CONGRESSMAN GREENWOOD:
I think I have 15 minutes to tell you what's going to happen in the next century, and answer all your questions about that, so I'll speak as rapidly as I can.
Between Christmas Day and New Year's Eve, at my request, I went to the headquarters of the Central Intelligence Agency and had a top secret briefing on what to expect from terrorism on the eve of the millennium, and I was quite concerned about what we might expect. I spent an hour, and we talked about Osama Bin Laden; we talked about other terrorists groups around the world. At the end of that hour, they told me that they did not have any specific information that terrorists were planning to target a specific site in the country, and I walked out of there thinking, "Well I don't know whether that's the truth, or whether that's just what the CIA is telling this member of Congress."
On New Year's Eve, as most of you did, throughout the evening in our family we watched the television. I waited with baited breath to see if, in fact, there would be a terrorist act in this country or anywhere around the world. I waited to see if there was going to be some sort of apocalyptic mass suicide ala Hale Bopp or Jonestown. It didn't happen. There was no terrorism. In fact there was no Y2K glitch of any significance at all. I took that as a very good sign for our future. We have plenty of things to worry about, but I think that the way that we have begun this millennium is certainly cause for lots of hope and lots of bright expectations.
Let me tell you a little bit about where I think this country is going to go in the coming year and what the Congress is going to do, and what's going to happen in Washington. But before I do that, let me take you back a little bit in time to set the stage. Between 1937 and 1997 — 60 years — the United States Congress and the President of the United States spent more money than was received by the Treasury in taxes in all but seven years. They balanced the budget in 1947, 1948, 1949, 1956, 1957, 1960 and 1969, and that was the last time for a generation. During that time the Congress and Federal Government racked up some $5.7 trillion in debt, leaving our children with an annual burden of $250 billion in interest. That ended in 1997.
We balanced the budget in 1997, and I believe that we have ended it for the foreseeable future, and I cannot believe that any Congress, of either party, and any President of either party, would either propose or adopt another budget that puts this country further into debt and I think that is salutary news for our future. I think we have saved this nation, and all that it stands for, from what was predicted to be economic ruin. Whether you are an arch conservative or arch liberal, it does us no good to squander a quarter of a trillion dollars in interest payments every year. We can't meet Santo Gairo's [Bucks County Housing Group] agenda, we can't meet military hawks' agenda, if we are wasting money on debt; and that has ended and we are turning it around. In fact we are now paying down debt each and every year, and by this September 30th we will have paid down a quarter trillion of that debt; and let me tell you what to expect in the future in that regard. Let me share some numbers with you.
In 1992, we borrowed from our children $291 billion, in 1993 we borrowed $255 billion, in 1994 we borrowed $203 billion, in 1995 $164 billion, in 1996 $108 billion, and in 1997 $102 billion In 1998 we developed a surplus of $69 billion, and it will be $123 billion last fiscal year, and this fiscal year it will be $161 billion; and those numbers go up to 2009, when we'll have a $413 billion surplus which will make yet another down payment on that debt.
In 1937, the revenues paid into the Social Security fund exceeded what was necessary to pay for retirements, and in all but 18 years since 1937 the Congress decided to take that Social Security surplus and spend it for something else. In fact, Congress borrowed over that period of time $614 billion from the social security trust fund. As of last November, that's over. We did not borrow, in this fiscal year, a dime from the social security fund, and we will never borrow a dime from the social security fund in the future. That is a huge change. Those three facts: the balancing of the Federal budget, the payment of debts and the end of the raid of social security means to me that this country, the greatest country on earth, the country on which the rest of the earth depends, is on solid economic footing for the foreseeable future and well into the next century, and I think that is reason to be proud!
Our economy is strong. There are those who look at some of the high tech stocks and think that maybe it's a house of cards, but the fact of the matter is that there are no structural reasons, if you look at our economy, no significant structural reason to believe that our economic growth should wane any time soon. There will be cycles, but the basic foundation of our economy is strong, and I think that that bodes well for this generation and generations to come as well.
All that being said, we will continue in the year 2000 to pay down more debt, and to preserve the social security fund. It means we can turn our attention away from the very difficult business of making the hard decisions that are necessary to get to this point, and now we can address some of the other needs of the country. It will be difficult to do in the year 2000, because Republicans have but a five vote margin in the House of Representatives. Republicans have been the majority for three terms, and the Democrats desperately want to regain the majority, and feel they have the opportunity to do that in the year 2000 elections. And so, as was the case last year, it is to be predicted, and I don't say this in any partisan way, the Democrats in Congress will not want to sign on with the Republicans and pass any significant legislation. There will be Democrats who want to create the self-fulfilling prophecy that this is a do-nothing Congress by not working with the Republicans. The Republicans will be pushing an agenda.
