Floor Statements

Madam Speaker, it's a treat to be able to join you this evening to talk about the things that are of great significance to our country and to every individual citizen that lives in America. I thought that as we got into the subject of where things are with jobs and the economy tonight I might start by introducing it in a little different way than we do sometimes here on the floor, and what I'm going to be talking about tonight really is the fact that there is this fundamental difference between Republicans and Democrats. And most of the fighting and argument comes really in the answer to just one question. It's kind of a really simple thing. And the question is this: What should the Federal Government do? That's really what divides us. That's what makes all the people here in this Chamber disagree with each other, and sometimes even scream and yell, but at least respectfully disagree with each other, because we have a fundamentally different idea of what the Federal Government should do. That's a huge part of what we discuss. And, of course, the more that the Federal Government is going to do, it is going to cost more. And the more that it costs, the more regulations and all that you have, the more laws that are passed. And, inevitably, as the government does more, people have less freedom.

So there is some sort of a question, well, you know, what should the Federal Government do. So we're going to be talking in a way about that tonight because it is the question of politics, essentially. And of course the Democrat position is--it's almost like the law of gravity, that wherever there's a problem, the answer always is more taxes and more government. The government should fix that problem. That's what they think. And the Republicans always say, well, we want less taxes and less government, and they tend to go that way. So we're going to talk a little bit about that.

We're also going to talk about sort of a theoretical question that sometimes I used to ask interns. We had an intern program. These are students that are in college and are just about to graduate from college. And I would ask them this question, and that is, Is it possible for the government to steal? Can the government steal from people? And you'd see they'd get these quizzical or puzzled looks on their faces. Can the government steal? Well, what does that mean? And you'd see them thinking, Well, I guess it's impossible because the government can kind of do anything they want and, therefore, the government can't steal.

Of course if you come to the conclusion that the government can't steal, then that means that you believe the government owns everything. Do you really believe that? Many people are taught that in school. As they get older, as they work hard for a living, they start to take a different perspective. They worked hard for that dollar bill, and they're not so sure they want the government to confiscate it.

Anyway, we are going to be talking a little bit about the conditions in our economy and where we are. Why is it that we have a problem with jobs? Why is the economy flat on its back? Why do we have a sense that things are not well in America? And there are some answers to those questions. It's not complicated. We simply look to the people who have gone before us and see what those are.

I am joined here this evening by a new Member of Congress, a young man that shows tremendous promise and is joining us here on the floor tonight from Georgia. Georgia seems to be a good State for growing congressmen. And my good friend Congressman Graves is joining me on the floor here tonight from the State of Georgia. We are here early enough that it may be that even some of your constituents will have a chance to say, Hey, that's my guy. We sent him to Congress, and he's doing a great job.

Welcome, Congressman, and we are going to get into things here in just a minute. I thought I might start, though, by going back a little bit to how did this economic problem come to be.

And of course history just kind of continues to go along. But if I had to pick a point, this is kind of an interesting one. This is September 11, but it's not 2001, it's 2003, 2 years after the attack on New York City, September 11, 2003.

This is the New York Times, not exactly a conservative oracle, is reporting some news and this the news. It says that the Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis nearly a decade ago.

And it goes on to say that under the plan disclosed in the congressional hearing today a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac. Why? Because they just lost about a billion dollars, and they weren't running their house very well.

Now, Freddie and Fannie are not government organizations. They're quasi-government. And when Freddie and Fannie started doing some wild and wooly things economically, the problem was that the assumption was the Federal Government would come and bail them out. And so Freddie and Fannie are getting out. This is 2003. Real estate market's booming.

President Bush says, watch out, Freddie and Fannie are getting in trouble. I need more authority as President to control Freddie and Fannie. Freddie and Fannie, paying many lobbyists up here on the Hill, dishing out hundreds and hundreds of thousands of dollars, thousand dollar bills, just passing them out all over here. So there's Freddie and Fannie. They're starting to get in trouble. President Bush says we've got to regulate them.

Now the Democrats, on the other hand, the guy who is now in charge of taking care of regulating Freddie and Fannie because he's in the majority now, this is Congressman Frank, the Democrat, he says, these two entities, Freddie and Fannie, are not facing any kind of financial crisis.

Well, that's interesting. We, of course, 20/20 hindsight we say, well, obviously you were wrong. I'm sure he would admit he was wrong. They were facing a financial crisis. And as Freddie and Fannie start to crash and collapse, we start to see the recession that's upon us. And so that was a piece of it.

Now, Freddie and Fannie, their whole concept was that we're going to require banks to make loans to people who really can't afford to pay the loans. Now, how that's compassionate I'm not so sure because I wouldn't want to be in debt to some loan for my home that I couldn't afford to pay the mortgage payments on.

But many people were encouraged to take loans out on houses because they're going up in value so fast during those years. You just go ahead and take the loan, postpone paying any interest payments. Five years later turn the house over, you doubled your money. It sounded good for a while until the music stopped, and then you didn't have a chair to sit in. And so we have the beginning of this financial problem that was based on liberal social policy that said that banks have to loan money to people who can't afford to pay those mortgages, and we'll just sort of sweep it under the carpet.

Well, then as the economy crashes, what happens? Well, we go back to the same old mistake we've made in the past. Unfortunately, with the stimulus bill the Democrats didn't learn from their mistakes. I wish they would learn from other Democrats. They may not want to learn from Republicans, but at least learn from other Democrats.

This guy, Henry Morgenthau, is Franklin Delano Roosevelt's Treasury Secretary, and he's the one that started with the recession which turned into the Great Depression because they did the wrong things.

So he says now, after 8 years--their idea was that if you grab the loops of your boots and pull hard enough, you can fly around the room. The idea is if the government spends enough money, it will make the economy do really well. And so they tried it for 8 years. And this is his report to Congress.

He says, We have tried spending money. We're spending more than we've ever spent before, and it does not work. I wish they heard those words: ``it does not work.''

I say, after 8 years of the administration, we have just as much unemployment as when we started, and an enormous debt to boot.

You want to know why we've got unemployment? Because we haven't learned from going back even to FDR's Treasury. This was Keynesian economics. It says if the government hires a whole lot of people, spends a whole lot of money, it's going to make the economy okay. But the trouble is, it doesn't work.

I'd like to ask my good friend from Georgia now, Congressman Graves, if you would just join us. Let's talk a little bit about this whole situation because I don't want to be just critical of the Democrats. I will be critical of them, not because I don't like them, but because they're wrong. Their economics are wrong. They're doing the wrong thing. They're hurting the American public.

People are out of jobs, and what we need to do is say, that's not the right way to do it. But we have to have a good solution. We have to offer something constructive.

And let's talk about that. I yield.

It sounds like the people from Georgia got their nickel's worth out of their Congressman. Thirty-one separate meetings?

I wouldn't want to be your car.

You're saying $167 billion of indebtedness just up to the time of just before the 4th of July?

Wow, that's a lot of borrowing.

That's pretty straightforward. All you have to do is just create one job per every three businesses, and there's no more unemployment.

Not going to do it. Hey, you know, I'd really like to pick up because, as you said, there are people sitting around having dinner in America. In fact, I'm a little hungry myself. I'm going to look forward to getting some chow. But they're sitting around there talking about the same things you and I are talking about here tonight.

And we've talked about one solution, which was the government takes $800 billion. That's what the Democrats did with their stimulus bill, and they said, if you don't pass this stimulus bill, do you know what's going to happen? We might get unemployment as high as 8 percent if you don't pass this stimulus bill. So the Republicans didn't vote for it, but they pushed it through anyway. Spent $800 billion.

And it really wasn't even good old FDR, you know, ``stimulus.'' It wasn't concrete to build hydro-plants or roads. It was basically taking money from one State, like in the State of, I don't know about Georgia, but Missouri, we're fairly conservative and we have a balanced budget, and we're not overspending. And yet you've got Illinois or California, they're overspending on the pensions of a lot of, like, teachers and things. So they take money away from our States, and I assume Georgia is probably a little bit more cautious fiscally. They take money away from our constituents and send them to the other States where the governments have been out of control spending.

Well, anyway, so they get this idea.

The old wealth redistribution. The old socialism deal. So anyway it is $800 billion. And here is what actually happened. This is putting people back to work the big government, Democrat way. Look what happens to the employment in the private sector. It's this white line. So 2007, 8, 9, 10, you see there is unemployment. And yet if

you take a look at the red line, that's the Federal Government. It's hiring all right. Instead of letting the businesses keep some of their money and hire people, instead they're hiring government workers. So that's how it works.

The trouble is really the government can't stimulate the economy. The whole assumption is silly, because all the government does is takes money and spend it. But if you hire a government employee, does that create a job? The answer is no, because for every one government employee you have two jobs you have lost from the private sector because you are sucking money out of the private sector. So when you have the government spending a lot, you take jobs away. That's what's going on. That's why the jobs are going.

It's one of those things, it's sort of an inevitable law. And you can't just let the government continue to grow and grow and grow, because eventually it takes over everything like a cancer.

Don't you go giving people ideas here in D.C. Somebody will try and do that you know.

Of course, obviously, that doesn't work, does it?

This is what was promised with the government bailout. You know, we are going to do the stimulus bill, $800 billion. And if you do the stimulus bill, these are the numbers the administration and the Democrats said--this is what's going to happen to unemployment; it's going to go down. And if you don't pass the bill, they said this is what's going to happen. But we did pass the bill, and that's what happened. Obviously, their economics don't work. They don't understand the facts.

So where have we gone? Here is the picture right here. This is the nasty little secret down here. You remember hearing that they used to say that George Bush spent too much money.

See, those are these blue years, was George Bush. And then right here was a Bush year, but this is when Speaker Pelosi was in charge of Congress. So this was in a way, if you give Bush credit for when Pelosi was in Congress, Congresswoman Pelosi, then this would be his worst year, which is about $460 billion worth of deficit. That's his worst year.

The next year, 2009, was when President Obama and the Democrats ran everything. Take a look at this jump. My goodness, it's a three times worse deficit than the Republicans had run under Bush, and Bush was spending too much money. And I agree we were spending too much money. And then the next year, 2010, it's even worse.

If you spend more money, look what happens. You start to lose jobs.

Now, does that make sense? Is that logical? Now, you know, I was talking to a bunch of people, too, as I went around my district. And you know, people make economics way too complicated. I said, look, it's not that complicated. It's like a lemonade stand. Just picture you run a lemonade stand. It doesn't have to be complicated. And if you want a little business, if it's a lemonade stand or a machine shop or whatever it is, you want to make some jobs, you want to do some jobs, what you want is you have got to allow the guy that owns it to make enough profit from it so that he will add another wing on it, and he is going to sell tea mixed with lemonade, and then he is going to have peach lemonade, and different things and different products, different people. So as he expands his business he hires more people.

But in order to let him do that, first of all he's got to keep enough of his profit to be able to invest it back in his business. I mean it's isn't complicated. Don't make economics so hard. And so I am sure you are talking to your constituents. My constituents are nodding their head up and down, yeah, I understand that. Not that complicated.

So if you want to know what's going to kill jobs, the first thing is excessive taxation. It's just a killer to jobs. Where does the government get all its money? Taxation. Did you talk about that back in Georgia?

Good.

You are absolutely right. I think you are hitting a couple of different points in this chart. The first one I am talking about is excessive taxation. But taxation also creates an economic uncertainty. And if you have got that lemonade stand and you don't know what's going on, you think maybe a tornado is coming, or maybe there is a tornado coming from Washington, or whatever it is, what you are going to do is you are going to hunker down. In Missouri, we use the word hunker down. I don't know if there is a verb to hunker or not.

Is it? Okay. Anyway, if you are talking about economic uncertainty, if you don't know what's going on as a businessman, what you are going to do is you are going to be very cautious, very conservative, and you are not going to hire a bunch of extra people.

But let's take a look at these job killers. Excessive taxation. Lets's take a look at what's coming down the pike. You have to be able to see. This is the largest tax increase in history unless Congress is going to act to deal with it. First of all, for married people the standard deduction decreases if you are married. And then parents, you have a child tax credit, it will be cut in half from a thousand to 500 per kid. If you die this year and you have an estate, you pay nothing. Next year if you die, 55 percent tax on it.

You are a small businessman. You have gotten to be 80 years old. You got your business all going, it's really doing good. It's actually a farm. It's 1,000 acres with some big pieces of equipment. It's worth $10 million, your farm is. And you up and die this year, and you pass that farm on to your son and he runs it, no problem. Next year same thing happens, you got the nice farm, got it all set up, you die, the government says, hey, taps your son on the shoulder, I need 55 percent. But he says wait a minute. If I take half the land of the farm then it doesn't make the thing work economically. I can't run the farm on half the land and half the equipment. If I have to sell 55 percent of it, you are going to put me out of business. They say you don't understand. You owe the IRS 55 percent of the cost of that farm. And so that small business closes down next year because of this policy.

Because what are we doing? Largest tax increase in history. Take a look at some of these tax increases. If you are paying 10 percent, you are going to be paying 15 percent next year. Those who are paying 25 percent of what they earn, they are going to be paying 28 percent. Those paying 28 are going to go to 31. Those paying 33 are going to go to 36. Thirty-five is going to go 39. Capital gains, dividends, death taxes. All of this stuff is going up.

Same cycle again. So basically what you are saying is, let's say that you don't make hardly any money at all. And so you are saying to yourself, hey, I am not making much money, so I am not paying any income taxes. So do I care? I like it if the taxes go up.

Oh, no, you don't, because what happens if you have excessive taxation? You get no jobs. You know, you can't just beat up on businesses, say all businesses are bad and then complain there aren't any jobs. So if we keep soaking the owners of businesses with excessive taxation, we're going to have a problem with jobs.

So what the solution to these problems is--we're making it sound complicated. It shouldn't be complicated. It's simply that you've got to back off on taxes and back off on government spending. It's as simple as that.

This is kind of an amazing chart. These are all different countries all around the world down here, and there's a little green line there. And this is the corporate tax rates. And this little green line happens to be the United States. And the only one with higher taxes on corporations is Japan. And we wonder, gosh, we can't understand why we've lost jobs in this country. Well, we've got the second highest corporate tax rate going, not to mention the taxes on individuals, as you're saying.

So we're not doing the job. And part of the reason we're doing all of this taxation, of course, is because we're spending too much money.

Right. And that's the thing. People get really upset. In fact, the Democrats that were talking before we came on tonight, they're very upset that all of these jobs went overseas. And I'm thinking to myself, Well, who's pushing all of the jobs overseas? You create an environment in America that is hostile to business and the jobs are going to go overseas. It is as inevitable as water running downhill.

And what do we do? We keep increasing taxes, increasing government spending, and the smart executives and corporations in America that have plants and facilities all over the world, they keep creating jobs. It's just the jobs aren't here. The jobs are going overseas because they've created such a hostile environment that the jobs aren't going to be here. And how do they make the environment hostile? Well, first of all, by too much in taxes, and the second thing, of course, is too much spending.

Here's a containment dome. We've had some trouble with oil leaking out of containment domes. And here's one. This is a containment dome. There's another containment dome, and it's not working either. It sure isn't working. Take a look at the rate of the spending that we've been doing. And the spending is always followed by, of course, a whole lot of taxation.

And so the first thing is, if you want to get this thing back on track, if you want to do the opposite of job killers, you want to create jobs, then what you need to do is you want to cut your taxation. This is one of those things I started out by saying I wish the Democrats would learn from the other Democrats, and one of them they could learn from was JFK. JFK had a bad economy and he did the right thing. He cut taxes. And when he cut taxes significantly, guess what happened? More jobs, stronger economy.

And the funny thing is--now this is sort of odd. If you cut taxes, the Federal Government will actually take in more money in revenue than if you didn't tax it. Have you thought about that? It's almost counterintuitive.

So let's do that again, because these numbers are interesting.

You're saying Georgia basically did a little experiment along these lines. It was a specific tax on one product--that is, tobacco--and they increased the tax on tobacco.

I was trying to explain that to some--because I give some of these talks to my constituents, and one of the ways I try to explain it is let's say that you're king for a day and your job is to tax a loaf of bread and you want to get as much tax revenue as you can by taxing bread. And so you go

through this little exercise in your mind and say, I can tax the bread $10 a loaf or one penny a loaf. If I taxed at one penny a loaf, nobody would notice, and I would get a penny times all of those loaves of bread. But if I got $10 on a loaf, wow, I could make a lot of money, but then maybe nobody would buy any bread because it's too expensive. So common sense would say somewhere between a penny and $10 you're going to come to an optimum place where you can get the most tax on it and people will still keep buying bread. If you increase it, you actually lose revenue; If you decrease it--so there's an optimum spot.

And what's happening is the government is taxing people so much, by increasing the taxes, it basically stalls the economy and so their revenue drops.

Now, if I were a happy socialist, if I were really one of these guys that wants the government to do everything for everybody----

That's the trouble. There aren't very many of them that are happy because they're so worried about somebody else making money that they don't think--if I were a happy socialist, I would want a strong economy so I had more money to swap around to my buddies, you see. But instead what we're doing is we raise the taxes so much, it kills the economy and we don't have as much money to work on.

Now, the Federal Government doesn't notice it so much, but State governments that have balanced budgets--Missouri has a balanced budget amendment. We have to balance a budget. And if you're a legislator or Governor, particularly in a State that has a balanced budget--and most of them do--when you have a recession, it is a tough time to be the leader of your State because people hate you because you have to keep cutting things to keep the budget balanced. Of course, down here, we just let it go.

You're absolutely right. I like the idea of being positive. And the solutions, one of them was JFK. He cut taxes, and the recession, after a period of about a year, turns right around and things go along well. Ronald Reagan did the same thing. Massive tax cut. As soon as he did that, the economy--takes a little while--the economy turns right around because there's money now being invested not in more big government but the businessman puts that money into different new ways of creating, buying another milling machine, another wing on the building, more money for research and development to come up with a better way to make a product. And all of those things together, when the money goes back to the small business man, they start to hire people.

I think--what is it?--companies with 500 or fewer employees employ 80 percent of Americans. So if those smaller businesses from 500 employees on down, if they got more money to spend on their own business, that's part of the solution. And everybody does better when that happens.

Of course, another thing that kills jobs is this insufficient liquidity. The businessman can't borrow money because it's all tied up in banks. Of course, we've got that problem going on now, too, and part of the reason is the government is gobbling up so much money with their incredible, incredible level of Federal spending which, once again, we point to this chart. This is what's happened under Obama the first 2 years of his Presidency. It's three times more deficit than Bush, in his worst year, had.

So this liquidity is a big deal to the businessman. And the banking rules right now make it hard for small business men to get liquidity. And as you mentioned, the economic uncertainty. Who is going to take a risk when you see the lineup of what's happened to us? First of all, you've got Wall Street bailout, and then you've got Cash for Clunkers, and you've got this stimulus bill where we waste $800 billion.

And then we passed cap-and-tax at three o'clock in the morning. It was supposed to be about how bad CO2 is, and what's the solution to the bill to keep CO2 down? You guessed it, a whole lot of taxes and a whole lot of red tape and government regulations

We are glad to have you, too. We wish we had some more people who would vote along the lines of getting these jobs going and getting the economy going.

But you haven't mentioned Georgia peaches yet. You've got some good peaches down there.

That's what it boils down, too, isn't it? Two different visions for America. One of them is there are all these people who are victims and the government has to take care of them and you don't have to be responsible and you are just going to be part of this permanent welfare idea. And I don't think Americans by and large really want that. I think Americans really like the idea more of having the courage to live some dream that God puts on their hearts.

You know, the way that this country was founded, they believed that every single person that God created in this world had some purpose, some job that God had in mind for them to do. So what they did was they came up with the idea that the only thing that you got in trouble for up in New England was if you didn't work. You see, over in Europe they had all these classes and they had certain people who didn't want any calluses on their hands because they didn't like the idea of working.

But the people that came to this country said, no, your job is to work hard because God made a job for everybody to do. In the process of doing

that, they created almost a classless society because how can you look down your nose at somebody else if God made one person to be an accountant, another person to be a blacksmith, another one to be a farmer? How could you look down your nose if somebody is doing what God called them to do?

But it was always the idea of hard work and being honest and so people could be free and chase the dreams that they had in their heart. But I don't think people are happy when the government is dishing them out, you know, always dependent on the government, you see, and I don't think that's what America is all about. I don't think Americans are happy with the system where they're just constantly going to be dependent on the government. I think people love freedom in this country.

As you talk to people around your district, I ask people if you had to summarize what is America all about--I love to ask that question. Let's say somebody from some foreign country came and they had a bunch of TV cameras and put it in your face, and you've lived in America. Can you tell me just in a sentence what is the basic secret of what makes America such a special place. And the word that I always hear is freedom, freedom. It is not like, no, that the government's going to take care of me. No, it's the idea of being a free person, and that's something that's so precious to us in this country.

You know, when people make a mistake--we were talking quite a bit about socialism, and liberals really just hate it when you mention that word ``socialism,'' but really an awful lot of Americans don't know socialism when they see it. And it is very dangerous, it's deadly, and it goes to the idea of what's the job of the government.

And if you go to our Founders, right off the bat the Pilgrims had socialism imposed on them by the loan sharks from England, and they pitched it out. They knew it wasn't any good. They knew that socialism was really a system of stealing where the government would take from one person and give to another person. If you go to the founding of our country, it was built on a bright vision. There was a fresh air; there was a vibrancy and enthusiasm because you could fail. There was an incentive to do well.

The understanding was that the job of the government was limited and limited in a particular way, and that was, the job of the government was justice. And Lady Justice was depicted--they chipped her out of marble, you know, and she's sitting there and she always had this blindfold over her eyes and she held up the scales, and the scales were what the law says and your own actions. But she always had that blindfold on. Well, what did the blindfold mean? Well it meant when you came before the government, before Lady Justice, she didn't peek whether you're black or white or male or female, rich or poor. She just said this is the way the law applies evenly to all people.

But socialism does something different. Lady Justice peeks and says this one's rich, this one's poor. I'm going to take from this one to give to this one and then we get sophisticated and we steal from everybody and pass it around to everybody else in the government. It gets more and more inefficient, but Lady Justice is peeking. That's socialism. It's wealth redistribution. It is institutionalized debt. It's morally wrong, and worst of all, it doesn't work.

Which really kind of wraps back around. I promised when we started we'd ask a couple of these really basic questions, that is, Can the government steal? A lot of kids say, well, the government can't possibly steal. The fact of the matter is the government can steal when the government does stuff that it's not its job to do. And one of the things it's not its job to do is to take something from one person and give it to someone else and that's, of course, what the President said that he wanted to do with the government. He announced that before he was elected that that was his plan, to take money from Joe the plumber and give it to someone else.

And, of course, he said he wouldn't tax anybody that made less than $250,000, and yet that silly cap-and-tax bill that we passed in this Chamber before you were here--you don't have the shame of having that having gone through here--but if you flipped a light switch, you start paying a tax. You know, it isn't a matter of 250,000 bucks, you flip a light switch you're going to be taxed.

And that socialized medicine bill, wow, is that ever a disaster. They've got taxes in there on wheelchairs. I thought I saw a taxing on everything that moves or doesn't move, but they've even got taxes on wheelchairs in that thing, and of course the problem is that's what kills jobs. It's messing the economy up, adding to the insufficient liquidity, the economic uncertainty and of course the red tape and government mandates.

You put this package together and you can go both ways. You can have a vibrant economy, people free and prosperous and out there chugging along, good economy, or you can just keep on dialing in more and more government interference, more tremendous levels of spending, and basically what you're doing is you're killing freedom.

I think you're absolutely right.

The idea, though, that we can bring the level of spending that we've got

going on under control by just trying to get efficiency, I think that's probably optimistic. I think what we have to do is decide that there are some things that Washington, D.C. should not be doing in the first place. We shouldn't cut it; we should just totally eliminate it. It should just stop. None. We need to take a good look at our Federal spending and say, What are the things the Federal Government has to do? We have to defend our Nation. We know that much. Because the States aren't going to do that. We have to make sure there's no pirates on the high seas. There used to be a law, it was one of the few Federal laws against piracy on the high seas. There was a Federal law when America started that was against counterfeiting, because that was not a State job; that had to be a Federal job.

There are very few jobs that originally started at the Federal level. And then everything else, we have to push them back to the States. I would be happy to say, look, if the people of California, or Massachusetts, or Tennessee want to have socialized medicine, let them try it and see how it works. They could learn from Massachusetts. It didn't work well. They could learn from Tennessee. They about shut down medicine in Tennessee. If States want to try these things, let the experiments begin at the State level. But at the Federal level, we have got to basically stop a lot of stuff. The first place I would start with would be just what Ronald Reagan said, shut down that Department of Education.

I had a group I was talking to down at a Honda dealership just a couple of days ago and I asked them, How much benefit do you think you've gotten from a whole bunch of Federal bureaucrats that work in the Department of Education? Has it helped your kid any at all? There were these blank looks. No, I don't think it's helped a whole lot.

So what happens if you sell the building and just shut down the Department of Education at the Federal level? Why can't that be done at the State or local level? I think we have to ask those tough questions. Maybe you could make a case, gosh, it would be nice if; but we can't afford it.

Here's a number: Debt and deficit as a percent of GDP. This is deficit. Here's the United States. We're right alongside of Greece and Spain and the United Kingdom. We're right in there with these European countries that are struggling, and we're not much better off than they are. We're way overspending.

Here is debt as a percent of GDP. You've got the United States. There are only two other countries that are worse than we are, that's Greece and Italy.

Let's try and speculate a little bit. Let's say the income for the whole year, they make a hundred bucks. So what does this mean, 91 percent? If their income is a hundred dollars for the year, what does that mean? That means they've got an incredible level of debt. They're not going to get back out from under it hardly.

That's the problem.

Yes.

So the point is, what do we do here in America? We basically have to stop thinking that the Federal Government is God and that it's going to solve every problem. We've got the Federal Government now, they're into the automobile business, the insurance business, the student loan business, they're in the flood insurance business, they're in the food business, they're in the housing business.

It kind of reminds me, there was this country that I grew up paying close attention to in the U.S., and it had this philosophy that the government is going to give you food, and it's going to give you a place to live, some shelter, it's going to give you an education, the government's going to give you a job and it's going to give you health care. We looked at that country and thought, That's not going to work. And it didn't work. The whole country crashed economically. It was called the USSR.

Here we are today, and what does the Federal Government try to do? Give people housing and food and education and a job and health care. How are we different? What we have to understand is the Federal Government has to be reined in to do just what it's supposed to do, which is justice. That is, provide a set of laws where everybody is equal before the law and a national security that protects us from terrorists and other people that wish us ill. So that Federal Government is just going to have to go on a diet.

I think you and I have a pretty good idea what they're liable to say, because they have enough business sense to know what's happened historically. They know socialism doesn't work, and they know what you've got to do is as the jobs and wealth and freedom, those are things that come from free people. It isn't the government that makes jobs. It's the businesses. It's all of the innovative Americans that are out there, that are living that dream in their heart. From the beginning days of this country, there are these people, these crazy people that came to this land with some dream of something they wanted to do.

I remember there was one guy that had this idea, he wanted to build light bulbs. He built a hundred of them and none of them worked. His attitude was, now I know a hundred ways not to build a light bulb. These crazy people came with these dreams in their hearts, the dream became a vague possibility and eventually it became a reality, and America was built, one dream at a time. It got to be so common, we called it the American Dream.

I know, gentlemen, as you travel in Georgia and you talk to those people, that you really get to love them out there, and you hear the stories:

``Well, my wife and I were sleeping under a park bench, but we had this idea for a little business. That was 20 years ago. Well, now, my goodness, we've done pretty well. The kids are in good shape. We've got a nice house. I think I might be selling the business.''

We do this, this, or that. Who would have thought it? We've got one guy in Missouri. He started a little company called Innoventor. I love this story. Talk about somebody with some imagination. He had grown up on a hog farm. Some of us that are from suburbia, we're not too fond of the by-product of those hog farms. But he had a lot of that by-product kicking around trying to figure out what to do with it. And so this guy took all this pig manure and he put it into a tank and he ran the

temperature up and the pressure up in the tank according to some basic principles of the way that we work with petroleum products and figured out a way to turn all that pig manure into this thick oily sludge which they then use to make asphalt.

