Floor Statements

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

I rise in support of H.R. 918, legislation to designate the post office in Jamestown, New York, as the ``Stan Lundine Post Office Building.'' Stan Lundine is one of Jamestown, New York's most steadfast public servants. He served as mayor of Jamestown, as a United States Representative and as Lieutenant Governor of New York. A Jamestown native, Stan Lundine was elected mayor of his hometown in 1970, just 6 years after graduating from New York University School of Law. Realizing his success as a mayor, the people of New York's 39th District elected Lundine to the House of Representatives in 1976. In his five terms as congressman from New York, Lundine continued to focus on labor/management issues. In the Congress, he focused on finance and banking servicing as subcommittee chairman of the House Banking Committee.

After his House career, he was elected Lieutenant Governor of New York under Mario Cuomo and served New York working on housing, technology, and economic development initiatives, as well as training and programming policies. Putting his labor management skills to use, he now serves as a director of the National Forge Company, U.S. Investment Services, and John Ullman Associates. He also serves as executive director of the Chautauqua County Health Network, a group of four hospitals and their physicians dedicated to improving the local health care delivery system in his community.

In recognition of Congressman Stan Lundine's contributions to the country, the State of New York and the city of Jamestown, let us now commemorate his 25 years of public service by naming the post office in his hometown of Jamestown, New York, as the ``Stan Lundine Post Office Building.''

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

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

Today I rise in strong support of H.R. 1218, a bill I introduced to honor the life of Drew W. Weaver by designating the post office in St. Charles, Missouri, as the ``Lance Corporal Drew W. Weaver Post Office Building.''

A resident of St. Charles, Missouri, Lance Corporal Drew W. Weaver was part of the 3rd Light Armored Reconnaissance Battalion, 1st Marine Division, 1st Marine Expeditionary Force.

On February 21, 2007, Lance Corporal Weaver died while conducting combat operations in the al Anbar province of Iraq. As Captain Mark C. Brown noted, Drew was ``known for his enthusiasm and his ability to motivate people around him.''

Drew's contribution to his country was honored by his community when hundreds, maybe more than hundreds actually, showed up for his memorial service and procession. A graduate of St. Charles West High School, friends and family of Drew remember him as an energetic young man who was eager to serve his country. Ryan Hanson, his best friend and a fellow serviceman, said, ``Drew loved what he was doing and was proud of what he did for the Marine Corps.''

As a father of two marines, one of whom has served in Iraq and in Fallujah, it is a privilege to stand here today to honor one of our fallen soldiers. Drew's commitment and dedication to his country is a shining example of how our military men and women are the finest our Nation has to offer. His and his family's sacrifice should serve as a reminder to all that the freedom we enjoy as Americans is not always free but the result of tremendous bravery and selfless service of men and women willing to put themselves in harm's way for freedom's cause.

As Reverend James Benz noted during Drew's funeral, ``I think we can learn from them that the freedom we enjoy in this country is precious, that it is special, and that it must be preserved sometimes at great personal cost.''

Our Nation will be forever indebted to Lance Corporal Drew Weaver.

Mr. Speaker, I ask that my colleagues join me today in honoring Lance Corporal Drew Weaver. Vote ``yes'' on H.R. 1218.

I yield back the balance of my time.

Mr. Speaker, we have a number of interesting topics that we are going to be talking about tonight, and even a little bit of a challenge question for people who are feeling imaginative and innovative, and it is a strategic question about some votes that are coming up tomorrow on the floor. It should be very interesting.

Joining us first off this evening is my good friend, Congressman Pitts, who hails from Pennsylvania and has come up with quite a barrage of different colorful charts here. I don't know, it looks like some part of a critical measurement of somebody's life expectancy or what it is, so I am going to yield time to Congressman Pitts, who has been a Congressman for a long time, highly respected, from Pennsylvania. I yield the gentleman time, and I would like you to tell us a little bit about what you graphed here, because they are quite interesting.

Reclaiming my time. I think what you are saying is you are really putting a whole lot of information in one picture. Aren't you?

The white dash lines are transitions in terms of the Presidencies.

The blue color represents the Democrat color; the red is the Republican color; the hash marks is a mixed bag, you have got Republicans in one body and Democrats in the other. So now you have got basically a whole timeline going, what is it, close to 20 years or so?

Go ahead. Proceed.

Reclaiming my time, gentleman, it sounds like to me this is stock market advice that you are offering today. What you are saying is if you see the Republicans in charge of the House and the Senate, then go buy some stocks. Is that what you are trying to tell us?

Reclaiming my time, that little yellow line is so close to the edge that the first time I saw that, I just about missed what you are saying. This looks like some sort of science fiction thing. Let's go through it.

If you add up the yellow bars between those two sets of dotted lines, which represents the 8 years of the Bush years.

And that President Bush was being beat up because the Republicans were spending too much money. Now, was that true?

I voted against a lot of that spending. But now reclaiming, and taking a look at that chart, what you are saying is if you add up all of those Bush deficits together, how does that compare to that huge jump that you see this year?

More than all 8 years of Bush. You add all of the 8 years, and you are saying in this year--is this 2009?

You are saying that, in 2009, we have more deficit we racked up than all 8 years of Bush?

My heart might not handle that.

I notice we have been joined here by Congressman Rooney from Florida, who is bringing a little bit of southern perspective on these charts.

I yield to Congressman Rooney.

What just occurred today made it pretty obvious why we needed to be saying ``no'' to that big porkulus bill; because it had, just as we knew it would, all these little things hidden in it. We are going to be talking about that. We are going to be talking about some of the things that were hidden in it that were just announced on ABC News just recently.

We have also been joined by a doctor, we have increasingly a number of doctors in this Congress, the good Dr. Cassidy from Louisiana.

I yield time to Dr. Cassidy.

Reclaiming the time here. I recall standing not very far from where I'm standing right here on the floor of this House and hearing the President make a promise. And I felt good when he made the promise. He said, ``I'm not going to tax anybody who is making less than $250,000.'' And I sort of slumped back in my chair and said, ``well, at least he missed me.'' Now we are talking about cap-and- trade. And what he is going to do is he is going to increase the energy costs on every household across our country. It doesn't make any difference how much money you're making. If you're using electricity or burning fuel, you're going to get zapped. And the average is $3,000 per household. When you see that big yellow line, that just isn't a big old line on a graph. We are talking about families in America in all of our districts getting saddled. And this is just one proposal. This is just ``cap-and-trade.''

Certainly.

The gentleman from Florida, Congressman Rooney.

Reclaiming my time. We have shifted the topic here just a little bit. But I think it is very important. And you're making excellent points.

What I'm hearing is we are talking about taxes. Let's just talk a little bit about an average guy that has a small business, because 70 or so, depending on how big you call a small business, 70 or 80 percent of the jobs in America are in small businesses. So let's talk about the average guy in a small business. First of all, most of them are making or have a $250,000 income. So starting right off the bat, we are going to tax these guys, because they are the rich guys.

They are the ones making over $250,000. So first off, we are going to tax the very source of 70 percent or 80 percent of the jobs in America. Then we are going to whack them with a tax on energy, first in their own home, but then in their businesses. Depending on if it is a small job, it may or may not be an energy dependent kind of business. So we are going to hit them again. Then we are going to hit them again by allowing the dividends and capital gains tax cut, which very much helps small businesses, and the death tax, all that is going to be allowed to expire. So now we are going to whack them the third time.

After you get done beating them and beating them and beating them, then what we are going to do is spend money like mad on government programs, which the gentleman from Pennsylvania's chart is showing is unprecedented, we are in uncharted waters, so we are going to vacuum all the liquidity out of the economy so it makes it harder for the small businessman to get a loan and make an investment.

Basically there are a bunch of people that are old geezers like I am. I'm a baby boomer. And you have saved money for years and years and years, and all of a sudden half of your money is gone because of the entire economic crisis which is a result of these kinds of socialistic policies which say that we are going to give loans to a whole lot of people that couldn't afford to pay, and we created this entire loan crisis. The loan crisis then spreads to the rest of the economy. So now you have people who are not very eager to be putting money into small businesses because they just lost their life savings on the stock market. So what they are going to be spending money on is gold bricks to stick under their pillow or other kinds of things. But they are not going to want to take those risks.

We have been joined by my good friend from Ohio, Congressman Latta. Welcome to our discussion.

I yield time.

I yield to the gentleman from Pennsylvania (Mr. Pitts).

Reclaiming my time, there are two general theories going way back in our past in America about what do we do when we start into a recession. One of the theories was started back in FDR's day back in the 1930s.

We started into a recession, and there was a guy, Henry Morgenthau, and he was the Secretary of Treasury under FDR. He had the idea that we will spend a whole lot of government money, which will stimulate demand and get the economy going. People today still talk about stimulating demand by a whole lot of government spending. That guy's name was Henry Morgenthau. So how well did it work? He was joined in that theory by a little fellow by the name of Lord Keynes; a strange fellow. Because of his name, we called it Keynesian economics. And so at the end of 8 years of a tremendous level of government spending, Henry Morgenthau meets in the U.S. Congress in the Ways and Means Committee, and there is a quotation I have which says, ``We tried spending. We spent and spent, and it doesn't work.'' This is a guy whose theory it was you have to spend a whole lot of money. He said, ``It didn't work, and unemployment is as bad as it was 8 years ago. And what is more, we are tremendously in debt.'' The Japanese tried it in the 1970s, and it didn't work for them.

So what is the other theory than this Keynesian idea, the theory you are talking about, sometimes called supply side. JFK, who is obviously a Democrat, did a significant tax cut, and the economy improved. Ronald Reagan, another almost 20 years beyond him, did the same thing. You get this big kick, and then what you are showing there is President Bush. So this has been done a number of times.

The one thing I regret, and you could have assumed from your chart, was that every tax cut is going to produce this improvement to the economy. I think the facts of the matter are it is not every tax cut, but certain specific tax cuts, particularly targeted, as the gentlemen that were guests before were talking about, toward what is going to affect that small business. So the tax cuts that really work are things like dividends, capital gains tax, death tax, and things along those lines because those allow the small businessman to have the liquidity to invest in his own company, and that is what really works.

So it is not like Republicans just say no. It is just what we are saying no to is an absolute runaway train of government spending.

We have been joined by the gentleman from Louisiana (Mr. Scalise).

Reclaiming my time, gentleman, you have moved into a subject that I definitely wanted to get to tonight. I think this is something that our other congressional friends who are joining us tonight, and others, perhaps, would want to understand because this is an extremely exciting juncture really where we are timewise today and tomorrow.

I want to recreate what happened here on the floor less than 2 weeks ago. First of all, we voted for a measure that said when this great big bill, this supposedly stimulus bill, which I somehow call ``porkulus'' bill, when it comes out, we will have 48 hours to read the thousand- plus pages so we have some idea what is in this bill. And everybody on this floor voted that we would have 48 hours to have time to look at what was in this bill. It was $700-plus billion. We are talking about enough money to buy at the rate of--I think of big things because I am on Armed Services, you could buy at the average cost 250 aircraft carriers with this much money that we don't have. And we only have 11 in our country.

Reclaiming my time, so what happens? We vote for 48 hours, the bill comes along and we are supposed to have 48 hours, and we get a copy of it at 11:30 Thursday night; 1,100-plus pages, more than a thousand pages, as you said. So we get a copy of it. And, of course, we have lots of staffers sitting around at 11:30 just waiting for the bill, right. The next day what do we do, we vote on the bill.

Now of course what happened was the Republicans voted ``no.'' There was talk about we are going to have transparency and we are going to have bipartisanship on the floor. Republicans asked, Hey, I thought we had 48 hours? Do we have any way to get our 48 hours?

The answer was: No, we are going to vote on it.

We didn't like that, partly because of the tremendous cost of it, and also because what is hidden in those thousand-plus pages? That brings us up to today.

Where we are today is we find that hidden in this bill in conference, put in according to ABC by Senator Dodd, was an amendment that says that the executives from AIG insurance company, and a lot of them live in his district, that those executives can keep their $165 million in bonuses. Now the public is upset about $165 million in bonuses, and I can't say that I blame them. But on the other hand, they should be even more upset. It is not just millions, you have to look at that letter, it is billions or trillions.

I yield to the gentleman from Pennsylvania.

Reclaiming my time, when you start talking about debt, the public understands one thing; you have a bunch of executives who have run a company into the ground, and then they're picking up $165 million in bonuses for doing it, and out of the pockets of the U.S. taxpayer. The one thing is if you think people are mad now, if $165 million bothers them, when they start looking at the billions and trillions that are being wasted with no transparency at all, they are really going to be getting mad.

We are also joined, I see, by my friend, Congressman Scalise from Louisiana. I will yield to the gentleman.

Reclaiming my time, I like to get right up because we are talking about something that has been happening today. This is on the news. I think this is a very interesting kind of scenario.

So what happened a couple of weeks ago was, first of all, you had this tremendously expensive bill which was called stimulus--that I call porkulus. It came along. We were promised we would have 48 hours, we did not. It came to the floor. The Republicans voted ``no'' on the bill because it was way too much money, but also, we didn't even have a chance to know what was in it. But who did know what was in it? Well, certainly, according to ABC, Senator Dodd knew that he had allowed these executives from AIG to have this $165 million in bonuses for shipwrecking their company. Now what we have going on is we find out in testimony today that the administration knew that that was in the bill; obviously they would have probably had some people scan it before the President signed it.

So now that the President, the administration, was aware that this was in the bill, that the executives were

going to get their $165 million, that it was put in there by a Senator--who, by the way, had a loan for 3 percent on his home, who also got more money from AIG than any other Congressman. AIG gave him over $100,000 in 2008. The only second-place contender was the President. So the President and the Senator both received over $100,000 from AIG. This amendment was slipped into this bill--and we, of course, didn't know it when we voted ``no'' on the bill.

So, what is going to happen tomorrow? I am going to finish what is going to happen tomorrow, and then I would encourage some discussion, because this is kind of like a little case study. Because now the Democrats have put this amendment in, these executives are getting their $165 million, and the public is going crazy. They are mad. They are ready for somebody's scalp. And so we are going to bring a bill to the floor which is going to say that we are going to tax these executives at a rate of 90 percent. Well, that's interesting, isn't it?

We already knew they were going to get paid, and so now we are trying to somehow put the toothpaste back in the tube. We are going to tax a couple of specialized, specifically named people at 90 percent--which, of course, is unconstitutional. How would you like it if somebody could single you out as the only guy on your block and we are going to tax you at 90 percent, but nobody else? It is completely unconstitutional.

So they are going to bring a bill to tax these guys at a 90 percent tax rate, which will make a lot of Americans on the surface think, oh, this is a pretty good idea. And if we vote no because it's unconstitutional--because we took an oath of office to protect the Constitution--- we look like we are defending people getting $165 million for crashing this company. So that's a pretty clever thing to do; it's a good diversion.

I thought it was a brilliant piece of strategy to try to cover the fact that the Democratic Party knew that this thing was in the bill all along, did not take any actions. Now people caught them. Now people are mad. And so what we are going to do is we are going to start this unconstitutional policy of taxing somebody. Now, the question then becomes, what are the Republicans going to do tomorrow morning? That's going to be an interesting question.

I yield to my good friend, the doctor from Atlanta, Georgia, Congressman Gingrey.

Reclaiming my time for a second, you just gave us a number thing. It is hard to keep all those zeros straight. You are saying that we just gave--as I recall the number was $173 billion to AIG. How does that compare to $165 million? What was the ratio?

So a thousand more than this executive pay thing?

That does raise, though, an interesting question. Because here we are, we are in the middle of this whole situation. We understood that there wasn't time to look at what was in the bill. We know that this prominent Senator, that is in the same home as AIG, who has got that 3 percent loan on his house, he has received more money than any other Member of Congress--House or Senate--from AIG, that he put the amendment in to protect those bonuses. And the administration knew that was in there, and yet there is this sort of a mock sense of, hey, we are really upset about this. So what we are going to do is we are going to just ignore the Constitution and tax these guys at 90 percent. And then that puts us in a trick box as Republicans; do we vote to ignore the U.S. Constitution or do we vote to try to make some claim on these guys' salaries?

Reclaiming my time, gentleman, when you talk about consequences, just taking a look at that one bill alone, which was the thing they called the ``stimulus'' bill or the ``porkulus'' bill at $800 billion, $800 billion that we don't have. We only have a 300-ship Navy. We're talking 250 aircraft carriers as the equivalent cost. But let's talk about what the indebtedness of that is. Just that one bill, what that would mean would be nine new aircraft carriers every year. That's just the cost of the debt that we're getting into.

I will yield.

Reclaiming my time, to summarize what we have been talking about in a way, first of all, we're taxing too much; second of all, we're spending too much; and third of all, we're borrowing too much. That's basically the way things are going. We have tried that approach before. We tried it during the Great Depression. It turned a recession into the Great Depression. Henry Morgenthau was the one who made it clear that it hadn't worked.

And take a look at what's going on here in the situation with the jobs that have been lost since the Democrat majority, and you see what's going on is this thing is really going up in terms of jobs lost. Why is that? Well, because small businesses are getting hammered and they're the source of a great number of those jobs. So if we do not have the liquidity and we don't allow the small businessman to keep some of what he earns and to invest in his company, we lose jobs. And this is what's going on. It's predictable. It's happened this way for years, all throughout history. And the solution is straightforward. There is a solution. We don't have to go down this path. But it means that we have to stop spending, we've got to stop taxing, we've got to stop borrowing, and what we have to do is let some liquidity back for the small businessman, and you'll see this job thing turn around.

Mr. Speaker, I rise today in strong support of H.R. 1217, a bill I introduced to honor the life of Peter J. Navarro by designating the post office in Ballwin, Missouri, as the ``Specialist Peter J. Navarro Post Office Building.'' A resident of Wildwood, Missouri, Specialist Peter J. Navarro was part of Company A, 2nd Battalion, 70th Armor Regiment, 3rd Brigade Combat Team, 1st Armored Division. On December 13, 2005 Specialist Navarro was one of four soldiers killed when a roadside bomb detonated near their Humvee during combat operations in Taji, Iraq.

A graduate of Lafayette High School, Peter declined his acceptance at Truman State University so he could join the Army right after graduation.

When Peter returned home for his younger brother's funeral, he was faced with the undeniable risks of serving his country. However, he returned to Iraq telling friends and family, ``They need me there.''

Peter was a dedicated soldier, willing to give the ultimate sacrifice to protect his county and the men and women who reside there. As Peter's father, Jose Navarro said, ``He cared for the soldiers he worked with. He would do anything for his friends. And he told me he believed in what the mission was.''

As the father of two Marines, one of whom has served in Iraq; it is a privilege to stand here today to honor one of our fallen soldiers. Peter's commitment and dedication to his country is a shining example of how our military men and women are the finest our nation has to offer. His and his family's sacrifice should serve as a reminder to all that the freedom we enjoy as Americans is not free but the result of the tremendous bravery and selfless service of men and women willing put themselves in harms way for freedom's cause.

Our nation will be forever indebted to Specialist Peter Navarro. Mr. Speaker, I ask that my colleagues join me today in honoring Peter.

Vote ``yes'' on H.R. 1217.

Mr. Speaker, it's a pleasure to be able to join you and my colleagues here today. Our topic today is something that is on the minds of Americans everywhere. It's the question of our economy, the seriousness of the recession and the steps that we are taking, whether they are constructive or destructive to repairing the financial condition of our Nation, our allies and of the world.

I suppose it goes without saying that the recession is something that's serious. We can look at it in various different ways because it affects each of us in different ways.

We could look at it from the fact that there are people who are husbands that have wives and children, who have mortgages that are due and no job and their bank account, already seriously whittled down, is shrinking even farther.

We have those who have even been thrown out of their homes, those who have lost all of the money that they had saved for retirement, their 401(k)s are becoming 101(k)s. And it has a troubling aspect that we don't have any idea when is it going to let up and what will be the end of this ride, as the stock market goes down and down and people continue to suffer.

One of the things we have heard about over the last 6 years from our

liberal media and from others that are very critical of the foreign policies of America, as we stood up for freedom, was the tremendous cost of the war in Iraq, the war in Afghanistan.

To put in perspective what we are talking about here on this economy, if you were to add up the cost of the war in Iraq, every day of it, and add up the cost in Afghanistan, and the first 5 weeks of this Congress in the stimulus--it was called a stimulus bill, I call it a porkulus bill--we spent more money, what we voted for in the fifth week here, than we spent in all of those wars, all of those years added together. So we are talking about a lot of money, and that's just the beginning.