The question is: what will the President do? I think that the President, this being his last term in office, and given the relatively rocky road of his administration in the last couple of years, I think he will want to accomplish significant legislative items, and I think he will work with the Republicans in the Congress despite Mr. Gephardt's and Mr. Daschle's concerns. I think it is in his interest because of his legacy; I think it is in the interest of Vice President Gore that something gets done so that he can stand in the Rose Garden with the President and point to a significant accomplishment. I think it is in the First Lady's interest that this administration signs legislation this year. I think that will be interesting to watch.
What will we work on? We will work on health care. We have in passed in the House and the Senate significant HMO reforms, and we're going to see if we can now come into agreement with the Senate and put something on the President's desk in the early months of this year. Managed care is a good thing. In the old days, the doctors ruled the world. They told you how often you needed to get what procedure, hospitals told you how long you needed to stay in the hospital; it was very expensive and the insurance companies simply passed the premiums on to the employers. As you all know, employers got to the point where they couldn't take another double digit premium increase year after year. Managed care came along and said, "We'll come between you and the health care providers, and we'll be the gatekeepers and we will try to promote wellness and reduce costs."
They've done that, and they've done that relatively successfully, and the problem is now that the pendulum has swung in the other direction. Now the managed care companies seem to be not interested in promoting wellness, but in denying care. We have a serious problem in this country, where the insurance industry and relatively unskilled employees of insurance companies stand between the doctors and the patients, and we have to find how to strike a very delicate balance, because there is a limit to how much the government should intrude in a contractual arrangement between an insurer, and the patient insured, and the employer. I think there are steps that we can take that will strike the proper balance, so that we can preserve the benefits of managed care into the next century while restoring the proper balance between physicians and patients.
We also, I think this year, should do something that's overdue, and that is to provide a prescription drug benefit for the Medicare program. In this century, in this moment, you don't have health care if you don't have access to the miracles of pharmaceuticals and biotechnology. They are the wave of the future, and they are what medicine is largely about today. They save money. Pharmaceutical products and advanced biological products keep people from the need for surgery, and they are in the long run interest of taxpayers who pay for insurance, employers that pay for insurance, and certainly the patient. We will try to develop this year, early on, additional benefits for Medicare; we'll try to make it flexible so those who have little need for medicine are not burdened by the high cost of the program, but those who have a heavy need for medication will be able to gain access to it, and thereby improving the quality of life.
We're going to probably have a tax cut bill. Last year Bill Archer, who's been on the Ways and Means Committee for a thousand years, is in his last year and Congress's last session. He's a wonderful guy. He wanted to take every tax cut idea he's ever had and put them into one bill, and it came out to $792 billion in tax cuts over five years, and it was too heavy to lift. The President vetoed it. In fact, there wasn't a lot of clamor for it. The people were caught between the notion that they want tax relief, but they want debt reduction and they were afraid that the two were incompatible.
We think that this year what we will do is pass incremental tax bills. We will put one tax relief idea at a time on the President's desk and see if we can negotiate some reductions. Things like the marriage penalty — we shouldn't penalize people with the tax code because they happen to be married and stay married. I'm not sure how many marriages stay together over the tax code, but in any case, it's good policy not to penalize anybody for it. We will probably increase the deduction for the inheritance tax. I think that whether you are a farmer trying to pass on the family farm to your children after your demise, or the corner store family that has worked for generations to build a business, should not have that business have to be sold in order to pay the taxes. We think we ought to increase the deduction there.
On the education front, Republicans are often charged with not looking favorably towards a federal role in education, but the fact of the matter is we have, since we have been in the majority, dramatically increased the spending for public education; and the area that we have tried to focus on is special education. Congress, back in 1974, told every school district in America: you will educate every mentally retarded child, every child with a learning disability, every child with an emotional problem, every child with a speech problem and every gifted child — every child who is in need of specially tailored education; and you will educate them to their full potential whatever it costs you.
It is a very good thing we did for these children. It is a very expensive thing. Those of you who have ever had anything to do with school boards know that that is the fastest rising cost in education. The Congress passed that mandate in 1974, and said, "don't worry, we will pay for 40% of those excess costs that we have now burdened you with," and then never paid more than 9%. And although the Republican party does not believe in micromanaging education at the local school level from Washington, we do believe in funding mandates, so we are going to continue to raise the percentage of that special education cost that is funded out of Washington.
Why? A) because it's the right thing to do for the kids; B) because if you impose a mandate on a local government you should fund it; and C) because it is the best way to relieve that burden from each and every school district, so that each school district can then say, with what we now no longer have to spend to pay this federal mandate, we can do wonderful things for our school. Maybe we need new computers; maybe we need more teachers to get smaller classrooms; maybe we need to fix a leaking roof. Instead of Washington saying, "we'll tell you what to do with that money," we say, "we'll pay for our responsibility and you and the local school board decide what to do with the rest."