And so he's got a section of road in the State of Missouri that's paved with asphalt made from pig manure. Of course the first question is, does the road smell? He says, No, when you get it up to this temperature, all the ammonia and things that you associate with smell is gone. But here's a guy that took something that nobody wanted, people looked at it as a liability, and he's got an invention that's going to turn that pig manure into asphalt to pave our roads with.

That's the kind of thing that makes America. I thought that was a colorful example. I know you've got stories of your own from Georgia. My brother was a Ramblin' Wreck from Georgia Tech. I know they've trained some good engineers down there.

Well, you know, that is a heartwarming story, and it shows the basic nature of your 10-year-old son. He understands that somewhere along the line, that he was made to do something, and even that God maybe has a plan for him, and his thinking was, I want to help my dad.

You know, there is nothing I think as a Christian that inspires me more than a passage in the Bible that is in Ephesians. It says that we are God's workmanship created in Christ Jesus. That means that each one of us is a unique and special person.

But not only that. Here is what exciting. He says unto good work which God prepared for us to do, every single one of us has a purpose in this world, and the purpose is to do some good work, which our Father wants us to do. And it is a pretty exciting thing if you are not cynical to say, you mean I can actually do something that would please my Father in heaven?

You see, I think the freedom that we treasure in America was given to us so that we could do that mission that we were created to do. That is what freedom is all about. It is not to abuse, not to have the government take from one person and give to another person. It is about each one of us doing what we were called to do and living that American dream.

Then as the country builds and becomes strong and we have this attitude that everybody has a purpose, everybody, there is no one that isn't included in that, and that the freedom we enjoy is freedom so that we can do what we were created to do in the first place. When we have that kind of attitude, it gets contagious, and all over the world people are going to say, hey, look what is going on in America. Isn't that exciting? Those people really do believe in freedom. They understand the difference between socialism, which is big government doing something that is stealing, it is dishonest, and allowing people to follow their god-given direction.

That means as you said though that people will fail sometimes. We try, we fall down, we have to get up and try it again. If we didn't understand that, none of us would know how to walk. We fall down the first few times. And I found that out trying to ski as well. You know, there is a part of my anatomy that worked as a brake for quite a while. It got pretty sore.

But we keep getting back up again, and that is necessary in a free kind of society. But I think America loves that sunlight and bright light of freedom and that fresh air and the enthusiasm of the challenge, and the fact that every one of us has a purpose that we were put on this earth to do.

The Lord has given us the simple commandment, thou shalt not steal, and when somebody takes something from one person and gives it to you and you didn't earn it, you see, that is short-circuiting the way God made everything, and that is why it didn't work. It didn't work for the Soviet Union, it hasn't worked in these other countries.

Socialized medicine doesn't work. Yes, you get insurance, but you can't get any health care. That doesn't do you any good.

Well, I appreciate your joining me, and thank the good citizens from Georgia for sending up such a great Congressman, Congressman Graves. Is a pleasure joining you.

Mr. Speaker, we're going to talk about an interesting subject here this evening, and one that might seem a little boring to start with but actually has tremendous ramifications, and that is the question and the subject of budgeting.

Now, budgets are always kind of an unpleasant thing because there's a natural requirement of a budget to balance a couple of things, balance spending and how much money you take in. So when a family works on a budget, it may be a hard time because you have to make choices between what are you going to spend your money on and how much money do you have to spend. So budgeting is one of those tough things, but it's necessary for organizations in order to be organized enough to try to keep some semblance of economic sanity.

We're going to talk about budgeting some. And the subject is of some interest tonight because, if you think about a family, maybe some families budget in a much more formal process, others do it a little bit informally, but more or less what they try to do is keep how much money is coming in pretty close to what's going out. When they don't, they start to get some very high credit card bills. Of course, small businesses, very important for them to budget.

So who is it? Which one do you think forgot about budgeting? Fortune 500 corporations? No. Schools have budgets. But we find tonight this curious phenomenon, and this is a little bit like watching an eclipse or something. It doesn't happen very often. Since 1974, when the Budget Act was passed, it's never happened that Congress did not have a budget. And yet, this year, Congress, it's Congress that doesn't have the budget. Kind of an amazing thing.

We've heard our floor leader, Congressman Hoyer, he says it isn't possible to debate and pass a realistic long-term budget until we've considered the bipartisan commission's deficit reduction plan which is expected in December.

That sounds a little bit like an excuse, doesn't it?

It's the first time we've done anything bipartisan in the last 18 months if they did wait for it. And if it were bipartisan, I'm sure they wouldn't be interested in passing it.

Is it true that we have to wait until December to pass a budget? I don't think so. There's no excuse. There's a balanced budget resolution here. Here it is, actually, a copy of the front of the bill.

Of course, the trouble with this, this has a big problem. This is a Republican budget. This is a budget that's talking about getting the budget balanced by 2020. It's an austere budget. It's a tough budget. It's a budget that you'd argue about, but it's a responsible budget.

And I'm joined by some very good friends of mine on the subject of budgets. And we're going to move from budgets. We're going to end up answering at least one question. That is, well, why are budgets important?

I'm joined by my good friend from Arizona, Congressman Franks, an expert on quite a number of different subjects, and we're going to talk a little bit later tonight, too, about doing some oil drilling.

I believe you were, was it 16 or 17 when you had your first oil rig? But I yield time to my good friend.

That's really discouraging.

I very much appreciate your starting off on a very sobering kind of note because I wanted to get to that question about, well, maybe budgets sound boring, but what does it mean? And I think you put that in graphic terms. You are saying it's more damaging than some war that some foreign conqueror could wreak, more havoc than a war.

You know, you have been almost reading my mind, because I have some charts that do compare Greece to where we are economically, and they are spooky charts.

I am joined by another one of our good friends, my good friend from Georgia, Congressman Broun. And I have to say I have got a couple of my favorite people to share an hour with on the floor tonight, both very articulate, but both very knowledgeable.

Congressman Franks, if you start to talk to him about missile defense and ballistics and all kinds of technical questions, he is a veritable Popular Mechanics walking on two feet.

And then my good friend Dr. Broun, who spent years as a medical doctor, also has a whale of a lot of Georgia common sense. And I would like to welcome you, Dr. Broun, or Congressman Broun, or my good friend Paul. Thank you.

I would like to jump in, if I could, because I think that's where we got to ask the question. This is, I guess, when the Republicans were in the majority, 2006. And they are saying the most basic responsibility is governing. This is Congressman Hoyer. And now we don't have a budget, and he is one of the leaders.

Here we have the ranking member on the House Budget Committee, and he says, ``If you can't budget, you can't govern.'' Well, that's what they are saying in 2006. But it seems like that's not where we are today, is it? Here's ``Where Is the Budget?'' This is something that was in The Hill newspaper. But it's kind of telling. ``Skipping a budget resolution this year would be unprecedented. The House has never failed to pass an annual budget resolution since the current budget rules were put into place in 1974.''

That's why I am saying this is a little bit like one of those full eclipses of the sun. You have to wait for a certain number of years and be just in the right place to see it. This is unusual. We haven't seen this before. Unfortunately, it is not a good omen exactly from an economic point of view. According to what? The Congressional Research Service. They are the ones that keep records of all of this kind of stuff. So there isn't any budget, which does beg the question.

Unprecedented.

Unusual. And what are the implications of all of this? You know, the Congress didn't pass a budget, but the administration sent us a budget. This is kind of a complicated looking chart. But this isn't very complicated in a lot of ways, because this thing is receipts. This is the money coming in. And this is outlays. Now, this is the sort of chart that you need to have some first-graders, because they could give us some real wisdom.

We could say which one of these circles is bigger? Is it the red one or the blue one? The red one is bigger. So we're spending more than what we're receiving. That says your budget's in trouble. That's not very complicated. And it's so much in trouble that the U.S. Congress doesn't want to acknowledge that fact. They say, well, if we don't see it, maybe--it's like at night, you know, when you have a bad dream. If you pull the covers up, maybe it will go away. That seems where we are.

My good friend from Arizona.

I am on the front end. So let's talk about that.

I think that Congress has tended--our job is to spend money. That's what Congress is designed to do. Of course we do too good a job of it. And the question is we have been overspending for a long time.

We overspent when President Bush, we Republicans, when he was in. And I know you gentlemen joined me in some very tough votes in saying, no, we can't do that. But we have overspent to a degree all the way along. But what

happened is we've taken this thing to an entirely new level. And I have some charts that I think explain that. But I want to hear from my good friend from Georgia.

The point you bring up, gentlemen, I was not a Boy Scout, but we had a bunch of boys that were Boy Scouts. And one of the things that they learned, which we did, because my wife and I were outdoors people and did a lot of backpacking and canoeing and all, is that when you come to a campsite, you always want to leave it better than the way you found it. It was just sort of like a tradition among outdoorsmen. And that tradition very much reflected the mindset of my parents' generation, the people that fought World War II. My father is 89 and was with Patton in the Army.

But there was a general way of thinking in that generation. And the mindset was that they were going to sacrifice a lot of things they wished they'd had as kids in order to give their kids something better. They're going to leave the campsite better than it was left for them.

And so my parents' generation, if they made a mistake, it was they tended to spoil us. They tended to give us everything we wanted, whereas they had had to really--the other generation, they might not have had a college education but said, My son is going to be a doctor. My son is going to be an engineer. I'm going to make sure they have enough money to go to college, which I didn't have a chance to do. And that was their mindset. And that's what breaks my heart about such a boring subject as budgets is because of the fact that we're not following--we're leaving that campsite look like a dump truck full of litter just got dumped on it. We're leaving litter that our kids can't pick up, our grandchildren won't be able to pick up. And that's just wrong. And it is not the American way.

And yet what's it spring from? Our own selfishness politically that we have to appease--which is wrong in the first place. It's theft and we're going to steal money from a lot of people that aren't even alive yet and we're going to spend it and hand it out to people. And that's a sad place to be in.

So we're doing two things. So we're increasing taxes radically, but we're increasing spending even more. The ironic thing is that when you increase taxes, you also kill the goose that's laying the golden eggs and you start to take in less revenue.

Here's a list of some of them. This cap-and-tax bill that we passed. This thing is supposed to be about global warming. It's supposed to be about reducing CO2. The only thing this thing does is create more taxes and more government regulation and probably more CO2 to boot. If they wanted to stop CO2--if people were honest about stopping CO2--let's assume you're a greenie and that your CO2 is really bad and we've all got to stop breathing. How are you going to do it? You're just going to double the number of the nuclear power plants and you wipe out all the equivalent of all the CO2 burned by every passenger car in America. But that's not what this bill does. It supposedly is about global warming, but in fact it's just more taxes.

And the health care tax thing. This deal here, that bill, they had to struggle to keep it under a trillion dollars. The President said, I won't do it if it costs a dime. No. He did it because it costs more than a trillion. So there's another great big tax. Death tax. Capital gains. They're going to expire. So we're going high in taxes. But does that mean we're cutting back on spending? No.

This, my friend, is why if I were a Democrat I wouldn't want to put a budget out there. Take a look at that picture. My friend from Arizona.

I don't think they want them to see that graph.

I thought it would be appropriate to talk about what these bars mean. It's pretty straightforward.

These were Republican years under Bush, and this shows the deficit. We're not proud of this deficit. Shouldn't be any. The worst year under Bush was this one where Speaker Pelosi ran the Congress. So this was Bush's worst year for deficit right here.

So we go from 2009 to 2010 with President Obama, and he's three times the Bush level of deficit and this year is even higher.

Now, one of the ways to measure these things is this deficit is a percent of our gross domestic product, all of the stuff that we make in America.

This is running at about 3.1 percent. This is about 9.9 percent right here. Now, these numbers have consequences, and the consequences are your children and your grandchildren. But it also could precipitate a crisis a lot sooner, and we really don't know what that crisis looks like.

What happens when you go to the bank and your ATM doesn't work? You worked all of your life and you have savings in the bank and there isn't any money in there because you can't get any money out because the dollar bill isn't worth anything. Have we ever experienced that before? We've seen some high inflation that's not pretty. What happens if the banking system just stops working because we pushed this too far?

What is the civil unrest? What happens with our just-in-time food inventories when there is no more food on the shelves and when there is no more gasoline at the gas pumps because we have pushed this too far? How far is too far? I don't know, but I know this: This isn't the right direction that we are going.

I yield to my friend from Georgia.

I think he also promised that nobody making less than $250,000 would be taxed, right? Yet, if you flip on a light switch, you are going to get taxed.

How do you square those?

You know, the funny thing is that we need to learn something from history, and the Democrats have got something they could learn from. It's Henry Morgenthau. He was the Secretary of the Treasury under FDR. They had a recession, and by his policies, they managed to turn it into the Great Depression. After 8 years of government spending, which is what we have seen--just incredible levels of government spending--he makes FDR look like a piker. He makes George Bush look like Ebenezer Scrooge.

So here is Henry Morgenthau before the House Committee of Ways and Means. He says this:

We have tried spending money. We are spending more than we have ever spent before, and it doesn't work. I say, after 8 years of the administration, we have just as much unemployment as when we started and an enormous debt to boot.

That is Henry Morgenthau. He is a contemporary of little Lord Keynes, that not so bright British economist.

Here is a Democrat who just says, Hey, we tried it for 8 years, and it doesn't work. So what are we doing now? We are going right back around, and we are overspending. We haven't learned our lessons.

I do.

I'm not sure about the intent.

Yes, your whole idea about little Lord Keynes and his idea about spending one's way into prosperity strikes me about like grabbing your boot loops and trying to fly around the room, you know? I don't know if he was a boot loop kind of guy, but anyway, he was certainly different in his view of economics.

My good friend from Arizona.

Gentleman, you expressed that in good scholarly terms about your debt being as high as your GDP. But just trying to put that as a family--if you're a family and you make $100 a week and your credit card bill is $100 a week, you're in trouble. That's what you're saying. In fact, you're more than in trouble. And I think that's what you're talking about

Yes. And that's one of the factors that totally destroys jobs--and that is the uncertainty factor. So if you want to ruin jobs, raise taxes a whole lot, create a lot of uncertainty, and then spend way beyond your means. That's what we're doing. It's a war on business.

There are a couple of different things. We talked about these tax increases that the Democrats did. Here's something they didn't do at all. They haven't fixed the problem with Freddie and Fannie. These are two timebombs ready to go off again. They started the big crisis before when we mismanaged Freddie and Fannie. As much as people go ``boo'' and ``hiss'' at George Bush, in September 11, 2003, he was asking for authority to regulate Freddie and Fannie because they were out of control. And the Democrats blocked that legislation in the Senate, and now we have a meltdown on our hands. So there's some things that are taxes, some things that are spending, and some things that are no action at all that all feed into this problem. So this sounds kind of boring.

This doesn't say Rush Limbaugh here. This says: The New York Times. This is the New York Times. Not exactly a conservative newspaper. September 11, 2003, the headline is: The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. Under the plan disclosed at a congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac.

So this is 2003. They saw it coming.

This then resulted in Republicans in the House passing a bill. Where's it go then? We sent it to the Senate. What happened in the Senate? You needed 60 votes to pass it. And so what happened? The Democrats killed this in the Senate, just like they killed the energy bill in the Senate that was designed to help us with gas prices; just like they killed, as you know, gentlemen, the tort reforms in the Senate to reduce health care costs; just like, as you know, my friend from Arizona, they killed the associated health plans that we passed time after time here on the floor to try to allow small businesses to pool their employees to get a better price on health insurance.

Now we were accused of doing nothing. We didn't do nothing. We sent a lot of legislation to the Senate where they didn't have 60 Republican votes, and it was killed by Democrats. Here's what happens here. But have we done anything about Freddie and Fannie? No. It's still hugely in debt, and we're just basically bailing it out all the time. What's the result of that going to be? It's going to be a lot of trouble.

Here's one of the pains. This is what hurts, one, is unemployment. Look at the private-sector employment numbers here. Look at the red line. That's the public-sector employment. Have we created jobs? Sure have. We hired a whole lot of census workers. But the jobs that pay for the government are going down because these policies make a difference in peoples' lives.

Whenever I think of unemployment--you gentlemen are both gentlemen. Both of you have wives and kids. And I suppose that somehow wired back in the back of our minds, certainly in the back of mine, when I have a wife and kids, I need to take care of them. That's the fundamental thing that I'm supposed to do as a dad. If I fail at that, then I'm a miserable failure in my own mind.

And I'm picturing a set of policies that the Democrats proposed to put people into houses they couldn't afford to pay for, so they're going to default on their mortgage, and they and their kids are going to be sitting on a sofa out on the street as they have been thrown out of a house. That, to me, is kind of a nightmarish thing. And that's that unemployment. It looks like a boring number on a chart, but it's people who are hurting. It's people who are living back with their parents. It's parents who are digging into their savings to take care of their kids because there are no jobs. So these things may be boring, but they sure have a lot of pain

associated with them and a lot of consequences associated with them.

This was a promise that if we gave lots of money to different States that had been mismanaging their budget with this supposed stimulus bill, I think it was supposedly $787 billion, but turned out to be $800 billion. And we spent all this money. And this is what's supposed to happen. It's supposed to reduce unemployment. Here's what the unemployment really is. Because we didn't learn from Henry Morgenthau. You have can't spend your way into prosperity by spending Federal money. These things have consequences. They hurt people. This isn't just boring numbers on a graph. That's actually what the actual unemployment is. So there's a consequence to these policies.

The tragedy is there are solutions to this stuff. It isn't that hard to do. What we ought to do is just learn from JFK. We can learn from Ronald Reagan, but try to be a little charitable. JFK got it right. There's a solution to this. We don't have to do this. All we've got to do is simply cut spending and cut taxes. Everybody knows that.

I've used the analogy--were you a pilot, Congressman Franks?

Was it you?

You're a pilot. I think we used this analogy the other day on the floor, because I remember as a kid the biplanes and the early days of flight. My science teacher flew glider planes and designed some of the glider planes that were used in the D-day invasion. He was a guy that hated what he called ``fizzle ed'' because he wasn't in great shape and he didn't like the football jocks. But the ironic thing was he got an award to the National Hall of Fame of Glider Pilots, which is an athletic type of thing because he could do all kinds of aerobatic loops with his glider planes. And he taught me some basics about flying. And what caught my attention was, in the early days of flight you get in an airplane and you do one of these deals where you don't have enough power and you pull the airplane into a stall and the airplane falls over backwards and it'll start to spin. And it was called a graveyard spin, I guess. When pilots got into those things, they kept flying the airplanes into the ground, which ruined their whole afternoon.

Finally, somebody realized--I guess a smart pilot decided to gamble his life. He said, I think there's a way out of this problem. And it's counterintuitive. And that is, when you're in that spin, the temptation I guess of pilots is to pull the stick back and try to get the nose of the plane up so you don't fly into the ground. And that just makes it worse.

So this guy, when he's in this graveyard spin, he says, I'm going to do it. And everybody is watching him, Here goes another guy who is going to fly his airplane into the ground. And instead, he kicked the rudder to stop the spin, pushed the stick forward until the airplane stabilized. And then he pulled the stick back and pulled it right out and made it look easy.

You know, the solution is JFK, Ronald Reagan, and George Bush all understood the solution to this problem. It doesn't have to be doom and gloom. The solution is, stop Federal spending, stop the high tax rate; and pretty soon we'll come out of the graveyard spiral. And we don't have to do another Great Depression. We've done that before. I don't want to be too doom and gloom about this, but the fact is these numbers are hurting people.

This is the President. He says, Now give me one more good reason why you're not hiring, and you've got this great big socialized medicine bill, which is well calculated to destroy the economy, and then this goofy cap-and-tax excuse for global warming. I asked my constituents, Which is more important to you, our dependence on foreign oil or global warming? And it was an 80/20 type thing. Let's get practical. We need to be doing something about our energy business in this country is what they're telling us. But it isn't all doom and gloom. There are solutions to these things. My good friend from Arizona.

You know, the thing that strikes me is most people that I know--I am an engineer. Engineers are kind of geeks anyway, but we have such a predictable sort of thought pattern, and that is, now we've got this great big hole that we've just drilled in the bottom of the ocean. Now, you can talk about that it's a mile deep and there's tremendous pressure. We are going to talk about this because you used to have an oil rig, and we need to talk about oil.

But in it's simplest form, there's this ocean, and there's a hole in the bottom, and it's leaking oil. And my impression is that most Americans I know, when you have all this sloppy, yucky, sticky oil pouring out of a hole in the ocean floor, your first reaction is to try to figure out, how do you fix it. You know, you want to try to say, Okay, let's get some people together that know about this stuff, and let's stop the problem, and let's try to mitigate the damage that's done, clean it up; but let's stop it from spilling oil. I mean, that's such a fundamental thing. Engineers have this big weakness. They're always ready to fix something when they haven't even defined what the problem is, but that's such a knee-jerk reaction.

And yet what we've got here is somebody who is more ready to try to figure out who to blame than to fix the problem. We've seen it before in the economy on the other things, but there's nothing quite as vivid as just a plain old hole in the ocean that's spewing out oil. And you'd say, Well, first let's put a team together to fix it. Instead, we're going to say, Oh, let's see how much we can excoriate BP. Well, I don't feel sorry for them. They're the ones that had--as far as I know, the personnel on the oil rig were either incompetent or made some very bad decisions. They deserve to lose a lot of money. They did things wrong.

The only thing is, it seems to me that the Federal Government has been even worse. And the thing that's so amazing is, why don't we put the team together to fix the problem instead of just standing around and looking to assign blame on the whole thing? That's what concerns me a lot. What happens if this economy turns into another big hole in the ocean that really starts to go downhill? What are we going to have for leadership to fix that problem? I recognize my good friend from Georgia.

That doesn't sound too complicated.

I think it was 140,000 direct jobs. These are not the barbers and the restaurateurs and stuff. This is just the hard jobs that it's going to kill.

So did this plan, first of all, stop the oil that's coming out of the floor of the ocean?

So they didn't fix the problem?

Did they deal with cleaning up the mess?

Now wait a minute. Let's get this straight. This is a little confusing. A panel of, more or less, experts is put together. They're asked to come up with a recommendation. They come up with a recommendation, and the administration says, Well, we're going to put a moratorium on drilling because that's what was recommended. And the panel says----

No, we didn't. We didn't recommend that. I guess the panel came up with the wrong answer.

I call it cap-and-tax, tax-and-trade.

Let's get this straight. So what we're going to do is, we've got a hole in the ocean that's pouring out this really sticky, yucky oil. I mean, we're counting on BP to clog that up. We don't really have that good of a solution on the cleanup thing because the Governor is saying, we want to build some sand berms to stop the oil from washing into our wetlands. And the government says you can't do it, and then they say you can. And when they start to do it, they say you can't. So we're not really taking care of the mitigation piece of it.

Instead, our solution is, Hey, let's tax everybody. That seems a little counterintuitive. So we're going to tax them twice. One, we're going to tax them when the government taxes them on energy; and, two, they are going to get hammered because the cost of energy is going to go up because we don't have the whole oil basin of the gulf, which is a pretty good source of oil, to give us lower-priced fuel. That just seems a little bit counterintuitive, doesn't it? It's a little bit like that graveyard spiral. We keep twisting downward. We need somebody to firewall a stick, kick the rudders right, and then pull us out.

My good friend, Congressman Franks from Arizona, was it 15 or 16 or 17 you owned your first oil rig? We need a little bit of help on this.

Gentleman, you have illustrated the very point that I was trying to make. You instinctively think in terms of fixing the problem, not fixing blame.

And you're a member of the Armed Services Committee, along with myself, and I don't know if you were aware of it, but the military has basically a whole plan of what they call a fusion unit, and it's a management structure where, when you get into something like this, the President has complete authority to do this. He could pull on every resource of the United States. He puts together the smart people, puts somebody in charge of it, and they take a look and say, Here's how we're going to solve the problem. One, we're going to try this. If this doesn't work, here's plan two and here's plan three. We need these resources.

Foreign countries offered to help us. You put this thing together. You have somebody else that's taking care of State laws, environmental laws, making decisions.

When Governor Jindal says, Hey, we want to put a sandbar in front of our wetlands to stop the oil before it gets in, you take a look at that and you get back to him within 24 hours or 12 hours and decide whether it's a good plan or not, and you have the right people, the

best people available in place to analyze that, make a decision and move forward.

And instead, he waits a month to get a response from the Federal Government, builds the sand dam, and then they tell him to tear it down.

You're saying the President waited two months before he goes to meet with BP.

Well, that's convenient, because then anything that doesn't work you can continue to blame BP. The problem is, there's all this oil all over the place, that little detail.

You know, I agree with you entirely. BP was wrong. What I'm not clear on, was it more of equipment or was it more human. I suspect from what I've heard, it seemed like it was more operator error than it was technology.

But, be that as it may, it seems to me that the only thing that eclipsed the foolishness and the incompetence of BP is the Federal Government response that's even worse.

Well, thank you gentlemen. I appreciate your joining me. Thank you, Mr. Speaker, for allowing us to talk about budgets, but also about the situation in the gulf.

God bless you. Thank you. Good night.

Thank you very much, Mr. Speaker. I appreciate a moment here to get our charts lined up and to talk about a subject that we have been talking about for some time but which is very much on the minds and hearts of people in America, and that is the situation of jobs, the economy, and the condition of our solvency as a nation, and the challenges to leadership and the way forward.

Now in order to try to get a perspective on where we are, it's helpful to look back a little bit and to see where we have come from. Those of us perhaps who have been paying a little attention to what has been going on over the last couple of years, there have been some changes, changes of a recession that has come, changes in terms of unemployment, people having trouble making their mortgage payments, people having trouble keeping or getting jobs, and also a sense that the economy is not all that it should be. These things didn't happen just by accident. They were a result to a large degree of government policy. Many of the problems that we are experiencing actually

were caused by decisions that were made right here in this Chamber, and some of those decisions now turn out to be not wise at all.

I would like to go back a number of years to part of what created this entire real estate bubble which then collapsed our economy and put us in the condition that we are now. I hope to conclude with some very positive suggestions as to what we have to do to go forward. America is not in someplace that we haven't been before. We're not in over our head, but we're getting close to it. There are things that we can do to mediate and to take care of some of the problems that have been created, but we must act decisively and we're going to have to act immediately.

Going back a little bit, it became popular over a couple of different administrations to allow people who couldn't really make their mortgage payments to get mortgages to buy houses. So what we did was we created a law that actually said to bankers and to people who were going to give people home loans that you have to give loans to people who can't afford to pay some of them, or who may be a bad credit risk would be a better way to state it. And so we had these laws saying that a certain percent of loans have to be given to people who were bad credit risks. Over a period of time, what happened was those percentages were increased. In President Clinton's last year in office, they increased those percentages up. In the meantime, the economy had a series of different things that occurred with Greenspan creating a great deal of liquidity because of the recession in 2000-2001. So what you had was this real estate bubble where a lot of people were putting money into houses, the housing prices were going up rapidly, everybody was flipping these home loans and making lots of money. As long as the music continued to play, everybody was happy. When the music stopped, there were a lot of people without chairs to sit down in. Well, this tremendous bubble that ended up bursting in the home mortgage area was not something that took everybody by surprise. Many people took advantage of it. Many people were hurt very badly by it. But it was not something that people didn't understand was going on. In fact, on September 11 in 2003, which goes back quite a number of years now, President Bush saw this coming; and so he is recorded here in the New York Times, not exactly a conservative oracle, saying that ``the Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.''

What the President wanted was more authority to regulate Freddie and Fannie because he saw that Freddie and Fannie were out of control. But that's not such an easy thing to do to control Freddie and Fannie. They were quasi-private agencies that were loaning money like mad to people that wanted to buy houses. The trouble was they had just lost a billion here or there, so things weren't going quite right for Freddie and Fannie.

But Freddie and Fannie had a way to fight back. They had many, many lobbyists in Washington, D.C., and they gave lots of money away to Senators and other political people. So the President is asking for authority to control Freddie and Fannie. The President got the bill through because Republicans controlled the House at the time, got a bill through the House, it went to the Senate. But because the Republicans did not have 60 votes in the Senate, the bill was killed by the Democrats in the Senate.

In the meantime, the congressional Democrats disagreed with the idea of regulating Freddie and Fannie more. And of course Congressman Frank, who is now the one in charge of this committee, saw it very different than President Bush did. He said, these two entities, Freddie and Fannie, are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies and the less we'll see in terms of affordable housing. So he did not want to regulate Freddie and Fannie. He didn't see a particular financial problem; he said they're just fine financially. This is the same article, New York Times, September 11, 2003. Of course as it turns out, through the eye of history we can look back and say of course Congressman Frank was completely wrong and President Bush was right; we should have done something about Freddie and Fannie.