So I think it's appropriate for us to start out as we should. Instead of being too hasty and jump into things, to stop and just ask ourselves, how did we get in this mess? What policy mistakes did we make and what is our logical way forward?

The good news I have for you, my friends, today is, is that there is a way home. The policies that are necessary to turn this situation around are available to us. History has shown us what works and what doesn't work. So a bright future is available, as it has always been for America, if we make the right choices.

So, how was it that we got here? Well, the story starts some number of years ago, a number of administrations ago, when it came to people's attention that there were certain areas of some cities where you could live where it would really be hard to get a loan to own a house. We felt that it's part of the American Dream for somebody to be able to own a house.

So, we created a couple of groups. One was called Freddie Mac and the other was Fannie Mae. And the purpose of these groups--they were not quite government agencies, but they weren't quite private either. The purpose of them was to be able to make loans affordable to various people.

We also leaned on the bankers in those various communities, saying, As a bank, you have got to write some loans to people. Well, Who are we supposed to write the loans too? Well, People who don't have very good credit ratings. Let me see if I understand this correctly. What you're saying is, You want me to give loans to people, and it may be they are not going to pay the loan back. That's right. The government is telling you to do that.

In addition, as Freddie and Fannie had been created during the last years of Clinton's administration, what happened was that Freddie and Fannie were given legislative instructions saying that they had to make more and more loans to people who couldn't afford to pay them.

And at the time, in 1999, the New York Times had an article that said, Hey, we better look out. This is like the savings and loan deal about to happen all over again. We are about to make the same mistakes we made before. The mistakes were that if people can't pay these things back, then the securities that you package these different loans up-- and that is what Wall Street was doing, was packaging these securities--they won't be able to pay, and we are going to have a big problem because Freddie and Fannie, everybody assumes that the government will back up their loans. And if it's the government that backs them up, that means all of the taxpayers in America are going to be held hostage for loans that were made, and maybe to people that couldn't afford to pay them. And so this article was written in 1999, warning: Savings and loan scandal. Look out. We are starting to do the same mistake we made before, 10 years earlier. But we didn't pay attention.

By 2003, President Bush is also reported in the New York Times saying that what is going on in Freddie and Fannie is a big problem. It could create a whole lot of economic trouble for America. I need the authority to regulate Freddie and Fannie, the President was telling us.

That same New York Times article said that he was opposed by the Democrat Party. In fact, the recent chairman, and this is an actual quote from the New York Times, September 11, 2003, this is in response to President Bush asking for authority to regulate Freddie and Fannie. Now, this Democrat Congressman, Barney Frank says, ``These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee, the man, I might add, who is working on the solution to this problem. ``The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Well, anybody can be wrong. Some people can be terribly wrong. And, in this case, this mistake has turned the entire world economy upside down. And so we have a whole series of these loans.

Now, you all know that what has gone wrong has been that these loans have been in default. But this is what started with the loan business and has now affected all of our economy. So, this is where the problem started, but it has now spread. So we have a recession.

So, the question then is, this is where we got off track. We have the government spending just tons of money to try and turn this problem around, but the question is: How really should we go about fixing it.

And I am joined here in the Congress today by one of our distinguished colleagues, a new Member, from the State of Ohio. Steve Austria has some experience in this area and is rapidly making a name as quite a sober and distinguished Member of our body. And I would like to yield to the gentlemen if you would like to make a comment on where we are and where we should be going.

Just reclaiming my time for just a second, I really appreciate your starting there with the small businesses because a real solution has to take a look at where are the jobs. And small business, depending on how big you make a small business, but most people say 70 to 80 percent of the jobs in America come from small business. So you're starting at exactly the right place.

Forgive me for interrupting, but I yield.

I would yield in just a minute, but I note that my distinguished colleague from Ohio has started on the subject of small business. I recall that what you just said was that there is a certain level of uncertainty among small business owners. And just piggy- backing on that idea, let's just think a little bit about what that uncertainty might be.

First of all, you have got dividends and capital gains, which is about to be repealed. That was something which allowed small businessmen to have more capital, to keep more of their own capital so they could invest that in their own businesses.

What we are going to do is we are going to repeal that tax cut and therefore tax the small business owners because many of them are in the bracket that are going to get taxed heavily. So that is the first thing they have got to be thinking about.

Then we're talking about we are going to be doing this cap-and-trade stuff on any CO2 that is generated. So, we are going to increase their cost of electricity. And then we are talking about going to a socialized medical system, which is going to make medicine more expensive for them. And then we see a tremendous level of government spending, which is vacuuming the liquidity out of the private sector, which makes it harder for them to get loans to make investments in their own companies.

It seems like we are loading the dice against the very people who should be creating the small jobs. So I can understand why they come and visit my good friend from his district in Ohio. But I continue to yield him time.

Reclaiming my time, I'd like to lay a little bit of groundwork, if I could, along the lines, because what you're doing is getting right into the idea of solving the problem. Being an old engineer, I like solving problems.

But I think it's also helpful here, if you will allow me to jump in a little bit, to say that there are two theories that are out there about what do you do when you have a recession. I think most people understand we have got a recession on our hands here, and they realize it's pretty darn serious because there's all these jobs that people have lost. Things are not going the way we'd like to see them go. So, what are you supposed to do in this?

Well, there are two general ideas. One of them was tried by FDR some years ago. It was called Keynesian economics. Little Lord Keynes, a weird little guy, and he had this idea if you get in trouble financially, what you should do is spend like mad and it will make everything okay.

It seems a little bit odd. I think most of the people in your district in Ohio, my district in Missouri, have enough common sense that when you get in trouble, you don't go out and buy a brand new car and run up the debt. You hunker down a little bit. That may be a Missouri term, to hunker down. You know, to hunker down like a toad in a hail storm. Things are getting bad so you're going to save some money. You're not going to spend as much money.

So the idea that when you get in trouble, that you're going do spend money like mad, seems to offend the common sense, I would say, of most Americans. Yet, that is a common political theory.

And so this guy, Henry Morgenthau, he was the Secretary of Treasury under FDR. He had this idea we have got to spend some money. So he does this for 8 years. Unemployment is terrible. It's the Great Depression going on.

In 1939, he appears before our Ways and Means Committee right here in Congress, and this is his statement about their wonderful experiment. ``We have tried spending money. We are spending money more than we have ever spent before, and 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.''

Now, this guy is the father of this Keynesian economics, the idea that can you spend your way out of trouble. That is one theory. The other theory is one that the Republicans subscribe to. This is one the Democrats tend to like and, apparently, are following, even here as we speak.

The other one is what is sometimes called supply side economics. And it's the idea that those 80 percent of those people creating those jobs, the small businesses, the entrepreneur, the investor, and the risk-taker, the people that work and create productivity, those are the ones that you have to empower

to be the engine to pull America forward because government doesn't create prosperity, it either taxes or spends or slops money around, or it creates a whole lot of debt, but it doesn't create anything where it creates any prosperity. It can only move money from one person to another.

And so the other approach is to do as you are saying, gentleman, you have got to work and you have got to empower those small business people. But when you spend tons of money, that takes the liquidity away from the small businessman and you make it so that he can't go. And that is what they did for 8 years. Unemployment just stayed high, and they spent tons of money; and when they got all done, they said it didn't work.

So I wanted to lay that down, because I think people have to understand there are two basic approaches people are taking: One is spend a whole lot of money, stimulate the economy. And the Japanese bought that theory. They tried it. It didn't work for the Japanese for 10 years, and we can't seem to learn from them. And yet, the other theory was tried by JFK, by Ronald Reagan, and it has worked great. And so why don't we do the one that works? I am not quite sure why we are going down the wrong path.

I want to yield to my good friend from Ohio, Congressman Austria.

Reclaiming my time, I think one of the things you alluded to, gentleman, was the fact that what we are talking about is an unprecedented level of spending that we have seen in a very short window. We are a week or two into March. We didn't really come in the first week or two of January, so we have been at this an equivalent of 2 months, and we have been spending some money. We have been spending a lot of money.

I happen to serve on the Armed Services Committee. When I think of trying to put a number on billions of dollars, I tend to think in terms of something that is tangible, like an aircraft carrier. For the Armed Services Committee, aircraft carriers are big and expensive. And we don't want them sunk, so we put ships all around them to protect them. We have got 11 of these. They cost about $3 billion apiece. So you take that $3 billion apiece for aircraft carriers into what we passed out of this House in this porkulus bill, $840 billion. We have got 11 of them. You are talking about a line of aircraft carriers, 250 aircraft carriers. We only have about 300 plus ships in the Navy. 250 aircraft carriers, that is a lot of money that we don't have that we spent.

Now, what you are starting to see in this graph here, this is the deficit. Under the blue lines here, this is deficit under Republicans, 2004, 2005, 2006, and 2007. You see the deficits going down. 2008, 2009, and 2010. You take a look at what is going on to this deficit, and we are talking about deficits unlike anything our Nation has seen historically at all. We are talking uncharted waters here, and that porkulus bill at $840 billion is just part of it. As you mentioned, we had that other Wall Street bailout bill for $700 billion. Half of that we did this year, also. That takes us over $1 trillion. We are talking about some real change here, and a change unlike anything we've seen before. This is the sort of change that the government will have a lot of money, and you and my constituents will have nothing left but change, I am afraid.

I notice that we are also joined by a member of your class, gentlemen, a distinguished doctor from Tennessee, Congressman Phil Roe. I would love to have him jump in.

Reclaiming my time, doctor, I appreciate what you are saying. When you really take a look at where we are here, the policies that we make in this House have a tremendous impact on people's lives. And a lot of

times the people that get hurt very badly, just as the example you are talking about, and all of the other jobs that would have been created by that project moving forward, those people are hurt because of the policies that we made. And people want to say, this is a failure of free enterprise.

This has nothing to do with free enterprise failing. This is a failure of a socialistic scheme to force banks and lenders to give money to people who can't afford to do it. And I assume this was done under the pretense of being compassionate. But I am asking myself, if I am the dad and somebody talks me into a loan that I can't afford and I am getting my house foreclosed, how is that compassionate? I don't really understand that.

We are joined also by another just fantastic Congresswoman, and this is Congresswoman Foxx from North Carolina. She always has a real commonsense point of view, and I would like to have her join our discussion, if you would go ahead and proceed.

Reclaiming my time just a moment, what you said there was a mouthful, but it really makes a lot of sense. What we are doing is robbing the prudent to pay for the prodigal. The prudent and the prodigal.

I think what he is saying in very fancy words is, we are punishing the guy who did the right thing. That is what is going on. In fact, there is a rule of economics; I think it says something that the more that you pay for, the more that you get. So if you pay for people to make bad loans, then you are going to get more of them. I think that is what he is getting at.

Reclaiming my time, that is what is disconcerting. That is why the stock market just gets hammered down, because decision after decision we are making doesn't really make sense, particularly if you look at it from the point of view of the small business person. They are just getting asked to pick up the tab on everything. And aside from having trouble getting credit, the tremendous level of spending is just vacuuming that money, that liquidity, out of the market.

I would like to return to our good friend from Ohio, Congressman Austria. If you would like to jump in, I will yield.

If I could reclaim my time, let's talk a little bit about this because one of the things Republicans get accused of sometimes is that we are just a party of saying ``no'' and that we don't have any solutions. And that is absolutely not true.

What is misunderstood is we just say ``no'' to a whole lot of excessive government spending. But there is a way to solve this problem. And it is the same thing that JFK did and the same thing that Ronald Reagan did. It is called supply-side economics. And it requires investing in these small-business kinds of people. And it means you can't invest in them and fleece them at the same time. This is the new set of taxes that the President is talking about. He says, ``oh, we are not going to tax anybody that doesn't make that much money.'' Well first of all, this cap-and-trade, all of this stuff in the blue, this is a tax that is going to anybody that pays electric bills. Does that seem like rich people? It doesn't to me. But anyway, that small business, one of their expenses is energy. And if you run their energy percentage up, and this will kick it up a good number of percentage, it makes them less competitive. And then you jump to the other side, and we have small businesses being taxed over here. This is not what you do. And if just those of us that are even here gathered on the floor, if we said, hey, okay, wise guys, you make a decision. How are you going to fix this thing? I think we would probably agree the first thing you do is you have to back off all of this Federal spending. And the second thing you have to do is you have to allow enough liquidity and capital to get to those small business people. There are different ways to do it.

I do yield.

Reclaiming my time, thank you for that question.

Maybe I assume too much. Certainly that is what happened. JFK cut taxes. Ronald Reagan cut taxes. And in a very strategic way, President Bush cut taxes and turned around a recession. But here is a point we have to clarify. It is not just any tax cut. One of the things that has been done lately which has kicked this debt up tremendously was the fact that we just gave some cash back to every good old American on the street. It is a nice thing to do if we had the money, but to tax their children and grandchildren in order to give them a $1,000 or $5,000 paycheck, it is nice, but it doesn't help the economy. It isn't that kind of tax cut.

You have to understand it is certain types of tax cuts. And those tax cuts have to have the effect of investing in entrepreneurs, the risk- takers and the productivity-generating sector of the economy. And that is why the dividend capital gains is a big deal.

I will yield.

Congresswoman Foxx, you have a way of making it very straightforward and plain. I like that common sense. I believe we have a couple of guests here that would love to comment on that.

Dr. Roe from Tennessee, why don't you comment on that.

Reclaiming my time, what you said is so important to understand. It is such a basic principle that we should never, never forget what you said here on this floor, and that is that what you tax, you're going to get less of. And what you pay for, you're going to get more of.

I will yield.

Reclaiming my time, you started with the premise, though, that it is not the job of the government to tax people. Particularly in your particular position, you just couldn't tax beyond a certain level, whereas here in Congress, we tax. We just print some more money. And you started with a mindset that, no, you're not going to make life hard on your constituents. You're going to try and find smart things and ways to encourage the private sector to function. And that is something that we should be looking at.

I certainly do yield to the gentleman from Ohio, Congressman Austria.

Reclaiming my time, the proposals the gentleman is talking about are scored by different economists. And they are saying that these proposals are going to create twice as many jobs as the thing that we passed that put us into tremendous amount of debt. The thing that is ironic about that porkulus bill that we passed, billions and billions, as I said, if you want to go with your Cadillac aircraft carrier, you're talking 100 of these things. That is how much debt we created.

And how much of that really went to the Keynesian idea of just building roads and hydro plants and that kind of hard manufacturing jobs? Almost none. It went to things like training people about STDs and AIDS and protecting mice in the Speaker's district that are on an endangered species list, and all kinds of maybe wonderful projects, but they have nothing to do with creating jobs or getting the economy going.

What it has a lot to do with is taking all of the money out of the private sector so these small businesses can't get a breath of oxygen. That is a problem.

We don't like to just be negative, but these bills that we have passed won't work. It is not that we want to be negative. But I am an engineer. You have to say, Did you put enough steel in the bridge? If they don't have enough steel in the bridge, it falls down. This economic set of principles will not work. It has not worked historically. It did not work for the Japanese.

The fact is we have a good set of principles that worked for JFK, for Ronald Reagan, and it worked quite well for us in the second quarter of 2004.

Reclaiming my time, this picture right here does not make the stock market feel very comfortable. There are people who are my age, I am an old geezer, and I am thinking about saving for retirement, and you see your 401(k) become a 101(k), you are not just one to shell out dollars to invest in small businesses, you just had your head handed to you financially, and then you see this kind of level of deficit spending, this is Republican spending in 2004, 2005, 2006 and 2007, and you know what, I don't like the fact that the Republicans were spending and creating a deficit. I didn't vote for that deficit, I don't like it, but there are a lot of differences between these blue lines and these red lines.

These red lines, we have never done anything like this in our country before. These are unprecedented times, and they are unchartered waters. The effect of doing this kind of thing sooner or later is going to come back, and we have to stop this.

I recognize my good friend, Dr. Roe, from Tennessee.

Reclaiming my time, certainly there are some things that could be done that wouldn't cost anything, just along the lines of what you proposed to your local businesses where you saw problems in your local area as mayor, but there is something called mark to market, and there is good opportunity there. We talked about that last year, but we just couldn't get Treasury and the people there to take a good look at this whole situation. The rules needed to be dealt with.

We are joined by a good friend, the gentleman from Louisiana (Mr. Scalise), who has joined us before on the floor. He is articulate, very much up to speed on these topics, and it is a treat to yield time to Congressman Scalise.

Reclaiming my time, you just got my attention. I had seen some numbers, but are you saying that the average family in America, what is this cap-and-trade tax going to be? It is going to increase your electric bill on the electric side?

Reclaiming my time, on top of everything else, you're saying we have another thousand bucks a family in this deal?

Reclaiming my time, that is not even talking about what you are going to do to further bury small business, who are the very people we want to create our jobs.

I see that we are joined by a highly respected congressman, the gentleman from Indiana (Mr. Pence). I yield to the gentleman.

Reclaiming my time, Mr. Pence, you said it so simply. What is that again?

Wait a minute, reclaiming my time, maybe my memory is foggy. I thought I recalled the President saying he wasn't going to tax anybody making less than $250,000, and I kind of almost went back to sleep. I said that's not me, I'm not going to worry about it. Now you're upsetting me.

Reclaiming my time, the budget that we are talking about spends too much, it taxes too much, and it borrows too much. That ought to be pretty close to the title of our discussion here.

I really appreciate the good thinking and the high level of education. We have doctors here on the floor today. Congressman Austria from Ohio, we appreciate you joining us. And Congressman Pence, a solid, conservative, commonsense kind of guy, coming from the heartland of Indiana. And Dr. Roe, this is the first you have joined us, and I am so thankful for your perspective and leadership. You are a medical doctor, and you also literally ran a small government. You have tried and you know what works. That is obvious from your comments today. Congressman Scalise from Louisiana is a regular, and we are so thankful for you.

Spends too much, taxes too much, and borrows too much.

Well, thank you, gentlelady. It's a treat to be able to join you this afternoon on the topic that I think arrests the attention of Americans everywhere, the state of our economy, and what should and could the government be doing about it?

If we just back up a small amount and try to frame the question, we go back to a time, a number of years ago, when there were created these Freddie and Fannie quasi corporate entities. And what happened was, under President Clinton what happened was that they decided they were going to increase the number of loans that were going to be made to people who couldn't afford to pay their loans--which is a little bit of a risky thing. And so we created these entities and we issued a whole bunch of loans to people.

And while the real estate market was doing well, it looked okay on the surface. And then, as everybody knows, what happened was the real estate bubble popped, and now all of a sudden you

have this socialistic kind of policy that was implemented by the Democrats that was supposedly to help people with loans, and now the whole thing is collapsing and people say, well, this is a failure of free enterprise. It's not. It's a failure of another one of these government programs that's trying to take two plus two and get eight out of it. So that's essentially what happened.

If you want to take a look at the New York Times, you can look at September 11, 2003. And you can see what happened in 2003, and that was the President, President Bush at that time, was saying, hey, we've got problems with Freddie and Fannie, you've got to give me authority to regulate these guys. And a Member of the House here, Congressman Frank, said there's no trouble with Freddie and Fannie. A couple of years later it turned out he was radically wrong, and now the whole world is in an economic tailspin because we had these loan programs. Well, that's where we are.

So the question then becomes, what should we do? Well, obviously we shouldn't keep making loans to people who can't afford to pay them. But the other thing that you know in a recession is this; you don't want the government spending too much money. Well, why would that be? Well, because there is an effect that goes on. When the government spends too much money, it's like a big vacuum, it sucks that liquidity out of the regular private sector. And the private sector are the very ones that have to fix the problem.

To get the economy going, you've got to get the private sector going. The government can do anything it wants, it can do handsprings and all this sort of stuff, but the government makes no wealth whatsoever, all it does is spend wealth. It can print money, it can tax people, it can spend money, but it doesn't create prosperity, it doesn't create efficiencies. It simply can hamper the process.

So what's going on here? You've got two basic theories about what you do in a recession. One of them was started by FDR. And he had a guy, this fellow here that I have a quote, his name was Morgenthau. Morgenthau was Secretary of Treasury under FDR--and this is the first theory of what to do. And Morgenthau's idea was, we're going to spend a whole lot of money to stimulate the economy, and that will make everything better--because we're starting to enter into a recession back in the 1930s. And so Morgenthau, along with this Little Lord Keynes--who was a little weird--came up with this idea that they were going to spend a whole lot of money. And so they did it. And here at 1939, after he's done this for 8 years, Morgenthau meets with the Ways and Means Committee, and he takes a look and says, we've tried spending money. We've spent more than we've 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 enormous debt to boot. So that's one theory. The theory is--and this is one that the liberals have always liked because they love to spend money--is if you spend enough money, you can get out of trouble.