We will undertake social security reform. We won't get there in this session, but we'll tee it up, I hope, for a new President to deal with; and what we need to do there is, we need to allow each and every American to take some of their social security tax and put it into their own personal retirement fund and let that grow; let that be there for a variety of reasons. Number one: for too long our country has consisted of two groups of people — those who have a stake in the growth of the economy, and have invested in the stock market, and those who don't. Those who don't have no interest in public policy that has, in fact, helped the economy to grow. They are more interested in extracting something from corporations, extracting from business, heavily taxing them because that is the only way they get a benefit.
But if every single American, regardless of economic position, regardless of ethnic background, regardless of anything, every American, somehow invests their personal retirement fund in the economy, then every American has a piece of the American dream — every American has an interest in seeing that the economy as a whole grows; and every American has to rely less on politicians in Washington threatening to play around with their social security, because our retirement will be in our hands, And as this progresses over time, and each American has a good strong personal pension plan, then they will become less and less reliant on the federal social security system.
We will continue to keep our Defense Department strong, not only to protect our nation, but to fulfill our international responsibilities. The key here is not fancy new weapons. I frankly don't think we need B-2 bombers, and I don't think we need a lot of fancy new weaponry. We need to pay the men and women in uniform adequate salaries and keep them. I landed on an aircraft carrier at sea, and spent the day there. I talked with some of the young men and women, and most of them wanted to get out as soon as they could, because they couldn't stand the living conditions any more. They weren't paid enough. They could make a lot more money getting out. And when you train these kids to fly jet airplanes in the middle of the night, and to land them on the deck of an aircraft carrier, and you want to keep them, you ought to pay them enough, and train them enough, and you need to make sure that they get to be with their families enough, and that is our primary goal in Defense.
I'll just take a couple of minutes and talk about one other issue, and that is the school violence issue. This country has been shocked, for well over two years now, by these indecipherable, senseless shootings in the schools; and we've had all kinds of reactions. We took a juvenile justice bill before the house. Unfortunately, this wonderful juvenile justice bill (a bill that will help prevent kids getting into trouble, and for those who are serious perpetrators, to make sure that the sanctions are tough enough) was right after Columbine, and the bill got loaded up. The liberals had this knee jerk reaction: the solution is more gun control. The conservatives, and the NRA, had their typical knee jerk reaction, which is "we can't talk about gun control."
And the fact of the matter is, we then had this ridiculous free for all, in which members were free to offer all kinds of amendments to this juvenile justice bill, and people proposed if we only had the ten commandments posted on the walls of the schools, then that would end juvenile crime, and all of the rest and a lot of relatively silly notions. Not that the ten commandments are silly, but you don't get to the depth of this problem with superficial solutions. We are taking a hard look at what is going on in our society, and what it is that is affecting these children. It is not easily understood.
I have had legislation passed and signed by the President that is going to direct the National Academy of Sciences, and they are going to go into every one of these towns where the shootings occurred. They are going to interview the kids that did the shootings; they are going to interview the parents; they are going to interview their teachers and their friends, and try to find out what went on in the lives of these children. Were they abused and neglected at home? Was there spouse abuse at home? Was there substance abuse at home? Were the kids involved in substance abuse? What kind of music did they listen to? What internet sites were they on? Were they bullied and ostracized at school? We have to do this in a sophisticated way that shows we care about these kids, and we care about all of the kids in this country whether they be potential perpetrators or potential victims. But there is something fundamentally amiss in our country, something fundamentally wrong with the way we impart values to our children, and we have to learn. We have to avoid knee jerk and quick solutions.
Let me make a political prediction that maybe will inspire some give and take. The Presidential candidates coming out of the conventions will be George W. Bush and Al Gore. I say George W. Bush because he has the money. Money works in politics. I say Al Gore because, interestingly enough, the Democratic convention is less democratic than the Republican convention. To be a delegate in the Republican convention you have to actually get elected by the people in your home town. To be a delegate in the Democratic convention, many of them are members of Congress, and many of them are hand-picked members of unions, and so, since Al Gore has the strong hand in both of these categories, it would require that Bradley win something like 80% of the remaining elected delegates in order to be nominated.
So I think the contest will be George W. Bush and Al Gore. I think George W. Bush will win that election. I think that Republicans will retain control of the House and the Senate in this election, partly on the coattails of the Republican President. I think that will be interesting, from my point of view, because hopefully, I'll be there. And it will be interesting to see — it hasn't been since 1993, when the Democratic Party had both Houses in Congress, and they had the White House, and they could do pretty much whatever they wanted and did.