So you start to get this real estate collapse and mortgage problem. So the economy starts to go down and a lot of people blamed President Bush for it. But anyway, the economy starts going down, it's because of this congressional policy of allowing these mortgages to be made to people who couldn't afford to pay. What happened was of course Wall Street took them, chopped the mortgages up into little pieces, packaged it all up into these mortgage-backed securities and sold them all over the world. The whole crisis was compounded by the different ratings agencies like Standard & Poor's and Moody's, giving them all Triple A ratings--in fact, these things were not Triple A at all; they were a lot of trouble waiting to happen.

So the real estate crisis then drug the rest of the financial market into trouble, along with some accounting rules that were so rigid and strict that they couldn't deal with the situation that occurred. Following that, of course, President Obama is elected and the economy is going down. And so he proposes a series of solutions and things that hopefully are going to make things better. Part of his solution, of course, was a whole lot of taxes and a whole lot of spending.

And so his policies started out, first of all--actually, it started out with the stimulus package. The stimulus package was one of these things that were supposed to help us get some jobs. He told us what we were going to do with the stimulus package, we were going to spend--it was originally $787 billion, but as it turned out it was $800 billion in the stimulus package. And here's what was said by the President about it. Our stimulus plan will likely save or create 3 to 4 million jobs. Ninety percent of these jobs will be created by the private sector, the remaining 10 percent mainly public sector jobs.

So this looked like a pretty good deal. We were told if you don't pass the stimulus bill, what's going to happen is you may get 8 percent unemployment if you don't pass it. And so because the Democrats were totally in charge, we passed it. The Republicans all voted no. We had seen this before. It was not even a legitimate stimulus package. It was a whole lot of big spending on a lot of giveaway government programs, but it was not going to do anything to improve the economy, we believed. Now we've had a chance to see how did that $800 billion go? Well, it went to pay the pensions of a lot of States that had been irresponsible and had not managed their pensions properly.

And so now we've seen how that worked. Well, the private sector has lost nearly 8 million jobs since 2008. The government has gained 656,000 jobs--mostly the census-type jobs--and there was very, very little job creation in the private sector. Well, is it because Republicans were such wizards that they could figure out it wasn't going to work? Well, no, we just know something about history. In fact, we would have hoped that the Democrats might have learned from history from the days of FDR, who took a recession and turned it into the Great Depression.

These are the comments from a Keynesian economist in a way, he was somebody that was about the same time period historically as Little Lord Keynes. His name was Henry Morgenthau, he was FDR's head of Treasury. He said, We have tried spending money. We have spent more money than we've ever spent before--this is after 8 years of the Federal Government spending lots of money--it doesn't work. I'd say after 8 years of the administration we have just as much unemployment as when we started, and an enormous debt to boot.

So, so much for the stimulus bill. It wasn't even FDR kinds of concrete and asphalt types of pork; a lot of it was just giveaways to various States that had mismanaged their budget. So that's what happened. So we could have learned. And the Republicans did know that the stimulus bill didn't work, we didn't vote for it. And what was the result of it? Well, we should have learned at least from Henry Morgenthau because here's the results. This is when the stimulus bill was put

in. It was projected that we're going to have unemployment going down. If you pass the stimulus bill, it's going to go down here; if you don't pass it, it may get up to 8 or 9. In fact, we passed the stimulus bill, it gets to 9.7.

If you take a look at the other graphs--I don't know that I have that graph here today--what you find is that the employment in the private sector has been going steadily down and the government employment has been going steadily up. So, so much for the first step of economic policies in the administration. That was followed, of course, by all of these different nifty big tax increases. Now, that says something's wrong when you have a recession and you're doing tax increases.

I'm joined in the Chamber tonight by a fellow that is very aware of how these things interact, has done a fantastic job for his district, and I'd like to invite him to join me in our discussion tonight, Congressman Scalise, please.

We just didn't learn.

Maybe I should just interrupt for a moment and recognize, gentleman, you have really studied up on the whole oil spill situation and shown tremendous leadership there. I'm very thankful for the fact that you have stepped into what appears to many Americans and many conservative Congressmen as a leadership vacuum. You have really stepped in, and I'm very thankful for you doing that. I would encourage you to make the connections here.

Could you hold that right there for a minute because I think you're on something that I think we ought to be exploring a little bit here tonight, but we do have an item of business.

I yield to the gentleman from New York (Mr. Arcuri).

Mr. Speaker, I think we were just talking a little bit about the situation in the gulf that's gotten everybody's attention.

My background is engineering, gentleman, and my first reaction when there's a problem is, how do you fix it? That's the first thing I'm saying. What has puzzled me and actually made me pretty frustrated is it seems that the administration is more interested in affixing blame than they are in fixing the problem.

I recall that President Bush took a whale of a beating after Hurricane Katrina because it took him about 2 or 3 days after he had been rebuffed by the Governor and the Mayor of New Orleans, it took him a couple of days before they sort of got going. And then of course our FEMA didn't respond very well; the Federal response was a bit weak in terms of the magnitude of the disaster. And yet, by comparison, what we're dealing with here in the gulf is it took 50 days for the President to call the head of BP. Now, he had the power, if I'm not mistaken, is it right, he had the power to basically declare that a national emergency, get together a team of people, a fusion cell, get the very top resources in America. They could have pulled that together, they could have processed the different questions, sorted through the conflicting claims and started to put this thing together, put together a series of, We're going to do this, this and this. If this doesn't work, this backup plan is already getting set up.

We could have managed the process. Instead, after 50 days he calls the head of BP and just wants to ream the guy out. Well, BP did a terrible job, but after the crisis started it was the administration's problem to deal with, and I didn't see it fixing the problem. Am I mistaken in that? I mean, that's just an outsider looking in. I'm up in Missouri, we don't have too much coastline up there.

Wait. The President approved the sand barrier plan that we've been waiting a month to get approved, and now it's been shut down by the Federal Government?

The Federal agency said they didn't shut them down. Yet, in fact, they weren't telling the truth. They did shut them down.

It is a vacuum of leadership, isn't it?

The thing that struck me about it was--because I heard about this sand barrier thing. I mean there are a lot of different ways you could try to mitigate the oil that is in the water. There are dispersants. You can put hay in the water. There are a lot of things. One thing you could do is you could dredge up a little sandbar, which is very flexible. I mean you could pump it away a week later if you wanted to. That sandbar could protect these very delicate ecosystems along the edge of the water. They could trap the oil.

You know, some years ago, there was a place that had some good food in Missouri. It was one of those truck stop-type places, and it had a picture that was kind of a cute one. It had a beautiful John Deere green wagon, and it had these two little kids dressed up in the high- bibbed, blue-and-white-striped overalls. One of them had a handle on the wagon and was pulling on it. The other one was pushing. Apparently, the wagon had sort of gotten stuck in a bump, so he is looking back over his shoulder, and the caption reads, ``Are you pulling or pushing back there?''

I've got to think of poor Governor Jindal. You're trying to get permission to build a sand barrier to try to protect your environment, which is what the Federal Government is supposed to be demanding that we do. We have all of these expensive bills to supposedly protect our environment. He says let us build a simple sandbar to catch the oil on it, and then we can take it away later. Yet it takes the government a month to try to make a decision. The oil is already into all of these delicate ecosystems while the Federal Government is dithering around, trying to make a decision.

If I were the Governor of that State, I'd be jumping up and down mad. It's just a vacuum of leadership is what we've seen. Now you're saying the President said they could build them, and then they can't build them. There is no one in charge, it seems like.

The question that raises my blood pressure is it seems to me like President Bush was almost accused for bringing on Hurricane Katrina. Yet we've got one of the biggest leadership vacuums in terms of this oil spill every time you hear about something. There was also that moratorium about we're not going to drill any more wells at all. The equivalent would be, if an airplane falls down, we're going to cancel every air flight in America. You know, there were some reasons there was this disaster. From what we're hearing, there were enough coverups and different things, so we don't really know exactly what happened. Though, apparently, the equipment, at least if it's functioning properly and has been properly checked out, should work. So there was some human error involved, clearly, and possibly some equipment that was not properly inspected. There are some problems, but that doesn't mean you shut every oil rig in the gulf down while you're trying to figure out who did something wrong.

Wasn't it over 100,000 jobs that were just going to, all of a sudden, disappear?

Is that 40,000 jobs just in the oil industry alone?

Just from what we've talked about in 10 minutes tonight in terms of this leadership vacuum, we are seeing a threat to 40,000 jobs. Just in your State alone, it's 40,000. We're not talking about the barbers and the restauranteurs and all of the other people who are supported by it. It's just 40,000 hard jobs which are being thrown down the drain when a panel of people who really have studied and know the industry are simply saying, Look, go out to the different oil rigs. Make sure that they're inspected and up to spec because, by the way, MMS, the Federal agency supposedly doing this, has not done that. Make sure that they're up to spec, and then let them go ahead because there is nothing wrong.

We have drilled thousands of wells in water, and they have worked fine. Just because one goes bad, you don't shut the whole industry down. So we are threatening 40,000 jobs. Also, in spite of what the panel recommended the President do, we are continuing to endanger the environment, and they are always screaming they care so much about the environment. Though, they are the very ones preventing you from trying to protect the environment.

The thing that strikes me is: Why do we put so much trust in the competence of the Federal Government? That's what is striking me. That's part of the reason I thought it was good to take off a little bit and talk about the gulf situation.

We've got this proposal now. The President wants to use the fact that a company mismanaged its oil well and that he and his administration have made a complete mess of the management of that crisis to say now what we need to do is to have the Federal Government do this cap-and- tax bill, which is more taxes, more red tape and government regulation. When the last government agencies didn't even do their jobs, now he wants us to buy more of this, not to mention the fact that we've already passed this huge tax increase for health care. Now we're supposed to trust the Federal Government to take care of our own bodies. We took a look at what it's doing down there in the gulf. I sure don't want the Federal Government tampering with my body. I'll end up with two left arms, which would be a pretty terrible fate for a conservative like me.

Well, you know, the thing that strikes me--and maybe it's because I'm an engineer and I see it this way. For most Americans I know, if you've got this big hole in the middle of the gulf and if it's pouring out all of this oil all over the place, the reaction of most people is, Well, let's fix it. You know? Let's get the job done. Whether you believe in big government or in little government, what you want to do as Americans is to have this ``can do'' attitude. Well, we made a problem. Now we've got to get in and fix it. We've got to figure out what we did wrong. We've got to make sure we don't make those mistakes again, and we're going to move forward.

I don't like being negative. I like fixing problems, and I know you're the same kind of temperament. We've been kind of complaining about the fact of a vacuum of leadership in the administration, and it's a vacuum that's evident in the gulf oil spill. It's evident in Afghanistan, and it's evident in a lot of policies. Let's stop for a minute. I don't want to be negative. Okay. Let's say that we are President and that we have this oil spill. What would be an appropriate response?

My thinking is I know the military has these things they call ``fusion cells.'' They're teams of people who get together. It's a clearinghouse for all kinds of information. You get the top resources all over America of what you need in different areas. You put a plan together and say, This is our first attempt to stop this well up. If this doesn't work, we're going to do this. That means we've got to have this, this, and this piece of equipment ready to go. It means we've got to clear this, this, and this with this agency.

We've got Governor this; Governor this; Governor this asking for permission. We've got to consider that, take a look at the law, move fast if we have to change the law or change some policy, and we need to get back to them within 12 hours. And you've got a whole team that is on top of it, managing this thing. That's my sense of where we would be going. You have to be able to look at all of the data, get the right people in the loop, and make decisions. We're not seeing any of that.

It's got to be terribly, terribly frustrating. As I took a look at it, my daughter actually was taking a biology class and she did a paper on the whole oil spill and some of the different technologies for mitigating all this really raunchy oil that's floating around. One of the things is there's a company that has in barrels a powder-like yeast--these little critters that will eat that oil. When the critters eat the oil, when they get done eating it, if there's no more oil, they just die because there's no more food and other creatures can eat them, and the whole thing just cleans up the mess biologically, naturally.

Now, I don't know whether that's a great solution or not, but it sure seems to make a lot of sense. And then you've got other people in the Midwest areas, we've got plenty of straw and hay. And there's even these YouTubes and people are saying, Here's one way to fix it. Put a bunch of straw and stuff in this water. All of this very sticky oil clings to the straw, you bring it in, pile it up, and burn it in an incinerator or whatever. But Americans have ideas how to do this, and our government is standing around saying, You can't do it. No, we don't like that idea either. In the meantime, the oil is piling up on the shores, and we're just asking for some legitimate government.

My friend, Congressman Broun from Georgia, is here, a medical doctor and also a guy with some strong ideas and a lot of common sense. It's a pleasure to have you.

That all goes to the same thing we're just talking about. I don't really naturally like to be dumping on people for mismanaging something, but this is so outrageous. I mean, the only thing that could top the outrageousness of BP is the outrageousness of the administration to be sitting here 2 months after this situation without a clear-cut plan. I would think the President would have some boards like this and say, Look, the first thing we've got to do--and this is just like somebody has been hit in an automobile accident. They're bleeding. You're a doctor, Dr. Broun. And you stop the bleeding, is one of the first things you do.

I would say, Well, we've got to stop that oil coming out of the floor of the ocean, and here's the plan to do it and we'll do this, this, this, and this, in this order. And it's going to require these resources and we're putting the team together and the plan to do that. Now we've got this situation with jobs down there. And Congressman Broun's got an idea to help on the income tax side of it. Congressman Scalise has got a plan as to what to do with some sand berms to stop this oil from coming into the harbor. And you put the team together to make decisions and deal with this. And so instead of fixing blame, you fix the problem. And all we've heard is the government getting in the way.

My understanding is private companies have more oil booms out there to collect oil than the Federal Government did. And there are types of booms--I heard they're called fire booms--where they're a material that's more or less fireproof. It corrals the oil. Light the oil on fire and they can burn the stuff up before it drifts onto the shore and causes a lot of trouble.

And the thing that drives me crazy is here is this example of the government just totally failing and the gall of the administration to turn around and say we've got to pass a great big tax increase and we're going to give the Federal Government power to tell you you've got to put a 220-volt plug in your garage for your electric car and you can't build a wing on your house without making sure the carbon footprint is right and we're going to tax anybody every time you flip a light switch and we're going to try and pass this piece-of-trash bill, and the excuse for this is the fact that we haven't dealt with the problem in the ocean. I don't understand how people can have such great, great faith in the Federal Government. It just blows my mind.

And, of course, you know, gentleman, the health care bill. Every day that comes out, we find more and more problems, all things that we were saying were going to happen. And it shows that the real objective here isn't health care at all. That's the ironic thing. This Obama benchmark progress report. Here's the thing about jobs. Is it going to help with jobs? No. It fails this measurement. Costs. Today, I want to lay out the details of a plan that not only guarantees coverage for every American but also brings down health care costs. Is it going to bring down health care costs? No. The whole thing is a scam because all it does is businesses will dump their employees in the Federal Government.

And so why do we have so much trust the Federal Government should be entrusted with health care? You're a doctor. Would you want to trust your body to the Federal Government when we've seen this record?

The funny thing is, the very words they spoke kind of come back to condemn them. They're kind of condemning themselves because here's the Democratic whip, Congressman Hoyer, he's saying, Budget is the most basic responsibility of governing. That's 2006. The most basic responsibility of governing is what? The budget.

And here's the guy in charge of the budget, Congressman Spratt, If you can't budget, you can't govern. So this is what they're saying in 2006. And now we take a look at what's coming forward and we say, Where's the budget? Here's the Hill: Skipping a budget resolution this year would be unprecedented. The House has never failed to pass an annual budget resolution since the current budget rules were put into place in 1974, according to a Congressional Research Service report.

So, since 1974, Republicans and Democrats have met in this Chamber and every year they put a budget together. Some of them were a lot better than others. Some were tighter. Some tried to balance the budget. But they have always had a budget. Didn't always get passed. Didn't get taken care of. But they always had a budget. Until when? Until this year. And why? Why is it Democrat leadership says it's absolutely essential to have a budget, and they don't have one this year? Why do you think that is?

I do yield.

The Congressional Research Service is a bunch of professionals that are paid by the U.S. Congress and they try to be as objective as they can. They're not always right. But they at least have very good access to historical records and the history of the Congress. This statement that the House has never failed to pass an annual budget resolution, that's a historic fact.

So what we're seeing here is we're in uncharted ground, at least since 1974, that there is no budget. Well, why is there not a budget? You made reference to it. And here's the nasty little picture. We were told that George Bush spent too much money. President Bush.

And he did spend too much money. In fact, you and I, gentleman, voted ``no'' on some of the things he wanted to spend money on. His worst budget, though, was when Speaker Pelosi was in charge of this Congress in 2008, right here. That was his worst deficit, $459 billion in deficit that year. Not proud of that, $459 billion. The people said that Bush spent too much money. And here we come to the very first year of President Obama, and it's $1.4 trillion. That's three times the worst Bush deficit. And so if you had that followed by an even bigger deficit this year, you had unemployment at 9 percent, if you were one of the Democrats, would you want to pass a budget right now? I think they're running for cover.

You know, we have an expression in Missouri, it's called ``hunkered down''--``hunkered down like a toad in a hail storm.'' It seems like to me, if I had anything to do with that level of deficit spending, I would be hunkered down. In fact, I think I would have resigned and gone to try to do something else with my time because this is totally destructive to our country.

And you raised the question, Is the objective to precipitate such a crisis that they consolidate power in the Federal Government? At least it seems like to me the American people are going to go, Oh, my goodness. You're going to need to create an awful good crisis for us to ever trust the Federal Government with the kind of quality of leadership that we've been seeing.

I do yield.

Well, Saul Alinsky was a Communist, wasn't he?

And that's a historic fact that he was a Communist. And Obama studied under him, right?

The first great radical, Lucifer, Satan.

Did he have all of his bolts together? What was his problem?

Yes. Now an average guy on the street--let's just say they're reading some newspaper headlines over the last 18 months. Now what's the impression they get? First of all, there's this huge bailout, a Wall Street bailout. So you get these firms on Wall Street that are getting billions of dollars of taxpayers' money. That, of

course, makes people get really happy and excited about that. So we're bailing out Wall Street first of all. Now there are people that are making a case that the economy was in very bad shape and that we had to drop $700 billion. We didn't vote for that. But there are people that make the case that, Well, there were these things that were failing.

So we drop all this money into Wall Street. We bail out banks. We bail out insurance companies. And then the bailout fever really gets started, which we predicted would happen if the Federal Government basically opens the kitty to any group that wants to bail out anything, and we start buying out Government Motors--I think it used to be called General Motors before--and Chrysler. So we're doing that. And then we decide, Hey, it would be a great idea if we bailed out college kids who want to get loans. The government's going to take that over. And now the government is in the process of collecting other things that it can own. Of course notably, 17 percent of the free side of the economy which used to be where you worked, Doctor, in health care. So now the government's taking over 17 percent of the U.S. economy in the health care area. They're nibbling and just salivating about taking over the energy business.

So if you're an average guy on the street, and you start connecting the dots--which many people may not. But when you start to think about it, the government's taking over everything. So it's not an odd thing for somebody just taking a look at the headlines and looking back at the last 18 months to say, Holy smokes, what's going on here?

I know America likes to win, but I don't know that we want to do better than Hugo Chavez. That's not exactly where most Americans want to be going, I don't think.

Well, I appreciate, gentleman, your perspective on all of these things, and I appreciate you sharing what a lot of your constituents are telling you because it very much reflects what I am hearing when I go home. And the question mark is, Really, what is the game plan of this administration? It seems that one thing you can say, whether it is the Katrina oil spill, whether it is the attempt to try to do the cap-and-tax or cap-and-trade or whatever you want to call it--a government takeover of energy is what I would call it--and whether you want to talk about socialized medicine, whether you want to talk about a whole series of different things, it seems like the pattern is that every single thing the administration does is to try to create an entitlement class, a victim class, a group of people that are totally dependent on the government. And perhaps the worst of all of those things, as you know, Doctor, is the socialized medicine, because if your body is physically dependent on the government to give you your health care, it makes you truly one of these dependent classes. And it seems like the government is trying to turn all of us into a bunch of people totally dependent to the government--in fact, slaves to the government. It reminds me as we start approaching the Fourth of July how it was that the people in this country said, We really don't want the government to be our master. We don't really believe the philosophy that the government should provide everything for everybody. And I think the public is waking up to this.

I would be happy to yield you a minute if you'd like, gentleman.

I really appreciate you mentioning Star Parker. She is really a fun person. She has a great personality, is a lot of fun. She's cute, and she is very articulate. And she has an amazing story about how the government tried to trap her into all of this welfare stuff and all of the behaviors that would destroy her life. She came out of it through the power of Jesus Christ, started her own business. Now the government gives her trouble. While she is trying to run a business, doing the right thing, the government is taking shots at her. And she says, Whose side are you on, government? You know, when I was doing the wrong stuff, you were encouraging me. When I am doing the right things, you are giving me a hard time. What's the story here?

As I said, I started with a picture of that little green wagon and those two kids. One of them pulling, the other one pushing. The guy looking over his shoulder said, Are you pushing or pulling back there? You know, it just seems like, is the government trying to help us or is it trying to destroy us? And it seems like every decision we have seen is more dependency on Big Government.

Thank you, Doctor. It's a pleasure to join you, and God bless America.

Madam Speaker, today I wish to congratulate Mr. Jeff Theerman, Executive Director of the Metropolitan St. Louis Sewer District (MSD) on his election as the new President of the National Association of Clean Water Agencies, NACWA.

Mr. Theerman is an accomplished leader and committed environmental steward. He has dedicated his career to the improvement of the environment and public health in Missouri, and throughout the Nation. Without a doubt, he is ideally suited for this national leadership position with NACWA.

Mr. Theerman has served Missouri through his work at MSD for over 25 years. In October of 2003 he was named MSD's Executive Director, willingly and ably accepting accountability for all aspects of the utility's operations.

As MSD's Executive Director, Mr. Theerman leads one of the nation's largest wastewater and stormwater management utilities, providing services to approximately 1.4 million people in the City of St. Louis and St. Louis County. Under his leadership the MSD currently operates seven wastewater treatment facilities, treating an average of 330 million gallons of water per day and maintaining 9,649 miles of sewers.

Since joining others in founding NACWA 40 years ago, the Metropolitan St. Louis Sewer District has benefitted from its active engagement with the organization. A member of NACWA's Board of Directors since 2004, Mr. Theerman has served as the organization's Secretary, Treasurer and Vice President. It is fitting that his election as President coincides with the 40th anniversary of NACWA's advocacy on behalf of the nation's clean water agencies--and the environment we all value so much.

When I hear the terms like ``accountable'' and ``responsive,'' I think of public servants like Mr. Theerman. Under his able leadership NACWA looks forward to proactively and effectively addressing the complex 21st century water quality challenges we face as a nation.

It is my sincere pleasure to congratulate Jeff Theerman on becoming President of NACWA. I am certain his actions will ensure continued water quality progress for St. Louis, Missouri, and the Nation.

It's a treat to be able to join my colleagues this evening as we take a look at, once again, some of the fundamental questions that we face as a Nation: the questions that center around our budget deficits, the world economy--particularly unemployment in America--and the various policies that are involved in some of these questions. These are things that have absorbed the attention of our Nation now for some period of time because the economy has been very tough. There are many Americans that are hard workers that are out of work, and the condition of our country overall, even particularly various States, is troubling at best, and dire probably would be more accurate.

I think that it's appropriate sometimes just to look back a few years to see where we have come from and also to develop a little wisdom from the past and the lessons that we can learn from the past. I have chosen just to jump in at a particular point, an interesting point in history that I think a lot of people don't know. This isn't really old history. This is things most of us have lived in our own day.

This was September 11, just 2 years after the attack on the Twin Towers, September 11, 2003, the situation chronicled by The New York Times, not exactly a conservative oracle, yet accurately reflecting a proposal, in fact, a plea, from President Bush. This is what the actual text of the article says: The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

This is 2003. This is not 2008, when the housing crisis came crashing down upon all of our ears and destroyed the stock market and our economy. It says here: Under the plan disclosed at the congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

Freddie and Fannie, for people who have just gotten a little hazy in their memory, of course, were quasi-governmental. They were really private companies, but they were created with almost the implicit assumption that if anything goes wrong, the Federal Government will step in. And what was going on was that going back even before 2003, you had Federal policies. This is closely tied up with the ACORN organization and our President. You had Federal policies that said that banks had to give loans to people who were a very poor risk. There were certain areas of the country where it was very hard to get mortgages and for individuals to buy a house. We felt that home ownership was a good thing, in general. And so the banks, the Congress decided that the banks should be required to make loans to people who may not be able to pay those loans.

So what you have here is social engineering. It reached its height almost under President Clinton in his last year. And he changed the percentage, saying that the banks have to up the percentage of loans which, by most other economic standards, would be just considered risky or poor loans. Well, what happened was the different bankers and other people who sold the loans took these loans and offered people money to buy houses, even though their credit or perhaps the job they had showed that they could not support that rate of mortgages and mortgage payments. So they sold all these things. But guess who picked up the tab? Well, it was Freddie and Fannie. And Freddie and Fannie got into a huge business of underwriting people's home mortgages, and this grew and grew and grew.

Well, by 2003, even while we were in the height of the real estate boom and it seemed like housing prices were doubling every few years, Freddie and Fannie lost a few billion dollars or so, or a lot of millions of dollars, and that reflected the fact that Freddie and Fannie, in the President's estimation, were in trouble. So the President wanted more authority from Congress to regulate Freddie and Fannie, who were largely private, and the President had no authority to do that. So he is requesting authority.

The response of the Democrats--in this case, particularly the top Democrat in the House at the time was Representative Frank. He said these two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.

Now, of course, 20/20 hindsight, you look back and say, Well, yeah, this isn't a very smart thing to have said because Freddie and Fannie were in huge trouble. They continue to be in huge trouble. They're extended way beyond what they have any means to pay for. They've got lots of debt that they shouldn't have. So there is a huge problem with Freddie and Fannie. But Freddie and Fannie were very popular here in Washington, D.C., because they had hordes of lobbyists with many, many thousands and hundreds of thousands and millions of dollars which they gave out to political people in Washington, D.C. So Freddie and Fannie were very popular, and it was quite a number of people, particularly Democrats, said, No, there's no real problem with Freddie and Fannie.

As we know, Freddie and Fannie did have a problem and they're in a tremendous crisis. As that crisis developed, what happens is not only does ACORN and the social engineering threaten just the housing market, but it affected not only just our economy but the entire world economy and created this crisis which started in housing but, unfortunately, did not stay contained just to the housing market.

So we see the beginning of the economic problems that we're experiencing now started with ACORN, started in the housing market.

Now, there are people who say sometimes that this is evidence of the failure of free enterprise. I bristle a little at that because this is not a failure of free enterprise. This is a failure of government social engineering. The loans that didn't work, I suppose that those loans were made in the name of compassion, although I don't know what is compassionate about asking somebody to take a loan and giving them a loan that they can't afford to pay and slowly they get farther and farther behind in debt and eventually get evicted from their house. That doesn't seem, to me, very compassionate.

Anyway, it was this social engineering that got us into trouble. People could not afford to make these loans. And for a while there it got to be a pretty good deal, because you could get a loan where you wouldn't have to make any payments for a couple of years. You could buy a house for $300,000, make no payments for a couple of years, sell it just about the time you're going to have to make this huge, big mortgage payment, and double your money. That worked okay for a while until the bubble popped. Anyway, we start to get into serious economic problems.

Now, as that continued, it affected other parts of the economy. As people are aware, we had the great big TARP or the big bailout of $700 billion, something that I did not vote for and many other conservatives did not vote for. We believed that that problem could have been solved by changes in accounting rules, but I won't go into the details of that. Following that, then, is President Obama is elected, recognizing there were some difficulties in the economy. We had unemployment that was getting up there, 7 and 8 percent unemployment. At that time, the President came in and told us that we needed a big stimulus bill.

Now, I have to say that many conservatives are skeptical about ``stimulus'' bills. Just the premise of the whole idea is flawed.

The government cannot stimulate really the economy; the government can only just create an environment where the private sector can be productive, can produce jobs, can create wealth. But the government cannot create wealth, and it cannot really stimulate. It can only simply take money and spend it.

