House Chamber, Washington, D.C., September 23, 2010.   M. Speaker:

Mr. Speaker:

Many people are asking why Congress is here today.  I think the answer’s pretty simple: we’re not bankrupting the country fast enough and so we need to come back and spend more.

In the merciful week that Congress was not in session, my constituents had one message: STOP THE SPENDING.  Obviously, Congress isn’t listening.

Over the past two years, this administration and this Congress have increased spending by nearly 18 percent and run up more debt in two years than the irresponsible Bush administration did in all of its eight years combined.  Meanwhile, unemployment has increased from 7.6 to 9.5 percent.  Yet the problem in the view of House Democrats is that we just haven’t spent enough.   So we gather here today to shovel another $26 billion at the problem

That comes to about $330 for an average family – taken directly out of the nation’s struggling economy.  We’re told, don’t worry, it’s paid for.

How’s that?  $10 billion is from increasing taxes on businesses with foreign subsidiaries.  But remember this: BUSINESSES DON’T PAY BUSINESS TAXES.   Business taxes can only be paid in one of three ways – by us as consumers through higher prices, by us as employees through lower wages, and by us as investors through lower earnings on our 401(k) plans.

Another $12 billion comes from cuts to Food Stamps starting in 2014, but we’re going to use the savings starting now.  I tried that one out with my wife at home.  “Honey, sure we can afford that new Jet Ski this year – I’m planning on cutting our grocery budget by $10,000 in 2014.”  I’m sad to report that she didn’t buy that.

We’re told this is part of the plan to “save or create” jobs.  M. Speaker, this isn’t saving jobs – it is destroying them.  Government cannot inject a single dollar into the economy until it has first taken that dollar out of the very same economy. 

We see the job “saved or created” when the government puts the money back into the economy.  What we don’t see as clearly are the jobs lost or prevented when the government first has to take that money out of the economy.  We see the lost or prevented jobs through chronic unemployment rates and a stagnant jobs market at a time when we should long ago have moved into a normal “V” shaped economic recovery.

Nor does this even guarantee saving teaching jobs.  Good school boards, faced with the choice between a couple of good teachers or a pointless and over-paid bureaucrat are probably going to keep the teachers and fire the bureaucrat.  But this bill says they don’t have to make that choice.  Indeed, this bill says they’re actually prohibited from doing anything that would reduce their spending below last year’s level. 

What about Medicaid?  A bi-partisan group of legislators in my state of California tells us they need this bailout money to save the state’s Medicaid program.  But bailing out bad management doesn’t improve it.  At the peak of the good times, when California was taking in more money than ever before, it was already running a deficit of over $9 billion – almost ten percent of its budget.

 Just four years ago, those same legislators voted Medicaid expansions that have increased its share of general fund spending from 14 to 19 percent.  California offers such Medicaid options as acupuncture, chiropractic services and psychological counseling. 

 And now they’re shocked-just-shocked that they keep running out of money. 

I love my state, but deficits that are made in California should stay in California.

 M. Speaker, with the nation now some 13.2 trillion in debt – 93 percent of the entire economy – it is time to invoke the first law of holes: when you’re in one – stop digging.  And if Congress doesn’t invoke that law now, I can all but guarantee you the American people will invoke it in November.
 

July 28, 2009, House Chamber, Washington, D.C.  Mr. Speaker:  In order to support the Democrats’ healthcare plan, we are asked to accept three arguments that are fundamentally absurd:

First, that the same government that pioneered $400 hammers and $600 toilet seats is somehow going to control healthcare costs;

Second, that the same government that runs FEMA is going to make our health care system more efficient and responsive;

Third, that the same government that runs the IRS is going to make our healthcare more compassionate and understanding.

Frankly, I doubt it.

Instead of putting government in charge of our health care decisions, let’s put patients back in charge.  We can do that by using tax credits to bring within the reach of every family a basic health plan that they can choose, that they can own, and that they can change if it fails to meet their needs. 

That’s what Republicans are proposing.  And it’s a much better way.
 

House Chamber, Washington, D.C.  June 26, 2009.  Madam Speaker:  When we discuss Herbert Hoover’s mishandling of the recession of 1929, the first thing that economists point to is the Smoot-Hawley Tariff Act that imposed new taxes on over 20,000 imported products.

The Waxman-Markey Bill is our generation’s Smoot-Hawley.  It imposes new taxes on an infinitely larger number of domestic products on a scale that utterly dwarfs Smoot-Hawley. 

At least Hoover could argue that Smoot Hawley made domestic products more competitive with imports.  Waxman-Markey disadvantages American products.

When California adopted similar restrictions three years ago, we, too, were promised an explosion of green jobs.  Instead, California’s unemployment rate has skyrocketed to one of the highest in the country.

If this bill becomes law, I believe history guarantees us two things.

One: the planet will continue to warm and cool as it has been doing for billions of years. 

And two: Congress will have just delivered a staggering blow to our nation’s economy just at the moment when it’s the most vulnerable.     

