and that is our spending and our tax relief.
What this budget does is it says we need to continue that tax relief. We are not going to increase taxes just now as our economy has finally gotten back on track, as the people we represent have finally seen the kind of opportunity we all want them to have. We are not talking about new taxes; we are talking about keeping the tax relief that was in place in 2001, 2002, and 2003 by this Congress, put in place by this Congress, so we can continue to have good economic growth.
The speed and the strength of the economic recovery of the past several years has been due in large part to this tax relief. We cannot forget that as we look at this budget. We also need to keep spending under control.
Earlier this month, Alan Greenspan told us that the notion of raising taxes in response to deficits ``posed significant risk to economic growth and the revenue base'' and that in his judgment we should aim to ``close the fiscal gap primarily, if not wholly, on the outlay side.'' That is what this budget does. It makes some tough choices in nondefense discretionary spending, some tough choices in terms of our entitlement growth. Our entitlement programs are growing well beyond inflation.
As the gentleman from Iowa (Chairman Nussle) has laid out today, this budget calls for a lot of responsible ways for Congress to help itself to control spending, controlling discretionary growth, allocating discretionary spending to defense and homeland security priorities, as we talked about earlier, and calling for reconciled reductions in the amount of growth on the mandatory spending side. None of it is going to be easy.
A lot of us here in Congress have gotten pretty comfortable in signing off on big spending increases and free-flowing new spending. But success at keeping taxes and spending down is critical to a strong economy and with it higher standards of living for our Nation's workers and our families.
The gentlewoman from California (Ms. Pelosi) talked about the good old days in the 1990s when we did have an opportunity to get the deficits down and get some surpluses. We did it very simply by keeping taxes under control and keeping spending under control. That is what this budget provides for, so we can reduce the deficit in half in 5 years and see that opportunity continue.