So this stimulus bill was put together at about, not $700 billion like the big bailout for Wall Street; this was an even bigger bailout of about $800 billion. This is what we were told before the bill was passed: Our stimulus plan, this is the Democrats speaking, will likely save or create 3 to 4 million jobs; 90 percent of these jobs will be created in the private sector, and the remaining 10 percent are mainly public sector jobs. This is President-elect Obama January 10, 2009. And then the Romer Report estimated unemployment without stimulus is 8.8 percent in 2010. So, in other words, we were told, If you don't pass this stimulus bill, what is going to happen is you are going to get unemployment that is going to go as high as 8 percent, so you need to hurry up and pass this big stimulus bill.

Now the stimulus bill was not a stimulus bill. It was an investment in big government. It was an investment in socialism, and it was never going to work. We stood on the floor, I and a number of other Republican colleagues, a year ago and said, This will not work. And it is not because we were geniuses that we knew it would not work; it is just because history shows that this approach is flawed. It doesn't work at all.

So, now as we take a look, the private sector has lost nearly 8 million jobs. They claimed it was going to create three to four in the positive. We have lost 8 million since 2008. The government has gained 656,000 jobs of government employees. A lot of these are temporary Census workers. And in May, only 5 percent of the job creation was in the private sector. In fact, the May unemployment rate was at 8.7 percent, approaching 10 percent. So this stimulus bill didn't work.

Now you could say, how is it you know it wasn't going to work. Well, we know because it has been tried before. It was tried by FDR. In fact, his Secretary of Treasury, Henry Morgenthau, tried this same basic idea. And as a former engineer myself, it is like the concept of reaching down into the loops of your boots and lifting hard and attempting to fly around the room by lifting your own boots.

What they decided to do was, when the economy was having a hard time, with a little bit of coaching from dear little Lord Keynes from England, that what we would do is have the government spend a ton of money, and when the government spent this money, it would get the economy going. It would, quote, stimulate it, and get us back onto a sober track. Well, of course, that is pretty appealing to politicians because you get to be the guys to hand out all of other people's money in giveaways. That is what the stimulus bill included, a lot of handouts to various State governments so that their pensions could be propped up when the State governments had irresponsibly spent pension money that really wasn't there, and promising all kinds of retirees that they could have a much fatter pension than what the government can afford, that and a whole series of other things.

But this bill was not even a classic FDR kind of stimulus bill because that would have been lots of cubic yards of concrete and hydroelectric dams and also lots of roads and sort of public works projects. This stimulus bill was much longer in increasing sort of welfare-related type of giveaways, giveaways to various States and buttressing and increasing various government handouts. And it was not as long and concrete in those types of jobs.

Be that as it may, we can learn from Henry Morgenthau, if the leading and liberal party in this Capitol can learn from history, but they didn't.

This is Henry Morgenthau going way back to 1939 after the Great Depression, and he appears before the House Ways and Means Committee and he says, We have tried spending money; we are spending more than we have ever spent before, and it does not work.

Now we have read this here on the floor many times, but people in politics don't want to hear it because they like dishing out other people's money.

He continued, I say, after 8 years of the administration, we have just as much unemployment as when we started, and an enormous debt to boot.

It sounds hauntingly familiar; doesn't it? We did the stimulus bill. We created that much more debt, spent $800 billion, on top of the $700 billion for the Wall Street bailout; the one was a bailout for big Wall Street firms, the other was a bailout for States and other individuals who spent more money than they should, and so we are supposed to bail them out. How well did it work? Well, Henry Morgenthau said it didn't work. And what do we find? Oh, my goodness, it doesn't work. Our unemployment is higher now than when we spent the money.

So we are saying, okay, is this a failure of free enterprise? No, it is a failure of government to be able to straighten the economy out by taxing people a lot and spending all of their money. That just doesn't work. It may make you popular with the people you give the handouts to, but it does not get the government going. Unemployment, of course, skyrockets.

Now here is the logic of how this thing works. Here is a picture of it graphically. This white line is the private sector level of employment. You can see the drop in employment coming down here in terms of the number of jobs on this axis, and the red line is the increase in government employment. So, as private sector jobs are going down, which means that is where you get tax revenue by people who are making income in their jobs, as the private sector is flat on its back, you see the red line here is government spending for hiring all kinds of different people who work in government.

In fact, some statistics came out the other day saying people who work for the government now on the average are making twice as much as the people working in the private sector. That sounds hauntingly like what is going on in Europe. Obviously, you can't have a whole lot of people working for the government making more money per person than the people in the private sector because pretty soon, there just isn't going to be any more money

in the private sector. Not only will you slow the businesses down that create the jobs, you will kill the businesses dead, and then we will really be going from a recession to more like a great depression.

So here we have the big government Democrat way. We see that this whole plan of stimulating the economy really is a failed scheme. You could say, well, you have your theories; everybody has their theories. But the fact of the matter, we just did this $800 billion experiment with your money, the taxpayers' money, and it hasn't worked. And the economy has not responded. That shouldn't be anything surprising because in a few minutes, we will get into the logic of how that works and why it doesn't make any sense.

As we continue along after the big proposal for the stimulus plan, we have other major initiatives that the President and Speaker Pelosi and Senator Reid have been proposing. The first was this cap-and-tax deal. We saw that last spring a year ago, and that, of course, was to deal with global warming. The theory was, of course, in that, that CO2 was a very, very bad gas, and it is making the planet heat up at a terribly alarming rate, and we have to reduce the amount of CO2 that is being created because that is actually going through a feedback loop in our weather system. The CO2 has a disproportionate amount of leverage and is creating global warming. That is the proposed idea anyway.

If you assume that is true, which as an engineer, I don't believe that is true, certainly the data does not support the radical claims of global warming that we have seen from that community. In fact, we have seen evidence in some of the e-mails of the cheating that was done, where the lab was being fudged and the facts were being skewed in order to make it look like global warming was a bigger problem.

But even if you believed that were true, if you really want to get rid of CO2, all you have to do is close down some coal-fired power plants and replace them with some nuclear plants. In fact, in America, if you just took 20 percent of our coal-fired plants and changed them to nuclear, it would get rid of the CO2 produced by every passenger car in America.

Was that what this big old cap-and-tax bill did? No, this bill was huge amounts of government bureaucracy, and it was a huge taxation. It was a big taxation scheme. It was a big power grab by the Federal Government. Would it really reduce CO2? Probably not.

It just increases the power of Washington, increases taxes. It's of course breaking the President's promise. He said, I will not tax anybody who makes more than $250,000; and yet this is a tax every time you flip your light switch. So this was one of his initiatives, and he has a whole bunch more. And every one of these initiatives is carefully crafted, whether they were done intentionally or not I am not saying, but every single one of these things has the effect of further destroying jobs and ruining our economy.

I am joined by a good friend of mine from down in Georgia, my good friend Dr. Gingrey, and we are going to talk a little bit about some of these problems. And then as we start to conclude this evening, we are going to talk about the positive things, the things that can be done to fix this problem. These problems are not things we haven't seen in America.

We have not seen this much gross uncontrolled Federal spending, this much lack of discipline, fiscal discipline in our country any time that I recall. It's been this bad, but that doesn't mean that there aren't solutions and there are things we can do. But we need to do them rapidly and soon.

I would now recognize my good friend, medical doctor and U.S. Congressman from Georgia, a good friend, and a very bright fellow, Dr. Gingrey.

I don't think he added that little piece, did he, until you can't keep it? You can keep it. He didn't add, ``until you can't keep it.''

I appreciate it, Doctor. Certainly as a medical doctor you have been looking very closely over the last year at one of a whole series of these taxes. These things effectively work as taxes. Let's just take, if you will, health care out of the equation, whether people are healthy or get good health coverage.

The point of the matter is that this cap-and-tax is a huge tax that the House passed on the use of energy, which affects anybody who uses energy. You don't have to be very well-

to-do to have a pickup truck and have to drive a long way to a job, and you spend a lot of money in gas or some type of energy. So this is a big tax on energy. This is a big tax on health care.

There is going to be a huge, huge amount of taxes. They tried very hard to make it look like this is a trillion-dollar increase in taxes, and the numbers continue to come out that it's a lot more than that. So there's another tax. And then you have got the death tax, as you mentioned; you have got the capital gains dividend tax, which is one of the main things that helped get the economy going before.

All of these things are boomeranging around, and you finally, when you get done with the whole thing, you end up with a cartoon that some humorous fellow put together here: ``Now give me one more good reason why you are not hiring.'' And you see these bulls coming into the china shop; and you have got cap-and-tax, or cap-and-trade, the health care reform, which is, of course, the biggest, probably the worst, bill we have seen; and then of course the various other taxes that are coming into this. And he says: ``Why are you not hiring?''

And of course what's happening is we are doing two things, basically, in the economy. It's very simple. We are spending a whole lot of money, and we are taxing a whole lot. And, historically, that's exactly the wrong thing for us to be doing. And you have all of these taxes, and of course people don't even begin to realize how much that socialized medicine program is going to cost. Other nations have tried it. It's a total budget buster, even though it ruins the quality of health care as well.

I'm going to get to that, but one of the things when you do what you're talking about, that bull-in-the-china-shop mentality of just spending money out of control and it's a bailout for big businesses, bailout for Wall Street, bailout for various States, bailout for individuals that didn't save money and we're going to give this and this and this, when the government starts getting into the bailout business--of course it's choosing winners and losers--there are lot of people that are not getting any bailout. They're being expected to pick up the tab for other people's financial errors.

What happens is you start spending all this money, of course if you're running any kind of a responsible operation, you've got to have some sort of a budget saying, you know, how are we going to make this all work, because pretty soon you're going to start giving away more money than you have. In fact, I think somebody was quoted one time saying, the trouble with socialism is pretty soon you run out of other people's money.

So budgets are necessary, and some of our leaders here on the floor, some of the Democrats said they recognize the fact budgets are necessary. The Democrat whip, Congressman Hoyer, said the most basic responsibility of governing was a budget. The most basic responsibility of governing. I have to agree with Congressman Hoyer. Here's Congressman Spratt, the head of the House Budget Committee, said, if you can't budget, you can't govern. Those are strong words and they're true words.

You know, there's a certain point where if you spend too much money and you try and put a budget together, the train is going to come off the track. I think that's where we are, and that's, I think, the reason why the Democrats said, yeah, you have got to budget. We always had a budget when the Republicans were in the majority and we always had a budget here in the House. It didn't always get through the Senate necessarily, but we had a budget in the House.

We're also joined, as you can see, my friend, by another good friend of ours coming from the State of New Jersey, and that's Congressman Garrett. And, you know, I have to say that the State of New Jersey has been refreshing in the last year or so with their new Governor showing some fiscal responsibility, just giving heartburn to all the big spending people that want to spend that State into oblivion. And Congressman Garrett is a good friend of ours, a good, solid, fiscal thinker, and I'm just delighted that you've joined us in our discussion this evening.

I yield.

I don't know if that's good bragging rights or not. That's pretty scary.

So local spending, the average family of four, is a hundred thousand bucks of debt, per family of four?

What would be the first step in living within your means? Would it not be putting a realistic budget together, perhaps?

I guess he was being gentle at least, trying to give us a little nudge in the right direction.

I think I've got that chart, gentleman. Maybe we'll proceed. I have one other chart here I think that's kind of interesting, because we've heard these statements now from the Democrat leadership saying budgets are critical, and as you know, you know the punch line, the decision is we're not going to have a budget. So here you have, this is The Hill, a newspaper. It says, Skipping a budget resolution this year would be unprecedented.

The House has never failed to pass an annual budget resolution since the current budget rules were put into place in 1974, according to Congressional Research Service.

Now, that's a fairly reliable report; at least they can get the history of whether we passed a budget in the House. They said we have always, since 1974, passed a budget, and yet we're not going to pass a budget this year. That's unprecedented.

I do yield.

I very much appreciate you bringing that up. Actually, I should pay you a few dollars for helping me get to the next slide because I've got a picture of where Greece and Italy and some of the European nations are relative to the U.S., but I will get to that in a minute.

But I think, just before you joined us, my good friend from New Jersey mentioned the level of this deficit spending. And I think it's important to take a look on a bar graph as to what we're looking at here.

I know that President Bush--and as a Republican, I heard this frequently--he was criticized for spending too much money. And I voted against some of those things and think, yeah, we did spend too much money because we had a deficit. But on the other hand, he argued that we had a couple of wars and a bad economy kicking things off. As you can see, the amount of deficit during the George Bush years here was coming down because of the things that they did by reducing taxes. They had the right formula for getting us going in the right direction.

Here was President Bush's worst spending year, his very far worst when Speaker Pelosi was in charge of Congress, so he wasn't getting any help from the Republicans in the House at that point. This was Bush's worst spending year.

And then you come to the first year of President Obama, and he triples the deficit. From about $450 or so billion of deficit, we go to $1.4 trillion of deficit right off the bat in the first year. I mean, this is absolutely skyrocket, smashing, incredible levels of spending.

I yield.

Originated in the House.

So that was this one. But what happens when you put Chairman Spratt together with President Obama?

Here we go, $1.4 trillion.

Now, there are different ways of looking at this. When you talk about billions and trillions, for poor little people like me, those numbers are very hard to understand or make much sense out of it. But one way to take a look at it is this deficit as a percent of gross domestic product; that is, all of the goods made in America, what is the ratio? This one, the worst, was 3.1 percent of GPD. President Obama's first year here, where you have total Democrat control, one party rule, you've got $1.4 trillion, which is, as I recall, 9.9 percent of GPD, which is the highest since World War II. So this stuff is unlike anything we've seen before. And this is part of the reason why the Democrat Party doesn't want to make a budget, because they're really proud of those numbers. If those were my numbers, I'd be scared to death. And I think the American public is concerned about that level of spending.

I was going to jump just to a little bit--I mean, we've been very critical of the fact that we're doing two things wrong in this one- party rule run by the Democrats, and that is too much spending and too much taxing. It shows a tremendous faith on their part of what the Federal Government can do in terms of solving problems. They believe that there isn't any problem that can't be fixed with more taxing and spending; that's where we seem to go.

But let's talk about some stuff that's just so basic that many, many Americans understand this, particularly kids in Georgia or New Jersey or Missouri that have ever run a lemonade stand, just to understand a little bit about how businesses go. And so I put together a list of some of the main things that are job killers because the result of too much spending and too much taxing is there is unemployment. So what is it that kills a job? What is the solution to this problem? I'm an engineer. You're a doctor. And gentlemen, I don't recall----

A lawyer. This is almost like one of those jokes, you know.

But anyway, what is it that kills jobs? I've talked to my businessmen in my district, and I've heard this over and over: The first thing is excessive taxation. You take a look at the stimulus bill, huge amounts of Federal spending. You've got the socialized medicine bill. You've got the cap-and-tax bill, all those massive tax increases, capital gains, dividends, death taxes, all these, more and more taxation, heavy taxation. And what does that do? It kills jobs.

Well, why would that be the case? Well, if you're a businessman and you're going to get taxed a lot, it takes your money away from investing back in your own business. And 80 percent of the jobs in America are with companies with 500 or fewer employees, and so if that guy that owns the business, he looks like he's a rich guy. Maybe he's making more than $250,000 a year. You say, let's tax that guy. But if you tax that guy, then he can't put the money back into building a wing in the business, putting new machine tools in it, or whatever the new technology is, and creating the jobs. And so this taxation inevitably works to create unemployment.

The funny thing is the Democrats can't have it both ways; they can't have a war on business and say they're worried about unemployment, because it's businesses that employ people. They act like there isn't a connection between businesses and the people who get hired by the businesses. So if you tax a business out of business, there won't be any jobs. It's not that complicated. So the solution to these things isn't that complicated. You can't hammer the guys that own the businesses with all these taxes.

Of course, the other problem that we've created economically is that the regulations on the banks are so tight that the small businesses are having trouble getting access to capital. There is a liquidity problem, and that's part of the regulation of the banks and the finance industry, which they've also managed to mess up.

Then, of course, economic uncertainty is a factor, which is where people don't know what's going to happen next. What crazy scheme are we going to do next? Well, it means you're going to hunker down, and you're not going to hire people. Then, of course, red tape and government mandates--all of these things--kill government jobs, and we're doing every one of these things. It's like we've declared war but not on radical Islam. We haven't declared war on Iran, on Iraq or on North Korea. We're declaring war on U.S. businesses.

Gentlemen, fortunately for you, or maybe unfortunately for you, you are on the committee that is dealing with that. To me--and just tell me if I'm confused about this because I work more of the Armed Services side of things and the national security and the national defense side, and we've got a lot of bad news over there, but I'm not going to share that tonight.

There is an irony here that the Federal Reserve has created this huge, massive liquidity. Yet it's like they've choked the funnel off so tightly that the liquidity can't drip down. The Democrats used to talk about trickle-down economics. I mean, this truly is kind of a trickle- down scheme. You have all this liquidity created by the Fed. Yet it can't get down to the small business guy because, I assume, that part of this is the banking regulators and the banking policies that are saying to the local banks, That's not a good enough amount of security on that loan. You've got to go back because that loan is upside down. Even though that business has been there for 100 years, even though you know the family, even though you know they're going to pay off, even though they always pay on time, it's not good enough. You've got to go get a whole bunch more cash from them to make your books look right for your bank.

Well, I appreciate your perspective there, particularly with your working on that committee. That is very helpful.

Here are a couple of other charts that I thought were interesting. This gives a little bit of a sense of progress on a 20-year increment. This is 1970. The foreign holdings of our debt were 5 percent. This is who owns our debt. Foreign holdings were 5 percent in 1970. Jump forward 20 years to 1990. Foreign holdings were 19 percent. In 2010, foreign holdings are 47 percent. So not only are we being asked to pass another one of these stimulus bills to bail out these States that have been irresponsible in managing their pensions, but we are now asking foreign countries to come in and to underwrite our silly economic policies.

Now, after a while, these foreign countries are going to ask, Wait a minute. What's going on over there? What are you guys thinking?

I promised the gentleman that we did have a chart that was taking a look at these foreign countries. We've taken a look at Greece, and Greece has been in the news because it has just created shock waves in Europe as to how it has been affecting their economic system.

This is the deficit as a percent of GDP. I mentioned that, as to where we are in the United States, which is at that $1.4 trillion level that we just saw last year and at another even higher year this year, we are at about a 10.3 deficit as a percent of GDP. Greece is at 9.4. So our deficit, as a percent of GDP, is worse than that of Greece. Spain and the United Kingdom seem to be worse off than we are, but we are the next worse on this chart with regard to the deficit.

If you go to debt as a percent of GDP, you've got the United States here. Greece is ahead of us there, and Italy is ahead of us, but we're ahead of the other European countries as well. So this isn't exactly a cheery picture of the job we should be doing in terms of management.

We are coming close on time here, and I have one other chart here, which is that of our corporate tax rates. The green one over on the right is the second highest corporate tax of any nation in the country.

So what's the solution?

I promised we'd deal a little bit with solution. The solution is quite simply that you've got to cut spending and that you've got to cut taxes. If the Democrats could not learn from Ronald Reagan or from Bush when they cut taxes and restored the economy, they should learn from JFK, who did the very same thing. Here is an example of this. It's called the ``Laffer curve.'' You can see that this red is the tax rate. As the tax rate comes down, the bar chart shows the total Federal savings in receipts, so we actually get more revenues in. When you drop taxes, you get more revenue.

So the solution has been demonstrated by JFK, by Ronald Reagan, and by Bush. They turned economies around. Instead of doing what FDR did, which is what Henry Morgenthau told us would not work, you can simply do this: what you do is you've got to drop the tax rate and drop government spending. The trouble with dropping government spending is you can't do giveaways to everybody and do bailouts to everybody.

So what's going to happen here?

America is in the cross-hairs of a choice. We're either going to choose to follow--because there are two U.S.s: one U.S. had the idea that government is going to provide health care and education and jobs and food and housing. The other U.S. said that we believe the job of government is to provide life, liberty and the pursuit of happiness. That is a very narrow description of government--just national defense and a level playing field. Those are the two U.S.s. The one is, of course, the USSR, and that system didn't work. The other is the one that has worked for hundreds of years.

We need to get back to that idea of a limited government, doing just what it is supposed to do constitutionally and not try to be the bailout king of the entire world and of the entire country.

I thank my good friend, Congressman Gingrey from Georgia, for your insight, and not only your medical professionalism but the way that you've run your office. And the same thing for

my good friend from New Jersey, Congressman Garrett. Thank you so much for joining us tonight.

Good night, and God bless all of America.

Mr. Speaker, I yield to the gentlewoman from New York (Mrs. Lowey.)

I yield to my good friend from New York (Mr. Engel).

I thank the gentleman. I think you're articulate, and I think that that's accurate to say: there is a good bipartisan sentiment that when a small nation is trying to defend itself, we have always stood for people.

The basic principle of people being allowed to be free and have some self-determination as to how they're going to rule their own country and be free from the fear of terrorists, that's something that Americans can really agree on. I appreciate you taking time on that subject, and also my good friend from New York taking the time to organize the hour. Very good job. Thank you.

Well, thank you very much, gentleman. And thank you for the leadership you've shown tonight.

Democrat's Management of The Economy

I would now change gears here and get on to another subject.

We're dealing with some weighty topics tonight; the previous was of course international relations, the other is closer to home, and it's really the question of the economy: the Democrats' management of the economy, what should be done with the economy, how does that affect jobs and how does that affect all of our lives. I guess it sounds like kind of a boring subject in some ways; but on the other hand, it so much influences and affects every single person in our country that I guess

we have to put up with a little bit of talk about economics just to make sure that we're not destroying our country or destroying our jobs and putting our grandchildren into debt. And so the whole topic of economics and jobs can be a little perplexing, but it doesn't have to be.

I do apologize ahead of time that I am, by training, an engineer. Someone once said that engineers shouldn't be allowed in political office perhaps because they're too logical, or whatever the reasons are. But I do think it's important to back up just a little bit to say where we are here in the economy and how we got to where we're going and what mistakes have been made.

I'm not one to want to just criticize and not offer a solution, so I'm going to try to do that. I'm going to try to draw some practical applications as we wrap up in a while as to what we should be doing, what policies should be changed, what does America have to do to pull ourselves out of the economic nosedive that we're currently in.

It's not a graveyard spiral. There were days in the early days of airplanes that when a pilot pulled his airplane up into a stall, fell over backwards, he would get into what was called a graveyard spiral. And the pilot would grab the stick of the airplane, pull it back violently to try to get the nose of the airplane to pull off from the ground and the airplane would just keep spiraling down and crash into the ground. It ruined the pilot's whole day. Our economy may be at a graveyard spiral, but there are things that we can do to prevent it from crashing, but we're going to have to do that and do it soon. So that's what I want to take a look at.

I want to back up just a little bit to the days back at this superconservative oracle, The New York Times. This is September 11, 2003. This is really the beginning of President Bush's Presidency, and he goes to the New York Times--and this is September 11, but it's not 2001, it's 2003--and it says here, this is the article: The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. That's interesting. President Bush was saying in 2003 that we've got to take a look at this finance industry and the overhaul of this housing finance industry. And under the plan disclosed at a congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry. Interesting. This is way before the mortgage-backed security thing hit the fan and the whole stock market crashed and all that sort of stuff; this is way before that.

So President Bush, he's saying, okay, let's regulate these because they're out of control. They've lost $1 billion or something. And he thought, well, that's not pocket change. Here's the President asking for this authority, and what do we have from then in the minority? We had this from Representative Frank, he says: These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing. Now, people who know Freddie and Fannie know that these guys were big players here on the Hill. They had lobbyists that were terribly effective, went around and distributed a whole lot of money to a lot of people, and they didn't want anybody playing in the deal they had going.

So what happened here? Well, what happened was the House--at that time in Republican control--passed a bill to regulate Freddie and Fannie. It went to the Senate, and what do you think happened to it? Well, in those days, Republicans had a majority in the Senate, but they didn't have the 60 votes necessary for cloture, and so the bill was killed by Democrats in the Senate. Freddie and Fannie continued on their merry way, and all of a sudden, a number of years later, what other people had seen--Bush had seen years before--was going to happen, it happened, and we had this great big crisis start. Now, that was all connected with ACORN, the organization that was pushing banks to make loans that normally a bank wouldn't make because the people that the loans were going to be made to couldn't afford to pay them.

So we started going on this track of passing out loans to people that couldn't afford to pay them, and every time we sold one of those loans, somebody made some money. And what did they do with all of those bad loans? They dumped them all on Freddie and Fannie. And as you know, you just keep doing something like this, pretty soon the music is going to stop and there are going to be people without chairs. That's what happened in the savings and loan problem.

Now, what is going to be the solution? Well, we are going to talk a little bit about that, about where we are going with the economy and about what we need to be doing.

I am joined now in the Chamber by a good friend of mine, Dr. Paul Broun, from the Atlanta, Georgia area, if I recall properly--not Atlanta but, rather, some other part of Georgia.

I yield to the gentleman. I don't know what you think about Atlanta, so I won't say anything about that.

My good friend from Georgia, Congressman and Dr. Broun, please join us.

I think what you're saying is important. You're using some doctors' analogies.

I think that's good. It paints a vivid picture, but there is a problem with Freddie and Fannie.

The problem with Freddie and Fannie is you don't get something for nothing. I'm an engineer. I mean, it's one of those things, if it isn't there, it isn't there. So what we're doing is we're using Freddie and Fannie to make loans to a certain number of people who can't afford to pay them. Then that means, Where is the money going to come from?

That's the point.

So the deal is: Is it the job of the American public to bail out people who make irresponsible loans? How about all of the people who get loans, who make their mortgage payments, who do everything by the book, who then get hammered because somebody else didn't do it that way? That's the basic question.

Is there any sense of fairness in this? Is this a good way to run a ship? Because what we're doing is creating an incentive for people to do the wrong thing, which is to take loans they can't afford to pay. They put more stress on their own families economically.

How is that compassionate, by the way, when you're the dad, supposedly providing for your family, and you're in danger every month of the mortgage payment, and they're going to put you and the kids and the sofa out on the front sidewalk? That's not compassionate. Yet that's what these policies

on Freddie and Fannie are doing. So we need to reform Freddie and Fannie, and apparently, we're not willing to do that.

Hey, I want to jump forward just a little bit, gentleman. I want to jump forward now past Freddie and Fannie. We've got the whole trouble with Wall Street starting to melt down. We do the great big bailout of Wall Street. Then the center point of the Democrats' plan was the stimulus package. Unemployment started to go up, and the economy was dipping. They said, This is a great opportunity for us to spend money on all the things we want to spend money on. So they spent $800 billion on the stimulus package, which is a whole lot of money, and the idea was, if we spend enough money, it will get the economy going again in spite of fixing Freddie and Fannie.

Now, what do you think about that theory that, if the government spends tons of money, it's going to somehow get the economy going? You know, a lot of people believe that idea.

I yield to my friend.

You know, I really appreciate your jumping a little bit ahead because you anticipated where I'm going.

There have been some assumptions made by the Democrats about the economy, and the question is: Are those assumptions any good or not?

One of the things that history does tell us is we should learn something from it. Of course, FDR's Treasury Secretary, Henry Morgenthau, after trying it for 8 years, turned a recession into the Great Depression, and we consider it the greatest depression we had. What they did was they just spent tons of Federal money, but at least they spent it on concrete, like great big dams and roads and building projects. Of course, the $800 billion that we spent wasn't spent on a lot of stuff. It was much more of just government giveaways.

We are joined by my good friend, Congresswoman Lummis. I would just be delighted if you could jump into our conversation here. We are focusing, really, on the economy: What assumptions have been done that are wrong? What do we need to get it fixed so as to straighten things out?

I yield you time, gentleman.

So things have changed, and it has gotten even worse, hasn't it?

Let me just jump in for a moment.

You know, the charts that you chose actually have a relationship to each other, and you alluded to the mechanics of what that connection is, which is, when the government creates a job by hiring somebody, it does create a job. The problem is it kills two other jobs in the private sector. So you think to yourself, hey, if we have unemployment, for the temporary sense, let's get the government to spend some money and hire a bunch of people, and that will take care of the problem in the

short term. Maybe the economy will rebound, and then maybe the government will shrink, and more private-sector jobs will come along. Not so. What happens, in fact, is, when the government creates jobs, it spends a whole lot more money. It takes money away from the private sector, and it drives the number of private jobs down.