See also Special Order Speech
 

Tough Love for California.  House Chamber, Washington, D.C.  June 11, 2009  M. Speaker:  Gov. Schwarzenegger of my home state of California has called for the federal government to underwrite as much as $15 billion of Revenue Anticipation Notes that the state has to issue to avoid insolvency.

I think that would be a colossal mistake, and that such an act would not only dig the nation deeper into the hole it is in, but would actually make California’s fiscal condition worse.

 Today, California faces a paradox: despite record levels of spending and borrowing, it can no longer produce a decent road system, educate its children, or lock up its prisoners.

 Those who blame the recession for California’s budget crisis profoundly misunderstand the nature of that crisis.  Even before California’s revenue began to shrink, the state government was running a chronic $10 billion deficit and piling up unprecedented debt.

 The recession is merely the catalyst; the underlying cause is rampant mismanagement of the state’s resources.  California spends $43,000 per year to house a prisoner while many states spend just half that.  California spends over $11,000 per pupil, but only a fraction of that ever reaches the classroom.  California has one of the most expensive welfare systems in the country and yet one of the worst records of moving people off welfare. 

 And that’s never seemed to bother California’s governor and legislature.

 They are like the shopkeeper who leased out too much space, ordered too much inventory, hired too many people and paid them too much.  Every month the shopkeeper covers his shortfalls with borrowing and bookkeeping tricks. 

Ultimately, he’ll reach a tipping point where anything he does makes his situation worse.  Borrowing costs are eating him alive and he’s running out of credit.  Raising prices causes his sales to decline.  And there’s only so much discretionary spending he can cut. 

 That’s California’s predicament in a nutshell.  California’s borrowing costs now exceed the budget of the entire University of California and the reason for the loan guarantee is that their credit is exhausted.  They have just imposed the biggest tax increase by any state in American history and it has actually reduced their revenues and made their budget gap wider.   

 Although there are many obsolete, duplicative or low priority programs and expenditures that the state can – and should – abolish, there aren’t enough of them to come anywhere close to closing California’s deficit without directly impacting basic services.

 Sadly, California has reached the terminal stage of a bureaucratic state, where government has become so large and so tangled that it can no longer perform even basic functions. 

 Simply stated, there is now no substitute for a fundamental restructuring of the state’s major service delivery systems and restoring the efficiencies that once produced a far higher level of service at far lower cost that what we see today.

 Restoring that efficiency will require the governor and the legislature:
• to wrestle control from the public employee unions,
• to dismantle the enormous bureaucracies that have grown up over the service delivery level,
• to decentralize administration and decision making,
• to contract out services that the private sector can provide more efficiently,
• to rescind the recent tax increases that are actually costing the state money and
• to roll back the regulatory obstacles to productive enterprise.

These are changes that cannot be implemented overnight and that will not begin producing results for some time. 

 This brings us to the fine point of the matter.  What Churchill called history’s “terrible, chilling words” are about to be pronounced on California’s failed leadership: “too late.”
 
A federal loan guarantee or bailout may be the only way to buy time for the restructuring of California’s bureaucracies to take effect, but the discussion remains academic until and unless the state actually adopts the replacement structures, unburdens its shrinking productive sector and presents a credible plan to redeem the state’s crushing debt and looming obligations. 

Without these actions, federal intervention will only make California’s problems worse by postponing reform, continuing unsustainable spending and piling up still more debt.

In short, if California won’t help itself, the federal government cannot and should not.    
 

January 22, 2009 Speech in Support of House Joint Resolution 3, House Chamber, Washington, D.C.

M. Speaker:

This resolution presents the House with its last chance to admit that the Bush bailout has not worked.  And it will not work because of a simple and self-evident truth:

Government cannot inject a single dollar into the economy that it has not first taken out of the economy.

 It’s true that if I take a dollar from Peter and give it to Paul, Paul has one more dollar to spend and that dollar will ripple through the economy.

 But we forget the other half of the equation: Peter now has one less dollar to spend, meaning one less dollar to ripple through the economy.  In short, it nets to zero.

 In fact, it nets to less than zero, because you are shifting enormous amounts of capital from investments that would have been made strictly by economic calculations to investments that are made entirely by political calculations.

 We are not helping the economy with these bailouts – we are hurting it.

 If they actually worked, we should by now be enjoying a period of unprecedented prosperity and economic expansion.

To those who say, “Well, it’s just the way Bush administered it,” let me pose this simple question: when in the entire history of civilization have such bailouts actually worked?  

They didn’t work in Japan in the 1990’s.  They didn’t work in America in the 1930’s.  And they aren’t working today.

 Fortunately, we know what does work.  Reductions in marginal tax rates and reductions in taxes on investment consistently do stimulate the economy.

 They worked when John F. Kennedy used them in the early 1960’s and they worked when Ronald Reagan used them in the early 1980’s.

 When taxes are reduced on productivity, productivity increases.

 But how typical of government to resist what we know works and to embrace what we know doesn’t work. 

 This resolution offers the House one last, fleeting chance to admit its mistakes, to step away from rigid adherence to failed policy, and to offer the change that the people of this nation deserve.