It's a little bit like if I were to tell those of you here today, reach down, grab your shoe laces and lift hard and fly around the House Chamber. That's what this is like doing. And, you know, there isn't hardly an American family I can think of that's dumb enough to support this idea, and Morgenthau finally figured it out in 1939. There's not an American family that would say, when you're in economic trouble, go buy a brand new car, spend money like mad because maybe things will be better the next day. We just know intuitively, when you get in trouble, you've got to hunker down a little bit. That's what you do in Missouri, you've got to hunker down and use a little common sense. So this theory doesn't work.

Now, what's the other approach? What do you do when you have a recession? Can the government do anything? Well, it can. What it should be doing is not spending so much money, which is the topic of the congresswoman's discussion this afternoon. We're doing the wrong thing, we're spending too much money. The reason that that doesn't work is it pulls money out of the basic, particularly out of the places in the economy that need to have money in order to create jobs and productivity.

So, you see, jobs here, they had a big problem with unemployment. Eight years of government spending, they still had a big problem with unemployment. Now, what we've done is spent money like mad in the last couple of months, and people say, I'm not sure it's going to work. The stock market is saying, I don't think that's going to work. And history says, I don't think that's going to work. And the Japanese tried it and they say, that didn't work for us. You don't want to go spending a whole lot of money when you're in trouble.

What do you want to do? Well, here's what you want to do. You want to make sure particularly that the small business people have enough liquidity to get their companies going. And so what you want is policies that are going to keep money in small businesses so they will invest because 80 percent of the jobs are in small business. You've got unemployment? You want small businesses going like mad to create more jobs.

And so how do you do that? You let the small businessman keep money so that he can plow it back into the business, create the jobs that create the productivity. You need people who are entrepreneurs and who are inventors and investors. You want those people with the liquidity to be able to get the economy jump-started. And that means the government has got to stop spending money.

Well, what way are we spending money? Wow, we're really spending money. This last thing that they called the stimulus package--I call it the porkulous package--I'm on Armed Services, we deal with things like military things. And one of the biggest, most expensive things in our budget is called an aircraft carrier. We have ships surround them to protect them. We've got 11 of them. They're really expensive and they're really big, and we protect them because 11 of them are very valuable. And they cost about $3 billion apiece.

So what we passed in the House, do you know how many aircraft carriers you could buy for the money we borrowed that our kids and grandchildren have to pay back? You could make 250 aircraft carriers. Can you picture 250 aircraft carriers in a row? That's an incredible number. Or if you want to look at it a different way, you've heard us complain, you've heard the media complain about how big the spending was in the war in Iraq and Afghanistan. Add the spending in Iraq and Afghanistan together totally for both wars, add it up. Well, we spent more than that in the first 5 weeks we were here in Congress this year. That's a lot of spending.

And now here we've got, on top of that, here's the President's tax increases for 2010. And what exactly does this big tax policy do? One, this is cap and trade. What this is is global warming, which means your electricity and your power is going to be more expensive. Guess who uses that? Small businesses. This is going to be hammering not only to small people, not people making a lot of money, the little guys. You have to pay an electric bill? You're going to get hit with this tax. This bit about this is just for rich people is baloney. If you have an electric bill, you're going to pay this tax.

And this one over here is on small business. Both of these things affect small business. This is exactly the wrong thing to be doing. Tax increases is not what we should be doing. We should be going in the opposite; we should leave the money in the small businessman's pocket to create the jobs.

And the gentlelady, Congresswoman Bachmann, I really appreciate you taking some time to talk about the economics because this is on the minds and hearts of Americans. I appreciate your sharing a little bit of your time on the floor with me.

I see you have some other distinguished colleagues here that are very qualified to talk on this subject, so I don't want to rattle on too long. But I thank you very much for giving me a few minutes.

I think you're absolutely right. And that is definitely my point. The point is is it was tried under FDR. You can at least say they were trying a new theory of how to get the economy going. And they tried it and it didn't work and he made it clear it didn't work. And now, apparently the Japanese didn't learn too much from our history, so they tried it for 10 years, did all kinds of government spending like mad, and they basically wasted 10 years of the productive use of their own economy because the Japanese knew it didn't work.

And the thing that's ironic is, not only do we know what doesn't work, we know what does work. JFK and Ronald Reagan, both of them did the right kind of tax cuts. The economy turned around. We had long periods of very productive, good economic times in America because they did the right thing. Why don't we use the good example? Well, I think part of the reason is is because we have a mindset now in Washington, DC. that big government is God and it knows better how to spend our money. And we just like spending a whole lot of money, but it's not what's going to make the economy better. And there are going to be more and more of your and my constituents who are going to be suffering because they don't have jobs, they've got mortgages that are too big, and they're really feeling the squeeze.

And it's a shame when you can't learn when history is staring you right in the face. But I really appreciate your putting the focus where it belongs in this excessive government spending. And you can take a look at billions and billions of dollars--and the numbers just seem so big, but when you put it in perspective, the whole war in Iraq, the whole war in Afghanistan, added together, spent by this House in the first 5 weeks of this year, that's a lot of money, that's an awful lot of money. But I do see we have some experts on the floor, and I thank the gentlelady for yielding me time.

Madam Speaker, I'm just delighted to be able to join you here this evening and join my fellow colleagues in talking about some really, really exciting and important topics. The first we're going to talk about this evening is the economy and a little bit of the background on what's going on, where we've come from, where we should be going in the future. The second topic is going to be the topic of freedom.

One of the things that I have a chance to do is speaking to many audiences is to ask them, what is it that makes America such a special place? Why is it that we love our country so much? And our country is so unique in so many different ways. What is the secret to that unique nature of America? And the word that always comes out is the word ``freedom.'' It's right near the front of the tongue for most Americans. We're going to be talking a bit about the subject of freedom tonight.

But before we do, we do need to take a look at the economy, what's going on there, and what's happened in the past and use that as somewhat of a guide as to where we should be going in the future.

The economy, of course, works on numbers. And numbers, you can't cheat with them too much. People try to, but the bottom line is, somebody ends up having to pay.

And so what we have here, going on in Washington, DC in the last number of weeks has really been incredible. We've charted absolutely new territory, I think irresponsibly. And we have heard for the last 6 years about the tremendous cost of the war in Iraq, how we're wasting money there every single day. And yet, if you add up the entire cost of the war in Iraq, which we now concede is largely won, you take those 6 years of costs, add them to the cost of what we spent in Afghanistan, add those together now, and it's not as much as what we spent in the first five weeks here in this Chamber in this supposedly stimulus bill. Many people are calling it a ``porkulous'' bill.

And so how is it that the economy got to the point that it would cause people to go into debt so tremendously, spend so much money?

Well, the story really goes back a number of years. It goes back to the Carter administration and really the creation of Freddie Mac and Fannie Mae. What happened was there were areas where it was very difficult for Americans to get home loans, and there were places where banks didn't really want to loan to people for fear that they wouldn't be paid back. And so the Federal Government created Freddie and Fannie, and those organizations are neither private nor public. They're somewhere halfway in between. And so Freddie and Fannie were given authority to help underwrite people's home loans and, actually other kinds of loans as well, but primarily for home loans.

Well, as time went along, various Presidents started demanding that Freddie and Fannie make more and more loans to people who would be considered subprime, or that's a way of saying not as good a risk. And so by the time that we had President Clinton, toward the end of his tenure as President, he required an increase in the percentage of loans that Freddie and Fannie were going to make to people who were considered to be not very good risk kinds of loans. And so, what happened was, you have Freddie and Fannie now underwriting more and more loans, and you started to get a snowballing kind of effect.

At that time, in 1999, the New York Times, in its editorial page reported, I believe it was September, that several people mentioned that this is not safe, that we are starting to create the environment for another savings and loan disaster in America. This is 1999, people were warning that this policy was not a good one.

Was it a free enterprise policy?

People say the reason the economy is bad, it shows the weakness of free enterprise. No, it doesn't. What's created the problem with our economy has nothing to do with free enterprise. It's socialistic programs of government jumping in and telling banks and economists that you have to take loans which we think there's a very good chance people will not pay back.

Well, as the 1999 article in the New York Times indicated, this was a risky thing. As we move forward, we have Greenspan then reducing the interest rate, the economy getting stronger and stronger, the housing market just going up and up and up, increasing at a tremendous rate. In fact, if you looked at its rate of increase historically, you would have to start to worry that it might have been a bubble building.

Well, by 2003 we have President Bush. And President Bush has come to the Congress. He says, hey, this is reported in a September 11, 2003, article, again in the New York Times, saying, I need authority to regulate Freddie and Fannie. We have got big trouble with Freddie and Fannie. They are making all of these loans and if the real estate market comes down some there is going to be the dickens to pay. You have got to allow me to get Freddie and Fannie regulated.

And in the President's request, the Congress, in those days, run by the Republicans, passed a bill to regulate Freddie and Fannie. They sent the bill to the Senate, where it was killed, according to this article, by the Democrats in the Senate.

Now, you have, in that very article that's quoted here, the New York Times, September 11, 2003, this is the Congressman now who is in charge of fixing the problem that was created, basically, another savings and loan type of problem. These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis, said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. 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, in looking out the back window, looking through history, we see,

Barney Frank was totally wrong. Freddie and Fannie are the heart of what has fallen apart and created a world economic crisis. The crisis is created by defaulting mortgages, and as that mortgage crisis has spread and continues to spread in the next couple of years, this is what's been driving the bad economy.

So there's an irony here that the person from the House that's in charge of fixing the problem is the one who created the problem. Maybe there's some humor in there somewhere, I suppose.

So I think we need to correct the rhetoric of various people that say that this is a failure of free enterprise. It's not. It's a failure of a big government program that was poorly managed, and it's like trying to make a dollar out of 15 cents.

You can't give people mortgages when they're not going to pay the mortgages.

Of course, it was more than just the Democrats. I'm not blaming this entirely on the Democrats. It was the start of a failure of Congress. Beyond the failure of Congress, you also had other culpable parties. You had some of the people who were rating, some of the rating agencies--Moody's and Standard and Poor's--and they were rating these mortgage securities that would have been chopped up and sold all over the world. They were rating them AAA. Now, how they could do that with a straight face, I don't know, but they fed again on the Wall Street tremendous level of speculation. So that's how we got where we are.

Now the question is: Now that we've gotten ourselves a first-rate recession going, what are the things that should be done to try to fix the recession?

There are two basic schools of thought on this subject. One of them is known as Keynesianism. It was made popular around the days of FDR. Also, it was something that was very much supported by Henry Morgenthau, who we're going to talk about in just a minute.

I do see my very good friend, Congresswoman Foxx, from North Carolina, a lady who has won all kinds of accolades in the last year or two. We think of her a little bit as the toughest grandmother in the entire U.S. Congress, and if there's anybody who is pretty long in what we in Missouri respect, which is commonsense, Congresswoman Foxx is certainly long in that.

I would yield the floor to you, gentlelady.

Could I reclaim my time for just a second? There's a little, funny story about where this quote came from of all things:

My father is 88 years old. He was reading a flyer that had been sent to him from Hillsdale College, and it was a quote out of a book called New Deal or Raw Deal. It has just been published. So here is my father. He gives it to me. ``Son,'' he said, ``you don't read enough. Here. Take a look at this.'' So we've been using it some, but I yield time to the gentlelady.

Reclaiming my time, gentlelady, what you just made is really an important point.

What you're saying is Republicans do have an alternative, and part of that alternative is to stop spending money, but it seems like some people down in Washington, DC and a certain party have their ears plastered. They don't want to hear that as an alternative, but there is an alternative. It is the same thing that every commonsense household in America is doing, and that is, when you're troubled, stop spending money. That's a good first step, isn't it?

I yield.

Well, reclaiming my time, gentlelady, I think there are a bunch of us--and I'm not accusing you of this--in the baby boomer kind of category who have just seen our 401(k)s turn into 101(k)s. We understand, when the government does things the wrong way, it really can be expensive, and there are different ways. One, as you say, is to tax people. You don't have to pay your taxes. If you don't, you go to the free hotel.

The other alternative is they can, of course, borrow it. Then of course, within that category, we have the other thing that we don't hear much about but which has happened extensively in the last 9 months, which is printing it, a form of borrowing it.

I don't mean to interrupt, and would yield to the gentlelady.

Reclaiming my time, gentlelady, I would like to highlight what you said.

Those numbers are absolutely shocking. In 1930, you're saying the Federal Government was spending three point something percent of the

Boy. Oh, boy. I'll bet you there's a lot of people who would love to see us get back to that kind of a number. Then the tax rate was four something, 4 percent?

Well, I sure appreciate your sharing that with us.

You know, we are joined by another very good friend of mine, Congresswoman Marsha Blackburn. She is one of our great communicators, a lady from Tennessee.

We're just delighted to have you with us, Congresswoman Blackburn, and would ask you if you want to chip in a little bit here in our discussion on where we are economically. I yield.

I would reclaim my time and yield. I'm the one who's supposed to do this.

This is part of the dinner conversation here. Being the father and the guy who serves the food at our dinner table, I would recognize the gentlelady from North Carolina.

Yes.

I would yield to the gentlelady from Tennessee.

Reclaiming my time.

The gentlelady from Tennessee has a very, very effective chart. And what you're pointing out is that we're in uncharted waters. We have not dared to take and swallow this much debt in the past.

I was trying to put some kind of a handle on what we passed just a couple of weeks ago on this House floor on about--I think it was--what was it, $840 billion. Now, I don't make that much money. So I tried to think, Well, what's something big that the Federal Government buys. And because I'm on Armed Services, I think of aircraft carriers. They're bigger than tanks. They're like a whale. They're tremendous. Well, an aircraft carrier, we've got 11 of them. And they're valuable. And we put other ships around them to guard them. And we don't make aircraft carriers very often because they're so expensive.

So let's take the average cost of those 11 aircraft carriers and divide it into $840 billion that we just spent a couple weeks ago-- money that we don't have--and you're talking about 250 aircraft carriers--can you picture that--end-to-end-to-end. This is a lot of money. Or if you want to get one of those kinds of Cadillac aircraft carriers, the big long-deck ones that really do all of the fancy stuff, you're still talking over 100 aircraft carriers. That's money that we don't have that we just spent, and it was supposed to be for stimulus; but we called it ``porkulous'' because there wasn't really much stimulus.

But that's talking about doing some big-time spending following that same old Keynesian idea that if the government spends enough money, that everything will be okay.

To this engineer, that's a little bit like grabbing your bootstraps, lifting up, and trying to fly around the room.

We're joined by another very good friend of mine, Steve Scalise, Congressman from Louisiana. I think you wanted to also talk a little bit about where we are with this level of spending and what's going on with these taxes.

Reclaiming my time a second.

That should send the alarm bells off in people's minds. When you're having not only just a little recession but what's starting to turn into almost a depression and you're talking about huge tax increases, you don't want those two things in the same sentence, I believe.

I yield.

This is something I want to be very clear in our discussion this evening. We're having this, like a dinner conversation.

What I want to make clear is that the Republicans are not just saying ``no.'' What you're saying is, You're doing the wrong thing which will make the economy worse.

Now, what you've gotten to in your chart here is the absolute crux of what has worked in the past to pull us out of a recession. And it's not the government that pulls us out of a recession; it's the marketplace. And it's particularly the entrepreneurs and the inventors and the investors and those small business people. And what do small business people need in order to create all of those jobs--because depending on what you call a small business, you're talking 70 to 80 percent of the jobs in America come from small businesses.

So if you harm the small business guy--even though he may be fairly well-to-do--you're cutting off your nose to spite your face. And what's going to happen when you take $636 billion out of small businesses-- that's the money they need to invest in new equipment, new processes, new procedures and innovation which is going to result in hiring the people that need to be hired.

So what's happening here is this policy is economically crafted to make the problem worse.

I would yield to my colleague.

Reclaiming my time.

I think there must be something wrong with your chart here because I was just on this floor last week, and I heard the President say that nobody making less than $250,000 is going to pay any of these taxes. And I said, ``I'm glad I'm not going to have to pay these taxes because I make less than $250,000 a year.'' And now you're ruining my whole evening by telling me that that isn't true. Is that what you're saying?

I yield.

Reclaiming my time.

You can be making $20,000 dollars a year, and you are still going to be burning some natural gas and using some electricity; is that right?

Reclaiming my time, gentlemen.

You're getting me all upset. You're ruining my entire evening here. But I have a feeling what you're telling us is true. In fact, I know it is true.

I would yield for one minute.

Reclaiming my time.

I think you're a little bit of a prophet, gentlemen, because they were dumping tea in the river in St. Louis this last weekend. I think people are starting to get wise and they're getting upset.

I also am just thankful that we're joined by a very good friend, a very distinguished colleague from this House, Congressman Pence from Indiana.

I would yield time to my good friend. I know that you have very good insights on these issues.

Reclaiming my time, gentleman, what you're saying is we're just not learning from history. It's not that the economy is brand new, there are patterns here. It's not that the Republicans are the party of ``no,'' it's the fact that these solutions don't work and they're going to hurt our constituents, and that's why we get a little excited about them.

I mean, here you have the quote from Henry Morgenthau, he is the guy that, along with little Lord Keynes, came up with Keynesian economics. And he says, After trying it for 8 years, our theory didn't work. Our unemployment is as bad as it was before, and now we're in debt. And what we're trying to say is, don't accuse us of not having solutions, the solutions are there; but don't repeat history's mistakes.

I didn't mean to interrupt, but just continuing to yield to my good friend from Indiana, Congressman Pence.

Just reclaiming my time for a minute, gentleman, what you're suggesting is, one, what's being done is exactly the wrong thing. And if you want a positive Republican recommendation, it would be to do the opposite of that, right? In other words, what we would be saying would be, look, if you've got 70 or 80 percent--depending on how big you call a small business--if that's where 70 to 80 percent of the jobs in America are, you want those small businesses strong. How do you make them strong? They have to have enough liquidity, enough capital to be able to invest in entrepreneurial ideas, to put in more productive assembly lines or machines or processes. So you have to invest, and you have to let that money work for you. And you have to leave it with the small businessman. But if you vacuum it out of his pockets with massive tax increases, he's not going to have the money to invest, and he's going to lay off more people, it's going to make things worse. So the solution is, quite simply, leave more money for the small businessman and back off the spending pedal a little bit.

I don't mean to get overexcited. I want to yield again to my good friend from Indiana, and then go to a wonderful new Congressman from Wyoming.

Well, I reclaim my time. And I would once again thank the gentleman from Indiana for joining us.

We have all kinds of expertise here tonight. And Congresswoman Lummis from Wyoming, my understanding is Wyoming has only got one Congresswoman, if I'm correct.

I yield.

Reclaiming my time, are you saying in a way you've almost got a sneaky cut in defense spending?

I yield.

Reclaiming my time, lady, I think what I'm hearing you say is what we've been trying to emphasize all the way along.

There are a couple of basic things we need to do with the situation that we're in, a situation that was created not by free enterprise, but by failed government programs that issued a whole lot of loans with government guarantees on them that people weren't going to pay. And so we got ourselves in a lot of trouble, but it doesn't mean that it's the end of the world. There are ways to fix these problems.

America has been through a lot of hard times. A lot of people are kind of discouraged right now, but they don't have to be. There are solutions, it's been done before--J.F.K. did it, Ronald Reagan did it, even Bush did it in 2003. You can see the result of the dividend capital gains--the exact effect of what you're talking about, putting money in the pocket of the small businessman--not putting it in, but just letting him keep it, just getting off the taxes on the small businessman.

And look what happens here to gross domestic product. These are the years of Bush before this tax cut went in place. And take a look at what jumps. You go from an average of 1.1 percent to 3.6 year after year because of the fact you did just what the wise woman from Wyoming is saying.

And then if you want to say, well, what happens when GDP goes up? Well, here you go; here's what the job numbers look like; same time period, May 2003, we do the dividend capital gains tax cut. These are all job losses below the line, everything above the line is a job gain. It's an investment just basically allowing a small business, like an engine, to have enough liquidity and money to be able to make it run so that it can create those jobs and put America--and the other chart that we're missing is what happens to Federal revenues. And Federal revenues go up like a rocket because you've got all these people working and the economy going strong.

We are also joined here this evening by Congressman Chaffetz from Utah. And it is just a delight to have you on the floor and to hear from some people out west. So I hope that you enjoy joining our little dinner conversation this evening.

I yield.

Reclaiming my time, last week we voted on what was called an omnibus. It was basically nine budget bills all in a row stacked together. And the result of that, just on the surface, was an 8 percent increase, which if you don't believe in increasing government, why kick it up by eight? That's the largest increase since back in the seventies under Jimmy Carter, Democrat Jimmy Carter. But 8 percent is really what it was because you've got to put all that porkulous money into the budget. When you do that, it's an 80 percent increase in the growth of all of these government programs.