So what you've just shown is an illustration and an example of a failed economic policy. It's a failed economic policy, and we should have known from Henry Morgenthau that it wasn't any good and that it wasn't going to work. He said, Look. We've tried spending money. We're spending more than we've ever spent before, and it doesn't work. Now we're turning around and are doing it over again. With 8 years in the administration, we've just as much unemployment as when we started and an enormous debt to boot.

So what are we doing now? Oh, we're repeating this same foolish policy.

Here it is. Nobody really wants to look at this graph. This is the deficit under the Democrat budget. Now, I'm a Republican, and I'll admit that we spent too much money when President Bush was President, but it wasn't as bad as it could have been. People didn't know how bad it could be. Now we do. Take a look at that. The very worst year of President Bush's spending was in the Pelosi Congress here in 2008. That was his highest amount of deficit in a given year. That's one-third of what it was under Obama, the next year, and this is even more so.

I do yield.

It seems to me, gentlemen, that President Bush was Ebenezer Scrooge by comparison to what we've got here. I mean, this is runaway spending.

And this is created not just by TARP, not just by the, quote, ``jobs bill'' where we just dumped all kinds of money into increasing various government handouts and things. It wasn't concrete and roads; it was just government-handout kinds of things.

But this tremendous level of spending then creates the very problem which creates the unemployment, and it threatens our economy.

If you take a look at where this is going, you take a look at these numbers, and you start to put it--these seem like a lot of money. This one here is $1.4 trillion. Well, what does $1.4 trillion mean? Well, let's put it into context.

Here's the context right here. This is a comparison to these other countries over in Europe. This is deficit as a percent of GDP. United States, 10.3. We've got Greece at 9.4.

Now, Greece has been in the news. It's been causing a whole lot of trouble in the European Union. And its deficit as a percent of GDP is 9.4, and we're 10.3? These are not good numbers.

I think it's helpful to compare to the others. United Kingdom is a little worse off than we are. If you go debt, this is a larger term, this is going year after year after year, you see United States here is at 99, debt as a percent of GDP. And you've got Greece and Italy that are worse off than we are.

That's not a good sign when we're in third place to Greece and Italy from an economic point of view. So this rate of spending just does not work. This is a glide path.

I used the analogy of, you know, the guys, the World War I pilots that used to fly those airplanes, whatever it was that Snoopy used to fly. Many of those planes, they would get into that spiral and they would just start to head down for the Earth.

And that is what has happened, is, because of lousy economics, we are in essentially a graveyard spiral in America. And you, my friends, know what the solution is to fix this.

And there was a solution to the graveyard spiral. And maybe it seemed a little counterintuitive, but from a pilot's point of view, what they're supposed to do--their instinct is to pull back on the stick to pull the nose up. Instead, you had to do the counterintuitive thing, which is push the stick down. And that would stop the spiral, the plane would start diving, and when they had control, then they could pull the stick back up again.

And there's the same kind of thing in our economy, which we have to do or this economy is going to crash. And if you think 10 percent is bad for unemployment, it could get a whole lot worse.

I yield to my good friend, Congresswoman Lummis.

That's a great point. And let's repeat that. What you just said was, you don't raise taxes during a recession.

And what we are going to talk about here tonight--there are some bad assumptions that were made that are destroying our country and that are destroying our budget, our economy, and just killing jobs in America and creating a whole lot of hardship.

But it doesn't have to be that way. There is potentially good news. But we

just have to follow the principles, just like airplanes follow aerodynamics, we have to follow the principles of economics. And one of those--you just got to the bottom line--is, you've got to ease off on the taxes. And there is a logical reason for it.

Let's just take a look, though, so people understand the gravity of what we are looking at. This is who owns our debt. This debt is created because we are promising all kinds of benefits to American citizens, all kinds of promises that we are going to give them health care and we are going to give them housing and food and education and all the stuff that the Soviet Union also promised their citizens. And who is picking up the tab? A lot of foreigners are buying our debt.

Here it is. Foreign holding of American debt was 5 percent in 1970. That was when I graduated from college. Foreign holdings, 1990, 20 years later, go from 5 to 19 percent in 20 years. Now, 20 years later, in 1210, foreign holdings, 47 percent.

Is that healthy? How much longer are the Chinese and the other foreign countries going to continue to pay us money that we don't have to pay off American voters just to keep them happy? This is a glide path that will end up in a crash.

The gentlewoman, Congresswoman Lummis, has suggested that, even now, trying to pull this thing out is going to take a number of years. This isn't something that can be turned around overnight.

And I think this 20-year kind of pattern reflects the fact that what we are talking about is really serious here, but it still is basic economic principles.

I would like to yield a little time to my good friend from Georgia, please, Dr. Broun.

I think you're an optimist. I really do. I'm not so sure that our children and grandchildren will live at a lower standard quite the way you're talking about. I'm not sure that this is not going to create a more catastrophic kind of crash, where the whole credit system of the United States--if your Treasury bill is no longer any good, you have, by definition, just crashed your airplane into the ground and it's going to ruin your whole day.

You are talking about a crisis unlike anything we have seen ever in our history. That is what is potentially there. I don't think we should be overly dramatic about it, but this is really serious stuff.

And what this cartoon is trying to point out is that there are a whole series of Obama policies; every single one of them is diving the plane faster and faster toward the ground.

First of all, there was the Wall Street bailout. Then there was the stimulus bill, which was supposed to create jobs. We saw how well that has worked. The private job creation is in the dirt, and we are creating all the jobs by hiring government bureaucrats who are paying more than the poor guys working in the private sector. That doesn't work.

And then you've got this cap-and-trade. ``Cap-and-tax'' is what I call it. It was passed out of the House. What a mess that is. I am an engineer by training. It is supposed to save us from global warming, but all it is, is more big government and more taxes. Fortunately, the Senate is not dumb enough to have passed it yet.

And then you've got, of course, the socialized medicine deal, which surely will break the budget unless they put in enough waiting lines for everybody and enough rationing so that it won't break the Federal budget.

So all of these policies together are creating those numbers and those graphs that we see.

I do yield.

The thing is, you and I are not talking can tonight, we're not talking about tonight something that is speculative or based on theory. These graphs are ending in 2010. These are actual numbers. This is what has happened, and it doesn't work. It didn't work for FDR, and it's not going to work for President Obama and the Democrats. It just won't work.

That is what is happening to employment in the private sector. And the red line, of course, is government. And a whole lot of that is these census people running around and snooping on everybody and figuring out who lives in what house and everything, which, of course, makes you feel just wonderful that we're putting those kind of government jobs on instead of just killing manufacturing.

Let's get to the mechanics, though, because all of this stuff, it's not rocket science. This is basic, basic economics.

I just wish some of the Democrats had run lemonade stands when they were kids. They could understand some real simple kinds of economics here.

One of the things, we had a town hall meeting back in my district. I thought maybe I am getting too radical, maybe I have been here too long. You know that old folk song you have been on the job too long. So I asked them. I said, Now, if you wanted to kill jobs, what would you do? What are the job killers? You know what was the top of their list? Excessive taxation.

Now, this is a connection that you were making, gentlelady, a moment ago, between the taxes and these jobs going down. And of course part of what you use the taxes for is to pay for all these public sector jobs. So what's the connection here? Why is it that taxation just kills the economy? It's not just any taxation, but it's particularly taxation on what? On businesses. Why? Because businesses have to have money in order to add new processes, come up with new technology, new machines, a new building to do something in. They have got to have some money to do it with. And if you take it all away by taxing them, you make it so that they can't create the new jobs.

The places where jobs are created in America are largely, 80 percent of the jobs, are in corporations of 500 or fewer people, which you call medium or

small size. A lot of them are just mom-and-pops with, you know, 10 people, or five people, or 20 people. That's where the jobs are created. And if you tax the people that own those small businesses, you say, hey, that guy's making $200,000 a year, we are going to--that's what Obama said in the campaign, hey, if you are making 250,000, look out because I am going to tax you, but anybody under 250, you are okay. Of course he wasn't telling the truth, because he had that tax that they were pushing on this global warming deal where if you flipped a light switch, you would start getting taxed. But aside from that, the fact is he wanted to tax heavily the people that own these small businesses. Guess what that's going to do to employment? It's the worst thing in the world. And then there is some other points, too.

I yield to my good friend from Georgia.

How are you going to pay that mortgage payment now?

Five million?

You didn't even mention that little small detail of the government becoming the master. The government is getting so big, the government employees are making so much money it's effectively becoming not the servant, but the master.

I am very concerned about our discussion tonight because I am afraid somebody may be watching and they are thinking, oh, my goodness, there isn't any hope, things are terrible and bad. Yeah, we are in a big financial mess because we have been doing the wrong policies. But I want to take about 10 minutes, I want to talk about let's wipe the slate clean. Let's stop all of this foolishness and let's talk about what we do to fix it. Because we can do that. I want to go first of all to my good friend----

Let's talk something positive.

Good.

I love talking about solutions, because you know what those solutions are about? Those solutions are about freedom. And that's a good word. And that's what America has always stood for. And that's what we need to talk about for a minute. But I do want to yield to my good friend, Congresswoman Lummis.

Thank you for that insight and the wisdom that you have shared with us. This is a graph of actually what happens over time. And this is this effect I was talking about. You know, when you were flying those old-fashioned airplanes and you wanted to not drive your airplane into the dirt, what you had to do was push the stick forward, which would stop the spin. The plane would start to dive; but when you had control, you could pull the stick back. That seemed counterintuitive.

Pilots for years would get in that graveyard spiral, and they would keep hitting the ground until this one crazy pilot said I am going to take my airplane up, I am going to put it in a graveyard spiral, and I have a solution, I believe, to pull it out of the spiral and live. So he bet his life on his solution. And he put it in the graveyard spiral, he pushed the stick forward, the plane stabilized, and then he eased the stick back, and the plane pulled out, and all the people on the ground went, whoa, that was a gutsy move.

That's a little counterintuitive. When you are out of control going down, your temptation is to jerk the stick up, which is what the Democrats are doing. They are raising taxes, making the situation worse, turning a recession into a depression. And what you have got to do is to learn from the pilots who had before you figured out how to do it. One of them, ironically, was JFK. Now, that guy's a Democrat, and they didn't learn from him. Because he was in a recession and he said less taxes, and the economy recovered.

Then a guy came along by the name of Ronald Reagan. He cut taxes like mad. Guess what happened? Recovery of the economy. Then comes along Bush. Cuts taxes. Recovery again. I mean, we have seen it over and over. Here it is and it's counterintuitive. Why in the world if you cut taxes could the government have more revenue and get the economy going?

Well, here is what happens. And think about it a little bit like this. Say you are king for a day, Congressman Broun, you are king for a day and you are allowed to tax loaves of bread. And you are thinking in your mind now you have been technically trained as a doctor, you are a scientific thinker, and you have got these loaves of bread, how much are you going to tax a loaf of bread? First you think, huh, maybe a penny, because no one will notice a penny tax on a loaf of bread. Then you think, yeah, but if I taxed them more, I could get more money. So you say, huh, maybe $10. Then you think, ah, no, maybe they wouldn't pay $10 tax. So somewhere between $10 and a penny there is an optimum tax to tax a loaf of bread to raise money for the government.

Well, the same kind of thing goes on on a larger scale. And what this guy Laffer understood was if you drop taxes, what happens is the economy gets going. When it gets going, there are more transactions. And so even a lower tax rate will generate more revenue.

So here is what he did. This is like that airplane. He is dropping taxes here, and take a look at government revenues. Government revenues are going up and taxes are down. That seems like making water run uphill, but it's not. Because when you get the economy going, then a lower tax rate actually generates more money. And that's the solution out of this problem.

So let's talk about what is it we have to do. We have to learn, if nothing else, from the Soviet Union. The Soviet Union had the philosophy that the government is going to give you health care, the government's going to give you an education, the government's going to provide for your retirement, it's going to give you housing and food. The government's going to do all of that. And we laughed. Because we said you can't--that socialism, that communism-socialism doesn't work. And yet what are we doing here? The same thing.

We are deciding the government's going to do health care, the government's going to do your education, the government's going to do your housing, and then the food stamps. It doesn't work. So what I think we understand is the government is just going to have to get out of the business of taking care of everybody and get back in the business of just simply managing the economy, providing for the national defense, and they are going to have to push all of that decision-making down to the State level and let the States do it. So we have to have a good breath of freedom and fresh air instead of the big Obama welfare state that we are doing.

Congressman Broun.

I really appreciate the gentleman for joining me tonight.

We, in a way, as Americans have got two choices here. One choice is the path to freedom, and the other path is the path of servitude to Big Brother government. Every solution that we've seen coming from the Democrats--now, we've seen an unusual year-and-a-half. I have been in Congress now 10 years. I've never seen a year-and-a-half like this. This is a total one-party rule. Almost every bill that passes, Democrats all vote one way, Republicans the other, and the Democrats have such a majority, and everywhere along the line they can do whatever they want and they have. And the solution is always more taxes, more government, and more government control.

So, on the one hand, you have the world of the Big Brother government taking care of things, and you're guaranteed that you can't fail because the government will always be there to bail you out, not just as a big corporation but as an individual. You can make bad choices. The government will be there to bail you out; that's what they promise, but it doesn't work that way.

In fact, what all of human history shows us is that one of the most dangerous things to human beings is big government because big government has killed more human beings than all the wars of history combined. Just take communism alone, which is a big government theory. Just communism alone has killed more people than all the wars since the time of Christ, and so this faith in big government is a very, very unlikely thing to put your faith in.

The other choice is freedom, the bright light and the fresh air of saying go out and do the best you can; you may fall on your face but get up and try again. That's what America was always founded on, the idea that government should just protect life, liberty, and the pursuit of happiness.

My good friend, Congressman Broun.

Freedom is a beautiful thing, but we have to realize there are a couple of things that come along with freedom. If you really want to be free, you're going to have to be responsible as well. You can't assume Big Brother government is going to do it all for you. The other thing is, if you want to be free, you have to tolerate the fact that other people near you may be successful. You have to suffer with some guy next door that's made millions of dollars and he gets to get in a fancy motorboat and ride around and maybe you'll feel jealous and even covetous of him. But that's freedom. You have to allow people to succeed, and you have to realize that you can also make a mistake and fail but you can have the freedom to get up and try again, but at least the government won't chain you down with regulations and bureaucracy and red tape and drive you into the dirt like an airplane that's not being flown right.

I thank you very much for joining me, Congresswoman Lummis and Congressman Broun.

Mr. Speaker, we are now considering a rule on the Armed Services bill. The rule allows 10 minutes to debate the question of Don't Ask, Don't Tell. A question in terms of policy which probably has more far-reaching implications than how many aircraft carriers we have is going to get 10 minutes just before Memorial Day. I think maybe some people in the rules department here don't really want to see this fully investigated or discussed.

The current rule of Don't Ask, Don't Tell says that if you are homosexual and you want to serve in the military, that's fine, but, if your behavior disrupts the mission, you can be discharged. The question then becomes, if we repeal Don't Ask, Don't Tell, what does that mean? Does that mean that we are going to then protect or condone homosexuality? Does it mean that we are going to have to create separate barracks? How do we deal with sexual harassment? What are the implications on recruiting? What are the implications on morale? What are the implications in terms of small unit cohesion? All of these are big question marks, and there are many more besides. Does this impact, for instance, the different benefits and how benefits are delivered?

Well, the military leadership doesn't know the answer to these questions

any more than we do, so they have said, Please, don't do this. Let us have time to take a look at it, see how it affects overall our national security. But we are being asked, in a period of 10 minutes, that we want to repeal this. So we are being asked once again to pass legislation when we don't even know what it means. That hasn't worked very well in the past.

Now, I have three sons, graduates of the Naval Academy, all three Marine Corps. One survived his experience in Fallujah in 2005. And it seems to me that when people are willing to give their lives and their limbs for our country, that that is quite a sacred obligation that they have placed in our hands as legislators to be careful how we handle that trust. And so as we consider something that has very far-reaching implications, is this something that we should do lightly, and particularly with little respect for them?

The military leadership, of course, is opposed to this. They are asking us for time. They are wanting to take a look and see what that means. Are we going to then protect and condone homosexuality in the military? That is a big question. And how does that work out? And is this the way that we show respect for the people who are willing to offer their lives and their limbs for our country? Is this the sort of thing that George Washington or our Founders would be proud of that we are doing today in this little quick flash before Memorial Day?

And why are we wanting to do this? To tickle the fancies of a very vocal but very small minority for political purposes. I will not betray my children or our armed services people just for mere politics.

Mr. Chairman, I rise in support of H.R. 5136--that's the National Defense Authorization Act--which we have before us at this time, and it was approved unanimously by Republicans and Democrats on the House Armed Services Committee. And we believe overall a proper balance has been struck on this bill.

I was personally concerned about some problems with our missile defense system, but I made several amendments looking to get a little more information from the administration on these programs. Those were adopted.

In addition, we were concerned about the department's assessment even in the most rosy scenario that we are short on strike fighters. And I was pleased that we are able to add some additional F-18s to the budget to at least, in a small way, mitigate that particular problem.

I would be remiss, though, if I were to stand here and say that everything is well. As much as I support this bill, it is possible to mess up any good thing. And the idea of repealing Don't Ask, Don't Tell at the last minute with an amendment that doesn't even come out of our committee, that has, at the most, 10 minutes to debate and has more far-reaching implications for defense than almost any single item in this bill is the height of folly.

Approaching Memorial Day weekend, for us to try to slide this little fellow in, this little political gimme to some vocal but very small interest group over the interests of our sons and daughters who serve in the service, in spite of the objections of the military leadership, starting with the Secretary of Defense coming down the chain of commanders saying, Give us time to figure out, what does it mean to repeal Don't Ask, Don't Tell.

The current policy says that if you're gay and you want to serve in the military, that's fine, but don't let it get in the way of the mission. If we take that out, what does it mean? We need time, and we don't need some fast little political fix to mess up an otherwise good bill.

Mr. Chairman, it's a treat to be able to rise and say the en bloc amendment is fine, just as most of what is in the bill is fine.

Unfortunately, there is an amendment that's being offered which threatens to poison the entire package and to do great damage to our military, and that is an issue that you've heard from earlier this day, the idea of repealing the Don't Ask, Don't Tell legislation.

Now, the way it works currently in the military is that if you happen to be homosexual and you want to serve in the military, that's fine. And as long as your particular sexual tastes don't get in the way of performing the mission, there's no problem.

The point is that the military has a job to protect our citizens, and we don't want things getting in the way of that. If you were to commit adultery, you could be discharged because that gets in the way of our performing our mission.

Now, we face an amendment here, which is opposed by all of our military leadership, which says we're going to repeal Don't Ask, Don't Tell.

What, then, does that look like?

I mean, currently the policy is you could be gay, and as long as it doesn't get in the way of doing your job, everything is fine.

So now we're going to repeal Don't Ask, Don't Tell. So what exactly are we asking?

Are we asking the military then to protect or condone homosexual behavior if it does get in the way of performing the mission?

What exactly are we talking about?

Are we talking about creating separate dormitories, for instance, if we have sexual harassment?

What will this have to do with recruitment? People that have a 17- year-old kid that may be wanting to sign up, what will this do to recruitment?

What's it going to do to the morale of the troops?

What's it going to do to small-unit cohesion?

And, also, the other piece of the military is about these soldiers that are giving their time and lives are confined to very tight areas and pushed together in very difficult circumstances over long periods of time. What is the effect of that?

And all of these questions are sitting out there, and the military leadership is saying, yeah, we don't know the answer to those questions. Give us some time to take a look at it. We don't want you to pass this until we can see what's going on with this.

Now, I have three sons. They've graduated Naval Academy. All of them went Marine Corps. One survived his experience in 2005 in Fallujah.

And when our sons and daughters are serving and laying their lives or their bodies on the line so that we can live in peace and freedom, that is a very sacred kind of sacrifice they're making for us. So why would we belittle that by jumping into something?

We're being asked to pass something that we don't even know what we're passing. We don't understand the implications or how it would look. And yet we're going to jump into this for, what, some sort of political deal to satisfy some vocal but small minority using the lives of our own children?

I will not have any part of betraying the interest of our kids just for political purposes.

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

Just to respond briefly here on the subject of missile defense, I know we are working with some en bloc amendments. We're comfortable with those amendments. There is some disagreement on missile defense, and I think at least a considerable vulnerability that many people on our side are very concerned with was the decision not to build a ground base system in Poland and the radar in the Czech Republic, but instead, to suggest that the Aegis class cruisers could cruise around in the ocean and take care of the mission to stop ballistic missiles, particularly a longer range ballistic missile possibly equipped with a nuclear warhead coming out of Iran.

The fact of the matter is that the Aegis class missiles do not have the velocity necessary to stop a longer-range ballistic missile. And the only way we had to do that was, quite simply, the ground-based system, which is a 20-ton missile; the Aegis class missiles are more two ton. So there is a factor-of-10 difference in the weight of the missile. Obviously, the much larger missile can develop the velocity it needs to go after a very high-flying, fast-moving ballistic missile that could come from Iran as early as in the next few years.

And so there is a serious concern that, in terms of missile defense, we do not really have protection over Western Europe and our troops that are stationed in Western Europe. Of more concern to us was some level of obfuscation that we received from the Pentagon as to what the real capabilities of this potentially Standard Block 3 missile--it's called the Standard Block 3, 2A--and what sort of velocities that

could attain. From the most reliable sources that I personally have been able to discuss this with and keeping things within the nonclassified setting, that missile we have very little hope will ever develop the velocity necessary to take out a high-flying ballistic missile.

So we have a big gap in our ballistic missile capabilities, and that gap is the size of Europe. And we are betting on the development of a missile that just does not have the physical size or capabilities of developing the velocities we need to protect Europe. We don't think that's good strategy. We think that's a weakness in the bill.

I still support the bill, it's a good bill--unless we put bad amendments on it. This block of amendments is okay, but we do have some weaknesses.

Mr. Speaker, I'll be right with you as we get our charts adjusted here and get started for the evening.

It's a pleasure to be able to join you this evening and to talk, once again, about subjects that are on the list of attention for many Americans, the kind of questions people are paying attention to, things that make people concerned, and overall questions regarding jobs and our economy.

And if you step back a considerable distance and get way outside of Washington, D.C., one of the things that you can see if you look over a long period of time is that there's a big debate as to what the Federal Government should be doing--in fact, that is kind of the main political debate--and should the government be doing a whole lot of things or should it be doing a smaller, limited number of things.

We have just heard over the previous 40 or 50 minutes from the Democrat Party, and they were very excited about all the things the government was doing. The government was involved in all of these handouts to different people and the different ways of trying to show compassion, and so they were very interested in seeing that the Federal Government was involved in a whole lot of different things.

There's a different perspective on that, and that is that the Federal Government should be involved in a smaller number of things and that, in fact, the government should be limited, the Federal Government should be limited. We should leave a lot of things to the State government, and local governments also should be taking responsibility. The Federal Government should not be the big mother giving everybody whatever they want. And so this debate goes back and forth as to what should the Federal Government be doing.

Now, if we take a look, there are some things we could learn from history. We do recall that there was a very famous, well-known nation that you've heard of, read of many times, and they had the philosophy that it was the job of the government to provide these basic necessities to their citizens. They believed the government should provide food and a place for people to live. They believed that the government should provide education and that the government should provide health care to the citizens. After all, if you don't have health care, you'll get sick. And they also believed that the government should provide jobs for their citizens. And so that nation operated under that principle that the Federal Government should be providing food and clothing and a place to live, education, health care, and a job.

Yet we watched that nation. It was a big threat to America, and over a period of time, it totally collapsed. The wheels fell off of it. And the nation doesn't exist anymore. It used to be called the Union of Soviet Socialist Republics. We in America in the meantime looked at their nation, and we said their economy is a mess. They don't know what they are doing. The Federal Government cannot afford to be giving all things to all people, and it is much better for the private sector to run the economy, for the Federal Government to be limited and just focus on the things that it can do well.

So this is sort of the source of the large debate today, What is it that the Federal Government should be doing? And of course the problem with the Federal Government doing too much is pretty soon you run out of money. That is what we are starting to see all over Europe and the governments in Europe, but as well in our own government, particularly over the last year and a half.

Now, we have just heard comments from the Democrat Party talking about the fact that the financial and economic crisis that we have experienced was the result of Wall Street. It was all Wall Street's fault. Unfortunately, their memories are selective. The fault lies more than anywhere else here in Congress. This was a government mistake. Republican and Democrat economists saw this thing coming, they saw it a long distance away, and politically we did not have the will to deal with it and solve the problem.

How did this all happen? Well, we came up with a nifty idea a good number of years ago that it would be a nice thing if people who were very bad investment risks had the opportunity to buy their own home. And so what we demanded was that banks had to make loans to people who were a poor credit risk. So we said you got to make a certain percentage of your loans like that. So the banks are going, boy, this doesn't seem like a very good idea. You are demanding that we make loans to people who probably can't pay back their loan.

I don't know how you could try to say that that's a compassionate thing to do. I don't think a family that has a loan that's too big for them to pay and that constantly is missing their mortgage deadlines and eventually gets evicted from their house, somehow that doesn't impress me as a picture of

compassion. But that was the desirable thing. And so we put that into the different regulations and the government mandates, and we created Freddie and Fannie, two quasi-public, but really private, firms which made a big business in home loans. They gave good prices to people, and through the years Americans had many of their loans put into Freddie and Fannie. But what happened was the very last year of the Clinton administration, they kicked up the percentage of loans that had to be made to people who were bad credit risks.

So we are starting to create a bit of a problem because what happens when all the bad credit risks don't work? Who is going to pay? Well, the implied payer was, you guessed it, the poor old taxpayer. And so we see Freddie and Fannie moving along, and through a series of other circumstances, particularly Greenspan's keeping the interest rates low, the liquidity high, we see this big bubble in real estate bubbling right on up. From when I first came to Congress in 2001, the housing prices almost doubled in about 5 years. And you thought, boy, was I silly not to have bought a house, because if I would have bought a house it would have doubled in price. And then ker-pow, the bubble pops. When that happens, now all of this mischief that was created by Freddie and Fannie making bad loans starts to come due.

Was this something that people understood? Yeah, there were people smart enough to see it coming. In fact, President Bush saw Freddie and Fannie, saw that they were in serious financial trouble, saw it was going to be a tremendous hit on our economy and asked the U.S. Congress for authority in the very smallest ways to regulate Freddie and Fannie. And that you can find documented in that great conservative oracle The New York Times. Take a look at September 11, 2003. This is 5 years at least before the big collapse of the economy.

He is requesting permission from Congress to regulate Freddie and Fannie to take care of this problem that the liberal Democrats created, that is, making loans to people who couldn't afford to pay them. Now, they were assisted in this mischief also by different ratings firms like Standard & Poor's, who rated these different instruments that were created with these loans as AAA rated, which of course is a scam: they weren't. And the idea that Wall Street had was that if we would take one bad loan and we put it together with a thousand other bad loans that we have enough diversity that all these bad loans will not be bad loans, which was of course a bad assumption. Anyway, you know the story.

The Republicans passed the bill to get more control of Freddie and Fannie. It went to the Senate. The Republicans, while they were in the majority, never had 60 votes, and the bill died over in the Senate because the Democrats refused to support it. In the meantime, the gentleman who is now in charge of fixing some of these economic problems was saying there is nothing wrong with Freddie and Fannie. And Freddie and Fannie had a great lobbying team, ran around the Hill here in Congress giving away hundreds and hundreds of thousands of dollars in PAC contributions.

So first of all, let's not say that it was Wall Street that created this economic crisis. Let's go back to the fact that it was ACORN, that it was loans that were made to people who couldn't afford to make those loans, it was loans that were put into Freddie and Fannie and ended up the tab now being picked up by, you have got it, your grandchildren and your children. So that's where we are.

Now, the big question is if we are going to give all this money away to different people the way that we have been doing for the last year and a half, how are we going to pay for it? Somebody once said the trouble with socialism is that sooner or later you run out of other people's money. Well, so what've we been doing? Well, the last year and a half, boy, we've been doing some spending. But one of the things that anybody who runs a business knows is you got to have some kind of a budget. You have to have a plan as to where you are going so that you can somehow balance how much money you are spending with what's coming in. You have to have some sort of a sense of where you are going. You don't want to just float from month to month not knowing what you are doing.

