[Congressional Record Volume 147, Number 17 (Wednesday, February 7, 2001)]
[Page H208]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan (Mr. Smith) is recognized for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, I would like to spend a couple 
minutes talking about the challenges that this body faces over the next 
several weeks and months.
  We are talking about a tax cut. We are talking about what is the 
status of the economy in the United States, where will we go with 
unemployment, what can we do as a body in Congress to help make sure 
that the economy of the United States continues.
  We were talking about economic expansion in the neighborhood of 1.8 
percent a year for economic expansion. Now we are talking about maybe 
2.8 percent a year economic expansion, even with the slowdown. The 
technology that we have acquired over the last several years is a 
result of our investment in research.
  If there is one thing that I would suggest that we do in this body to 
help make sure that we have a strong economy, it is capital investment.
  I divide capital investment in two areas. One is physical capital, 
where we make sure that we put the effort into research to develop the 
state-of-the-art equipment and technology and techniques that can 
maximize our productivity. The other is investment in human capital so 
that we have a better education system.
  Now we are challenged with a question of how much do we excite the 
economy by leaving more money in the pockets of those individuals that 
have earned that money. In other words, where do we cut taxes? How do 
we cut taxes? How do we do it in such a way that it is going to 
maximize the economic benefit of keeping a strong economy?
  I have a couple suggestions. One is that we do not look away, or in 
any way disregard the importance of paying down the Federal debt. Today 
the Federal debt is $5.7 trillion. The Government has borrowed $5.7 
trillion either from Social Security and the other trust funds or has 
issued Treasury paper to lend money to the public.
  Out of that $5.7 trillion, and this is the whole load of hay, out of 
that $5.7 trillion, $3.6 trillion, that is, $3.6 trillion out of the 
$5.7 trillion, is debt held by the public. So over the last several 
years, whether it is this body or whether it is the White House, when 
they talk about paying down the public debt, they are talking about 
only paying down a portion of that debt that has been lent to the 
public, Treasury bills, what I call the Wall Street debt.
  As we pay down the debt, the question that we have to ask ourselves 
is, where is the money coming from to pay down that debt held by the 
public? And where it is coming from is the surplus coming into the 
trust fund. And the trust fund that has the greatest dollar amount of 
surplus or other taxation is the FICA tax.
  In that FICA tax, most of it is Social Security tax, 12.4 percent of 
the total 15-odd percent is Social Security tax.
  This year we will have $158 billion more coming in from the Social 
Security tax than is needed to pay benefits. But when we hit the year 
2010 to 2012, there will be less Social Security tax money coming in 
than is required to meet the benefits just 10 years from now.
  So the question before this body, the question before America, is, 
what do we do with the extra surplus now to make sure that that money 
is more available when we need it 10 years from now?
  Some have suggested, look, let us start getting some real return on 
investment, let us invest that money and let us put it in the name of 
those individuals so that Government and politicians cannot mess around 
with it in later years. And that is important. Because what we have 
done in the past is, when we were short of money, we cut benefits or we 
increased taxes.
  I think Social Security reform continues to be a vital part of the 
decision of where we go in the budget process, how much we cut taxes, 
and how much we increase spending in government.
  Let me give my colleagues an example of the danger of not having a 
tax cut, not getting some of this money out of Washington. That danger 
is that this body and the body over on the other end of this building 
ends up increasing spending so much faster than inflation.
  The last three bills that we put together and passed last December 
increased spending almost 14 percent over what those three particular 
appropriation bills spent the year before.
  The challenge before us is holding down spending, deciding what 
percentage of our total income is reasonable in terms of paying taxes.
  Right now, if one is an American taxpayer, on the average, he spends 
41 cents out of every dollar he makes to pay Government taxes at the 
local, State, and national level. I suggest that that amount is too 
  Let us decide on the priority for the limit on taxes. And if that 
limit is less than what we are paying now, then let us decide on the 
best way to spend that money so that we keep social security solvent 
and Medicare solvent and give some priorities to important projects, 
like improving education.