[Congressional Record Volume 140, Number 12 (Wednesday, February 9, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: February 9, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]

 
                        TAXPAYERS OF THE FUTURE

Mr. D'AMATO. Mr. President, I rise today to discuss the long-term 
impact of deficit spending.
  Next year, the Federal Government will spend $165 billion more than 
it takes in. It's losing money every year, and piling the deficits onto 
our already enormous national debt.
  The President's proposed health care plan will add a huge new 
bureaucracy that will add hundreds of billions of dollars more to our 
national debt. Indeed, our spending on entitlement programs is out of 
control.
  And who winds up stuck with the check? Who pays off the debt? Not you 
and I. No. The people stuck with the bill are my grandchildren and your 
grandchildren, and their children--they will have to pay our bills.
  That is just wrong. It is time to cut spending and balance the 
budget. Our grandchildren cannot afford for us not to.
  Mr. President, I would also like to ask that an article from today's 
New York Post entitled, ``Taxpayers of Future Face 82% Wallop,'' be 
placed in the Record following my remarks. I think this article 
illustrates clearly how tax burdens for our next generations will get 
higher and higher, and worse and worse.
  The article follows:

   Taxpayers of Future Face 82% Wallop--Nightmare for Next Generation

                           (By Jonathan Karl)

       Americans born after 1992 will be saddled with a whopping 
     82 percent tax rate, according to a little-noticed appendix 
     in President Clinton's 2,038-page budget.
       The appendix, entitled ``Generational Accounting,'' looks 
     at what each generation can expect to pay in average net 
     lifetime tax rates.
       It tells a startling story of lifetime tax rates getting 
     higher for each generation--and shows that Clinton's budget 
     continues a trend that threatens to turn future generations 
     into indentured servants to the national debt.
       Americans born in 1900, for example, faced an average net 
     tax rate of 23.6 percent over the course of their working 
     lives, while those born in 1940 can expect to pay 31.9 
     percent.
       For those born in 1970, the average rate climbs to 36.5 
     percent.
       Lawrence Kotlikoff, a Boston University economist who 
     helped devise the generational-accounting section, says the 
     first to feel the squeeze will be the baby-boom generation, 
     born between 1941 and 1961.
       ``Baby-boomers can anticipate substantial benefits cuts and 
     tax hikes if we continue with the present level of government 
     spending,'' he said.
       But the dire news is for Americans born after 1992.
       The burden of an aging population, runaway government 
     spending and a huge national debt will leave them with an 
     average net tax rate of 82 percent.
       Net taxes represent federal, state and local taxes paid 
     minus direct benefits received.
       ``The reality is that we are bankrupting the next 
     generation,'' Kotlikoff told The Post.
       He called the generational-accounting section the most 
     important part of the budget.
       ``It says that we are producing a fiscal disaster for our 
     kids and our future kids,'' he said.
       Kotlikoff said the cause of the coming ``generational 
     nightmare'' is the unwillingness to confront `'the coming 
     crises in America's out-of-control entitlement programs.'' 
     Republican Presidents Reagan and Bush also failed to control 
     these programs.
       The two largest entitlement programs--Social Security and 
     Medicare--represent 37.6 percent of the proposed 1995 budget.
       ``The Clinton budget leaves entitlement programs 
     untouched,'' said Minnesota Rep. Tim Penny, a Democrat. ``And 
     it is impossible to deal with the deficit without attacking 
     entitlement spending.''
       But the generational-accounting numbers have been buried 
     amid press reports about Clinton's ``lean'' budget, praise 
     for ``tough choices,'' and bipartisan complaints about cuts 
     in politicians' pet programs.
       Sen. Jim Sasser (D-Tenn.) expressed the widespread view 
     that the spending plan is ``one of the most penny-pinching 
     budgets we've seen.''
       And the administration has sought to focus attention on the 
     short-term ``good news'' that next year's annual deficit, at 
     $165 billion, will be slightly less than this year's.
       In presenting his budget, Clinton boasted, ``It will be the 
     first time deficits have declined for three years running 
     since Harry Truman occupied the Oval Office.''
       But Rep. John Kasich (R-Ohio) said, ``To say that a $165 
     billion deficit is a reason to pop the champagne corks shows 
     we are almost anesthetized by deficits now.''
       Kotlikoff said the long-range numbers make it clean that 
     the annual deficits show merely how much the government is 
     adding to the debt in the short term.
       As Clinton ``cuts'' the deficit, he follows Reagan and Bush 
     in pushing up the national debt.
       His budget proposal would cause the national debt to soar 
     from $4.35 trillion to $6.3 trillion by 1999.
       But for now, even most Republicans grudgingly credit 
     Clinton for ``deficit reduction.''
       Instead of attacking Clinton based on the generational-
     accounting data, Republicans like Rep. Dan Coats (R-Ind.) 
     complain that Clinton has cut military spending ``too far and 
     too fast.''
       In light of the long-range news, Penny is not impressed 
     with Clinton's new deficit numbers.
       ``It's all tactical. [The administration] just wants to get 
     the deficit out of the news so they won't have to deal with 
     it as they proceed with health care,''he told The Post.
       Penny said he would fight for deep cuts in entitlements 
     during the coming budget battle. But it won't be easy.
       ``It's a tough sell,'' he said. ``Budget-cutters have to 
     point to the long-term crisis, but most politicians are 
     notoriously short-sighted.''
       Kotlikoff pointed to another problem. ``The people who are 
     really going to get hurt are either too young to vote or 
     simply not born yet.

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