And so if you are going to have any kind of decent management in a business, you need to have a budget. Now, some families run without a budget, but to some degree what they do is they just take the money that's coming in, put it in the bank, and then they can take the money out until they run out, then they know they got to stop spending until the next month. But there has to be some kind of a plan of how you are going to proceed economically for any kind of a good management.

I don't think there is hardly anybody that has stocks and bonds or whatever, or traded on Wall Street, that doesn't have a budget. And of course the Congress needs to have a budget too. In fact, the Democrat whip, Steny Hoyer, made this statement: he said that enacting the budget was the most basic responsibility of governing. The most basic responsibility, according to Steny Hoyer, was that we have a plan. Now, I agree with Steny. I do think having a budget is very, very important. You have got to have that.

He was joined by Congressman Spratt, who is the House Budget Committee chairman. And he was even more specific: If you can't budget, you can't govern. He said that in 2006. So the Democrats, like the Republicans, are recognizing that you have got to have a budget. You have got to have some kind of a plan. If you don't, you are going to start really getting off the track economically.

So, we then find this rather surprising article in The Hill newspaper just April 14, 2010: ``Skipping a budget resolution this year would be unprecedented.'' Wait a minute: ``Skipping a budget resolution this year would be unprecedented.'' In other words, we don't have a budget? You got it right. We don't have a budget this year. We don't have a budget. Any other business has to have a budget. Do we have a budget? No. ``Skipping a budget resolution would be unprecedented. The House has never failed to pass an annual budget resolution since the current budget rules were put into place in 1974.''

We have never not had a budget resolution since 1974. So we are setting a record this year. We have got no budget. No budget. First time that's happened since 1974, according to a Congressional Research Service report. That's the research branch that works for everybody in Congress.

So we have just marched off the edge of the economic world. We have decided rules don't apply to us. We have good intentions. We are going to have the Federal Government be all things to all people. Let's spend some money. Let's take care of everybody we want to take care of. And, hey, about this deal about having a budget, let's not have a budget because, you know, somebody could really beat you up if you had a budget.

I am joined by a good friend of mine, Congresswoman Lummis. I don't know if you would like to take a minute or two to make a comment. I would be delighted to have you join us.

I would like to reclaim my time for just a minute. I really wanted to inquire of you about some of these numbers that you just said, because I am not on the Budget Committee. And I was kind of shocked in a way. We haven't not had a budget since back in the 70s, and that was just since we put this current budgeting process. And we've always had a budget, and yet this year we don't have a budget, and we are spending money at a tremendous pace.

Is the rapid rate of spending, is that part of the reason we don't have a budget, because we are just so embarrassed we are spending so much? Is it because by putting a budget down it acknowledges the complete fiscal irresponsibility that we have started down that path? Do you think that's what it is? Or is it just we can't figure it out? Why don't we have a budget?

Let me just stop you for a minute here, please, because I would like to try and get these numbers figured out a little bit. Of all of the different complaints I heard about President Bush, the one that I think I heard the most was that he was spending too much money. I think the people didn't like the fact we were at war in Iraq very much, but I think particularly they were worried that he was spending too much money.

And so I guess his last year in was 2008, and that was when the Pelosi Congress was here. And that was his worst amount of deficit spending that he did, which was about a $470 billion deficit that year in his spending. Now, that wasn't good; that was about 3.1 percent of gross domestic product, and that was his worst spending, and he was spending too much, and some of us said, yes, he was, and we didn't vote for some of the spending.

He was followed by President Obama the next year, which is 2009, and the amount of deficit there was $1.6 trillion, that is three times more than Bush's worst year. And, boy, were we doing some spending. Then we went from 3.1 percent of GDP all the way up to 9.9 percent GDP, and so we just rocked into this. I will tell you, President Obama made George Bush look like Ebenezer Scrooge.

The thing that has, I think, other Americans, and myself included, concerned about, is you keep going out into this uncharted territory where we are spending more and more and more money that we don't have, and America is banking on our good credit. We have nations like China who buy our Treasury bills because the Chinese are very good at saving money, and they are taking their savings and buying our Treasury bills.

You wonder how long can we keep spending money on all kinds of pension and welfare programs and feel-good programs and reward-people- for-not-working programs and food stamp programs, and all kinds of other things that may be nice? How long can we continue to borrow other people's money to do that before it comes time to pay the fiddler?

When we do, what is that going to look like? That is kind of a scary thing. This is a chart of some of these absolutely amazing items of spending. This is the Wall Street bailout at $700 billion. You have got the economic stimulus bill--I think it's closer to $800 billion, finally, which wasn't a stimulus bill at all; it was just paying various States that had exceeded their budgets so they could keep paying generous pensions that they can't possibly afford to sustain.

Then you have got the appropriations, Obama appropriations and the IMF bailout, and now you have got the big health care thing. They are claiming that's a trillion. I think we will be lucky to get away with it only been being a trillion.

You put all of this stupendous spending together, and the bottom line is they don't want to have a budget because they don't want people to see that we are really pushing the edges on things.

I have a chart here that I think is a little bit spooky. I don't know if you can see it from where you are standing, but this is debt and deficit as a percent of gross domestic product.

What I have got here, this is deficit as a percent of gross domestic product. The deficit that we have in the United States, as a percentage of GDP, is 10.3 percent. You take a look at Greece here and their percentage as a deficit of GDP is about 9.4 percent. Now Greece is about to crash the European Union because of their crazy financial situation, their socialized medicine and all. They can't make it work.

And so deficit as a percentage of GDP is 9.4, and here we are at 10.3. That doesn't make me feel comfortable that we are worse off than Greece is. Then coming across on the chart, debt as a percent of GDP, our debt is 90.9 percent of GDP. Greece is worse at 130, but Greece and Italy are the only two nations of Europe that are worse off than America is.

So these numbers don't give us cause to be very comfortable with our economic situation. I am wondering whether that's not the reason why the Democrats don't want to put a budget in front of people, because they are going to realize somebody is going to get wise that we are just blowing the lid off of any kind of economic sanity by our excessive spending.

Well, I very much appreciate the expertise that you bring from Wyoming. The idea of cutting spending here, that's got to be the closest thing to a swear word you can say in Washington, D.C., the idea of cutting spending.

Yet I just heard less than an hour ago the Democrats just raving about the wonders of Social Security and their Medicare and Medicaid programs, the three major entitlements, all of which a Democratic economist, a Republican economist, all agree that they are on a train- wreck path in a fairly short period of time. Because these entitlements are just like starting a robot, some machine that gets going. You create the law, the law gives out money to people, and it just runs. If you don't touch it, it just keeps giving out money.

And the trouble is, it's giving out more money than we have. What's going to happen is you are not going to have anything to spend any money on for Defense or any other program because Medicare, Medicaid, Social Security, will eat the entire budget up.

What you are saying is correct. We need some of that common sense that says, wait a minute, we just can't keep running more and more and more government giveaways.

It gets back to the question, do we really want to follow the model of the Soviet Union down the primrose path into just economic collapse, because we know it didn't work. It's not working well for Europe, and we know what the models are that make for a prosperous and healthy and good economy.

And it's what you are saying; one of the main things you have to do is to cut taxes. The interesting thing is that the Democrat, JFK, figured that out. He cut taxes because we were in a recession. He cut taxes and found out a very fascinating thing: That the recession stopped, the economy got stronger, and he actually collected more tax revenues with a lower tax rate. It seems like it's like making water run uphill, but it's not.

What happens is you have more economic activity. Because of that there are more taxes that are generated because there are more transactions and, therefore, the government actually raises more money by cutting taxes. JFK figured it out. Ronald Reagan did the same thing, and it worked like a champ for him, and George Bush did the same thing. He did some serious tax cuts and moved us from recession to recovery.

Because he understood this basic principle: There are certain things that are job killers, and one of the worst ones is excessive taxation. Why is that true? Well, because, the people who make jobs are businesses, and the business people have to have some of their own money to plow back into the business to put a new wing on a building, to buy a new machine tool, to start a new process, and to get a new plant going somewhere.

They have to have some money. If you tax it all away from them, then they are not going to have money and they can't make jobs. FDR found that out the very hard way. They kept driving and driving and driving the taxation of business owners. Instead of just creating, business owners that were hiding and hunkered down inside their businesses--they closed them down. The businesses closed, and all the employees were laid off.

Well, I very much appreciate the little history lesson and also the shot of inspiration that you have shared with us, the idea of the shining city on a hill.

I think that there are a lot of people that can be quoted. I'm thinking of good old Alexis de Tocqueville, a Frenchman who traveled around America, took a look at our system and said he looked for the secret of America's greatness. And he had a great quote along those lines, but one of the things he said was: You have a weakness in America, and that is, if the public realizes that they can vote themselves largesse out of the public treasury, you're really going to be in trouble.

There's another name for that. It's called socialism; the idea that voters can demand the Federal Government to keep giving them more and more stuff. The problem with that system is that eventually you run out of other people's money. That was one of the great weaknesses that Alexis de Tocqueville saw with our system, that because we are a self- governing people, because people have the right to vote, they can also make irresponsible votes and they can perpetuate a socialistic system.

A lot of Americans don't really know what socialism means anymore. They don't understand that the concept of American law was that people are all equal before the law, that Lady Justice is not supposed to give a special deal to a rich person or a poor person or anybody else, that people are all equal before the law.

The Pilgrims experimented with socialism. It was demanded of them by the agreement that they made with the loan sharks of London that financed the expedition to send the Pilgrims to America. So it was forced on them and they agreed to it, to have everybody take all of their corn that they grew and everything they produced over at the new colony in Plymouth and divide it equally and then send the shares back to London.

Well, that lasted less than about a year or so. And Governor Bradford saw everybody starving to death, and they pitched socialism, and he wrote in ``The History of Plymouth Plantation,'' he said: As though men were wiser than God. And he said: This is an experiment that's been tried among godly, hardworking people, and everybody can take a look at our example and see that this isn't going to work.

So the Pilgrims understood it. Unfortunately, our Congress today doesn't seem to understand it, and that's why you see these kinds of things.

Here's the Federal Government employment numbers. We're trying to create employment. Well, that's one way to do it; go hire everybody. What's the trouble with this theory? Well, every time you hire somebody in the government, you lose two jobs in the private sector. So now after we've passed this wonderful stimulus bill--which we were told if we didn't pass it, unemployment might get to 8 percent. We're now close to 10 percent unemployment, and we continue to do the very things which kill jobs, particularly worst of which is taxation.

But this is an alarming trend as well, government employment going up. And I think a recent study just indicated that the average government employee makes twice as much money as the average civilian employee in America. That is not a good trend, because pretty soon everybody is going to be working for the government--that's not very hard to break that equation--and then who's going to be paying?

I see my good friend, Congressman Gohmert from Texas, coming to bring us a little bit of Texas wisdom, perhaps.

Lou, would you join us, please.

Hey, let's do that one again. One worthless man is a shame, two is a law firm, and three is a Congress. Congress was smaller in those days, I suppose.

Well, thank you for that bit of Texas wisdom.

Here's another chart that runs along with it. This is private sector employment, government employment. You can see what's happened here. We're doing some employment, all right. It's the government that's doing the employment. But you take a look at the blue line--this is the private sector employment--you see jobs going down like a submarine. And that isn't just a statistic, that isn't just a fact, that is suffering--suffering in our economy, suffering with lots of people who don't have jobs, a lot of younger people moving back with their parents. The house is full of people because we're having trouble with not having the jobs.

Now, what kills the jobs?

Well, first of all, excessive taxation is a big deal. Insufficient liquidity is another problem. Our banking regulators are so tough that it makes it very, very hard for businesses to get loans. A third big job killer is economic uncertainty. Boy, oh, boy, do we have some of that. Who knows what we're going to do next.

We just passed this socialized medicine bill, and everybody who has employees is going to get whacked for having employees. There's a huge incentive we've created to get rid of any excessive employees on your budget because you're going to get taxed heavily for socialized medicine.

And then, of course, the old standby. If you can't get them with too much taxes, no liquidity, and uncertainty, then you hit them with red tape and government mandates.

You put this together, and you've got a great formula to destroy jobs in America, and we have been doing this in a massive kind of way.

Here's kind of a list of some of the Obama plan taxes:

Cap-and-tax. That's that tax on energy. Do you remember how the President said, I'm not going to tax anybody who makes less than $250,000? And then he comes up with this deal, that you get taxed when you flip your light switch. I don't know how in the world you can keep those two things separate, that you're going to only tax people making $250,000, and then nail them with a tax when you flip your light switch.

Did you want to make a comment? I would be happy if you want to jump in, Congresswoman.

Reclaiming my time, all of these things are really indicators that we've got a Federal Government that is out of control. We're hiring too many Federal employees, spending too much money. We don't even have a budget for the first time since the seventies. This is not a good picture.

Congressman Gohmert.

I'd just like to jump in if I could, gentleman.

I'm detecting a certain level of skepticism on your part whether or not this government agency was really very effective in protecting us and in preventing a massive environmental mess. I guess the question I have is--you're suggesting that maybe a government agency isn't that reliable. Yet we just trusted the government with all of America's health care. Does that make you feel comfortable now that you see how the government is working in the MMS area?

Appointee.

So, when we're talking about a cozy relationship here, it's very cozy.

So Obama's person in charge, Salazar, who is in charge of this thing, basically hired somebody out to basically do this oversight?

What was her name, gentleman?

As to my understanding, doesn't the law require that the President in a major environmental disaster like this--I've been told that the Federal law requires that the President take charge of the situation.

Has he been down there basically running it and calling the shots?

I do yield, lady.

I thank you, lady.

We've been talking about a broad range of different topics today; but in general, it is the condition of our economy.

The thing I would like to be sure that we don't do is to leave with the impression that there aren't solutions to these problems, but the solutions include, one, we're going to have to back off our just giving away money to everybody. We're going to have to reduce Federal spending. What we're going to have to also do is to use the power of reducing taxes to increase government revenues. So we have to reduce taxes in order to get the economy back and going and to start creating jobs.

Now, if we want to continue the formula of destroying jobs the way we have been, what's going to happen is that it's going to be harder and harder to get the economy back on track, but there is a solution. It's not complicated. It involves doing tax cuts selectively to allow those small businesses to start creating jobs again, and we have to get off their backs with regulations and red tape. We have to increase their ability to get liquidity, but we also have to stop taxing and taxing and taxing. All of the talk about concern about jobs is just a bunch of lip service because every one of these things is a job killer:

Cap-and-Tax. They're going to tax energy.

Health care taxes, a massive effect of destroying jobs. There are all kinds of businesses now that are asking, How can I get my employees under 50 so I don't have to get involved in this?

The death tax. Taxes on inheritances. This is another thing that is going to tie up money that could be invested in business and that could create jobs.

The capital gains tax. This is one of the big things that helped create jobs before. This is going to expire next year. So there are solutions to these problems, but the solutions require some grown-up leadership in Washington, D.C.

Mr. Speaker, I thank you for your indulgence this evening. I yield back.

Mr. Speaker, thank you very much for recognizing me and allowing us again on a Wednesday evening to explore the interesting question that has certainly been much in the minds of Americans over the last couple of years; that is, the situation of jobs and our economy. Particularly, what is the connection between jobs and the economy, and what is going on? Do we have reason for hope? Are things turning around or not? And we continue as Americans to ask, where are the jobs? Because there are many, many people who are unemployed, and many people who are unemployed for more than a year are no longer counted in our statistics, which suggests that the unemployment rate is somewhere in that 9 percent or 10 percent area. So the real unemployment rate is probably higher. That is a reason for people to be concerned, if you have a job.

If you don't have a job, it is not a matter of concern; it is a matter of a serious crisis. And there are many people who are struggling with that, and we are going to take a look at that this evening and also take a look at what are the various factors that influence the fact that we don't have jobs, whether we are doing the right or

wrong things, and also the curious phenomena that we are seeing now, where, from a policy point of view, we are doing many things that are very destructive to job creation, and yet the economy seems to be coming back to some degree. What is that? What drives the economy? And, why would Wall Street be having things look good for Wall Street when so many people are out of work? We are going to take a look at those questions this evening.

Starting off, I have depicted here: The lower part of this graph is the net jobs gained or lost. This centerline here is zero jobs. We haven't created any jobs, we haven't lost any jobs if you see a bar that is near this centerline. This is going back to 1993.

We come here: 2001. It was the recession when I was first elected to Congress. In 2001, we were losing jobs. And you can see those. We inherited a recession from the last days of the previous administration. George Bush came to office here, we were losing jobs, and we had to do something to try to turn the economy around. You see, something was done. The economy turned around.

Now, the next and last section of the graph is 2009, and you can see the tremendous number of jobs lost over here, the jobs lost again being the lines under the graph, showing that these are thousands and thousands of jobs that are lost. So this graph here shows the fact that we do have a great deal of job loss. The graph up above is a little bit more complicated. We don't need to get into that for a moment.

So how is it that this whole situation came to be, and how did we get into the problems in the first place? Well, it started some years ago for this particular recession. It was brought on, as you recall, you have probably heard some discussion about the word ACORN or about Freddie and Fannie. The details of this whole situation may seem a little bit hazy to you. That is all right. A lot of things go on, and it is hard to keep track of everything. But the recession really got started because of a combination of several things that happened.

By and large, if you are looking at somebody to blame, you should be looking here. You should be looking at the Federal Government. It was policies of the Federal Government that created this problem, the unemployment problem and the turndown in the economy.

Well, exactly what happened? Well, what happened was, going back many years, people got the idea that it would be a good idea for banks to loan money to people so people could buy houses. But there are some people who economically are not in a very strong position to be able to continue to make their mortgage payment month in and month out. So Congress, in its wisdom, made the decision that we were going to force banks to make loans to people who were bad loan prospects. That means that there was a high chance that they could not repay the loan.

Now, I suppose this was done in the name of compassion or whatever. I am not sure how compassionate it is to put someone into a loan that they can't afford to pay for, but that is what we actually instituted into law. So we had the situation ticking along like a timebomb.

By the time President Clinton was in his last year, he increased the percentage of the loans that had to be made to people who couldn't afford to pay them, so the bankers were going out making loans to people that couldn't afford to pay.

You say, well, why would a banker do that? Well, part of the reason is because a banker could pass the loan on through to Freddie and Fannie. Freddie and Fannie were two quasi-public organizations. They acted like private companies, but there was always this implicit guarantee that if anything happened to Freddie and Fannie, the Federal Government would come in and bail them out.

Well, so what happens? You put that in combination with another thing that was going on, and that was this recession here. The Federal Reserve, first of all, created money, but they also particularly reduced very much the cost of money to banks. So you had almost a zero interest level and you had a lot of liquidity looking for someplace to invest money. So what did people invest money in? They invested money in houses. So everybody started buying houses, and housing prices went up and up and up.

I came down here by 2004 or 2005, and I thought I was the dumbest Congressman in the entire House because I hadn't bought a multimillion dollar house and watched it double in 4 or 5 years. But of course, when you see something expanding that rapidly, it suggests you may be dealing with a bubble, and of course that is what happened: The housing bubble popped.

So it was a combination, one, of policies created by Congress requiring loans to be made to people who couldn't afford to pay them. And as the housing bubble popped and the housing values came down, all kinds of people were like, when the music stops, who is left without a chair?

So the economy starts to take a beating, and the group that was pushing very hard for these loans to people who couldn't afford to pay them of course was ACORN, someone certainly that the President was closely associated with. And was this a big surprise to lawmakers? Well, it really wasn't to many.

In fact, if you take a look at that great conservative oracle, The New York Times--I say that somewhat sarcastically--you find on September 11, 2003, as early as September of 2003, President Bush was saying to Congress, ``Give me authority to work with Freddie and Fannie, because they are spending too much money.'' And so the Congress did that. The Republicans were in charge here in the House.

We passed a bill, it went to the Senate, and it was killed in the Senate because the Republicans did not have 60 votes in the Senate. And so this ticking timebomb continued to tick. We did not deal with the financial mismanagement of Freddie and Fannie until the train came off the tracks somewhat down the line.

That may be a brief version, but it gives you a sense as to how things got started. And it wasn't problems with free enterprise, it wasn't problems with businesses much. It was made right here in this Chamber.

I am joined by a fantastic Congressman from Illinois, somebody who is highly regarded, a graduate of West Point, which we won't hold against him even, and it is Congressman Shimkus.

I would be delighted to hear your perspective on where we are going with these things.

That is a profound statement that you just made. It is so simple, and yet we forget it. Don't we?

Well, you know, you have just made a whole series of very, very excellent, really commonsense kinds of points. And in summarizing what you said, many people have likened that our policy for the last year and a half is the equivalent--it's tantamount to declaring war on business. Now, you can't declare war on business and then complain that there aren't any jobs around. It just doesn't make sense.

Now, supposedly the President was going to do some ``Meetings on Main Street'' about unemployment. So a couple of weeks ago, we had a meeting across the river from you, gentleman, on Main Street in St. Charles, and we invited about 30 or 40 business people, some bigger companies, smaller companies, and we asked them, What are the most important things to get right, for us to get right down here in order to create the environment where the private sector could create jobs? We can't make any jobs in the Federal Government. Every time we make a job, it takes two jobs out of the private sector, but we can set a proper environment for job creation.

So I asked it a little bit from a negative point of view. I said, What are the things that are most destructive to creating jobs? I have got a list of them here, but they put them in order--actually the order that I think is almost common sense. The first thing they said was excessive taxation. Now, starting on excessive taxation, everything that just came out of your mouth, gentleman, is another story of excessive taxation. You've got the Wall Street bailout. I think you mentioned that failed stimulus bill--I would call it a porkulus bill. The $787 billion really turned out to be $800 billion, and then you've got the tax on carbon, the cap-and-tax. That's something we passed in the House, but the Senate, fortunately, hasn't confirmed it.

You know, the President made a promise, he said, No one making under $250,000 is going to need to worry about getting taxed, and yet we pass a bill that the poor soul that flips the light switch is going to be taxed. And then on top of that, we add socialized medicine. All of those things are massive taxes, and our small business people were saying, If there's one thing you want to do to create jobs, you do not want to bury the small business guy in taxes. Now, you know that. It's absolute common sense, isn't it?

Right. The first thing is on the taxation point, why would taxation kill jobs? You know, if you think about it--first of all, let's say, whereabouts are jobs? Well, 80 percent of jobs in America are businesses with 500 or fewer employees. So as you're saying you've got these small business guys out there, and all of a sudden the government just lets them have it with a whole bunch of taxes, the small businessman, the profit that his little business makes is viewed as he made a ton of money.

Is it tough on taxes?

Our businessmen said, That's the worst thing. I think their point was, You've got yourself a little machine shop or some business, if all your money is taxed away from you, you can't put a shed on it and add a new machine tool; you can't invest in a new process or a new idea or a new innovation.

We've got a guy in my district and he actually has a farm over in Illinois, and I just love innovation in Americans. This guy recognized that there is a material that nobody seems to want in our country, and it comes out of the south end of pigs. And it's kind of smelly stuff. He has found some way to put pig manure into these big kettles, run the pressure up and the temperature up and turn it into a crude tar which he uses to make asphalt to make roads. And we have a section of road which is a pig manure road which apparently our Department of Transportation says is pretty good quality asphalt. You know, that's the kind of thing, though, you've got to have money to invest in a new idea, and if the government taxes all your money away, how do you create those jobs?

Well, I sure appreciate the way that you represent your district, and I know your constituents do. We're proud of you, and thank you for the fact that you bring that kind of common sense from the heartland here to the Capitol. We need a little more of that common sense. Thank you so much, gentleman.

So I was just running along. We talked about what caused all this problem. Well, a lot of it was government policies and the idea of giving people all these loans. They couldn't afford to repay them, and then you have everybody buying all of these different kinds of mortgage-backed securities. And the major corporations in America, the Wall Street corporations, started to fail and choke on these bad policies that are based on no common sense at all.

So now you have what's happened before in America and, that is, you have a recession going on. So the question is, What do you do if you've got a recession? And different Presidents have had different approaches to that. But what we have seen, as we've just been talking about, is we have done about everything on this list which are things that are going to kill jobs. We've done everything policy-wise wrong. We could hardly get anything more wrong.

First of all, according to the small business people in our community, the excessive taxation. Well, let's talk about what the taxation was. Well, you've got the Wall Street bailout which is basically creating a whole lot of the government debt which is going to have to turn into taxation. You've got the taxation of the cap-and-tax bill that they're talking about. You're going to expire taxes on capital gains, dividends and death taxes. Those taxes are all going to go up next year. And then you've got the tremendous taxes that are inherent in the socialized medicine bill. So you have a whole lot of taxes coming down on the owners of businesses. That's a job killer.

The next thing that my constituents said that was a major part of the problem was the insufficient liquidity. A businessman needs to be able to get

loans from a bank. He doesn't want big ones. He usually gets a loan for 3 to 5 years and has to pay a pretty decent percentage to the local bank to get those loans. Well, what's happened is that we have tightened up the security and the requirements for lenders in small banks so tremendously heavily that it's very hard for small business people to be able to get loans. They can't borrow money, or the money they used to be able to borrow, they're paying twice the interest rate for the money. So the liquidity is a big problem. Insufficient liquidity is a big problem that small businesses are having.

They're having liquidity problems, tax problems. The economic uncertainty--of course all of these massive bills like socialized medicine, those are things that create a lot of uncertainty. So if you're uncertain as a small businessman, what you're going to do, as we say in Missouri, you're going to hunker down. You're going to avoid making decisions. You're going to try to preserve your capital and try do what you can to ride out the storm. So that's the economic uncertainty that has been created.

And then the red tape is another one that they mentioned. Excessive government mandates and red tape. That's particularly deadly to small businesses because a big business could have a red tape department, but a small business can't afford to have that kind of overhead in terms of management staff. So red tape is also very much a job killer.

Now we have employed all of these tools in the last year and a half and essentially declared war on business. So why in the world would we want to do something like that? We shouldn't be doing it. The result then is that we have created an environment to make a recession that could have been bad, we've made it worse. We were told in the recovery plan, in the beginning of the year in 2008 and 2009 here, we were told that if we don't pass the recovery plan--I guess they call it the stimulus plan--if we don't pass this thing, we're going to have unemployment as high as 8 percent or 9 percent if we don't pass it. Well, on a totally party-line vote, the Democrats passed this bill, and our actual unemployment has gone up like a skyrocket. And why is that? Well, it's because obviously the stimulus bill didn't work.

Now, should we have known it wouldn't work? Of course we should have known it. We could have gone back to the days of FDR who also had a recession that he turned into a Great Depression because he used a wrong economic theory. And what was that theory? Well, it was the idea that if the Federal Government just spends money wildly, it will improve the economy because as the government starts buying, they'll get everybody else buying, and the whole economy will take off and do well.

So that was what Henry Morgenthau, with the advice of Little Lord Keynes, did just prior to the Great Depression. So at the end of about 8 years of tremendous pain and suffering where the small businesses were not just hunkered down but were out of business, then what happens is, this guy, Henry Morgenthau who was Secretary of the Treasury under FDR, comes here to Congress. He talks to the Ways and Means Committee, and he said, You know, we tried spending, and it doesn't work. It just doesn't work. And he said, What's more, we're tremendously in debt as well. So that goes back to basically World War II days that shows that this idea of the stimulus bill just doesn't work. It's not the right way to do it.

Now, is there a way to deal with a recession that comes along? Well, the answer is yes. It's been tried by quite a number of different Presidents, and the various Presidents that have been most successful in stopping these recessions, one was JFK. Now, of course the Democrats run everything down here. Republicans in the House are 40 votes short of the majority, so we don't have a lot to say about these different bills that were passed, and the same thing is going on in the Senate, and of course there's a Democrat in the Presidency.

Now, is there an approach that they could do? I have been critical of Democrats, but not because of the fact that I have anything personal but because the policies have been hurting our country.

Here is a case, JFK, who is a Democrat, that did the right thing. They should have learned from him. And what did he do? He cut taxes. How does that help? He cut taxes. You've got problems all over. The government should be spending money and things. If you cut taxes, what happens is, it leaves more money for that small businessman to invest. As he invests, it creates jobs. As more people have jobs and make a good income, they pay more in taxes. So it's an ironic effect of economics that you can actually reduce taxes and increase government revenue. We saw it happen under the Bush administration. JFK of course was followed by, you know, Ronald Reagan and Bush. Both of them used the same approach. By cutting taxes, they turned us out of a recession.