In 2001 I predict that the Republicans will have the White House and the House and the Senate, and we will be able to do pretty much what we want. The price of the Democrats being able to do everything that they wanted is, they were promptly thrown out of office in 1994, and if the Republicans behave as irresponsibly as the Democrats did in 1993, they'll be thrown out of office in 2004. The Democrats went too far to the left, and there is a great danger that if Republicans have everything, they'll go too far to the right. One of the interesting questions will be whether the Republicans can have all the power and show enough restraint to actually respond to the 80% of Americans who stand in the main stream, and are not part of the radical left or the radical right. If they do that, they'll be reelected, and if they don't, they won't.
If there are any questions, I'll be happy to take them.
Q: If, indeed, portions of social security are privatized, a lot of people don't know too much about the stock market or about bonds. What provisions are needed for educating the public?
A: If we are going to move eventually to a system where each and every American gets to invest some portion of their wages into the stock market, and given the fact that many Americans, including some people who think they know what's going on in the stock market but really don't, what sort of protections do you have? The way that this has been envisioned is that the federal government would put forward a portfolio of approved plans. In other words, plans that have demonstrated they are sufficiently diverse, sufficiently well-rounded, that they constitute a safe enough investment. This is not going to be about penny stocks and wild speculation, but probably a very diversified fund that will be predictably safe enough to merit the investment by someone who is not skilled.
Q: But what kind of education will be offered to the public? If you have to pick between funds, which one do you pick?
A: I suspect that the education to the public will be provided by those in the market, and to a large extent the marketplace will prevail. I think with drawing a box around those investments that most scholarly investors would say constitute mainstream investments, not wildly speculative, then I think the marketplace will prevail and there will be advertising, and people will hopefully make well-informed decisions. The worst thing that can happen is that the economy goes down and we have to rely on government resources again. But the country of Chile, of all places, has pioneered this, and it has had a remarkable affect. The investments have been strong and it had a gigantic affect on their economy. Instead of taking all these funds and just putting them into the United States Treasury, they will be put back into the economy, and it will have a tremendous potential.
Q: Have you talked to managers of mutual funds to see whether they think this is a good idea or not?
A: I personally haven't spent a lot of time doing that. No. But I certainly haven't heard any hue and cry from the industry that indicates they are concerned about this. I think it will be a welcome colossal expansion to the marketplace.
Q: [Question about prayer in schools.]
A: When I was a student at Council Rock School District in this town, when I was in elementary school, we began every day with the Lord's Prayer and a reading from the Old Testament, and a reading from the New Testament. It was probably safe to say that everybody in my classroom during that time were Christians, and nobody thought anything of it. The fact of the matter is that the First Amendment prohibits Congress, and by implication all levels of government, from establishing a religion. This means that the government, in this case the schools, should not compel students to participate in one particular religion. So it is wrong for Jewish children or Muslim children to be required to participate in Christian religious practices and vice-versa. So, I think correctly, the court has said that that shouldn't happen. Now what has happened, unfortunately, as a result of that, is that many school administrators, and many advocates, took this to extremes; and thought that that meant you couldn't discuss religion in school. That is ridiculous. Anyone can pray in school whenever they want. The old saying is: "As long as there are math tests, there will be prayer in school."
It is also the case that any group of adherents to any religion are entitled under recent law, after school or before school, to go to a portion of the room and talk about or practice their religion. What I think is that part of the solution to this, I believe, is that you are not an educated student if you have not studied the history of religions of the world. And I think that every school system, particularly in the high school level, should make sure that every student takes a comparative religion course. You should learn about the history of Judaism. You should learn about the history of Christianity. You should learn about Islam. You should learn about Buddhism. You should learn about Hinduism. By teaching children the history of religion, you expose them to concepts that unfortunately most children today are not exposed to. What does faith mean? What does eternal life mean? What is the concept of sin? What is the concept of redemption? What is prayer? And you can expose children to those concepts without imposing anything on them, and then those children will be prepared, if they are not already prepared at their own church or synagogue, they will be exposed to these concepts and at least prepared to think about them and embrace them if they choose. I think that is a better solution than to go back to where we were, which in fact did violate the rights of free religion.
Q: Between 1937 and 1997 the Congress and the Presidents of the country borrowed $614 billion from the social security trust fund. Is there a plan to repay?
A: What happens essentially is this: today more dollars in social security tax will come in than will be expended to pay for all of the retirees and the disabled on social security. That surplus, which used to be spent for roads and everything else, will not be spent. It will be used to pay down debt. We will pay down debt each and every year according to the numbers that I cited. What that means is that when the lines cross, that is, when the demand for social security exceeds the revenues coming in, we will then be in a position of using what we are now spending to pay interest on the debt, the $250 billion this year. That will then be available not to pay debt, but rather to pay for retirements of the baby boomers and the young. I think that will all work in a perfectly good way so that it will meet all of their needs.