Somebody wrote a little note to me, I went to a Lincoln Days talk this weekend, and they said, the trouble with socialism is is that sooner or later you run out of other people's money. And I thought, that sounds like something that might have possibly been coined out in Utah. It's just common sense.

I will yield.

Well, reclaiming my time, I really appreciate your perspective. And I wish we had a little bit longer amount of time to talk with you because I'd love to get into that subject of freedom a little bit. But I know that we've also got a little Texas wisdom here in the Chamber here tonight, and I just feel like it would be a shame not to yield to Congressman Gohmert from Texas, actually a former judge and a gentleman noted for a good sense of humor as well, and we need a good sense of humor on this subject; so I would yield to my good friend Congressman Gohmert from Texas.

Reclaiming my time, it does my heart a great deal of sadness

to see my friend from Texas without a little bit of a twinkle in his eye, which is so commonly there. But this is a very serious subject. We try not to yell and scream too much about it, but we know that economically what's being done is going to harm our constituents. It's getting rid of jobs. It's making the small businessman have to basically shutter down and to keep his operation small, which is exactly the wrong thing for what we should be doing.

And why is it that we need all of this money? That is the question that I think we need to be asking. Why is it that we have to be spending all this money on government programs? And the answer seems to me to be, again, we're not learning very well from history. Just bear with me for a second. I'd like to get your perspective on this.

A certain number of years ago, there was a thing called the Soviet Union, and they were bad guys. And they were a bunch communists and they were socialists. And what was it that they thought? They thought the job of the government should be to provide you, first of all, with a job, and then they wanted the government to give you health care and food and housing and an education. And one thing particular about them, they didn't want you to talk about God ever.

Now, in our country, let's see, we've got all this government spending going on so the government can provide you with health care and a job and food and housing and an education and it's politically correct not to talk about God because if you did that, gentlemen, you'd realize your rights come from God. Life, liberty, the pursuit of happiness, not big government nanny state. And I just wanted to toss that out to you to see if I could get a response from my good friend from Texas.

I yield.

So reclaiming my time once again, the problem with socialism is sooner or later we run out of other people's money.

That concludes our 1 hour. I just thank all of my colleagues from all over the country joining us tonight. Next week we will try to get into freedom a little more heavily, but the economy is certainly a top topic and that's why we have given it a lot of attention this evening.

God bless you all. Good night.

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

The motion was agreed to; accordingly (at 6 o'clock and 21 minutes p.m.), the House adjourned until tomorrow, Wednesday, March 4, 2009, at 10 a.m.

Madam Speaker, pursuant to the Republican Leadership standards on earmarks, I am submitting the following information regarding earmarks I received as part of the FY2009 Omnibus.

Requesting Member: Congressman Todd Akin

Bill Number: H.R. 1105

Account: Health Resources and Services Administration (HRSA)--Health and Facilities Services

Legal Name of Requesting Entity: SSM St. Clare Health Center

Address of Requesting Entity: 1015 Bowles Avenue, Fenton Missouri 63026

Description of Request: Provide an earmark of $167,000 for the development and manufacturing of a medication distribution system for St. Clare to reduce the risk of medication errors. Essential elements of the system include: medications for each patient which will be kept in the patient's room, medications will be double locked and entry will be tracked by computer for security and narcotic tracking, and there will be a bar code system and a medication administration record on the computer in the room for additional safety and documentation. Associated costs with this request include development and software and hardware costs.

Requesting Member: Congressman Todd Akin

Bill Number: H.R. 1105

Account: Health Resources and Services Administration (HRSA)--Health Facilities and Services

Legal Name of Requesting Entity: ThriVe St. Louis

Address of Requesting Entity: 4331 Lindell Blvd., St. Louis, Missouri 63108

Description of Request: Provide an earmark of $143,000 to expand pregnancy resource services by expanding the facility in which they operate. Expanding physical space by an additional 1,130 square feet will allow ThriVe St. Louis to offer one-on-one counseling for clients and provide a second exam room which could be used for STD testing. The expansion will also give space for volunteers and staff to serve clients effectively, and conduct administrative work and phone counseling. Funding for this request will go towards facility construction, technology and equipment, furnishings and operations.

Requesting Member: Congressman W. Todd Akin

Bill Number: H.R. 1105

Account: Federal Highway Administration, Transportation, Community and System Preservation

Legal Name of Requesting Entity: Missouri Department of Transportation, District 6

Address of Requesting Entity: 1590 Woodlake Drive, Chesterfield, MO 63017

Description of Request: Provide an earmark of $237,500 to upgrade and partially relocate MO Route 141 in St. Louis County, MO and help complete a 33-mile four and six lane north-south connector that will run between I-55 in Jefferson County and MO Rt 370 in north St. Louis County. This project will provide traffic mitigation locally and regionally by serving as a reliever for overloaded I-270, provide safety improvements by diverting traffic away from the entrances to a high school and middle school eliminate two major at-grade crossings (one which floods intermittently) and promote regional business and employment growth. This project received $800,000 in FY05 Appropriations, $2.88M in SAFETEA-LU and $250,000 in the FY08 Omnibus Appropriations Act. The Missouri Department of Transportation will provide a local cost share of 20 percent. This project is also part of the State's transportation improvement plan, is eligible under the account request according to the Missouri Department of Transportation and considered by the State and/or regional transportation official to be critical to their needs.

Requesting Member: Congressman Todd Akin

Bill Number: H.R. 1105

Account: Federal Highway Administration, Transportation, Community and System Preservation

Legal Name of Requesting Entity: Missouri Department of Transportation, NE District

Address of Requesting Entity: PO Box 1067, South Route 61, Hannibal,

Mr. Speaker, through the period of the last 6 years, one of the things we have heard pretty commonly in the media has been the tremendous cost of the war in Iraq, and that every day we hear there are more and more millions being squandered on the war in Iraq. So it is an interesting fact to add up all of the spending in the war in Iraq and all of the spending in the war in Afghanistan and add it together. What you find is that there is less spending there than there was in the first 5 weeks of this new year, particularly with the new stimulus bill.

Well, how is was it that we got into such a fix, into such a problem, that our economy seemed to dictate these kinds of draconian solutions? That story actually starts back some number of years. It goes back to the Carter administration, the Community Reinvestment Act and the idea that there were some people that couldn't get a decent home loan. So we were going to tell banks that they had to make some loans to people that were riskier, and maybe even risky enough that some of them couldn't make their loan payments.

That started under the Carter administration, but over a period of time we then developed a couple of organizations called typically Freddie and Fannie, Freddie Mac and Fannie Mae. Those organizations are neither quite government, but really not quite private either. Their objective was to create a source of innovative financing so

that people could afford home loans and the average person could have a piece of the American Dream and own their own house.

Well, over a period of time Freddie and Fannie were established and they took more and more different loans, underwrote various loans for people's homes. By the time we got well through the Clinton years as President, President Clinton demanded that the Freddie and Fannie corporations, if you would call them corporations, had to change their rules, that they had to release more and more loans to people who in effect couldn't pay. So the percentage of these loans that were more marginal were increased.

In the meantime, you had some other things going on. You had the government policy under Greenspan. The Federal Reserve had reduced the interest rate down quite low to about 1 percent, so you had the money being flooded as we moved on with more and more very low priced capital at 1 percent, so people tended to think, hey, this is a pretty good idea. Let's put some of this money in the real estate market, because the real estate market started to boom. In fact, it was in a bubble.

When I came to Congress in 2001, real estate was starting to go up, and by the time 2004 or 2005 came, most of us around here that thought we knew a little bit about economics were kicking ourselves, how come we didn't buy the very biggest house we could possibly find and let the thing double and then quickly sell it.

Of course, there were a lot of people that were doing that. There was a lot of speculation going on. Speculators took advantage of the situation and real estate continued to expand and to expand. In the meantime, what was going on on Wall Street was the fact that because there really weren't any rules, Freddie and Fannie were quasi- governmental, it was assumed that they were going to back people up and back up these loans, and so it became kind of a free ride.

You had all kinds of mortgage brokers traveling around the country saying to people, hey, you want to get a loan? Well, how much do you need? Half a million dollars? Fine. I don't really care whether you have got a job or whether you can pay it back, because I am going to turn the loan right on over. It is going to go over to Freddie or Fannie or to the Wall Street market. They are going to chop it up in pieces, repackage it and sell it all over the world.

So it was one of those situations where we made a very big mistake in terms of government regulation. And we allowed this process to continue to run for some number of years without the proper regulations and control on Freddie and Fannie. So most people have read and understand that what got us into this recession was the fact that we allowed a whole lot of mortgages being made by people who could not pay those mortgages back. So that is how things got started.

Now, you say, well, didn't somebody figure this out? Didn't somebody ring a warning bell or let us know that things weren't going the right way?

Well, in fact they did. What you have here, and this is an interesting day to remember, in The New York Times, not exactly a right-wing oracle, The New York Times, September 11th, 2003, you have reported there that the President, at the time President Bush, was asking for greater authority to regulate Freddie and Fannie because he believed that what was going on was going to cause a whole lot of trouble. There were all kinds of mortgages and loans being made where it was not at all clear that people would pay them back.

Of course, in the past years, many years before when somebody was going to get a home loan, you would go to your local bank and the banker would take a look and say, ``I am not going to loan him money if I don't think he can pay it back.'' But what we did was we separated the person that was taking that loan, we separated him from the person that was getting the money, and the end result was there wasn't any accountability anymore. So the President said, hey, this is a big problem.

So you have September 11th, 2003, The New York Times. The President is saying in there, hey, we need to get some controls on these crazy mortgages that are going on, and he asked Congress to take action to regulate Freddie and Fannie.

At that time, or a year or so later, Congress and the House passed a bill to do that. It went to the Senate and it was killed by the Democrats in the Senate. But in that same article, September 11th, 2003, you have the words of the gentleman here in the House now who is in charge of rewriting the rules, and this is what he said about Freddie and Fannie. ``These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis, said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee.'' So the ranking Democrat on the Financial Services Committee is saying Freddie and Fannie are doing just fine, September 11, 2003. The President is saying we need more regulation, there are going to be problems. Then Congressman Frank goes on, ``The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Well, this doesn't look like very good prophesy here. Certainly this problem was caused by a lack of regulation. It was caused by the Democrat Party, as is reported in this article in The New York Times.

Now, there are people today who want to say that this is a failure of free enterprise. This has nothing to do with free enterprise. This has to do with socialistic government meddling in the real estate market and an unwillingness of the government to be responsible in what the government says it is going to back.

What has happened here is you have got Freddie and Fannie that could do anything they wanted, and we are supposed to, the taxpayer, you and I, are supposed to back up Freddie and Fannie when people make all of these lousy loans. So that is the quick rundown on how we got to where we are with the recession.

Now, when you have a recession, there are a couple different ways to handle a recession, a couple of theories. One of the theories is what FDR did back in the 1930s. Their idea was that if the government spends enough money it stimulates demand. Of course, everybody has been taught this for years in college economic classes, that if the government stimulates the economy by spending enough money, why, then it will just make the recession go away.

That sounds like a pretty cool idea, doesn't it? The government just spends more and more and more money and the economy is going to get better. The only trouble with that is if that really worked, where we have the amount of debt that we have at this time, trillions of dollars of debt, don't you think we would have a great economy?

So we have to ask, what is this theory? It was called Keynesianism. Little Lord Keynes was proposing this idea about the same time Henry Morgenthau, who was the Secretary of Treasury under FDR, was making this proposal. So we have had in the laboratory of history this idea of the government spending a whole lot of money to make the economy better. So we had a chance to do that for 8 years, and Henry Morgenthau tried this whole thing out.

At the end of 8 years, he appears before the House Ways and Means Committee and in 1939, and this is his quotation before the House Ways and Means Committee. ``We have tried spending money. We are spending more than we have ever spent before, and it does not work. I say after 8 years, the administration, we have just as much unemployment as when we started, and an enormous debt to boot.''

So this is the author, this is the first guy that tried this theory over in this country, just spend a whole lot of money to fix a recession, and he says it doesn't work. You take a look at the numbers and the tremendous amount of joblessness when they started, and when he got all done, they still had a whole lot of unemployment going on. And he said we have tried it and it doesn't work. Yet there are people who still want to hang onto this warmed-over Keynesian idea, and it doesn't work.

So, what does work? It is important for us to not be negative and just say what doesn't work, but what does work. And what does work is more of a supply side kind of model, and we are going to be talking about that in just a minute.

I am joined here on the floor by a very good friend and a gentleman who

has lived a number of careers in this world, one as a medical doctor, a guy with a very bright mind, but also a U.S. Congressman from the State of Georgia. I would yield to the gentleman from the State of Georgia, Congressman Broun.

I appreciate the gentleman and the additional point that you are making. I think it is a very persuasive point, because Henry Morgenthau tried this idea for 8 years and it didn't work worth a hoot. In fact, those were his words, we have a lot of debt to boot.

But in addition, we also had the Japanese. They tried it, and it basically was like taking an entire economic decade out of Japan. They had a whole lot of these tax-and-spend fellows over in Japan, and they just went at it hammer and tongs for 10 years. The Japanese economy bumped and bumped and bumped and it never could get off the ground. It is like the plane that didn't have enough propulsion to be able to pull it up in the air. And it was because of the fact that they were just sold on this idea that if they spent enough government money, something would be okay.

It kind of reminds me, I am an engineer by training and they probably shouldn't let us into a political body like this, but it reminds me of somebody grabbing their shoelaces, lifting up and trying to fly around the room.

This is just foolishness. I think most Americans, most of our constituents that are out there, I think they have to look at this idea and think what sort of funny stuff are those people smoking up in Washington, D.C. to think that when you get in hard times economically that what you are going to do is just spend money like mad. I don't think there is anybody in my district dumb enough that when they are in hard times economically they go and buy a brand new big car and spend money like mad thinking it is going to fix the problem. It is almost insanity to look at it that way.

The thing is, as well as the bad examples that we have, you have mentioned one of those, Congressman Broun, we have good examples, good examples of the right way to solve the problem. It is not like we are just hopeless and we are in a graveyard spiral with an airplane and there is nothing you can do to fix it. The fact is, there are all kinds of examples of the right thing to do, and that is not the Keynesian model but it is more what people call today a supply side model.

I yield to the gentleman.

Reclaiming my time for a minute. What I think I'm hearing you say was something that I just think it's so much common sense and so many Americans understand this. And it's about productivity, isn't it?

If you really look at, just look at your own life, and if you really want to do better, you become more productive. You produce more product. You're more efficient, and you get more stuff done, and therefore, you can earn more money that way. And that's the same thing. It's not like this is really complicated. You know, there's economists who would like to make it seem complicated so they get to keep that Ph.D. and have a nice job. But it's not that complicated.

When a business or an investor or an entrepreneur puts some money out and makes a good gamble or makes a good investment, it works well, or maybe it doesn't work quite right and then they adjust it a little bit, and then they come up with a better way of doing things, we call that productivity. And in order for that process to work, you have to have, just like oil inside a machine, you have to have a certain amount of liquidity and capital out there for these investors to be investing.

And so the whole logic of what you're saying is, you've got to prime the pump a little bit and let people keep some money so that they can invest it. And of course the thing that kills it is if you start to suck all the money out of the economy, now you don't have anybody investing, and so you start to run into this condition of joblessness. And we understand what that's like. There's all kinds of people.

I yield.

Reclaiming my time. What you're saying is that somehow or other people have trouble making this connection. But if you've got a business that's doing well, they hire people, and that makes jobs. Now, if you're jealous of the guy that owns the business, say you're too rich and I'm going to take you down a peg, and you take all the money away from everybody who owns businesses, then don't be surprised when you don't have as many jobs.

And so one of these things that people, you know, if they want to get real covetous and don't like their neighbor having a fancy-looking car in their driveway, think about it a little bit, because you're really a lot better off if you live in a neighborhood where there's a lot of businesses that are

doing well than if you're in a neighborhood where everybody is unemployed. And you can't let it get you upset that somebody else is doing well if you really want jobs, because if you want to have a job you've got to work for somebody.

But anyway, let's take a look at this. The point of the matter is there's no reason for there to be doom and gloom in America. There's no reason for us to be really upset or kicking our lips around. There are ways to fix the problem we're in. We made some very, very foolish mistakes with poor government regulation and basically misguided socialism that put us into the recession. But it can be fixed. America has come through a lot of challenges, and this is another challenge, and we can do okay with this. But we can't do it by doing the wrong thing.

So what are the examples of what do you do in this situation? Well, here's an example. Actually, when I was here in Congress in 2001, when we started--and we did a bunch of tax cuts, and people thought tax cuts help make the economy do better. Well, but that's not entirely true. It's certain kinds of tax cuts that make the difference.

So here you have a picture of what's going on in 2001; this is the year that I came here, and you see we were in the recession. And before this tax relief, right here at this line in the second quarter of 2003, we did a particular kind of tax cut which had a very strong effect. But going before that, we did some tax cuts here, and we still had an average GDP of 1.1 percent. So it wasn't just any tax cut. You just want to send a $1,000 check to everybody in America, people like it, but it's not going to fix the situation that we are in. No, you have to use your tax money wisely.

So what did we do? In the second quarter of 2003, we did a dividend capital gains tax cut, and we took it from--it had been quite a lot higher--we took it down to 15 percent. And when we did that, let's take a look at what happened. Now, the effect of that, of course, is dividends capital gains is not something that just helps everybody on the street. This is something that really affects people who own businesses, particularly, or people who own money, and you want them to get the money freed up so they will use it to invest and create this productivity.

So here's what happens. We do the tax cuts second quarter 2003. Look at what happens to gross domestic product. We're chugging along at 1.1, it's kind of spotty, and all of a sudden it jumps to 3. And this is going all the way over to 2007. So the effect--now, you could say, well, is that what caused that? Well, if you take a look at this point in history, this is the main thing we did economically.

So you say, well, does that show up anywhere else? In fact, it does show up in some very, very important places. Let's take a look at the second chart, which is what we're very concerned with today, and that is the problem of job creation. These are all--all the lines going down are jobs that are lost, and so we're losing jobs at an average of almost 100,000 jobs a month. That's what's happening, 100,000 jobs a month being lost.

Now, these lines going up are where we actually had some job creation. But this is an average here. Now, we do this tax cut, and take a look at what happens on the right side in terms of the gain of jobs: 147,000 jobs a month being gained with this one particular cut.

So this isn't rocket science. We did it before. JFK did it. Ronald Reagan did the same kind of thing. And here we go, right in our recent past we did the same thing, and look what's going on.

Now, here's the last thing. Let's say that you really do, as my friend from Georgia was just saying, using the word ``socialism.'' Let's say you really are a happy little socialist and you really want the government to slot money around and redistribute wealth and everything. If you want to do that, one thing you want is a good economy because it gives you more money to play with.

Look what happened here. This is Federal revenues. Federal revenues are going down, just as they've been going down this year because the economy's in bad shape. You turn the economy around with the right kind of tax cut, and take a look at revenues. They're jumping.

So this says everybody wins when the economy is doing well, and this supply side kind of idea of letting money be invested by the productive private sector, just as my friend from Georgia was saying, this is what works.

And there's no reason for Americans to be out of work if we just do the right thing. Instead, what we're doing is we're going to allow this tax cut to expire, and the math that drove these charts is going to go into reverse, and it's going to make the situation worse even than what it is right now.

I yield to my good friend from Georgia.

Reclaiming my time. There is a little bit of a gap between the rhetoric and what's actually going on here, isn't there? And so what you've made reference to is--and this is easy for people to get it confused a little bit because this has been happening so rapidly.

The end of last year, we had basically a Wall Street bailout bill at $700 billion. That is a lot of money. That puts us into uncharted territory. I know you voted against it. I voted against it. And the reason we voted against it was because it wasn't going to work. Quite simply, it was not going to work. We spent $350 billion of that, came back, and people said, where's the transparency? What happened? You know, this thing hasn't been working very well.

And then, on top of $700 billion, just this last week, or week before last, we spent another 800-something billion dollars. At least in the House it was 840. They backed it off a small amount. Now, when you put $700 billion, $800 billion together, we're talking some change, aren't we?

I notice we're joined by another doctor--this must be doctors night-- from Georgia over in the Chamber, my good friend, Dr. Gingrey, Congressman Gingrey. I just would yield some time to you.

Reclaiming my time for just a minute, I'd like to highlight what you just said.