You could see that on the first chart that we had. You can see that this recession that President Bush inherited here, he had in 2001--and you have kind of lackluster job growth through 2002 into 2003. And then put the policies of these tax cuts, which he was able to get through the Senate. In spite of the fact that we did not have 60 Republican votes, we did get tax cuts through the Senate, particularly capital gains dividends and the death tax. And when we got that through, you can see that the recovery followed. And so that's the effective way, and I think it's not American even to be critical of a political party or somebody else's solution without proposing a better idea. So certainly the better idea is cut taxes. That's what always works. It's worked in other economies and other parts of the world as well.

So here we've got actually a little bit of a cartoon of what's going on. Sometimes we have to laugh a little bit even though it doesn't seem very funny when you don't have a job. But you have the President here saying, Now give me one good reason why you're not hiring. Well, there are a whole bunch of good reasons in these bulls that are in the china shop. Certainly the health care reform is a huge tax, but it's also a tremendous amount of government red tape and an extreme, extreme incentive not to hire workers because you have to pay so much in health care if you are a small businessman with this new socialized medicine that has just been approved.

The cap-and-trade or cap-and-tax is the energy bill. Of course, most businesses use energy. So if you have an increase in the cost of energy, which this bill would do, you're taxing small business. And then of course you have other different taxes in the background coming in. So we're doing a lot of things that are absolutely the wrong thing to do. So that basically could be summarized as a war on business.

We have talked about what the right thing to do is, which is to cut our spending and also to cut taxes. The point of the matter here is that our economy and these jobs all work according to basic principles of economics.

So now we come to, I think, a very, very interesting question, and this is the question: If we have been doing everything wrong, which I would suggest from a policy point of view we have done about everything wrong. We have created red tape. We have created tremendous taxes, and we are not allowing the liquidity that the businessmen need to make jobs. On top of that, you have a high level of uncertainty and excessive government spending. If we are doing all of those things wrong, how come it seems like the stock market is bouncing back and it seems like we are starting toward a recovery in appearances? That becomes kind of an interesting question.

If what I am saying is true that we have done all of the wrong things for businesses, and if you check with almost any small business man in America, they would say yes, you do not want to increase taxes and uncertainty and government red tape. You want small business men to have access to capital and liquidity, and all of those things, if we haven't done a good job, are problems. Almost all small business men will say that is common sense, and if you want jobs, you have to have healthy businesses.

How come is it, then, that it appears that we are pulling out of the recession and starting to do better? Well, obviously the answer to that question is that there are some other things that also affect our economy. In fact, there

is another thing that is even stronger than all of the policies that are so important that we get right down here. What is that force that is so powerful? Well, in a way, you could look at it as the crack cocaine of our economy. Think of it for a minute that there is a person standing there. They are in need of a seven-way heart bypass and they have diabetes and they are getting older. So they are not too healthy. But with a little crack cocaine, they think they are Superman.

Well, we have the equivalent of crack cocaine in our economic system in America, and that is the Federal Reserve. And their crack cocaine is to increase the money supply. It used to be called ``running the printing press,'' except today we don't run printing presses. Things are just recorded. But the point of the matter is that the Federal Reserve has created a tremendous spike in liquidity to try to deal with the tough times in the economy.

On top of that increase in liquidity, they have dropped the interest rates down very low toward zero. What that does is it creates all of this easy money that is looking for a home, and that has a tremendously stimulating effect on the economy, a little like crack cocaine does to somebody who might otherwise be sick.

So, when we have done this in the past, we run into these bubble cycles where you have easy money at a low interest rate. There are people who have access to that money, and they want to buy stocks. They find something they want to buy; they bid it up. It goes up, up, up, and then the bubble collapses. We saw it with the high-tech stocks, and we have just been through it with real estate. People who had a lot of money, particularly low interest rates in 2004, 2005, they go out and buy real estate because what is more solid and American and reliable than mortgages of Americans for their own homes? It has been a very steady business.

Well, you have to watch out when you see money get too easy to be made. You saw home prices in many areas double, and then the top blows off. That is created by this easy money, or what I would call the crack cocaine of our economic system. That is what is going on right now. That is why you see Wall Street apparently seeming to do better, the stock market seeming to go up, and yet all of the policies from a logic point of view that are necessary for a healthy business environment and for lots of good-paying jobs, those policies are not in place and they are being ignored.

In fact, it is almost ironic. The President made a statement, and I had it on a chart last week. He said the government can't so much make the jobs, but we need to set the environment so there is the proper environment for job creation. He was exactly right on that. And then he turned around and has advocated every single policy that he has been advocating, all of his priorities are going to have the net effect of destroying jobs. So there is a little bit of a dichotomy here.

Now, I have been critical of Democrat policies, not because I don't like Democrats, and maybe I ought to make it clear. Everybody that I know of in this Chamber here, there are a lot of fantastic people, and I don't know of anybody who wakes up in the morning and thinks, How I can mess up our country? Nobody thinks that way, but the point of the matter is there are policies that work and there are policies that don't work. The policies that work to create jobs is you have to get off of the big spending and you have to back off on taxes. If you do that, you will actually get more revenue and you can pay for more government services.

Let's take a look at what I am talking about, big spending. Many people felt President Bush spent too much money; in fact, he probably did. These blue lines are President Bush, and these show what the deficit is by year. If you take a look here, the very worst Bush deficit was this year. It is shown in red because this was the Pelosi Congress with Bush as President. He was somewhere just about $450 billion of deficit, which was President Bush's worst deficit. So he spent more money than we had, and that wasn't a good thing to do. He had two wars going on, and we were just coming out of a recession. Anyway, his worst spending year was 2008.

Now we come to Obama's first year as President. What we find is that now the deficit has more than tripled in 1 year. So we go from $450- some billion under President Bush, which was about 3.1 percent of our gross domestic product, which is about average, really, for some of the deficits that various Presidents have run. The deficit is about 3 percent of our gross domestic product. The next year, under Obama, the deficit, and Pelosi and Reid, the deficit triples to $1.4 trillion.

Now, what does $1.4 trillion mean? Well, it is three times bigger than Bush's worst deficit, but as a percent of GDP, it is 9.9 percent of GDP. That is the highest since World War II in terms of government spending.

So this is not the thing to be doing when there are not a lot of jobs and when businesses are being hammered. We don't want to be running that kind of spending, and that kind of spending tends to lead to all kinds of taxes. What happens is you can take a recession and turn it into a Great Depression by using the wrong policies.

Now, one of the things that I hear sometimes from people, and I think it is a fair and a good question, and that is: Okay, Congressman Akin, you are criticizing some of these Democrats, but I think you have a short memory. Don't you remember that the Republicans used to be in charge of 2001 through 2006? You were in the majority. What kinds of things did you do?

Well, when we were in the majority, we did a lot of things that nobody knows anything about, but they were not actually such bad policies.

In the case of health care, for instance, did you do anything in health care? Yes, we did. We passed a number of bills to move forward with associated health plans. That was something where small businesses could pool their employees together and get a better price on health insurance.

What happened to the bills that the Republicans passed in the House? They went to the Senate.

What happened in the Senate? Republicans did not have 60 votes in the Senate, so the bill died for associated health plans. It was brought up numerous times.

We had bills to change tort reform. They passed in the House and they went to the Senate. What happened in the Senate? You guessed it. We didn't have 60 votes and they were killed in the Senate.

We had bills to protect against the problems of Freddie and Fannie. The Republicans passed a bill to create more government control of Freddie and Fannie because they were cooking their books and they were not solvent the way they should have been. Guess what happened to those bills over in the Senate? Because we did not have 60 votes, they were killed by Democrats in the Senate because we didn't have enough to get to 60 votes.

We also passed a number of energy bills in the House to protect against spikes in gasoline prices that we have experienced. What happened to our energy bills? A number of them that were sent to the Senate, you guessed it. They were killed by Democrats in the Senate. In fact, people are surprised to note that there is more difference on a party-line vote on energy in the U.S. Congress than there is on the subject of abortion. Most people know Congress gets polarized on the abortion issue. They don't realize that we are even more polarized on things like energy. All of these different bills were passed in the House. And, of course, we did get some strong judges on the Supreme Court.

Now, one of the things that has always surprised me from a policy point of view--aside from the fact that we can't seem to learn from the other countries that have gone bankrupt and the States in America that are going bankrupt because they are spending too much money--why is it that we have so much faith in big government? That is something that is a real puzzle to me.

I think of another country that was founded on the idea of a great, great deal of faith in big government. This was a major world power, and their whole basic way of thinking about things was that the government is going to provide you with food, the government will provide the citizens with housing for a place to live, the government will provide the citizens with education so they can be well-educated, the government will provide

them with a job, and the government will provide them with health care. So this was the idea that big government is going to provide you with food and clothing and shelter and a job and education and health care. What was the name of this big country? Well, it was known as the Union of Soviet Socialist Republics, the USSR. It was done by the Communists, and they felt it was the thing that big government could be trusted to provide all of those nice things for citizens.

It turned out, as we took a look at it, that it wasn't such a nifty theory. It didn't work, and it created a great deal of poverty. And not only that, the people who had adopted that theory had failed to recall that historically one of the greatest dangers to human life is big government. Big governments have killed far, far more human beings of their own citizens than all of the wars of history. If you take the wars of history from the time of Christ forward, you will find that there weren't nearly as many casualties from war as there were just from the casualties of a couple of Communist dictators to what they did to their own people. That's not to mention the Nazis and other kinds of dictators that have likewise killed many of their own citizens.

In the case of Stalin, about 40 million people were starved in the Ukraine. And, of course, Chairman Mao, not to be outdone, is noted for having murdered about 60 million Chinese. That is more, the combination of those people under communism, under the big government theory, killed more people than any wars.

So why do we have so much faith in big government when we have seen its tremendous failures? And yet it seems over the past year and a half, the solution to everything is more taxes and more government. I don't see the logic of why we want to be doing that. So that is what is driving this tremendous Federal spending is this faith that big government has to do everything for us; and, of course, economically that is not a good approach.

The result is we have gotten into this particular situation here. This is the actual money that the Federal Government takes in is the blue dot, and the red circle here is the money we are spending. Obviously, if you look at this, you can see the blue circle is smaller than the red circle. That says we are spending more money than we are taking in.

What is that ratio? That ratio today is when the Federal Government spends a dollar, 41 cents of it is borrowed. Out of a dollar, 41 cents is borrowed. That is the difference between the blue and the red circle.

Where is the Federal spending going? It is going to Medicare and Medicaid, which are now mathematically broken. Over time, if you run what is happening with these programs, you don't change the programs any, you just have more and more people asking for services out of these programs, that, in combination with Social Security, the dark red here, is growing at a rate that you could get rid of defense, nondefense and everything else, and you are not going to have enough money to run the government.

This is really a crisis, and it is a little bit ironic that when the Federal Government cannot run health care, that is Medicare and Medicaid, which is currently the Federal Government's responsibility to be running Medicare and Medicaid, although Medicaid is passed on to the States to a degree, too, that we cannot run that well, and so what do we do? We are taking all of that over and have the government run all of health care with this new socialized medicine bill. Certainly the solution to that bill is only one thing: It must be repealed. It is the worst piece of legislation I have ever seen in Congress, and I believe that there are many, many other people who have the same opinion that the solution for America to move forward with decent health care has to start with a repeal of socialized medicine. You can see we are not running medicine too well with the government even before socialized medicine, and that is the problem with this excessive spending.

And what happens then too is as the government grows and grows, you take money away from small businesses. First of all, they hunker down. They don't make decisions. They don't make jobs. They lay people off. But eventually you could make them sick enough that they close their doors. And guess where the jobs go? There will be jobs, they just won't be in America. They will be overseas. And that's the problem with the excessive taxation and the war that's going on in our economy on businesses and jobs.

People have taken a look at various countries and looked at this problem with excessive government and the regulations and the increases, and we can see in 2001, that the United States was sixth in terms of an economic freedom index. I think this is calculated by the Heritage Foundation. And they took a look at all kinds of things like taxes, redtape and a whole series of other factors, and the United States is sixth with the particular list they calculated. We've dropped, just in 10 years, to eighth, behind several other countries.

And one of the things that a lot of the European countries have discovered, and it's a little bit ironic because we always thought of them as being much more socialistic and Big Government in their solutions. They're finding that they're in a race to try to cut back on taxes on business because they realize businesses are the keys to prosperity, both in terms of jobs, but also in terms of government revenues.

You have to remember that when the economy is sick, the State governments really take a beating, and so does the Federal Government. In fact, if you take a look at the early Bush years, 2001, 2002, what you found was the cost of the tax cuts that the Bush administration put together, including the cost of the two wars in Iraq and Afghanistan, that the total of that amount of money was less than the drop in revenue because of the recession.

So when you have a recession, it's not just small businesses. It's not just citizens that take a beating. It's also governments that don't have revenue.

So by cutting taxes all of a sudden, what happens? Well, what you find is that the government revenue starts to go up. You say, that's just like making water run uphill. Congressman Akin, you're an engineer. How can you say something that seems to be so hard to understand? How is it that the government could cut taxes and actually increase their amount of revenue that they take in through taxes?

Well, the answer is pretty straightforward. If you think about it for a minute, pretend that you're king for a day and your job is to tax a loaf of bread. And so you're going to do--you've got to sort of think in your mind, now, how much tax am I going to put on a loaf of bread? Am I going to charge a penny per loaf? Or am I going to charge maybe $5 for a loaf of bread for taxes? Well, you start thinking, if I do $5 that's probably too much. People may not buy any bread at all. If I do a penny, I probably am not getting all the taxes I could get.

Well, common sense says that somewhere there is an optimum amount the government can tax something that's optimum in terms of how much revenue you can get. And what's happened is the government has increased taxes so heavily that we're way beyond the optimum. And so, by reducing the amount of taxes, you actually can increase the amount of revenue because, as the economy gets going, it generates more jobs, more prosperity. And as you take a percentage of that in taxes you end up, even though it's a smaller percent, you end up with more tax revenue for the government, which is what actually happened in 2004, particularly, and 05 and 06.

And so anyway, some of these different governments, these foreign governments are starting to realize, you know, the Americans were right all the time. JFK was right. Ronald Reagan was right. Bush was right. When you get in trouble, you want to drop taxes and cut government spending, and you don't want to get into this highly and excessive kind of government spending here. And so that's what they did. That's what many foreign countries figured out.

And here we go along, the USA, and our tax on corporations is the second-highest in the world. It's like we haven't learned at all from the lessons that Europe has been learning. And so that's something we need to be paying particular attention to.

Now, to add insult to injury, we not only are overspending, we're not only

overspending by looking at it in a different way, we're not only hammering businesses with all kinds of regulations, redtape, with a lack of liquidity, huge and high taxes, but now, we've gotten to the point where we're that cynical here in Congress that we're not even going to create a budget. It seems like I think it's the first time this has happened in a very long time, that the U.S. Congress is not going to have a budget for the year.

And maybe you could say, well, you haven't stayed in your budget anyway, so what's the point of creating it? But you've got to have some guidelines, some sort of rules that we're going to go by. And apparently, it's not in the cards that we're going to create a budget this year.

All of these things are very concerning. All of these things affect Americans everywhere. And they're things that it's right that the American public should be upset, should be concerned about these things. And there is certainly a level of fear and anger in the general public because of the fact that we're not really paying attention to our business. We're not really being responsible economically, with our constituents.

Now, all of this stuff about the economy, jobs, the Federal Reserve creating liquidity and low interest rates, I guess it can seem kind of mathematical or maybe even a little boring if it didn't have such a tremendous impact on the lives of everyday Americans and citizens.

I think sometimes it's helpful to put a picture on what we're talking about. And in my own mind, as a guy who's responsible for earning income for my family, the picture that I guess I live in fear of is a picture of a house with a sidewalk out in front, and the family furniture, like a sofa and an easy chair and an ironing board, and I don't know what else, sitting out on that sidewalk because I couldn't afford to pay the mortgage payment on the house. And so the house has been taken away from me and the family.

And I'm picturing a wife and some kids looking at Dad saying, now what are we going to do? Now where are we going to go? You haven't had a job in a long time, Dad.

And that's being created by the wrong policies right here in government. And it's that reason that there needs to be a change, and there needs to be a whole new look at what we're demanding that the Federal Government does.

What's happened is we have drifted from the idea of limited government, of the Federal Government primarily doing only the things that States cannot do for themselves. Originally, a couple of hundreds years ago the Federal Government was very boring. We only had about four laws to the books. We had a law against piracy on the high seas because that wasn't a State function. We had a law against counterfeiting because that wasn't a State function to take care of that. And we had a law against treason because when somebody is a spy on America, they're a spy on the whole country. So there were a very limited number of laws at the Federal level. And all of the other kinds of things, things like murder and stealing and all those things, were all State laws.

Now we look at the Federal Government, and what do we want the Federal Government to do?

Oh, we want the Federal Government to do food, and we want the Federal Government to do housing, and we want the Federal Government to do education. We've just taken over almost all of the student loans in this last year or two, so now the Federal Government's in the student loan business. And we've got the Federal Government in the car-making and the insurance business and the flood insurance business. And we've got the Federal Government in the food business and in the housing business, in all of these different things, which never, never were dreamed of by the Founders, that the Federal Government would get into the health care business and all of these different things.

And so what's been the result? Well, the result, as you can see, is excessive spending. But it's been that chairs and furniture sitting out on the sidewalk, and the father trying to figure out, I've been looking for a job for over a year now, and I still don't have a job, and asking himself, what went wrong?

Well, an awful lot went wrong. It started right down here when we started imitating the socialistic Big Government idea that the government is going to do everything for everybody. And the fact of the matter is, the government shouldn't and it can't, and we are getting a real lesson in that in these very days.

And so it is that we've come taking a good look at where the problem started, the fact that we have done the wrong solutions, the solutions of excessive government spending, excessive taxation, taking away liquidity from small business people, and then, last of all, using the crack cocaine of the Federal Reserve to create tons of money and low interest rates. That will boomerang on us, just as crack cocaine does to a sick person, and it will continue to make our country sick until we can start to direct the Federal Reserve to control and regulate the supply of money in such a way that we don't create tremendous amounts of liquidity and inflation.

I'm joined here this evening on the floor by a good friend of mine, the Congressman from Iowa who's noted as a businessman, a man of a considerable amount of common sense, a man who's not shy about expressing his opinions. And so it's a treat for me to just welcome my good friend, Congressman Steve King, if you'd like to share a word or two. We're about to close up.

Controlling energy, controlling health care, controlling every financial transaction, it's like three nets of oppression, isn't it?

Wow, that's incredible. Now, that's 74 percent of what used to be private a couple of years ago has been nationalized, or at least under heavy national regulation and control?

Now, is that based on the amount of revenue that each one-- the size of the business? Is that how you figured it?

Wow, that's absolutely incredible. So just in the last year or two we've seen history being made.

You know, what you are talking about makes all common sense economically. One other thing, and I have heard people talk about this, you can take a look and see that we are not learning from history. You can see that socialized medicine didn't work well in England because you look at the cancer rates there. You take a look at Canada, their socialized medicine system costs them a fortune. When you get sick in Canada, you come down to America to get medical care. And you can see examples.

You can see examples of it not working in Massachusetts, not working in Tennessee. And yet we refuse to learn from it. It didn't work in the Soviet Union. We refuse to learn. And to some degree, you can say logically we should be smarter than to do all this socialistic stuff.

But there is another argument why it's not a good idea which I have not heard as often. Maybe it's a more emotional argument, but it is true nonetheless. And that is that it's stealing. It's stealing. When the government takes money that it's not authorized constitutionally to take, that it has no moral logical reason why the government should take money and redistribute money, it goes back to the argument between the President and Joe the plumber. And the President made it very clear. He said we think it's the job of government to take money from one person and give it to someone else.

Now, when and where does the government have the authority to steal money from one person and give it to someone else? If I beat you over the head and take your wallet, we call it stealing. But if the government takes your money out of your pocket and gives it to me, is it morally any different? It's still institutionalized theft. And fortunately, our Founders understood that.

They pitched socialism out with Governor Bradford in the 1620s when it was imposed on the Pilgrims by the loan sharks from England. They understood that not only did socialism not work, they tried it. They almost starved under it. They also knew that it was morally wrong and that it was institutionalized theft.

I think that the no work, no eat came a long time before the Pilgrims. As I recall, it was written in the Good Book.

That might have been a direct quote from Scripture, though. So that's good.

We are getting pretty close in time. Well, I am very thankful for the opportunity to share with my colleagues and friends my very deep concerns about the fact that we are doing the wrong things in the economy. And the solution is straightforward. It is cut taxes, cut government spending, and repeal the socialized medicine bill and get back to some sense of fiscal sanity and reduce the number of functions the Federal Government is trying to do. This isn't that complicated. It's been done before. There is all the precedent that shows if we do this it will work. But we are on the wrong track now.

I do thank my good friend from Iowa, Congressman King, who has just been a stalwart of freedom and liberty. And God bless you and God bless the USA.

Mr. Speaker, it's a pleasure to be able to join you and my colleagues and others who are gathered here to talk about something that has been on our minds for some considerable time now--many months, even 1\1/2\ to 2 years--and that is the subject of the economy and jobs and what's really going on in America.

I'm a person who is of that baby boomer-type cycle--I'm 62--and there are many other people such as myself in America that have done a lot of work and tried to save our money and all of a sudden something seemed to go wrong in the economy. We lost a lot of money in 2008, and there is a real concern out there about jobs, the economy, and what's going on in the policies. And so I thought, in that we have 1 hour--we don't have to do everything in 1 minute or 5 minutes, but we have 1 full hour today--that I would open the subject. I will invite my other Republican colleagues to join me. You may see some coming in before long. And I want to talk about this whole situation, and because we have more time, I can go back just a little bit.

I would like to go back to how is it that we were kind of cruising along, things seemed to be going pretty well by about 2006 or so with the economy, 2007, and then all of a sudden, in 2008, we really seem to have come to ``grief on a reef,'' so to speak. So what went on?

Well, let's go back to an interesting article in the New York Times, not exactly a conservative oracle. It was September 11--not in 2001, but September 11 in 2003--the New York Times reported this, that there is a new agency proposed to oversee Freddie Mac and Fannie Mae. Well, why would there be a new agency to oversee Freddie and Fannie? Well, Freddie and Fannie were these quasi-governmental agencies, and their job was to help provide Americans with affordable loans so Americans could buy houses.

So here we have in this article, it says: The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Oh, my goodness. So President Bush is saying we need to overhaul Freddie and Fannie. They were quasi-private, quasi-public. Why would he want to overhaul? Well, they just had misplaced a few hundreds of millions of dollars and gave people a lot of concern that maybe Freddie and Fannie were not in good shape economically. Well, then the question becomes, if they're not in good shape, what would that mean? Well, that would mean, guess what? The American taxpayer may be asked to bail out Freddie and Fannie. So the President is saying, Hey, I need some more authority to make sure that Freddie and Fannie don't do some dumb things that cost us a whole lot of money. So that's what the President is saying in this article. Again, this is 2003.

Following that, we read further in the article, and we have another interesting situation here where we have the gentleman now who is in charge of trying to fix these Wall Street institutions, that is, our current Congressman Barney Frank. And this was his statement in the same article in 2003: These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.

So this is something we have a clear party line difference. The President is saying Freddie and Fannie are not managing things properly, they were a risk to our economy, and you have a Democrat, who is now the ranking guy on this committee, that's saying, no, they're fine, Freddie and Fannie are just fine.

Well, of course, hindsight is always 20/20. It was obvious that what was said here by Congressman Frank was completely wrong. Freddie and Fannie were in trouble. They did mismanage things, and they have now been taken over by the Federal Government, more or less. And guess who has to pick up the tab? You guessed it. The American taxpayer.

Now, how did this whole situation develop and what happened? Well, part of what happened was people came to the conclusion some number of years ago that it would be nice if people could get loans to buy houses. And what happens for the people who don't have very good credit ratings? How about the people who are a bad security risk? What are we going to do with them? Well, we're going to say, You can get a loan, too. That's what he's saying in terms of affordable housing.

So somehow, in the name of compassion, we came up with this idea that the government was going to allow people to get loans and not check whether the person had a capacity to repay the loans. And at the height of the big bubble that was going up on home prices, just about anybody, regardless of their credit rating or anything else, what job they had, could go in and get a loan to buy a great big house. And it worked pretty well for a couple of years. You could go in, buy a house, and then wait a couple of years. The price of the house would double, and you would sell it and buy some other big house.

And you could pyramid your money up even though you were borrowing money and you didn't have any way to pay it back, because these loans were so good you wouldn't have to pay anything for a number of years at all. You could get a loan that would say you don't have to pay anything for a couple of years at least. So you could buy something. It would appreciate. You could sell it, and then move on and do that. And so people were starting to do that with houses. The trouble was, of course, that the bubble burst, and all of the house of cards came tumbling down.

Now, we understand what caused the problem originally was the concept that the government requires the banks to make loans to people who can't afford to pay. That's a bad policy, because when people can't pay, somebody's going to have to pick up the tab. And guess what happened? You guessed it once again. It was Uncle Sam passes it on to the taxpayer to pick up the tab for this failed policy.

So you want to ask, How did we end up with this 10 percent unemployment? How did we end up with a very weak economy? How did we get into this trouble? The trouble was caused, about 90 percent, by the U.S. Government. It was caused by people who meet in this Chamber and various administrations.

At the end of the Clinton administration, the Clintons decided that what they were going to do was to increase the percentage of those bad loans that banks had to approve. What did the banks do with them? They passed them on to Freddie and Fannie. What happened to Freddie and Fannie? Well, Wall Street sliced and diced the loans up and sold them all over the world, and Freddie and Fannie then get into a big problem.

Now, what was the political organization that forced all of these loans to be

made to people who couldn't afford to pay it? You guessed it. It was ACORN. ACORN was involved in a lot of voter fraud, but it also was involved in forcing banks locally to take loans that they shouldn't have taken. So this is a piece of what happened.

The other piece was the policy of the Federal Reserve. Because of the recession that we came into in 2001 when I was first elected, the Federal Reserve decided to increase liquidity. But particularly what was happening, Greenspan decided to reduce the interest rate. Now, this idea of increasing liquidity is the equivalent of the crack cocaine of economics. What it is is it's a government--in the old-fashioned world, you would say the government is running the printing presses.

Well, that's what we did. We ran the printing presses, but we also reduced the cost of money to very low, to about zero percent, and held it there for some period of time. By dumping lots and lots of dollars into the economic system, people that had the dollars go, Hey, I'm getting these dollars for a very, very low interest rate. What can I invest in? Hey, why not invest in the housing business, because housing prices are going up like a rocket. I can borrow money at a couple percent, or even less, and I can double my money, almost, in the housing business in a couple, 3, 4 years. So why not do it?

Well, everybody did for a while until this very low interest rate, the high level of liquidity, and boom, you get another bubble. It's like the high-tech bubble, because we're using liquidity to try and pull ourselves out of problems. We'll come back to that in a little while.

So what was it that really caused the economic crisis? Well, first of all, it was lousy policy set right here in Congress about making loans to people who couldn't afford to pay them and then not holding Freddie and Fannie accountable for what they're doing. And by doing that, we ended up with the beginning of the recession.

Now, following that, we start to go into recession. The idea then was, just in Bush's last year or so and when I was here, we had Paulson come to us and say, Hey, look, everything's in trouble. You guys have got two choices: Either the entire world economic system is going to melt down--I mean, the Earth is going to crack. Hailstones are going to come from heaven. I mean, it's going to be terrible, and there's going to be riots in the streets because the dollar bill won't work anymore and the banking system will collapse--or your other alternative is, give me $700 billion in unmarked bills in a brown paper bag. Those are your two choices, Congress, and we're going to the public and letting everybody know. And if you do the right thing, hopefully there will not be this terrible calamity.

And so Congress was supposed to give $700 billion to Hank Paulson. Well, did he really need that? No, he didn't need it. In fact, it was part of the same mistake that we make frequently here, and that is that every time there's a problem economically, the government has to jump in and fix it, bailout fever. And this was, of course, the beginning of the big Wall Street bailout.

Unfortunately, some Republicans supported that idea, along with most of the Democrats, and we took $700 billion away from the American taxpayer to buy these supposedly troubled assets that had been created by Wall Street. Well, it's pretty hard to buy something when there isn't a market in it, so we took $700 billion out of the market--about $350 supposedly spent during Bush's last year, another $350 in Obama's first year--and that was the beginning of our big spending. And again, it's based on this concept that the government should jump in and fix everything and that the government is going to be able to fix the U.S. economy. That turns out to be a troubling assumption, and it continued to get us in trouble over the last year or two, which has then made the economic situation even worse.