Because a lot of times what we hear our opponents, the Democrats, saying is, ``Well, you don't have an idea. You don't have a plan. What's your idea? You're just always saying negative things about ours.'' Well, that's not true.

I mean, just starting with what we did today, the number I saw was that there was an 8 percent increase in a whole series of categories, an 8 percent increase. Now, the average household in my district has not had an 8 percent increase this year in their paychecks, and yet the government is going to push this 8 percent. So let's be specific. I don't want to be negative here. I would like to say positive things.

I will yield.

Reclaiming my time, you make an excellent point. So what's really going on here is there are two bills that are influencing those categories that you show on your bar graphs.

The first bill you call the ``spendulous.'' I'm maybe not quite so kind. I call it the ``porkulous.'' They've rather nothing to do with job creation at all. They had to do with a whole lot of expansion of government programs and government spending.

So, first of all, we took this about $800 billion. Now let's just stop for a minute and put that into perspective. One of the things that's really big that we buy, if you want to think of big things, is aircraft carriers. We have eleven aircraft carriers in our Navy, and we protect them. We put ships around them. We don't want people to sink our aircraft carriers because they're expensive. Now, if you take the average cost of our eleven aircraft carriers and divide this into these porkulous or spendulous bills, you've got 250 aircraft carriers. I mean I don't know if that would go all the way across the State of Georgia or not, but those are a lot of aircraft carriers--250 of them--when we only have eleven in the Navy. Now, if you want to get you one of them Cadillac kind of aircraft carriers, the extra long version with the super electronics and better planes and all, well now, you'll only get 100-and-some aircraft carriers.

Yes. Reclaiming my time, you could also look at it from this point of view, which would be that the interest we pay on that amount of money in this porkulous bill would buy nine new aircraft carriers every year, just the interest on that money, or you could look at it another way. You could say all we've been hearing about is how expensive the war in Iraq is. Well, add up every day of the war in Iraq. Add it all together. We're talking way more money in the first 5 weeks than what we spend in Iraq. In the House version, you've put Iraq and Afghanistan together, and it's still more money. So this is a pretty good chunk of change.

What you're saying, gentlemen, is that a lot of that had nothing to do with jobs. It was just putting more money into government programs. So the chart that you show there didn't really show an 8 percent increase. What it really showed was way up there. What did you say? I'll yield. What was the actual number when you added it up?

Reclaiming my time, what you're really saying is what we passed on this floor today, in and of itself, was an 8 percent increase, and that 8 percent increase is the biggest we've had in these categories since Carter was President, but that 8 percent is deceiving because you can add to it all of the stuff in the porkulous bill or a lot of what was in the porkulous bill, and that's going to run it up to an 80 percent increase. So what we're really talking about is a massive increase in government programs.

I see my other doctor friend, Congressman Broun, from Georgia. I yield to the gentleman.

Reclaiming my time, gentlemen, I heard it was 7,500 earmarks.

He said, if it has earmarks in it, he's going to veto it, but what do you think they'll say--that those really aren't earmarks? Those things that look like earmarks and that smell like earmarks aren't earmarks? Is that what we're going to hear?

I yield.

Reclaiming my time, you offered an amendment. It said we want to cut 10 percent out of this bill. When you made that amendment, did you bring that amendment to the floor, and did you have a chance to vote on it?

I yield.

Reclaiming my time, gentlemen, I see my congressional friend from Georgia.

Dr. Gingrey, I yield to you.

So, reclaiming my time, what we're saying is one simple solution would be to freeze the discretionary budget. That would probably be the first step of a supply side solution to get the economy going, wouldn't it, if we'd just simply freeze discretionary spending? Then if what we did was we allowed certain selective tax increases in a very short period of time, you'd see the stock market jump, and you'd see jobs being created, and the whole economy would start to move again.

I mean this isn't something that's too complicated. It's just several of us talking this evening. There are a number of ways it could be done. It's not that complicated.

One of the places that you might start would be with the fact that the corporate income tax in America is the second highest in the world. You could get rid of all of the little bells and whistles in that corporate tax and just knock it back a good number of percent, and that in and of itself could have a great influence in creating jobs. If you on top of that were to freeze the government spending and were also to maintain dividend and capital gains, I don't know how many months it would be, but you'd see a neck-snapping turnaround. There are solutions to these problems, and the fact of the matter is that the people who are in charge now are unwilling to look at those solutions.

I yield back to Dr. Gingrey.

Well, reclaiming my time, I guess what can happen down here--and we should guard against this--is we can get a little cynical. I believe it was the week before last that this House unanimously passed a resolution that was saying that we were going to have 48 hours to take a look at this 1,000-page bill that was coming down the pike.

We were going to have 48 hours because there were 1,000 pages, and there were all kinds of things in there. Doesn't it make sense to allow the staff and different people to read over it before they take the vote? Everybody said ``yes,'' so we voted unanimously for 48 hours.

The bill comes out. We get our first copy at 11:30 on Thursday night, and of course we have lots of staffers sitting around the office, waiting at 11:30 at night. The next day, we went straight to a vote on this.

And we're told that this is going to be transparency and openness, and it does tend to make you a little bit cynical when we say one thing and we do something else.

Now, the promise has been made here, if there's an earmark, we're going to veto it. Now, do any of you want to make any bets as to what's going to happen to this little puppy?

I don't mean to cause you trouble, Congressman Broun.

Reclaiming my time.

The American people, in a way, have a way to vote. The people that have money vote on the stock market, and the stock market has been saying, ``We're not buying all of this stuff that's coming out of Congress. We're not convinced.'' And the stock market, every time we do another one of these massive spending bills, the stock market goes down even farther. So that's some kind of an indication that all is not well.

I yield to my friend from Georgia.

Reclaiming my time.

One of the things that strikes me and is of great concern to me is something that I believe was in the dustbin of history in our thinking for many years now, and that was the old Soviet Socialist Republic, the USSR. If you think back before the Berlin Wall fell--some of us are old enough to remember--that was a formidable--and we were concerned about the USSR, but we didn't ever believe that its economics were any good because we knew they were a bunch of socialists over there. That's what the ``USSR'' part was all about. So, in a way, when we saw the Berlin Wall come down, we could kind of catch our breath, but we kind of laughed at them as saying, ``See, we knew that old socialism wasn't going to work.''

And what was that country based on? The basic assumption was that the government is going to provide you what? Well, I guess one of the first things would be the government's going to provide you with education. And then another thing the government's going to provide is health care, which I know, as a couple of medical doctors, this is something that we know a little bit about when the government decides to get in the health care business. And then, of course, we're going to have the government provide you with food and housing, you see. And then the government's going to give you a job.

And that was the heart--aside from being just sort of antireligious, the USSR, that was the heart of their program. The government is going to do all of this stuff.

And now, just a few weeks ago, the cover of a major news magazine in America, it says, ``We're All Socialists Now.'' When I saw that, I felt a little frustrated, because I'm not a socialist. And the people I represent are not socialists. And they didn't like socialism, and they don't want the government running everything in their lives.

Reclaiming my time

One of the things that's of concern is that if we follow in the path of the model that doesn't work, the Soviet Union, with the government trying to run all of these things, the government is terribly inefficient. People may think and complain to you doctors that medicine is awfully expensive today. Well, if they think medicine is expensive today, let them get a snout full of what it's like when the government runs it, with all of that efficiency. About half of the health care dollars in America are already going through the government, and that's part of what's made it less efficient and expensive.

So if we move in the direction of what I'm reading, if you read between the lines of the speech last night, we're talking about a single-payer system like Canada. And the bill that we passed already has the language in it saying the government can ration your health care, and I don't think that makes for good quality health care.

Reclaiming my time.

I appreciate you being a medical doctor. You've seen first-hand examples where government intervention in the marketplace is driving up costs for everybody. And the more areas we get into--just like the Soviet Union, when we get into food and clothing and housing and education, the more the government gets its nose into all of those

areas, and the size of the government grows, as we've just seen--it wasn't just 8 percent today, but you add the 8 to all of that before from the ``porkulous'' bill, we're talking about a massive increase in government.

And the Republicans did make some mistakes. We spent more money than we should have, but it's nothing on the scale of what we're talking about here.

We're joined by a very distinguished colleague of mine from Louisiana. And, Congressman Scalise, we'd appreciate if you could join us.

And I yield time.

Reclaiming my time for a minute.

You're saying a 20 percent increase in the national debt. So you add up all of the national debt since the country was born, you put that all together, and you're saying we added 20 percent to that in a period of 6 weeks?

Reclaiming my time.

You're talking about, in the last 6 or 7 weeks, we have added 20 percent to the debt. And yet, when you take a look at the money that we've spent, it's not going to do any good to help us with joblessness, it's not going to get the economy going, it just is flat not going to work. Because we can already see that it didn't work when you used the same approach during the ``Raw Deal'' or the New Deal. Henry Morgenthau says it won't work. He's the guy that engineered the plan. He says it won't work. And the Japanese tried it, and it didn't work for them. And yet we have solutions to the problem that will work which are being ignored.

You know, gentlemen, one of the things that I think we have to be careful of: We are in a very difficult time in America right now, and a lot of people recognize that.

And we'll have to continue this next week on Wednesday. And I really appreciate my good friend from Louisiana joining us, Congressman Scalise.

I thank the gentleman, and I appreciate your comments. And I think that, as we have been trying to discover more and more what is in the bill; now, it is a secret what is in the bill, in spite of the discussions about transparency and the chance that people will have a 48-hour window to actually read what is in the bill. Yet, the bill we still have not seen it. There have been people out saying, well, here is the deal we cut. But in terms of transparency and 48 hours, that of course was just campaign rhetoric, apparently.

But what it seems like, as we look more and more at this thing, is that this is really a form of financial infanticide, because what we are going to be doing is burdening not only our children but our grandchildren.

But I would like to back up just a minute on the gentleman from Iowa, a man that has been a small business owner, a great Congressman, and a great commonsense guy, and I want to just sort of back up because there is two theories about how to treat the situation. And I think it is important that we state that, as a Republican, and I believe you as a Republican gentleman, believe that this is a serious situation that we are facing.

At a town hall meeting, a little girl stood up and she said, ``My daddy just lost his job from 40 hours to 24 hours. Is there anything in this bill that is going to help my daddy?'' And the answer to that question is, ``no.'' And that is exactly the reason why we have to vote ``no,'' because it doesn't solve the problem.

Now, there are two theories about how you approach the situation that

our economy faces right now. And one of them, this word Keynesian, which is some old musty historical guy, some Lord Keynes from England, I suppose, and he had a theory that was convenient for government people; and that was, the more government money you spend, the better off you are. And the guy who really tried that theory, worked for FDR. He was Secretary of the Treasury. His name was Henry Morgenthau.

Henry Morgenthau went out and, boy, did he spend money. And he did just exactly what the Democrats are doing he said that they want to do, and that is to build schools and to do all of these different public works projects. And at the end of 8 years, he appeared before the Ways and Means Committee. Now, this guy was doing Keynesian economics before Keynes even made it popular.

At the end of 8 years he appears in the Congress here before the Ways and Means Committee and he says, ``It did not work.'' He said, ``We have spent money and spent money for 8 years, and I am telling you, it does not work. The unemployment is just as bad now as it was 8 years ago, and, to boot, we have a tremendous debt.'' Now, that was our first experiment with the idea that you just go out and spend tons of money and everything is going to be okay.

Now, I don't know too many households in America, Congressman King, that have such a lack of common sense that when their family budget gets in trouble, that they go buy a brand-new car, take out a second loan on their house, buy a motorboat, and just go spend money to make it better. There are not too many people that have that little common sense. And yet, right here in Washington, D.C., we seem to have all of them that doesn't have any common sense ready to jump on this idea that just spending a whole lot of money is going to make the problem better.

Now, we haven't even talked about what we are spending the money on yet. The theory is that we are going to do stimulative things, such as building roads and bridges and stuff, which in fact most of this bill has nothing to do with that at all, just expanding entitlements. I really don't understand how millions and millions of dollars spent on sexually transmitted disease education is really going to put people to work.

But aside from that, I just wanted to mention one other thing, and that is something that is a problem of scale. Sometimes numbers get so many zeroes behind them that people get a little batty and don't realize what they are talking about. So let's try and put this $800 billion into perspective. And it is not $800 billion; it is going to be more than $1 trillion, because what this does is it commits us to all kinds of additional spending which it is not going to stay anywhere near. But let's just say we talk about $800 billion. What does that mean?

Well, one of the things we have heard for the last 7 years is all of the money that we have wasted on the war in Iraq and how much money the war in Afghanistan has cost us. So let's start, first of all, go back to the beginning of the war in Afghanistan 7 years ago, the beginning of the war in Iraq 6 years ago, let's add it all up. Add all of those two wars up from the beginning of when they started, and it is less than what is in this bill. So that 800-some billion dollars, that is a pretty fair amount of money.

Let's put it in other terms. Let's picture, we now currently have 11 aircraft carriers in the military. Those are considered the most valuable assets, other than just the American cities that we have. We really try to protect our 11 aircraft carriers. How many aircraft carriers could we build for $800 billion? Well, if we got them at the old price, about 250. Can you picture 250 aircraft carriers end to end? But let's say we get the newest, most fancy brand-new aircraft carriers. Still, even with no discount for buying a large number, we are talking 100 aircraft carriers. The debt service in one year on this $800 billion would buy us 9 aircraft carriers.

And so what are we going to do? We are talking about protecting mice in the Speaker's district, and we are talking about all of these things that have nothing to do other than just spending a whole lot of government money.

So, first of all, the question is: Does spending a lot of money do any good? And the answer is: Historically, the Japanese tried it and it didn't work for them, either, any better than it did for FDR. They turned a recession into a depression using this theory.

And so what the common sense is, the Federal Government has got to stop spending so much money. That isn't too complicated. People are saying Republicans don't have an answer. We have got an answer: Don't spend all this money. What part of ``don't spend money'' don't you understand? It seems so simple. Everybody else in America can figure it out. Why can't we figure it out?

We don't want to spend a lot of money. What we want to do is we want to let the capital, the money, remain with the people that actually create the jobs. Don't we?

And I see that you have got a number of other really qualified people to join you on this hour. I just thank you for taking the time to try to get the truth out on a bill that is still smoke and mirrors.

Thank you, Madam Speaker. It's a pleasure to be able to join you again this evening and to talk about the subject that is certainly on

the minds and hearts of Americans everywhere, and that is the conditions in the economy.

We find ourselves this time at a unique position. We have heard for the past 6 and 7 years about the tremendous cost--how there's billions of dollars being spent day after day in Iraq and in a costly war in Afghanistan. And so it is a bit of a surprise that we find now that if you were to add the cost of the war in Iraq for the past 6 years, and then add up the cost in Afghanistan, the war there for the past 7 years, and then add those two numbers together, you would find that here, in the first 6 weeks of the administration, we are going to spend more money in 6 weeks than we did in those wars over a 6- and 7-year period of time.

How did we get to this curious place? When we start talking about $800 billion, one of the dangers of entering this kind of unchartered territory is that our eyes glaze over. What is $800 billion anyway?

Well, there are different ways of looking at it. If you think of it from the point of view of the defense budget, we currently have 12 or 13 aircraft carriers. Those are considered by defense people as very valuable. And you don't want to let people torpedo your aircraft carriers because 12 or 13 aircraft carriers have got a lot of airplanes on them, a lot of people on them. Costs a whole lot of money.

How many aircraft carriers could you buy with $800 billion? Well, we are talking about, at the price we paid for some of them, about 250 aircraft carriers. Or, if you buy the most brand new, fancy one and don't discount it any for mass production, you're talking about over 100 aircraft carriers that we are going to spend--kaboom--in the first few weeks of a new administration.

So how was it that we got to this curious point that there appears to be a crisis this severe? I have to say as a Republican, I don't disagree that we have our economic problems and that there are things that we should do about them. Fortunately, we have history as our North Star to show us what will and what will not work.

First of all, how did we get here? Well, it was something that developed, as you can imagine, over time. It didn't just happen overnight. Going back to the Carter years, there was the Community Reinvestment Act. What Carter and the people that were in Congress at this time said was, Hey, we've got certain areas in some of our cities where banks are not willing to give people loans. And that is not fair because every American ought to have the opportunity to own their own home.

So what we are going to do is we are going to tell the banks that they have to give loans around to people all over their communities. Of course, the banks were a little reluctant because the banks' concerns were, Hey, some of these loans may not be paid and we are going to end up picking up the tab. So that was starting with Carter.

Then, after Carter, we ended up creating what was known as Freddie Mac and Fannie Mae. And those also were partly government, but partly not government agencies, and their whole purpose was designed to try to provide average Americans with loans for their houses, which is a nice thing to do. They were really not under the administration control, and yet it was implied that these loans would be backed up by the Federal Government. So they were not really public, but not really private. They were half and half.

And Freddie and Fannie started doing more and more and more investment. They grew and they started picking up more loans of people in America, to the point that last year Freddie and Fannie had more than 50 percent of the loans of Americans, that Americans had on their houses. So Freddie and Fannie got really big.

Well, when Clinton comes along, Clinton, during his last year in office, he changed the rules some for Freddie and Fannie and increased the percentage of the loans that Freddie and Fannie had to make to people who were high risk people that would be getting these mortgages.

So that, in combination then with the fact that Greenspan drops the interest rate low, you start to get a combination of more and more people being loaned money that they can't afford to pay back, and speculators who can't afford to pay the money, borrow money, knowing that the housing market is going up like a skyrocket because, who knows, housing has never come down in America, so just keep betting on the fact that housing is going to be going up. So they continued to do that.

Well, was this something that nobody saw coming? Not so. You can go to the New York Times, not exactly a Republican right wing oracle, and the New York Times on September 11, 2003, includes an article that says, President Bush is asking for authority to regulate Freddie and Fannie because they are getting crazy with the kinds of loans they are making. He says, We are going to have a big problem if we don't regulate Freddie and Fannie. These two entities. This is a New York Times article. You can look it up. It's September 11, 2003.

So, Bush is pushing for regulation of Freddie and Fannie. In the meantime, he is being opposed by who? Well, he is being opposed by the Democrats. Particularly, Barney Frank makes this statement, These two entities, Fannie Mae, Freddie Mac, are not facing any kind of financial crisis, said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee.

That's interesting, isn't it? This is the man who's responsible for fixing the problem, and he's the man that said, There isn't any problem at all. We don't need to regulate these things.

The more people exaggerate these problems, the more pressure there is on these companies, and we'll see in terms of affordable housing. He's saying, Well, we're not going to be able to do enough affordable housing if we were to limit any of the activities of Freddie and Fannie.

Well, people have said, Well, this whole financial crisis we have got in America, this is a problem of free enterprise. It has nothing to do with free enterprise. This is a Big Government socialistic program that was not regulated properly, and it started to cause trouble. And, as you know, these loans got worse and worse. It was exaggerated and exasperated by the fact that you have got rating agencies in New York that were playing along with a very greedy Wall Street. They were raiding these loans at AAA rating when a lot of people who made the loans knew there's no way people could pay that kind of loan. They weren't asking, How much money do you make; they weren't saying, How are you going to pay it back? You want half a million? Fine. We'll write you the loan. Boom. Give it to Freddie and Fannie and let the government pick up the pieces when it crashes.

And so these loans, as the real estate market gets higher and higher and higher because of low interest rates, when that bubble starts to pop, all of a sudden these loans start coming down and it poisons the entire world economy. And that is what we have seen happen. Now, half of those loans are still outstanding.

So this is not a problem with free enterprise. This is a simple problem of the Democrats in the Senate killing a bill that the Republicans passed in the House, allowing the President to try and regulate. They couldn't do it.

So, this problem is one of another social program, perhaps even sold and marketed as compassionate, yet I don't know how it is compassionate to have somebody borrow money that they can't afford to pay back. And that's how things got started here.

Now what we're going to talk about is a couple of things: How bad really is the problem? And I also want to mention the fact that there are really two views at how to solve this problem. What you see on the floor, we just saw an hour ago, the Democrats were saying, you know, our package is fantastic, it's going to fix all the problems, it's really great, we've got to hurry up and pass this thing which, as I mentioned, is the equivalent of more than a hundred brand new, modern aircraft carriers parked in a row. That's a fair amount of money, okay? It's more than the entire economy of Australia. We're talking about spending more money than we will receive in tax revenues for the year 2008 in America. In other words, you take all the money we collect at the Federal Government in tax revenues and add it together, we're spending more than that in the first 6 weeks. This is a fair amount of money we're talking about here.

I am joined, though, right now by some very good friends and colleagues of mine, and I think they've got some perspective on this. I would like to go first to Congressman Mike Coffman. Mike brings us some very unique qualifications from the State of Colorado. He was the treasurer of the State of Colorado, so you've dealt some with money, Mike. And then also you ran your own small business. I think that what we need is not a lot of cries of crisis but some cold-blooded analysis of what the problem is, what the proper solution is, and then we need to be moving forward boldly but to do the right thing and not just waste a whole lot of money.

I would yield time to Congressman Coffman from Colorado.

Congressman, if I could reclaim my time for just a minute because you're making some great points. I would like to back up to just a little bit higher altitude. What I'm hearing you say is, first of all, the package that the Democrats are proposing includes a whole lot of spending. If it's got a whole lot of spending, the assumption then appears to be that if the government spends a whole lot of money, it's going to make everything better. Now when you had to run the treasury of Colorado, is that the approach you used, that when you got in trouble you spent more money?

I would yield.

As a small businessman, then, when you got in trouble economically, did you spend a whole lot of money to get out of trouble?

Reclaiming my time, it seems like what I'm hearing from the Democrats and Republicans is that people look at this from a totally different point of view. What I keep hearing the Democrats saying is we've got to stimulate spending. Most of the people I know, if they had money, they would love to spend it. They don't need to be stimulated to spend the money. And it seems like what you are saying is that it's not that we need to stimulate spending, what we need to be doing is stimulating productivity, that we need to be having those jobs created by small business or larger businesses and that those jobs then put money in people's pocket and then they're going to spend naturally.

I yield.

In other words, it seems to me that in that we already have a huge Federal debt, if going into debt more was going to make the economy good, we'd have a rip-roaring, great economy right now if you agree with that Keynesian assumption that was started.

I'm just going to go way back in history, a little bit even before my time, to the guy who was in charge of spending a whole lot of money the first time this Keynesian notion came to be. This is a guy that worked for FDR, the guy who started this whole thing. And his theory was spend enough Federal money and the economy's going to turn around. So we start with a recession and it becomes the Great Depression.

Eight years later this guy, Henry Morgenthau, he is appearing before the Ways and Means Committee right here in Washington, D.C., and he's talking about this theory about spending in order to stimulate the economy that we've heard for the last hour and he talks about how well it worked, because this is a guy that thought it was a great idea, this Keynesian model. He says: ``We have tried spending money. We are spending more than we have ever spent before and it does not work. I say after 8 years, the administration, we have just as much unemployment as when we started and an enormous debt to boot.''

And here we go again. It's like we can't learn from history. This is the author of this whole program and it just doesn't work. It wouldn't work for your small business, would it, gentlemen? And it didn't work for the State of Colorado. That's why you have a balanced budget, because you have the same common sense most American families know, that when you get in trouble you don't go buy a new car and run up a whole lot of debt.

We're joined tonight by another great colleague, a gentleman from Virginia, been a legislator for many years, a very good friend of mine, Congressman Forbes. It's just a treat to have you here.

I yield.

Reclaiming my time, I claim the same badge.

Reclaiming my time for just a minute, because I'd like to underline what you said. You're working

on the same assumption that has worked historically, time after time, and that is to look to the productivity of the private sector to create wealth instead of government to redistribute it. You know, we just tax or don't tax, we slop the money around, but we don't create anything, the government.

I yield back.

It's just such a treat to have the gentleman here from Virginia, Congressman Forbes, who gives us such good advice. You have a great voting record, such tremendous common sense. I think the American public agrees with you. We've taken just a bunch of phone calls and a sense of where our district is all the way out in the State of Missouri, and the people realize that just massive, massive levels of Federal spending is not going to solve this problem. And it isn't about stimulating people to buy stuff. It's about productivity. It's about a very positive vision that you've set forth this evening, the fact that we can rebuild, that we have the can-do attitude in America that if we just let freedom work, we can take care of this problem, and there are very simple, straightforward solutions that through history have worked. And what you're proposing is that very simple idea. The other alternative is, quite frankly, socialism, redistributing a whole lot of wealth, huge, massive government spending, and at the end of all of that, the author of that Keynesian economics under FDR said, 8 years later, we're tremendously in debt and we've got the same unemployment we had. It flat didn't work.

Thank you so much for joining us.

We're joined by another great colleague of mine from the State of Indiana, my very respected friend and senior statesman, Congressman Burton.

Could I reclaim my time for just a minute? Because I think what you're saying is so important.

People are saying that today things are worse than at any time since the Great Depression. And yet what you just said was that under President Carter, what did you say the rate of inflation was?

What was the jobless rate?

Reclaiming my time. Twelve percent jobless rate, rate of inflation at 14, and what was the interest rate?

Reclaiming my time for just 1 minute. Let's just go back and talk about what has worked. It is not that we are in unchartered territory in terms of the condition of our economy right now. We've got some problems, but we can deal with them. And what we can do is use what has worked in the past. And one of the things that worked was what President Kennedy did, and then President Reagan did it, and then Bush did it very selectively in the year 2003. And what it was was not just any kind of tax cut, but a specific kind of tax cut which gets businesses going, which encourages innovation and the creativity of better processes, and taking the risk to hire new people to make products that are better and less expensive. So it is that productivity engine that gets going. It worked for JFK. It worked for Ronald Reagan. And it worked in the second quarter of 2003.

So yielding back, I didn't mean to interrupt, but I just want to underline the fact that this, what you're proposing has hard evidence historically it is working, not to mention Ireland in contrast to Japan, Ireland dropped their corporate tax rates, and their businesses just shot up like a skyrocket. Japan did the opposite, and they had 10 years of malaise.

Yielding again to the distinguished gentleman.

Reclaiming my time.

I just really appreciate, Congressman Burton, your long experience here in Congress, the fact that you have really earned a great reputation. It is a treat to have you here and to have this common sense and this warning about inflation. This is a form of theft. It is a form of theft because everybody, particularly old people who are trying to live on a fixed income, are going to be penalized because their money just won't go as far. And that is what happens when you start to spend massive amounts of money. We're talking, if you take a look at the debt after World War II, you're looking at 6 percent. We're jumping this thing to 10 percent. This is unchartered waters. And that is the kinds of spikes that we're talking about is inflation. This is very, very serious. And it demands a good solution and not just shooting off more Federal programs.

I will yield.

Reclaiming my time.

It just seems to me that every family in America has the common sense to know that when times get tough, one thing you don't do is go out and spend money like mad. We have already been spending money like mad. In fact, we allowed this whole situation to get away from us because of a bunch of social programs that there was no fiscal accountability on them. We tried to control it. But we were blocked by the Democrats. And so now we have got ourselves in a little bit of a fix. But it is not the end of the world. As you said, gentleman, it is not as bad as it was under Carter when we had double-digit inflation, we were double- digit on unemployment and those kinds of things. We're not there yet. It is important we do the right thing but not just waste a whole lot of money on things. I'm joined by a good friend of mine, a judge from Texas. And he is a sober judge, too, which is a good kind. I think it is the only kind they have in Texas.

And so I would yield to my dear friend from Texas.

Reclaiming my time.

So what you're saying is this big bill that is proposed isn't necessarily about creating jobs at all. It is talking about creating new Federal programs. When is the last time you ever saw a Federal program die?

I yield.

Reclaiming my time.

What you're talking about here is really unchartered water for us. What we saw that FDR did back in the Great Depression was spending a whole lot of money, and we still had a high unemployment rate. In fact, his top guy, his Secretary of the Treasury said, after 8 years, all we've done is get ourselves into debt. We've got the same level of unemployment.

And so one of the things that we've been hearing to some degree is that the President has been claiming is the Republicans don't want to do anything. It is not that we don't want to do anything. It is that we don't want to do the wrong thing. We don't want to do something that historically has never worked. That is crazy. It didn't work for FDR. It was tried by the Japanese where they kept throwing more and more of their money at their economy. And the thing was just absolutely wallowed in the water, and the Japanese economy, for 10 years, was a mess.

And yet you look at what is the right thing to do and it is a little bit of discipline, isn't it? It is the idea that the Federal Government should tighten their belt and stop spending so much, and they need to return the money back to the private sector to get it working again. And the ironic thing about this is that when that is done, the bottom line is that the government gets more money in tax revenues. So everybody does well when the economy is strong. But when we suck all the money out of the private sector and

use it all and spend ourselves and our grandchildren into debt, that is not a good solution. So we don't want to do the wrong thing.

It is not that we don't understand the pressure and what is going on in the economy. Judge, I have some constituents that have written me a few letters, as you can imagine. I'll bet you have got some, too, on this subject. Here is one. This is one that comes from Town and Country, Missouri. ``For those of us who pay our bills on time, have no car payments and live beneath our means, I appreciate your effort,'' he is talking about my effort to vote ``no'' on all of these stimulus, and I guess I call it ``porkulous'' plans, ``at some point, will you ask your Democrat colleagues to once in a while think of me when they seek to take my money and give it to my neighbor who either can't or won't pay his bills and be responsible for his life?''

Now what we're talking about here is socialism. We're going to take, after the economy takes a hit, we're going to spend money like mad. We're not going to create jobs. We're just going to slop it around and hope somehow it is going to make the economy better. And the facts of history are that it doesn't work.

I yield.

Reclaiming my time, Judge Carter from Texas, you say, well, now wait a minute, we're talking about an economic question. And you're all of a sudden moving over to a subject of essentially government rationing of health care. Why in the world would you be talking about the government rationing of health care in a bill like this?

Well, the reason is because that was put in the bill. You know, when you get some hundreds and hundreds of pages of legislation, nobody's had a chance to read it except a few people they slip stuff into it. And one of the things is the idea if we're going to move to the government running all of health care, somebody's going to have to decide how we're going to control costs. And so the way to do it in a socialized medical system is that some bureaucrat has to tell you I'm sorry, Judge, you're just too old for that replacement hip that you have to have. Now, people think wow, that's really wild and wooly. That would never happen in America. Well, it's sure going on up in Canada.

There is an example of a guy younger than I am, so this is getting close to home and he, just like I do, he needed a new hip replacement, and the Canadians said no, we can't afford to give you that. And by the way, if you had enough money to pay for it on your own that would be a crime. So what's he do? He comes down to America. But that's slipped into this bill too, is the beginning or greasing the skids for this rationing of health care by bureaucrats, and I believe that, and I think Republicans believe that those health care decisions need to be made by the patient and by the doctor and not by some bureaucrat rationing health care.

I'd yield to the gentleman for this point.

Reclaiming my time, figuring it out in a very short period of time. Within a day or two, you're going to have to vote on this thing and you're supposed to go through that huge stack of a bill and the system's designed that way so you can hide stuff in it.

I yield.

Reclaiming my time, the Republican Congress did pass that. Several times in a row he vetoed it and finally, I guess it was the third time around I think he did sign the Republican Congress bill.

But I yield to my good friend, Judge Carter.

There was an interesting cover on Newsweek. It says, we are all socialists. But judged by the way you're talking, reclaiming my time, it doesn't sound like you're quite a socialist yet, and I think there's an awful lot of people in your district and in my district that are thankful for your common sense and your willingness to just basically state it the way it is.

Now, I'd just like to take a minute or two here and talk about the fact, and you alluded to this, as other Republicans have, this isn't the end of the world. We've been in a lot worse places back when Carter was President. It's not as bad as the New Deal yet, unless we keep doing the wrong things.

But the vision of a bright and prosperous America where freedom reigns, where people's God-given rights, particularly to own property, are respected, that still is there. That heritage is deeply ingrained in American spirit and a pride and a joy. People aren't interested in a handout in America. They're more, or some are, but most true Americans are much more interested in a good job and being able to be responsible and provide for their families. And there is an economic system that allows that to happen. It's what we've always done in America.

It's called free enterprise. It's not such a big surprise.

Now, what one of the things that seems to be a little disjointed, and that is, where I disagree with my Democratic colleagues, and that is, there's a connection between businesses, particularly small businesses, and jobs. And that is, the connection is, that the businesses hire people, and if you hammer the business into the dirt, you can't be surprised if there aren't as many jobs there. And so the solution to this is not for government spending. If government spending were the solution, we would have a great economy right now. We've been spending way too much money, and you and I have voted, Judge, to make sure that we don't spend as much as we have been.

But here's actually graphs that show this concept of allowing free enterprise to work. This vertical line on the chart is the second quarter of the year 2003. Now, we've done some tax cuts in these first couple of years. But take a look at what was going on with jobs. All of these lines that go down means it was a month that we lost jobs. But if you look over here, after we did the dividend capital gains tax cut, now this is not a popular tax cut because what you're doing is you're allowing people that own small businesses to keep more of their money so they can invest it in their own business. When they do that, they create jobs.

Look what happens. All the vertical lines are months when we had a net increase in jobs in America. So if you're caring about unemployment, which we should be if we have any heart in us at all, what we should be saying is, let's do what works. The people who create the permanent jobs that make the economy go, 80 percent of them are small businesses. So you cannot take all their money away from them by overspending Federally, and expect them to have any money left over to do an improvement.

I would yield to my good friend, the judge from Texas.

Reclaiming my time. That statistic just kind of got my attention. You're saying that this package, it's going to cost us $280,000 for every job we create?

Gentleman, I yield, but if you could sign me up for one of those jobs, that sounds pretty good to me.

Just reclaiming my time, you're saying that when we go out, because we've got to raise this 800-some billion dollars. We've got to raise that money in the market. That means somebody's got to loan the government that money, right?

And we're counting on what, foreign countries like China to loan us the money? And we're hoping that they're going to buy, what, our Treasury bills?

How far can we push this?

Reclaiming my time, what you're saying once again, in other words, is we're going into uncharted waters. We're talking about something in the neighborhood of $7,000 per family, just in the first six weeks of this administration.

I do yield.

Reclaiming my time. 28 billion out of 800-something billion?

Well, my understanding, though, is, gentleman, that they had money, at least in the version that came from the House, for millions of dollars for education on sexually transmitted diseases. Now, that's a totally different definition of stimulus, isn't it? How does that help us to get jobs in the economy?

Reclaiming my time, though, gentleman, you talked about a culture of smoke and mirrors here. This was supposed to be a jobs package. It was supposed to be a stimulus. I'm calling it a ``porkulus.'' But that was the theory. And yet what you're saying that it has in here, it really isn't; it's more about big government spending. I yield.

Reclaiming my time. Essentially what happened, we had a recession during the time of the New Deal. They tried this Keynesian economics, which, at that time, you could at least give them credit; while it didn't make any common sense, at least it hadn't been tried. And here you have the author, the guy that was really behind it, even almost before Little Lord Keynes came along, this guy, Henry Morganthau was supporting this thing. And then 8 years later he comes before our committee and says, it does not work. And then it says, also at an enormous debt, to boot.

Now, why would we want to turn around and do the same thing over again, when there is a bold initiative that can be taken, just as has been done, that history has proved works. I had just shown the chart of what happened when we did the dividend and capital gains tax cut to allow small businesses to keep more of their money to make the investments in their businesses. And we saw the fact that right after that tax cut right here, we see all these jobs being created.

What else happened? Well, let's take a look at the Gross Domestic Product of the country. These lines to the right are after that tax cut. You can see that the average has gone up to 3 percent, whereas before that tax cut it was at 1.1. And here's the best thing of all. If you care about all these different other ways that the Federal Government could spend money, one of the things you'd want would be the economy to be strong because then you have more revenue.

Take a look at--let's see. I've got to try and find the chart that shows what happened. Somewhere along the line we

lost one of the charts here. But the bottom line was when you did that tax cut, second quarter of 2003, what you find is immediately the Federal revenues start going up. Well, it doesn't surprise you when you think about it because look at all the more people that have jobs. They're all paying taxes. And you see the Gross Domestic Product going up.

So when the economy gets better, we have more money to spend. And that is what has always made America great. It's because there are certain basic true principles that are not smoke and mirrors. It's not a whole lot of government redistribution of wealth, and not everybody is a socialist, in spite of what the cover of Newsweek wants to tell us. And I'd yield.

Reclaiming my time, you know, what we're talking about here is, are we going to let the marketplace work? Are we going to trust in productivity? Are we going to trust in Americans that have always been able to deal with these situations?

We have been through a lot of crises as Americans, and yet there's something very, very special about our country. So many unique things. Aside from just the beautiful land that we enjoy, as soon as there's a tsunami or some huge storm or something, you see the Americans there trying to help all around the world. And you see the Americans in a positive way helping.

But then there's some things that we're proud of that they didn't do. We won a couple of world wars at various times, and after we won those wars, after every other Nation in the world wins a war, they claim more territories and more jurisdiction. Instead, we didn't claim anybody's territory. We simply taxed ourselves to help rebuild our enemies. That's what makes us a different kind of country. And we're a country that has always put a premium on freedom. Every time we get a chance to give a talk, Judge, we ask people what's so special about America, the word that just bubbles out of their hearts is it's about freedom; it's about a chance to have a dream and to go out, and you may succeed, you may fail, but we're the land where dreams can become reality.

We are the only Nation in the world that is based on a creed, that is based on a philosophical statement:

We hold these truths to be self-evident, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness.

Earlier versions have life, liberty and property. That means it's not the job of the government to take everybody's property away from them and to slop it around and redistribute it. That is socialism. This idea was tried by the Soviet Union. The government is going to provide you with a job and with health care and with food, and the government is going to give you your education. That idea died in the dustbin of history when the Soviet Union collapsed.

Our system is based on the idea of freedom and of allowing people to go out and invest their lives in businesses, not in the government's taxing their great grandchildren into the dirt.

I will yield to my good friend.

Reclaiming my time, I really appreciate your perspective. It's not about doing something fast. It's about doing the right thing. It is the thing that has always worked in history.

We are joined by our colleague, and I am just so thankful to have another perspective on what we're talking about. It's not that we don't believe that there are good principles that make things work, but specifically, if people want to say, ``well, what sorts of things would the Republicans suggest?'' there have been different Republicans suggesting ideas.

One says, hey, let's just have a moratorium on Federal taxes. Let's go 2 months or 4 months where we just don't charge anybody any taxes. It will cost less than this $800 billion loan and bailout we're talking about. Let's just let people keep their own taxes for a couple of months and see what that does to the economy. I'll bet you would see some immediate results.

Yet that is not a Washington-based solution. That is not a big government solution. It is allowing freedom to work, and that is what we are about.

There are other solutions which say, hey, let the small businessmen keep more of what they make so they can invest and can create those jobs. That's what happened before that worked fantastically. Why don't we do that kind of thing again?

I will yield to my good friend.

Reclaiming my time, I really appreciate the gentleman from Texas (Mr. Conaway) for coming out and for joining us tonight and for adding your perspective and particularly that point, because there is an almost ethical point to what you are saying: We are saddling our kids and our grandkids with a tremendous debt level.

Again, let's put this into perspective. We are talking about somewhere between 100 and 200 aircraft carriers end to end. We've got about twelve aircraft carriers. Now, that's what we're talking about. This is a lot of money. This is more money than we spent in Afghanistan and in Iraq during all of those years of those wars.

I very much appreciate my colleagues for joining me. Thank you, Madam Speaker. I yield back.

Mr. Chairman, it is a pleasure to be able to join with some of my colleagues here tonight. And we're going to be talking about a subject that is, I believe, near and dear to many people's hearts, or at least of concern to many people. And I suppose one way to introduce this subject would be to take a look at something that has been in the news now for 6 and 7 years, and that would be the subject of how much money we have spent in the war in Iraq.

Many people were observing that we were spending way too much money, that the budget was out of balance and we are just wasting money over in Iraq and in Afghanistan. And yet ironically, in the very first month of this new administration and this new Congress, we spent more money in that first month than what we spent in 2 years in the two different wars for 6 and 7 years added together. If you add all of the money spent in Iraq, all of the money spent in Afghanistan and add it all together, it is less than what we spent in the first couple of months of Congress this year.

Now, how do we get to that point? What brought this about? If you want to try to take a look at how much money does that mean, that says that we spent in the first month more money than the entire tax revenue that we're planning to collect for the year 2008. It would be as if you had your own family budget, and in January you spent all of your income for the year. You have got 11 very lean months to take a look at.

So how is it that we got to this point? That is what we are going to be talking about. We're going to have a nice kind of roundtable discussion with many people from different States. And so I want to back up just a little bit and take a look at how did we get to this point that we have the economy in the condition that it's in?

Well, the story goes back quite a ways. It goes back to the Carter years. People found that as people were trying to get mortgages, particularly in certain areas of economically disadvantaged areas in various cities, that it was hard for them to get home loans. And so they put together the Community Reinvestment Act. And in a sense, what it was saying to banks is, you have got to take a few of your loans and loan them to people who it's not clear that they will be able to pay it back, because somehow or another people everywhere need to have a chance to buy a home and to own a home.