The next thing that happened was, after we did this Wall Street bailout, we decided that what we had to do next was a stimulus package. The proposal was that we're going to do this stimulus. Now, the whole concept of stimulus is pretty much like the idea of, if you had a pair of boots on, what you're going to do is to reach down, grab your bootstraps and lift hard, and if you lift hard enough, you can float around the room. And this is the concept in economics that was known as Keynesianism. It was the idea that if the Federal Government just spends a whole lot of money, it will make the economy better when you have a tough economy.

If you think about that from a commonsense point of view, picture you're trying to run your family and you realize, hey, there's really some economic problems our family is having, so the solution is go out and just spend money like mad. Now, would you think that would be a very smart idea? Well, most commonsense people--certainly people from my State, the State of Missouri, would say that's not very smart just to go out and spend a whole lot of money. Has that idea been tried before? Well, yes, it has. It was tried by Henry Morgenthau back when Little Lord Keynes was first proposing this theory. It's a lovely theory if you're in government, because the theory says you can just spend lots and lots of money that's not your money.

People in politics think that's nice because people like it when I spend lots of government money. The problem is that Henry Morgenthau, who was Secretary of the Treasury under FDR, managed to use this policy to take a recession and turn it into the Great Depression. And so he came, at the end of 8 years, before the House Ways and Means Committee here, and Henry Morgenthau says that we have tried this theory of spending money. We've spent and spent and spent, and we have not seen any change in unemployment. We have terrible unemployment and a huge debt and deficit to boot. So this is the guy right alongside with Little Lord Keynes that said this didn't work. We tried it for 8 years, and it just created the Great Depression in America.

We should learn something from history, but, no, we decide what we're going to do is we're going to come up with the ``stimulus bill,'' another 700-and-something billion dollars, $787 billion. And here we have our new President here. He says, like any cash-strapped family, we will work within a budget to invest what we need and sacrifice what we don't. The things on this side of the chart sound pretty good. If I heard somebody say that that was my President, I would say, Hah, this is a pretty good idea.

This is what the President said at the beginning of the year.

The only trouble is there is this huge gap between what is said and what is done. So what we do, we start with: Is it any real serious budget reform? No, it is not really budget reform at all.

In fact, what has happened in terms of the Federal spending? Have we learned anything after the stimulus bill? What should we have learned from the stimulus bill? Well, we were told that if you do not pass the stimulus bill, if you don't pass it, here is what is going to happen, so you better look out. If you don't pass the stimulus bill, that is what is going to happen to unemployment, this line here. But if you pass a stimulus bill, here is what is going to happen, it will keep this unemployment down. So we were told that if you don't pass the stimulus bill, unemployment could go as high as 8 percent. And if you pass it, it will bring it on down.

Well, that was all based on this silly idea that if you spent lots and lots of money, everything would be okay. This really wasn't even a good FDR stimulus bill because if he had been doing it, it would have had a lot of concrete in it. It would have been hydroelectric plants and roads. This had much more food stamps and aid to States that overspent their budgets and things like that. So we spent $787 billion on the stimulus bill, and here is what happened. This red line. So you think a whole lot of government spending is going to fix unemployment? Absolutely not. We have already tried it. One more time, if we didn't learn our lesson from Henry Morgenthau, we have another chance. Here we go. Same dumb idea, still doesn't work. You can try it as many times as you want. It is not going to work. So the unemployment now jumps up. In many places it is more than 10 percent. These numbers are pretty conservative. If you have been looking for a job for more than a year, you are not counted anymore in these statistics. So people without a

job for a year--maybe some have given up in despair of ever getting a job--they are not even counted in these numbers. So this idea of a whole lot of government spending didn't work, and so we have unemployment.

I am joined by a good friend of mine, Dr. Price, who is really on top of some of these things. I would ask if he would like to join in the conversation a little bit here this afternoon.

Right. If we didn't pass it, 8 percent.

Don't forget the trillions. We are working on trillions right now.

Right. You know, I appreciate your bringing that up because one of the things that Americans intuitively understand, they are not really buying this idea that by spending tons of money the Federal Government is going to make everything better. Maybe some ivory-tower people, but most people on the street know that doesn't make any sense.

They also know we as Republicans did the wrong thing; we spent too much money. And the worst year in terms of spending too much money was Bush's last year in office and our deficit was $459 billion. That is this box here. The reason it is red is because this is when the Pelosi Congress took over, so it was George Bush with the Pelosi Congress. And of all of the years that President Bush had spent too much money, this was his worst year right here. We follow that up with 2009 and this $459 billion jumps to $1.4 trillion. Now when you really think about it, that is really a tripling of the amount of deficit.

It seems like people think politics is complicated, and all this economic stuff is complicated. It doesn't have to be nearly as complicated as people think it is. For instance, take a look between the parties. The Democrats, their basic idea of a solution to a problem is that the government has to get bigger and spend more money. That's the way they always look at it. They think that the solution is the government, and we think that the problem is the government. This thing here is an indication that with a completely Democrat House and Senate and President, this is what happens. We triple this amount of deficit to the point now when the Federal Government spends $1 today, 41 cents of that $1 is borrowed.

Aside from this just insane level of spending money that we don't have, which is basically taxing our grandchildren--I have some grandchildren, I've gotten old enough, and I don't like the idea of taxing them any more than paying taxes myself.

My background is engineering and the manufacturing business. You know, this idea about unemployment is not that complicated. It is really very basic. Anybody who has tried to run a little lemonade stand knows more or less how businesses work. What I have done, I have created a list that if you want to kill jobs, if you want to declare war on business in America, these are the things that you want to do to create unemployment. And the tragedy is we are doing all of the things that are well calculated to create unemployment.

Now, I guess the good news is that the jobs that would have been created here by American businesses and American ingenuity are simply going to be done in plants that are overseas, and so those jobs go to other countries. We will still use our intelligence. In my own city of St. Louis, we have a guy who is the president of Emerson Electric, it is a big company, and it has all kinds of divisions and it has all kinds of technology. They create tons of jobs. The president of Emerson says, Look, when you do all of these things to us, you are forcing us. We will still grow. Our stock will do well. We will create jobs, it just won't be jobs in the U.S., they will be somewhere else. So what do you do? If you think about this, it is not very complicated.

The first thing is, if you have a tremendous amount of uncertainty, you don't know what nutty thing the government is going to do next; if you're a businessman, you're going to say, I think I'm going to hunker down. I'm not going to make any big decisions because I'm not sure whether the last couple of dollars I have in reserve I am going to need for some other harebrained idea that these guys in Washington come up with.

So if there is economic uncertainty of any kind, that is going to tend to undermine job creation. And then if there is a slowdown, that is what we have been seeing, that doesn't help because you don't have the orders coming in. And here is the big one, excessive taxation, because what President Obama has promised is that he is going to tax those people in the $250,000 bracket. Well, I'm glad he is going to do that because I don't make that much money, so I don't need to worry, right. Oh, no, I do need to worry. I need to worry because the people who are making $250,000, a lot of those are the guys owning these small businesses that make all of the jobs. And the guy who is making $250,000, you say, I don't feel sorry for him. But you better, and here is why: because that guy is going to put that money back into his business to put a new wing on a building, put a new machine tool there, or develop a new process. Which is going to hire more people. So if you kill him, if you take all of his money away through excessive taxation, he won't invest in his business.

The President says here that families across the country are tightening their belts and making tough decisions, the Federal Government should do the same. Yes, we should do the same, but what are we doing? Let's take a look at the policies: Wall Street bailout, $700 billion; stimulus package, another $700 billion; then in this House we passed that goofy cap-and-tax bill which is going to put the government in charge of trying to reduce CO2 in the country by making the Federal Government in charge of all of the building codes for houses. You can't even add an addition to your house without making sure that it is safe from a global warming point of view. And there goes another number of billions of dollars in taxes. And then, of course, socialized medicine that we just got done with, which is absolutely the biggest government takeover. It is one-sixth of the U.S. economy. The government can't run Medicare and Medicaid and keep them in the black, so what are we going to do, take over all of health care?

The families are tightening their belts, so what is the Federal Government going to do? They are just absolutely going to go on another spending spree. So what does that do? Excessive taxation. What's that do? It kills jobs. What does that do? It takes away freedom because it makes you little and Big Government big.

Here is a question for you. Thinking back about what phenomenon in all of human history should human beings be most concerned about, should it be the problem of war or should it be the problem of Big Government? It is an interesting question. Why do we have this faith, why do the Democrats have this faith in Big Government? Is there anything historical to suggest that they are a solution or is it more to suggest that they are a problem.

A little island in the Caribbean, come on down. A big hospital and a landing strip.

In expectation of this thing. So what you are saying is really not very outlandish, from a commonsense point of view. It is not like you are speculating and saying this thing is not going to work.

We have seen European socialized medicine. We have next door the Canadian socialized medicine model. And I think it was about 10 years ago the head of Canada, their prime minister said, We have got the best health care system in the world, as long as you are healthy. It was that little ``as long as you are healthy'' piece that is the problem. If you are not healthy, you go down to America to get it taken care of. So we have seen it not work in Europe.

I am a cancer survivor. I see what the cancer rate statistics are in England. I don't want to be a cancer guy in England. I wouldn't want to be a cancer guy here. So you see it hasn't worked in England, it hasn't worked in Canada, as well as our system currently works.

Then, of course, we saw Massachusetts and Tennessee take bold forays into this socialized medicine field, and they got hammered by it. So what do we do? We do the same dumb thing.

I was going to jump to something even more basic, though, if you think about it, and this was a statistic that kind of surprised me-- some of them are in the Congressional Record--and that was the number of people that were killed by their own governments.

If you take a look, you know, at the good old communists. You look at Stalin, he basically had murdered about 40 million people. Now, he was pretty good at murdering people, but not nearly as good as Chairman Mao in China, who has credit for killing about 60 million Chinese.

Now, this is government-on-citizen crime. This was not a war. In fact, if you add just the people killed in various communist countries that killed their own population, the governments killing their own population, you have more people killed by just communism alone than all the wars in history since the time of Christ.

So the question is, is it really rational for human beings to put so much trust in government? That is not talking about Nazis or the other types of dictators that killed lots of their own citizens.

So why do we have this great faith in government, when we see it doesn't work for health care, yet we have the government in charge of that? We are putting government in charge of student loans and in charge of insurance for flooding, and we have got the Federal Government in charge of housing and in charge of education. We have got the Federal Government in charge of car companies, insurance companies and all.

Let's see, the Soviet Union, what was their model? The government was in charge of, well, let's see, education, health care, your house, your food and your job. It didn't work for them. Why do we want to do the same thing here?

And that is really what you are saying, is basically you are losing your freedom; a little bit here, a little bit here. You are losing your freedom, and pretty soon you feel frustrated, you feel angry, because you have some common sense, and you know what it takes to make jobs, and we are doing all the wrong things.

But there are so many people on the street, and they are looking to you, they are looking to me, to try to help turn this thing around and get jobs going. And, of course, we don't have enough votes to turn these policies around.

Another one of these things that is really tough on jobs is insufficient liquidity. What that means is that a business needs to be able to borrow money. But the banking regulators are so tight now that a lot of businessmen can't get the loans they need to make their business go.

Of course, excessive government spending, we have been talking about that, and excessive government mandates and red tapes. Boy, talk about that. And this health care bill, of course, is leading the charge and damaged all these areas. And the end result is what? Well, unemployment. Not a big surprise, particularly, because we are doing everything wrong.

And yet here is an interesting question. Apparently what is happening is Wall Street seems to be doing a lot better. Is it because we have turned these bad policies around and are doing the right thing in D.C.? No. We are still doing everything wrong, and yet Wall Street seems to be doing better. Well, what is the logic of that?

Well, you know, to some degree it goes back to that same problem that got us into this housing bubble, and that is the crack cocaine of the government Federal system. That is, they can create unlimited liquidity.

Unlimited amounts of money and very low interest rates. So you have got lots of money with very low interest rates, and it comes down and starts to create these bubbles. So we really haven't fixed the job problem.

You are absolutely right, and it doesn't involve the government taking everything over.

We're going to take a break and yield because I believe there is some business that needs to be taken care of.

Mr. Speaker, we are just taking apart a little bit some of what has been happening the last couple of years, why the economy has been struggling some, and why we are having a lot of unemployment and problems. Some people have a hard time understanding why it is that we are having a hard time. This little cartoon kind of comes along the same lines.

``Now, give me one reason why you are not hiring.'' And you have coming into the China shop a couple of bulls. You have the health care reform and the cap-and-tax and the war on business tax. That is basically businesses getting just hammered with taxes.

Of course, the picture here is we are not doing the right things that we need to be doing to keep the economy going and to create jobs. In fact, we are creating a perfect storm. People have said we have a war going on business, and we really do. We are doing everything wrong to try to create jobs and try to get the economy going.

So, on the one hand, we are making the statement here that families across the country are tightening their belts and making tough decisions. The Federal Government has got to do the same. What is the Federal Government doing? Oh, we are doing the Wall Street bailout, we are doing the stimulus bill, we are doing the cap-and-tax bill, we are doing the socialized medicine bill. And now we are proposing institutionalizing bailouts, so that anytime anything goes wrong, the Federal Government takes your tax dollars and goes in and picks the winners and losers and bails companies out. That is exactly the wrong message.

I am joined by a good friend of mine from the wonderful State of Pennsylvania, and I would yield to him just a moment to share along the same line.

Get him a job, yes.

Do you think people want to be bailed out? Do you think people want their unemployment to be extended? Would they rather be sitting being unemployed, or would they rather have a good job with really good prospects and a bright future? I think people would rather have a strong economy.

The gentleman is right. I think, if I recall, if you take 500 employees or less, that is 80 percent of the jobs in America. So 500 employees or less, which 500 is kind of more of a medium size, but 500 down, that is 80 percent of U.S. employment. So policies that affect those small businesses are a big deal in terms of jobs.

I would like to stop you for a minute. If I had to pick one on here, because we just had a jobs summit actually on Main Street, back in St. Charles in my district. We had to do one on Main Street because everybody talks about Main Street.

I asked a whole bunch of small business leaders--we had probably 30 or 40 of them, and we created a list of job killers, and this chart was made before that time. I asked them to give me their list and then rate them in terms of priority which is the most deadly in terms of killing jobs.

They came to exactly what you said, which is excessive taxation because when you take that tax out of the hide of the owner of the business, you really make it so that he cannot then invest in those jobs. So excessive taxation was the deal.

Of course, what we have done is we have got, what is it, the people in the upper tenth of the income bracket are paying something like, what is it, 50 percent of all of the taxes in the country or something. So we are just hammering these small business owners with taxes. Then we wonder why we don't have jobs. And you have the same experience, I gather.

Of course, you know, that is really kind of a thing. Maybe people feel safe to say, hey, we are just going to tax all those rich guys; don't you worry about all the policies we have got.

Well, you know, when you do that Wall Street bailout where the government is going to pick winners and losers, then you do the big stimulus thing, where you are taking taxpayer money and giving it to States that don't manage their State properly, and you are increasing the number of food stamps and all these other kinds of things that if you want to believe in big government they think they need to do, and then you are going to do this cap-and-tax thing, so everybody's energy cost is going to go up.

Now, the President said, I guarantee you, I am not going to raise taxes on people making less than $250,000, and yet in this Chamber we pass a tax that as soon as you flip a light switch you are going to start paying more taxes.

Now, that's not people making $250,000, that's an average guy that wants to turn his lights on. So you say, well, shoot, we're going to tax the rich guys. The trouble is those rich guys are the ones that are hiring you and your kids.

The thing that's amazing about that to me, I am an engineer by training, and let's assume that all of this global warming supposedly science were all true, which we now know, particularly since East Anglia and the scandal there that all of these guys were doctoring the numbers and everything, but let's just assume for sake of argument that CO2 is really a bad gas and aside from the fact that all of us have to stop breathing because we breathe out carbon dioxide.

Aside from that, let's just assume that that's true. If you really wanted to get rid of CO2 in America, regardless of what other nations in the world are doing, you think this is our moral obligation to get rid of CO2, we could get rid of all the CO2 produced by all the passenger cars in America, the equivalent of that amount of CO2, by simply taking the electric generation that's done in our country that's done with coal- fired plants, we currently have 20 percent of electricity in America is made by nuclear, if we were to go from 20 to 40 percent nuclear, we would get rid of all the CO2 produced by every passenger car in America.

So if you are a Democrat and you really think CO2 is so bad, why not come out here with a couple of page bill saying we're just going to gradually phase in nuclear plants in place of these coal-fired plants, and we would get rid of all the CO2 produced by every passenger car in America. No, that's not what comes out. We come out with this thousand-page bill, 300 pages, passed at 3 o'clock in the morning. People don't know what's in it. There isn't even a copy of the bill on the floor. And we vote for this piece of trash, which fortunately the Senate wasn't dumb enough to have passed. And anybody who flips a light switch would have been taxed. Your State would have gotten a 30 percent increase in electric.

Now, what does that do to jobs?

It just kills jobs. So this excessive taxation, combined with things like amount of government mandates and red tape, this starts to gang up. And one thing on top of the next on top of the next, and you get unemployment.

Go ahead. I didn't mean to interrupt. We're talking about a light switch tax. You were in the business that's getting the wheelchair tax. It's interesting to see what people want to tax. Now we are going to want to tax wheelchairs. That's with that socialized medicine bill.

I think maybe we could get too negative here, because there are solutions to these problems. This stuff is not new. Other Presidents and other people in different decades have dealt with these problems. There is a solution to getting the economy up and going. And the funny thing is it's sad, but the Democrats haven't learned from JFK. JFK had the formula right. He reduced taxes. As he reduced taxes, what that meant was the private sector started to grow. It created jobs. And guess what happened? The government actually got more revenue by reducing taxes, which seems a little bit odd.

But by getting the taxes off the backs of the American public, the businesses prospered when they did. The taxes that were there brought in more revenue to the government than if they hadn't done that. So by cutting taxes, JFK understood that you could get the economy going. Ronald Reagan did the same thing. George Bush II did the same thing. By cutting taxes, you allow private citizens to invest their money. When they do that, it gets the economy going.

The government doesn't get the economy going. All the government can do is to create an environment that helps. So it's not like these problems, it's not like there's no answer and doom and gloom. There are clear-cut answers. That's what's so terribly frustrating when you see our government at war with business and the President saying, oh, we've got to be sensitive to jobs and this and that, and every single policy proposed is destructive to job creation and the economy.

Now, here is the funny thing. Here are the regulations. This is overall economic freedom index. You see America in 2001, here it's sixth. It's already down to eighth. If you take a look at corporate taxes, we are the second highest corporate taxes of any country in the world, behind only Japan. And so our policies are not set to help us with these problems. We are doing all the wrong things.

And yet the economy could rebound. Why would it rebound? Well, it would be a little bit like this. I want you to picture, you've got a weak heart. You've had a four-way heart bypass. You also have diabetes. You also have several other medical maladies. So you're not feeling too super strong. And all of a sudden somebody gives you some crack cocaine, and you feel like you're Superman and you're doing great. Well, that's what's just happened to the U.S. economy.

We're doing everything wrong from a point of view of policy. We're doing everything to kill jobs. But we are doing one thing that's going to make people think everything is okay. And that is the Federal Reserve has increased a tremendous amount of liquidity with a very low interest rate. And that trumps all of the bad policy decisions we have been making. And so you see Wall Street starting to pick up and stock prices starting to go up and all. Why is that happening? It's happening because we have allowed the Fed to create all this liquidity and basically put our economy on steroids. And that's not going to work for very long, and it's not going to fix that unemployment problem. And before long, we are going to jump from unemployment to an incredible level of inflation.

Again, this stuff isn't so rocket sciencey. We know what's the right thing to do, but we are unwilling to do it. We are unwilling to get off the big spending kick. That's what really has to change.

I yield to my friend.

You are absolutely right. 2010 should be a little better year because of a weird thing. And that is the Bush cuts in capital gains expire next year. So if you have any capital gains in something, there is a huge incentive this year to sell whatever it is and get your capital gains tax paid this year at 20 percent because in 2011 it's going to jump to 35 percent. Because you know the Democrats are not going to allow that tax cut to stay. And so you are creating an artificial opportunity for 2010 to look better, when we are going to get hammered in 2011 because everybody's going to sell everything that they have capital gains on that they're going to take that tax hit on.

But here is what's really going on. If you take a look, these are the receipts. This is the money coming into the Federal Government. That's this blue dot. And this pink and red dot is how much we are spending. You take a look at the size of the two, and you are going uh-oh, something's wrong here. And that's why I said that when we spend a dollar, the dollar we spend of Federal money, 41 cents is borrowed.

You take a look over here at our outlays, what's going on? Social Security, Medicare, and Medicaid. Those are the three big entitlements. They are now bigger than all the rest of the spending. I am on the Armed Services Committee. Guess what I am seeing. We are gutting defense. Why? Because we don't have enough money here and we have too much over here.

Now obviously the Democrats are not that worried about balancing the budget. They are spending a ton on all kinds of entitlements and bailouts and all that kind of stuff. But sooner or later with this amount of entitlement, this amount of defense, we are going to pick up the other problem, which is we are not going to be able to defend ourselves. And you are seeing severe cuts in defense spending now, particularly missile defense and our offensive weapons, which have always been the thing that have kept Americans safe.

All of these problems don't stay tightly inside a box. One thing spills over into the other. But these huge outlays of big government have got to be brought under control for our Nation to survive. And just another infusion of running the printing presses and dropping the interest rate, that crack cocaine works for a little while, but it comes back with a whale of a hangover.

The trouble is that it's people in your and my district that are going to get hung with the cost of this deal. They are the ones that are struggling to make ends meet. They are the ones whose families are having a hard time. They are the ones that are getting taxed out of house and home. And they are the ones that are saying, I don't trust what Washington, D.C. is doing. I don't trust what Wall Street is doing. I don't know what to do with the last of my savings that just shrunk out from underneath me because of all of these policies.

We have to get back to some sanity and do the basic things that work. We have got to stop taxing the people who run the businesses. We have to get liquidity to business owners so that they have money to invest. What we have to do is to stop all the red tape. We have to basically change the banking rules so that there is some liquidity that way. And particularly, we have got to get off of the big spending. We just can't keep running this kind of deficit. This is just something that will not work mechanically. And so we are going to have to make some tough decisions. What we are going to have to do is let free enterprise work again, because that's the thing that pulls us out of this mess is good old American freedom, just allowing the U.S. citizens to be unfettered, have a chance to keep some of what they make, invest in their businesses, invest in Americans, and stop this whole sort of covetousness idea that any time somebody makes any money, the government's got to take it away from them.

If we want jobs, if we want a strong economy, and if we want money for the government to be able to spend to pay the government's bills, we are going to have to allow freedom to flourish in America instead of trying to stomp it out, which is what we are doing. We are following the failed model of the Soviet Union, and we are stomping out freedom.

Thank you, gentleman. I really appreciate Pennsylvania for sending GT down. It is a treat to serve with you.

Thank you all.

Madam Speaker, today I recognize and pay tribute to Major Speros Koumparakis, United States Marine Corps, on the occasion of his transfer from the liaison office. I, and many other members of this Chamber, have had the pleasure of working with him over the past 3 years that he has served as part of U.S. Marine Corps Office of Legislative Affairs and as the Deputy Director of the USMC Liaison Office in the U.S. House of Representatives.

From his arrival in the October of 2006 to his departure in May 2010, Major Speros Koumparakis has represented the Marine Corps on all matters pertaining to the U.S. House of Representatives. During his time in the House Liaison Office, Major Koumparakis planned, led and executed many of the Marine Corps' most difficult and challenging legislative initiatives and distinguished himself as a leader and as a visible example of Marine Corps professionalism and values. Through his direct and skillful engagement with numerous Members of Congress and Professional Staff Members, he ensured that the Marine Corps' concepts, programs, and requirements were widely understood; resulting in the greatest possible support to the Marine Corps. His initiative, leadership, and tireless efforts as a fellow, legislative liaison officer and as the Deputy Director of the House Liaison Office have had a direct and lasting impact on improving the war fighting capabilities and the quality of life for Marines throughout the Marine Corps. Among his many achievements are:

Major Koumparakis consistently demonstrated his expertise and knowledge by providing timely and accurate information to the Members of Congress and their respective staffs. He was a vital asset for all matters relating to the Marine Corps and their relationship with the House of Representatives. Major Koumparakis' straightforward and professional work garnered the respect of Members and staffers alike. His candor and knowledge were key attributes in maintaining the Marine Corps' superb relationships with the many Members of the House of Representatives.

Throughout his tour, Major Koumparakis personally responded to hundreds of congressional inquiries, many of which gained national level attention. Through his exceptional inter-personal skills and broad knowledge in a wide range of military affairs, he assisted the Director, Marine Corps House of Representatives Liaison Office, in gaining the Members' support for issues critical to the Marine Corps. This exemplary customer service provided the Marine Corps latitude and time to reach appropriate solutions in each case. Major Koumparakis directly contributed to the Marine Corps' high degree of success in these matters that may not have been otherwise achieved.

Major Koumparakis successfully planned, coordinated, and escorted more than 50 international domestic trips for high-level Congressional and Staff Delegations.

These delegations often included senior leadership Representatives, such as the Minority Leader of the House, Chairs and Ranking Members of the House Armed Services Committee and other Committees of jurisdiction. These delegations traveled world-wide and visited heads of state, military commands, and deployed U.S. military personnel. His meticulous planning, attention to detail and anticipation of requirements allowed the Representatives and staff personnel to focus on fact-finding and learning new information to guide critical decisions made by the Members of Congress. These trips enabled our elected leaders to understand both the successes and challenges facing our Marines that could only be gleaned from first-hand observation and face-to-face interaction. These trips led to increased Congressional support for funding the needs of our deployed Marines and led to a greater appreciation and admiration for the sacrifices made by our Marines and their families. The close relationships developed on these trips paid dividends for the Marine Corps in all areas of legislative affairs.

Another example of this Marine's impact on Capitol Hill was Major Koumparakis' having led or assisted in the planning, coordination, and execution of countless events, receptions, and meetings on Capitol Hill. These events included New Member Orientation for the Freshman Congressional Class of the 110th and 111th Congresses which took place both on Capitol Hill and in Williamsburg, Virginia; Four Marine Corps Birthday Cake Cutting Ceremonies with the U.S. House of Representatives; countless House Armed Services and House Foreign Affairs Committee hearings and events, promotion ceremonies, awards ceremonies, retirement ceremonies, and guided tours of the Capitol. He also scheduled and facilitated several hundred office calls for the leadership of the Marine Corps to include the Commandant of the Marine Corps, Assistant Commandant of the Marine Corps, the Sergeant Major of the Marine Corps, and numerous other General Officers conducting business on Capitol Hill.

Utilizing his particular expertise in Communications, Major Koumparakis was instrumental in designing and implementing an engagement tracking system for use within the liaison office shared drive. His efforts digitized a complex and cumbersome system and enabled all liaisons to have easy access to shared information, allowing them to focus on their work and create unity of effort in the office.

In addition to the administrative requirements of the Marine Liaison Office, Major Koumparakis was instrumental in leading the planning and execution of the Capitol Hill Running Club for the past two years. This club met several times weekly, preparing hundreds of Capitol Hill staffers and military personnel to run the Marine Corps Marathon. Due to his hard work, the Club offered the Marine Corps an opportunity to engage with Congressional Staffers through physical training and raised the level of Marine Corps Marathon awareness on Capitol Hill.

On a personal note, Major Koumparakis served as a military fellow on my staff in 2007. Speros was a fantastic addition to our office and was an invaluable resource to me in my duties on the House Armed Services Committee. His smiling face will never be forgotten by me or my staff.

Major Koumparakis, through his dedication to professional, exemplary engagement with Congress has contributed immeasurably to the Marine Corps' solid reputation throughout Capitol Hill. The rapport he developed with Members of the House of Representatives and the Professional Staff Members have made a lasting impression with these Members and Staff and have set the tone for a lasting partnership between the Marine Corps and Congress for years to come. The time he has spent supporting Members of the House has been truly noteworthy. He has made lasting contributions to the House of Representatives.