Well, that idea was then followed up with the creation of a couple of quasi-governmental but also quasi-private organizations that were little known at the time called Freddie Mac and Fannie Mae. And those organizations were in the same business of trying to help people that were sort of middle-income buyers or lower-income buyers to be able to buy a house. And so they helped to write loans and underwrite loans. The theory was, at least implicit, that the government IOU was behind the things that Freddie and Fannie took care of.

Then as we moved along further, we moved up to the Clinton era. Toward the end of Clinton's days, what he did was increased the percentage of the loans that Freddie and Fannie had to make and increased the percentage of them that were very risky loans. In other words, essentially what he was saying was that the government is forcing Freddie and Fannie to make loans and that we know an awful lot of them are not going to be paid. And of course when you start to mandate that quasi-governmental groups are going to make bad loans, then pretty soon you're going to have trouble.

Well, this coincided then, as we move along a couple further years, to the era when Alan Greenspan drops the interest rates extremely low because the economy is tanking. In 2000, Greenspan started dropping the interest rates. And then you create this idea of, well, hey, if we have got all of this money at tremendously low interest rates, where are you going to park it? Well, let's park it in real estate because real estate always goes up. You can't make a mistake in real estate.

In my first early days here at Congress, boy, did I feel stupid that I hadn't bought a great big multimillion-dollar house, because if I could have just afforded the interest payments on it for 4 years, it would have doubled in value between 2000 and 2004 or 2005. Of course, I would have to have been smart enough to buy it in 2000 and smart enough to sell it by 2005.

Well, as everybody knows, that old bubble popped. And increasingly all of these loans that were being made started in the process of defaulting. And it was not just people in economically disadvantaged areas that were making these loans. No. Wall Street got into the deal. And so did the speculators. And so what started to happen was you had people going out there and selling all of these loans. The local banks went through the Community Reinvestment Act and would make the loans. But as soon as they made the loan, they turned it right on over to Fannie and Freddie, assuming that if anything goes wrong, the Federal Government is going to bail them out.

Then you get to the point where people are running around who are mortgage brokers. And they don't care what kind of job you have. If you want to borrow a half a million bucks, fine, because they simply write the loan, make the commission on the loan, and the loan is passed on largely to Freddie and Fannie.

In the meantime, Wall Street was taking all of these loans, packaging them together and slicing and dicing them and selling them all over the world and making a great deal of money in the process as the housing bubble was going up and up. Everything looked pretty good.

And then you had the rating agencies, such as Standard & Poor's or the other one would be Moody's. They were all giving these things Triple A ratings. This is good stuff. Everybody around the world, buy all of these loans that are made to people who we know really don't have the ability to pay these loans.

And so now you get this situation where you're spiraling upward and upward. The bubble is about to pop. Did anybody see it coming? Well, the answer is, yes, as a matter of fact they did. President Bush saw it coming. He saw it coming in 2003. And he approached the legislature. He said, I have got to have the legislative authority to rein Freddie and Fannie in because these guys are going crazy making these loans, and it's going to mess the whole economy up.

And so Congress, while we were in the majority in 2004, we passed a bill that allowed the President to have the authority to regulate Freddie and Fannie to stop this runaway train. It went to the Senate, and it was killed by the Democrats.

Now let's take a look at what appeared in the New York Times, not exactly a right-wing oracle, about that very time, September 11, 2003. And this is part of the quote, September 11, 2003, New York Times, ``These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis.'' Who would say that? Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ``The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

I would yield to the gentleman from Georgia who is quite an authority on this subject. Thank you for joining us tonight, gentleman.

That's correct. That was 2003 in the New York Times, September 11, the President sees this coming, he says that we've got to regulate them more.

I'm reclaiming my time. People are saying that this is a failure of free enterprise. This has nothing to do with the failure of free enterprise. This is a failure of socialism.

That's correct. We passed a bill. Reclaiming my time, we did pass a bill. And this is something that we saw as a problem. But as you will recall, the way that the Senate body works, while we sent legislation over to them, this article goes on to say the Democrats opposed it. And we did have the 60 votes to get it passed. So nothing was done. And perhaps if there is any blame that needs to be made on the economy being in the condition it's in, it really rests with the U.S. Congress, with the House and the Senate.

Now these other rating agencies that said that you're going to give a Triple A rating to this trash, certainly they ought to have to be accountable as well. And certainly Wall Street was knowing that they were selling trash and rating it Triple A and selling it all over the world. It wasn't that they hadn't done some things wrong, but to allow that to happen, first of all, the Congress was out to lunch.

Reclaiming my time, my understanding was what Clinton did was not so much in the Community Reinvestment Act, although that was done with ACORN and all, but more particularly he specifically required that Fannie and Freddie make loans that essentially we knew weren't going to be any good. I yield.

Reclaiming my time, you know, gentlemen, somehow or other people want to try and package this as compassionate. I'm trying to think of people such as myself or other people in my district and what happens if you put someone into a house, and maybe they can afford a $250,000 house, and you put them in a $400,000 house, and all of a sudden, every month they've got that mortgage payment coming due; and the financial pressure, it starts to drive the husband and wife apart and make the children's lives hell as eventually they end up on a street side with their sofa on the sidewalk because they can't afford it. How is that compassionate? I don't understand.

But gentleman, I note that we have some other distinguished guests here. Could we come back to you in just a minute?

I will yield.

I yield.

So reclaiming my time, you're just giving an example of this absolutely crazy runaway policy that we have. It's basically a free money, you don't have any job, you don't have any money, borrow whatever you want and speculate and hope things work out right.

I yield.

Reclaiming my time, gentleman, we are going to get to that very point that you're making, and I thank you so much, Congressman Broun from Georgia. And I sometimes think of it as doctor, but now you're congressman. You've got a couple of different hats. I appreciate your just straightforward approach. This is what we're talking about that's hurting a whole lot of very small, very average people. And the thing that really makes me sick about it is we saw the thing coming, and not only has the American economy got a cold, we've given pneumonia to the rest of the world, and there are people starving because of these very policies.

And somehow, putting somebody in a house that they can't afford, I don't see how there's anything compassionate about that.

But we are joined by another doctor from the great State of Georgia as well, Dr. Gingrey, but maybe we should call him Congressman Gingrey. I would be happy to yield to you sir.

Reclaiming my time just a minute. What you're doing is you're fast forwarding a little bit. We started by talking about how did we get in this mess. I was going to make just a comment. Sometimes people say this is as bad as the Great Depression. Certainly it's not. It's not as bad as what things were under Jimmy Carter when we had double digit unemployment and double digit inflation. But we can make it that bad if we work at it and do the wrong things. So that's scaling it.

Now, what you're talking about is we've got a solution that's being proposed. It's a solution that's proposed by the Pelosi Democrat Congress. We saw the vote on that last week. Not a single Republican voted for it. But they had a proposal, and I think it's great that we do have a problem. We acknowledge there's a problem, and they made a proposal. And that's what you're talking about, Doctor, and you're talking about the mechanics of what they're proposing, and I think we need to take a look at that. And what you're saying, from what I'm hearing you say is, you don't think it's going to work. And I yield.

Reclaiming my time, you're saying this is $10,000 for every family in America is what this thing is going to cost?

Reclaiming my time, I appreciate, Doctor, and Congressman your joining us and your perspective. I think when you start talking about $800 billion or $1 trillion, those are such box car size numbers, it's a little bit tricky to put them in perspective. I think you've done a great job when you bring it down to the fact that the stimulus package that was just passed last week by the Democrats, that would be your medical care and your food and clothing for an average family. That's what that would be. That's how much it's going to cost an average family. Or you could say it's what it costs you to have your house. Those are significant numbers. I think it brings it home, and we really to ask ourselves what are we getting for this stimulus package?

And with that, I note that we have a distinguished colleague of mine from all the way out on the West Coast, Congressman Dreier, who has been here a number of years and is really on top of these issues. It's an honor to have you joining us. I yield to the gentleman.

Reclaiming my time for just a minute, I appreciate your perspective because we can stand here and talk about boxcar numbers and economic theory and policy, but you are bringing it down to what it has to do with the guy in the street, what it has to do with me.

There is a picture that always sticks in my mind. I don't know. You know, sometimes you take in mental pictures, and there is a picture that sticks in my mind. When we get talking about these charts and everything, I always want to come back to this picture, and that is a picture of a house, and sitting right there on the sidewalk is somebody's sofa. I think about the young dads who have just gotten married and who may have a kid or two, and they are struggling, and they are trying to keep their heads above water, and they tell their wives not to buy any food, and they tell their kids not to buy any toys. They are still trying to pay this

debt off, and they keep getting worse and worse behind. Finally, they go out there, and that is when they end up with that sofa that's sitting on a sidewalk.

That is what we are talking about with these socialistic policies. Here it all started with this ``give somebody something,'' and somehow or other, Uncle Sam and socialism are going to make it work.

I would yield.

Reclaiming my time, yes. Gentlemen, thank you for coming to that point, because I don't like people to come in here and be critical and say that it's no good, that it will not work, and then don't offer a better alternative. The good news is that there is a better alternative. We don't have to be doing what we are doing.

I noticed that my colleague from Georgia, again Dr. Gingrey, Congressman Gingrey, has got a chart here.

Would you like me to yield, and do you want to explain what you have?

Reclaiming my time, I am also joined here today with Congressman Latta from Ohio. I believe he has got some charts and can help cast a little bit more light on exactly what this bill is that was just passed last week and what it means.

It has $500 million for the National Endowment for the Arts. I wonder if that's going to get the economy going. It has got $54 billion for 19 programs that the OMB--that is the Office of Management and Budget-- said were completely ineffective programs. Yet we are going to put $54 billion into programs that, by our own definition, do not work. Particularly if you want to take a look at another one, there is $355 million for STD funding. That may put a totally different meaning on the word ``stimulus.''

Anyway, we are joined here by Congressman Latta from Ohio. Thank you for joining us, gentlemen, and I am interested in your perspective. I yield.

Reclaiming my time, let's get this number down. As to the number of unemployed when we started into the first big recession that was going to become the Great Depression, what was the percentage?

Reclaiming my time, your point is just what was observed by the guy who was doing all of this Keynesian economics, this guy Morgenthau. After spending us into tremendous debt, he just basically said, after 8 years, we weren't able to create any jobs, and you're saying it was basically World War II that generated the jobs; am I correct? I yield.

I hate to interrupt you. Could I reclaim my time for just a minute?

We are joined here on the floor by another expert we have got, and I want to get right back to you, but Congressman Scalise is trying to catch an airplane pretty soon. I wanted to try to fit him in because I think he has an interesting perspective that just ties in beautifully with where you were going, Congressman Latta.

So I yield to you, Congressman Scalise.

Reclaiming my time, Congressman Scalise, thank you very much for your perspective, and I appreciate your optimistic and positive approach.

We're not here just to say something won't work. We've got a better way to solve the problem. We've got something that has worked time after time historically, and the approach that is being proposed, which is just massive government spending, not only did it not work for Morgenthau, who was the guy who was the champion of this Keynesian economics for FDR, but it's never worked subsequently. It didn't work for the Japanese for 10 years, as they ran up huge debts, spent a whole lot of money.

And the average American in this country has got enough common sense to realize that just dumping a whole lot of money, if you're in financial trouble and you're the captain of your own little family, you're not going to go out and buy brand new cars and run up a whole lot of debt. It doesn't make any sense. And for government to do that, the public knows that won't work either.

But I want to get back to my good friend, Congressman Latta from Ohio, and I did interrupt you, and I yield to the gentleman.

Reclaiming my time, I think the gentleman, what you are saying is--and you're saying it in a pretty sophisticated way, but just some poor old guy from Missouri, what I think you are saying, just like when we issued all of these loans that people couldn't pay, what we're doing, in a national sense, is we're like running down a dead-end street, and pretty soon, as we keep printing more and more money and keep getting more and more foreign countries buying our debt, there's going to become a time, a reckoning, and boy, it's really going to be unpleasant when we hit that stone wall at 70 miles an hour. Is that getting in the direction of what you're saying, Congressman? I yield.

Reclaiming my time, that is the question, isn't it? How is this going to work? And I think that really there are two theories here in terms of the way you handle the problem that we're in with the economy.

One is you spend money like mad, which is what FDR tried to do and turned a recession into a Great Depression, and the Japanese followed that same example, went down the same street for 10 years, had a great big depression over there because they had a bunch of these guys thinking you could, quote, stimulate the economy by spending money like mad that you don't have.

But that raises the question in that we already have the amount of debt that you're talking about. We should have great economy if that theory worked, shouldn't we?

I mean, we've got a tremendous amount of debt; therefore, we shouldn't have any economic troubles. And just as Henry Morgenthau found out, it doesn't work. And the approach that is being done by the Pelosi Congress and what is being asked for by our new President is based on this Keynesian model of economics which really doesn't work.

I also promised my good friend, the gentleman from the congressional district in Ohio, Congressman Jordan, wanted to let you have--we've got about 5 minutes or so here. I wanted to let you have a chance to chip in on the whole conversation. You have been very helpful, and your thinking is highly respected, I know, in our caucus.

Reclaiming my time for just a second here, what you're talking about is where I really wanted to get to with this conversation tonight.

We're not just saying things won't work. Yes, what's being proposed, putting the government tremendously into debt, a lot Federal spending does not solve the problem, but there is a way to solve this problem. It's just going to require a little discipline, like some good wrestlers in the State of Ohio know, and I want to let you continue with that because we have a solution, a positive way, a bold approach to take care of this problem. We don't have to turn a recession into a great depression. But the solution that's being proposed always created depressions from recessions. We don't want to do that. We've got a way to solve the problem.

I yield.

Reclaiming my time, I very much appreciate your perspective in getting to the positive solution.

And I would yield to the gentleman. We've just got a minute or two, but if you'd like to join us, I yield.

Just reclaiming my time for a second, you're talking in kind of economic terms, but further, what does that mean to the average person in our district? It means a lower standard of living, doesn't it? It means you can't make ends meet. It means you're not going to buy the food you want to buy. And I yield again.

Reclaiming my time, I think what you're saying in a polite, sort of sensitive way is California has been spending money at an incredible pace, and the question is, should Nebraska have to subsidize California? And that's really what we're talking about, isn't it? I yield back to the gentleman from Nebraska.

Reclaiming my time.

I think we've got just a very short amount of time left.

But your point is so good. Our objective is not just to say what won't work but to say what won't work because we know it won't work, and instead, let's adopt something that's helping those families. I was talking about it earlier, the picture that just keeps jumping in my mind--and this is happening all over the world because of our lack of bold and decisive and disciplined action here--the picture that comes to my mind is the house with the foreclosure and the easy chair and the sofa sitting on the sidewalk. And I'm thinking about the mom or the dad of that family and the pressure that they feel where they're just dumped right out of their house. This is not just economic numbers, this is the people of our country.

I yield my last 30 seconds.

Reclaiming my time.

Thank you, Madam Speaker.

Mr. Speaker, I appreciate your patience in working with us here and allowing us to have this time to talk about something which is a very important and serious topic which has captured the attention, I believe, of most Americans: the work of the House of Representatives in Washington, D.C., today on the floor of the House. We have in a way created history here in a unique way.

We have heard for the last 6 or 7 years, depending if you are talking about the war in Afghanistan or the war in Iraq, about the tremendous costs of these two wars, particularly the war in Iraq. Year after year we hear from all different sources, all different political stripes, that these were very, very expensive wars. And yet, if you were to add up the total cost of the war in Iraq over the past 6 years and add that to the cost of the war in Afghanistan for the last 7 years, adding those two numbers together, in one fell swoop this afternoon we spent more money than that, in excess of $800 billion.

I want to repeat that, because this is a fact that I think people are starting to add it up and say this is what is going on, but I don't know if that has sunk into people's minds:

Today, on this floor, we voted on a bill which will spend more money than the war in Afghanistan and the war in Iraq added up.

Now, how did we get to this strange position where we are so concerned about our economy, so concerned about deficits, so concerned about the government overspending? We have heard that from both political parties for some period of time. How do we get to the point where, in one fell swoop, we just passed $800-plus billion?

Well, in order to try to put that in perspective, what I am planning to do tonight, and I am going to be joined with a number of my colleagues of very great reputation from all over the country; what I am going to be doing tonight is talking about how this developed, what is the nature of the problem, how did it occur; and then, how do we scope how big the problem really is, and what are the natures of the different ways that people might want to solve the problem?

The bill that we passed today was theoretically to solve a problem, and so let's go back just a little bit and say, how did we get into this particular mess that we are in?

Well, it goes back quite a ways to the Jimmy Carter years when we created various programs to try to help people to be able to get loans on houses, people that lived in areas where certain particular geographic areas were hard to get loans. And so the Carter administration put together the Community Reinvestment Act, and it was originally saying that when we are doing these different home loans, that we need to have some mechanism so that we can create some way for people that live in some more difficult areas to get loans in, for them to try to be able to get loans. I would suppose you would call it the economically disadvantaged areas. Well, that was under the Carter years.

Now, when we move forward in time, under President Clinton what was done was it changed this Community Reinvestment Act and it said that and it increased the percentages of the loans that had to be made from a banker's point of view to people who were not as good risks. In fact, it demanded that there were loans made to people who were just flat a bad risk and very likely would not be able to pay the loan.

At the same time in the 1970s, we created Fannie Mae and Freddie Mac, and these were two quasi-governmental agencies, and the purpose of them was also to provide loans for people in the sort of middle-income type bracket of housing so they could get loans at a reasonable rate. So Freddie and Fannie were born. They were really not quite government and they were not quite private. They were in the in-between zone, and they started more and more to make real estate loans, to the point that a few years ago when Freddie and Fannie got into trouble, more than half of the home loans in America had been made through Freddie and Fannie. So they had grown over the years to tremendously large quasi- governmental organizations.

What happened under the Clinton administration was Clinton forced Freddie and Fannie to take a whole lot of loans, loans that were not going to be very good loans, and he said you have to take them along with the other loans that you are taking. So the government, as a matter of policy, forced Fannie and Freddie to make loans to people who were going to have a hard time for some of them to pay back.

This starts to go along at the same time with Greenspan reducing the interest rates, so there was a whole lot of money available for people to put into houses. And probably many realize now when we talk about 2001, 2002, everybody's home values were going up like a skyrocket. Everybody was happy as their house was getting more and more valuable. Just in the 2000s alone, they doubled. And many people took secondary loans on their homes.

So this easy money in combination with the fact that you have now got all of these different speculators jumping into this housing market, and what happened was because of the fact that Freddie and Fannie were playing very, very loose with their rules and regulations, were taking loans. And they wouldn't ask anybody how much money they made. And they wouldn't ask whether they were able to pay or whether they were going to make a downpayment. They said, you want a loan, fine, we will give it to you, because the assumption was that you and I and the American taxpayer would back these Freddie and Fannie loans. But more and more loans were being made to all kinds of people, including speculators, where there was no way they would be able to pay those loans back.

So as the housing bubble burst. All of a sudden these loans started coming due and people were defaulting on their loans, and there were cries of crisis on Wall Street.

An additional fact that was going on here, you have the rating agencies, one of them is known as Standard & Poor's

and the other was Moody's, and I believe there was another major rating agency, what they would do, they would look at all of these loans that came to them, and they would rate them as to how good the loans were. Well, they wouldn't be asked to do any rating if they rated the loans not very good, so these loans were all rated AAA. That means this is good stuff, you can afford to invest in it.

So these loans were sliced and diced. They were sold all over the world, and many different banks and institutions held these loans on their books as an investment.

Well, what started to happen, these investments became of no value. People couldn't pay the loans. They started to realize what had happened was there was an absolute runaway on the loan process and the people that had gotten the loans didn't really have jobs and couldn't really pay off the loans. And so you started to have all of these mortgage-backed securities started to seize up, and the entire credit market started to seize up.

That was last fall, and it was that time when Secretary Paulson approached Members of Congress and said we have a huge crisis on our hands. It is a disaster, and what you all have to do is you have to give me $700 billion. And I would like it in a brown paper bag in unmarked currency, and I would like it in a hurry, too, please. A lot of congressmen were going: $700 billion? So you have the cycle of the first bailout.

Today we come to the second. We have already spent $350-plus billion of that $700 billion, and people could argue whether it has had any significant effect. Certainly it was not spent in a transparent way. Most people don't know if we got anything for our money, but it was a tremendous amount of money that was spent.

So today we come to the floor with the economy still in bad shape. Why is it in bad shape? Well, it is in bad shape for a couple of reasons. First, of these bad loans, only about half of them have come down and different institutions have had to write them off. There is still another half of what are called Alt-As or ARMs, there are two different kinds, that will probably also in the next 2 years be defaulting as well. So we have only drunk about half of the cup of poison of bad loans that were created by liberal policies and an unwillingness to regulate these quasi-governmental agencies.

I would like to call to your attention a New York Times article, not exactly a right-wing oracle, and this article is dated September 11, 2003. It says, ``New agency proposed to oversee Freddie Mac and Fannie Mae.'' So it wasn't like everybody was asleep at the switch. People were starting to wake up in 2003 that Freddie and Fannie were out of control.

The beginning of this 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.''

The Bush administration called on Congress to get these wild and woolly loans under control. And so what happened? Well, the Republican Congress passed a bill to do what the President was asking for, to put much tighter regulations on these loans so we are not making a whole lot of loans that are not going to be paid and create a huge crisis as the savings and loan crisis of a decade ago.

Here is an interesting quote in the same article, September 11, 2003. ``These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis.'' Who said that? Well, ``said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee.''

Who is it that is overseeing this bill that we passed today? It is one and the same.

So in 2003, the Democrat Party, the Democrat ranking Financial Services Committee chairman, he is saying that Freddie and Fannie are not facing any kind of financial crisis. Now there are people who want to say that the economic problems that we are facing show that capitalism isn't any good. This has nothing to do with capitalism. This has everything to do with the practice of telling financial organizations that you must make loans that we know are going to fail. That is not a very smart thing and is not looking very smart now, but this is where we were in 2003.

And the article goes on to say that the opposition to the bill that we passed in the House and Senate was the Democrat Party, and the bill was not passed because we didn't have 60 votes, and so we didn't oversee Freddie and Fannie until the train wreck actually occurred.

So how did we get into the crisis? Well, the simple answer is we got into the crisis because we started to demand that financial institutions accept and make loans to people that really couldn't afford to pay for them.

Now that raises an interesting question. How compassionate is it, how compassionate is it really to be making loans to some family that can't afford their mortgage payments? You have a mom and dad and some kids in some house, and they start arguing and fighting because the mortgage payment is too much for them. And so they get the credit card and the credit card has a high debt level. And so they start to say you shouldn't have spent money because we have this big loan. So how is it compassionate to put someone in a house they can't afford? Yet that is what we were defending and doing, and that is what caused this financial problem.

Now the interesting thing is that people say when America catches cold, the world catches pneumonia. And so this little oversight in assuming that the American taxpayer was going to bail out loans that were made irresponsibly has had worldwide implications and has caused all kinds of trouble in major Wall Street corporations closing up, and banks hunkered down worried about more of these loans that are going to be coming due in the next 2 years.

People are very mad at the banks. They say we gave you all of this bailout money. Why aren't you using it to get the financial service markets up and going? The answer is because we are afraid that when the rest of these things come down, we are going to need this money to cover all of the bad debts that are made.

So that is really the nature of where we are. This is something that is a result of active decisions on the part of people in Congress who are supposed to be, among other things, responsible for keeping an eye on our currency and the solvency of our economy, and we just basically have ignored what was our responsibility.

Now this is not something that you can dump at the feet of Republicans. The President, and once again I want to read this, this was 2003, the article says, ``The Bush administration today recommended the most significant regulatory overhaul in the housing and finance industry since the savings and loan crisis a decade ago.'' This was something that we saw coming and it was something that the other party was unwilling to deal with. So that is how we got to where we are.

Now today, today we adopted spending over $800 billion. Now as I said before, $800 billion, it is hard for many of us to think about how much that is. But we have heard how expensive the Iraq war was, all these past 6 years: ``We can't afford this war in Iraq. We can't afford Afghanistan. That is bleeding us dry.''

So now facing this crisis, what are the solutions we have because it seems like a very dire thing and it certainly is very serious, something that deserves our full attention. What are the different tools that we have to deal with this big mistake that we have been dealt?

Well, there are basically two theories of economics, and one of them is called the Keynesian approach. It is older and has been around since the Great Depression. And the Keynesian approach says that the Federal Government needs to spend some money. If the Federal Government spends a whole lot of money, that will stimulate demand and people will want things and therefore somehow or other we are going to get out of this recession or depression if we just spend enough money with the Federal Government. Well, I guess that was an interesting thought when the budgets were closer to balanced.

But if that were true, we have already spent way more money than we have as a country. We are already in debt. We should have a great economy if that theory were true because we have already been spending a whole lot

of money. But that is the Keynesian approach. It seems by some degrees like the idea of grabbing your shoelaces and lifting up and flying around the room. If we just spend enough, everything will go okay. Can you imagine any American family that would dare to try such a strategy if they were in financial trouble with their family budget? Are they going to spend a whole lot of money and hope that it will make everything okay? I don't think so.

History seems to indicate the same result. When FDR used that approach with the first big recession that came along, he turned it into the Great Depression. He spent a tremendous amount of money on public works projects, and some of them might have been useful, but the net result in the economy was that the recession just kept going year after year after year, and we called it the Great Depression.

Now, he wasn't the only one who tried this. The Japanese tried this in the 1990s, and they basically had an entire decade of lack of productivity and complete stagnant economy in Japan because they did one massive spending bill after another thinking it was going to work to pull them out of a recession, and it just made matters worse and worse and worse.

In contrast to that economic approach is another thing that is typically called supply-side economics, and that is the theory that government really cannot stimulate the economy at all.

The only thing the government can do is tax or not tax. And when it does tax, it can slop money around. But the government cannot actually create wealth whatsoever. It merely can take wealth away from citizens and redistribute it or refuse to take the wealth.

Instead, the supply-side model suggests that the best way to deal with a recession is to try to allow the people who are the inventors, the investors and the various risk-takers and entrepreneurs, allow them to have money to spend on new ways of doing things to build productivity in America. Particularly targeted with this approach would be the small business people, because small business people provide about 80 percent of the jobs in America. So if you have small businesses going strong, people investing in new ways and better ways to do things in small businesses, obviously some of those ideas will succeed or fail. But the result is you drive numbers such as unemployment and the overall productivity of the economy. And this is called a supply-side model.

We have had several examples of the supply-side approach. One of the earlier ones was done by JFK, who was a Democrat, of course. He did a major tax cut. And he did the tax cut in the right areas, and the economy snapped back and responded very favorably. He was followed another number of years later by Ronald Reagan, who did the same thing. He did a very large tax cut. But he made sure that the money got into the hands of the people that are going to be able to create the productivity. And we had a decade of fantastic financial success and productivity in America as a result of Ronald Reagan's tax policies. People made fun of it at the time. They scoffed at him. But the reality was that the economy was very strong.

It was tried again just a few years ago when I was fairly new here in Congress, and that was in the second quarter of 2003. I have some charts here which show what happened. What we did in the second quarter of 2003, which is the vertical black line on a couple of these charts, what we did was, we reduced the taxes of capital gains and dividends. Now what that was calculated to do was to allow the people who were the small business investors, the small business owners and the entrepreneurs, it allowed them to keep more of their money that they earned and plow it back into the small businesses.

And so what was the result of this particular tax cut in the second quarter of 2003? Well, as you can see, this is a picture of gross domestic product. Now we had done some tax cuts in the first couple of years of the Bush administration. But you can see that the gross domestic product averaged about 1.1 percent, but was also up and down. It was pretty spotty. What you see happening here then, as a result of dividends and capital gains where we are pumping money into the small business, into the investors, you see this tremendous increase in gross domestic product running out to 2007 of 3.06 as opposed to 1.1.

Now this tax cut is set to expire before long. But you can see the impact of the supply-side model. We're not the only people who have tried this. The Irish did this. They dropped their taxes on businesses and small businesses, and Ireland has just been booming and is almost an exact opposite model of what happened in Japan.

You might ask, well, what happened with this gross domestic product? That sounds like some sort of a boring government number. How about telling me something about jobs? This is the same time period. You have got May of 2003. These lines going down are job losses. The average loss of jobs per month was 99,000 jobs a month during these earlier years of 2001 and 2002.

Now you take a look at when we do the dividends and capital gains and take a look at the jobs gained. We went from a loss of 99,000-plus jobs lost per month to a gain of 147,000 jobs gained per month. This is an example of the supply-side kind of model. What it is saying is that government should not be spending tons of money.

Government should be cutting back what it's doing. And, in fact, what government should be doing is allowing productivity to take place in the marketplace and allowing the people that own small businesses to make those investments which result then in employment, and it results in better gross domestic product.

But last of all, and this is kind of an interesting idea, take a look at the effect of Federal revenues. Now, it seems to almost make water run uphill when you say, hey, we're going to cut taxes. What would you expect would happen to Federal revenues? Well, you would expect the revenues to go down. If you lower the taxes, you're not going to collect as much money. But that is not what happens. Why is that not what happens?

Well, this is actually the result of Federal revenues. Take a look at where they turned around. Again, the beginning of 2003 and after 2003, after these tax cuts went into place, Federal revenues are going up even though we cut taxes. Now how could that be? How could that happen? How could that be true?

Well, think about it for a minute. Let's just say you are king for the day. And your job is to try and raise as much government revenue as you can to pay for the cost of government. And you're allowed to tax loaves of bread. Now you start to think in your mind, let's see, I could tax 1 penny per loaf and it would hardly be noticed. But then you start adding it up. And you say, I wouldn't get very much money that way.

Then you think, a-ha, I will charge them $100 a loaf. By golly, that will get a lot. But if you tried it, you would say, no, what is going to happen is nobody is going to buy a loaf of bread if you have a $100 tax on it. I will get something else instead.

So common sense would say to tax somewhere between $100 a loaf and a penny a loaf. There is some optimum point where you adjust the tax and you are going to get the maximum amount of revenue.

So what has happened here is that we have taxed our citizens so much money that when we reduce taxes, the result is the economy surges and we end up with actually more tax revenue, which is what actually happened here following 2003. So this is the other approach.

There are two approaches. One is the Keynesian approach, spend tons and tons of money and somehow it is going to make everything better. Or the other one is, no, don't spend a lot of money. Let the money work in the hands of people that can be productive to build productivity, to build jobs, to build GDP and to allow the Federal revenues to increase.

And so we have these two approaches. Now, today, we had to take a choice, which approach are we going to use? And it was a straight party line vote, at least from the Republican side. Not one Republican supported this Keynesian idea of just slopping a tremendous amount of Federal spending--the money that we don't have, by the

way--as if that is going to fix this problem.

So our problem with it is, it was very courteous of the President to stop and pay us a visit yesterday, talk to us about what he wants to do with the economy and plead with us not to make it political. And it is not our objective to make it political. But the President said, but if you think it's not going to work, that is a different matter.

And so I stood up and talked to him. And I said, Mr. President, you have been very courteous talking with us today, but I think you made a couple of bad assumptions; and so my belief is that the package that you are proposing will not work. It is not only not going to work. We can't afford it, and not only can we not afford it, it's going to make matters worse; and here is why.

And so today we had a choice. We had a choice between the Keynesian model of spending a ton of money or the other model, which we proposed, which was not to spend a whole lot of money, but make sure that the money gets back in the hands of the small businessman and to allow American productivity to take place.

Well, as I said in my introduction at the beginning of my comments here tonight, what happened was we just passed an $800-plus billion. That is, once again, take all of the money for the cost of the war in Iraq, take all of the money for the cost of the war in Afghanistan over the past 6 and 7 years, and you put that together, and what do you end up with? You end up with the fact that this bill costs us more than all those wars. And that is on top of this big bailout from just a couple of months ago.

Can our economy handle that? What that does is it puts us more into debt than we were during World War II. As a percentage of our overall budget, we're getting close to 10 percent debt, whereas in World War II, we were looking at 6 percent.

I'm joined here by a good friend of mine, my colleague from just over in Iowa, just a State or so away from the great State of Missouri, and he is going to be joining us in just a minute to talk a little bit about his perspective on this absolutely incredible bill that we have just passed today.

So I would yield to the gentleman from Iowa.

If you would like to jump in here and tell me, what do you think about the fact that we just--I mean, I almost have to pinch myself, gentlemen, to think that just standing here a couple of hours ago, we just voted to spend $800 billion more than the cost of the war in Iraq and Afghanistan. There are other ways to look at that number.

Would you like to jump in?

Of course, in the Great Depression, you took a recession and turned it into a Great Depression and it just kept going and going and going.

Because what they are doing is they are vacuum cleaning all of the money out of the economy for Federal jobs programs, supposedly creating jobs and starving the very productive sector of the economy that could be solving the problem.

If you allow me--

--to just reclaim my time for just a minute, it seems that we have quite a number of different historic models to look at now where the Keynesian approach of big government spending has fallen on its face. It was not just the Great Depression, it was also Japan. And if you really want to say that, you could also quote America right now, because we have spent way more money than we should have spent, and yet our economy is not so strong. So if the theory is spend a whole lot of money you don't have, it

should have worked by now because we've been practicing that more than I wish we had as a Republican conservative.

And so there are models. And yet at the other end there are models showing what you're saying, that productivity of the businessman in America is what really works. It happened that productivity of businessmen in Ireland really worked very well. You could almost contrast Ireland and Japan using the two different approaches. And as you know, gentlemen, you've had the responsibility of meeting payroll and running a small business, the discipline that's required to do that. And you also have the satisfaction of seeing a worthwhile product that is added to the market and is there for some period of time because of the fact that you have enriched Americans through the work of your business.

If the gentleman would yield, are you saying that originally Ireland was going to get rid of all income taxes on corporations to encourage them to locate there and to work their free enterprise magic there, if you would; is that what you're saying?

Yes, I do yield.

Well, it's just a treat to have you here and to bring that free enterprise perspective that you have. And there is something that just seems kind of amazing to me in a way, the irony in a way, of the fact that this whole problem with the economy that we're dealing with, even now and for the last couple of years, is the result of people that were liberal Democrats unwilling to regulate Freddie and Fannie. And that's recorded right on the old New York Times. The President says, You've got to get these wild-and-woolly loans under control. They said we're not going to do it. And boy it hit the fan.

And it seems to me there's an ironic twist that this quote that I put up earlier, the chairman, the current chairman of the Financial Services Committee--who is now tasked with getting us out of this problem--there's a certain irony in the fact that this is the guy that makes the quote, ``These two entities, Fannie Mae and Freddie Mac, are not facing any kind of financial crisis,'' said Representative Barney Franks of Massachusetts, the ranking Democrat on the Financial Services Committee. It seems ironic to me that he makes that statement, the whole top blows off everything, and now he's in charge of fixing this thing. The thing that concerns me is is the way he's going to fix it is going to make it worse. And what we've done here today is we've spent more money than we spent in Afghanistan and in Iraq over the last 6 and 7 years, and we did it hardly with a blink of an eye.

Yes, I do yield.

And of course the Democrats are in charge. They got 60 percent of the votes today. They passed a really historic--it puts America into uncharted waters. And it was a very bold stroke on their part, but I'm arguing not as a Republican, but simply as an American, that the stroke that was taken is going to cause a whole lot of trouble.

I really appreciate if you could stick with us. We are joined also by a very respected Congressman, Congressman Cassidy from Louisiana. And we're just delighted to have you here with us this evening and talking about some really boxcar size numbers, really some unprecedented times that we are going through here.

And this particular solution that was passed today without any Republican votes in favor of it just makes the Marshall Plan look like child's play, even when you adjust it for current value of money.

But Congressman Cassidy, please jump in. I yield.

Congressman Cassidy, I think you're going pretty quickly here, and I think there may be some that aren't catching the implications of what you're saying.

What you're saying is, this bill is not really stimulus at all, it's simply putting more money into things that we normally budget anyway. Is that what you're saying?

Excuse me to the gentleman. The parallel then would be, what we should be coming home with is not bread and milk, but jobs for the economy; is that right?

Could I reclaim my time on that point?

One of the things that you might think of is, if you're talking about jobs, one thing that might occur to you is that, depending on what you call a small business, 50 percent of the jobs are companies that have less than 100 employees, or if you consider a small company bigger than that, 80 percent of the jobs in America are small business. So wouldn't you think, if you were really coming home--using your analogy with the bread and the milk, if you're really coming home with jobs for America, don't you think you would have some provision in there for particularly small businesses? And yet this bill, for every dollar in there for small businesses they've got $4 for seeding and sodding the Capital Mall. That seems like a weird set of priorities. And I see your analogy to the DVDs, and I would yield back to my good friend from Louisiana.

Well, reclaiming my time, I believe the people of Louisiana are probably watching one of their newest sons with his experience on the floor. You know, there's something fresh about somebody coming in here that hasn't been, in a way, influenced by all of the pressures and everything that Washington may try to exert on someone. And it sounds to me like you're talking just plain old American common sense. And I think an awful lot of Americans don't want Republicans and Democrats and all that stuff going on, they want solutions to problems.

What we have today is basically a 10-year-old shopping list that has nothing to do with real genuine stimulus because that has to come from the private sector. And this bill does everything to harm that because it's taking money out of the economy, it's spending money at an unprecedented rate. And I just think that you are so much on target and your common sense--obviously you may be new to Congress, but you're not new to what's going on in the world. And it's just a treat to have you here. I hope you will stick with us, and we will continue this as a little bit of a dinner table kind of conversation.

I notice that we're also joined by a good friend of mine from Georgia, a medical doctor, someone that has already risen to be highly respected among Congressmen. And I would yield to the gentleman from Georgia.

If I could reclaim my time for just a minute, those are strong words that you're saying, and yet there is an element of truth to what you're saying because, first of all, we're taking advantage of a crisis that people know is a crisis and we're exploiting the crisis to push a solution which is a big government solution. This money is being placed into places in the budget which once those things are jacked up, nobody is willing to touch. So basically what you're doing is you're taking these entitlement programs and you're inflating them and you're increasing the rate at which essentially the government is going to grow beyond the ability of the American taxpayer or the economy to finance it. Essentially, when the government gets that big, we start to think in terms of words like ``socialism,'' even though that's a strong expression.

But I yield back. I just thought you were making some interesting points.

Reclaiming my time, I think you've raised an interesting question, and I think the American public is probably watching this far more closely than a lot of Washington insiders may think. And when the American public understands the size and the scope of what we are dealing with, we're looking here, this bill is 33 percent larger than all of our spending on Social Security.

This is 33.4 percent more than we spend on defense in this country. There's a reason for us to have a sense of urgency and to use strong language. To me, this is a bridge to bankruptcy is the way I would put it.

I yield to the gentleman from Georgia.

Reclaiming my time, that's a good question. We received hundreds of calls. Almost all of them were completely against this massive, massive spending.

I note, though, that we've also been joined by the very distinguished judge from Texas noted for his wit and his good common sense.

Congressman Gohmert, I would yield to you if you have a comment that you would like to make.

Reclaiming my time for just a minute, what you were just saying is today--it wasn't quite the snap of a finger. It was 15 minutes. It was a 15-minute vote. We spent the entire money that's going to be collected in tax revenue from America for the year 2008.

I yield to the gentleman.

I yield to the gentleman from Georgia.

I yield to the gentleman from Texas.

Gentlemen, I think we are done with our 1 hour. I'd also like to recognize the good judge from Texas and appreciate your stopping in. We will try to fit people in again. We will have this discussion, I believe, next week.

Madam Speaker, I rise today in recognition of Catholic Schools Week.

Next week, the Nation's nearly 8,000 Catholic schools will celebrate Catholic Schools Week. Catholic schools have made many significant contributions to the education of our Nation's children.

In the Greater St. Louis region, Catholic schools have had a longstanding and proud tradition in the Archdiocese of St. Louis. The percentage of Catholic families who choose Catholic schools for their children is among the highest in the country. Currently, there are about 51,000 students enrolled in our Catholic elementary and high schools.

Catholic schools foster an atmosphere of mutual respect. Students learn to value God, themselves, and others. As Pope Benedict XVI noted in his remarks at Catholic University during his Apostolic Visit to the U.S. last spring, ``Education is integral to the mission of the Church to proclaim the Good News. First and foremost every Catholic educational institution is a place to encounter the living God who in Jesus Christ reveals his transforming love and truth. This relationship elicits a desire to grow in the knowledge and understanding of Christ and his teaching. In this way those who meet him are drawn by the very power of the Gospel to lead a new life characterized by all that is beautiful, good, and true; a life of Christian witness nurtured and strengthened within the community of our Lord's disciples, the Church.''

Today I would like to recognize and commend our Catholic educators who are committed to a living and vibrant faith community founded on the Catholic tradition of academic excellence and thank them for enriching the lives of the children they teach spiritually, academically and socially.

I strongly support the goals of Catholic Schools Week 2009 and laud their efforts to educate students dedicated to their faith, families, and values.