[Congressional Record Volume 140, Number 137 (Tuesday, September 27, 1994)]
[House]
[Page H]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]


[Congressional Record: September 27, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]


                              {time}  1100
 
CONTRACT WITH AMERICA: 10 INITIATIVES TO PUT AMERICA BACK ON THE RIGHT 
                                 TRACK

  The SPEAKER pro tempore (Mr. Sangmeister). Under the Speaker's 
announced policy of February 11, 1994, and June 10, 1994, the gentleman 
from New Jersey [Mr. Saxton] is recognized during morning business for 
3 minutes.
  Mr. SAXTON. My, oh my, we must have struck a good chord here. I have 
not heard such mean speeches coming from the other side in quite some 
time. All over a contract for America, a contract to make Government 
smaller and reduce taxes and a number of other things.
  My, it must be difficult to think about losing power after 40 years. 
The fact is the House Democrat policies have failed. Let me just give 
one example of how things have gone astray. At this very moment--and 
this is part of our contract, what I am getting to--the Federal Reserve 
is meeting to consider yet another tightening of the monetary supply to 
result in higher interest rates. This has all come about because the 
Clinton administration through one individual known as Alan Blinder 
advocated loose monetary policy in the recent past in an effort to grow 
the economy. Wrong tool, bad idea. Using money supply to control the 
economy simply does not work. And these high interest rates are a 
result of that bad policy urged on the Fed by Alan Blinder and Bill 
Clinton. I have a better idea, but I cannot claim credit for it. John 
Kennedy knew. Congressman Bill Steiger, a Republican Congressman from 
Wisconsin, knew. And Ronald Reagan knew. They each knew good job 
growth, good growth in wages and good economic performance is best 
brought about by good, smart tax policy. In 1978, the Steiger bill 
became law, cut the capital gains tax rate and new businesses began to 
form. In 1981 and 1982 and 1983, President Reagan and Congress cut the 
capital gains tax and businesses expanded, jobs were created and wages 
increased dramatically, all over this country. Let us look at what 
happened. In 1975 through 1977, that time period, less than $40 million 
in new capital was invested annually. Venture capital, it is called. In 
1978, the Steiger bill passed, and in that year alone over $600 million 
was raised and invested. In 1981 with the passage of the Reagan bill, 
$1.3 billion was invested. By 1987, the annual rate of venture capital 
investment was $5 billion. New businesses, new enterprises all over our 
country. More jobs, higher wages. And then in 1986, Congress 
implemented and the capital gains tax was increased, new investment 
capital fell dramatically and the economy fell, unemployment rose, and 
Americans were out of work. Today is it fair for us to ask why? Today 
Republicans suggest a better way. Alan Blinder has helped us prove it. 
It is not Fed control of interest rates that work. John Kennedy, Bill 
Steiger, and Ronald Reagan have helped to prove it as well.
  Today, I along with my Republican colleagues, will unveil 10 
legislative initiatives that we pledge to bring to a vote if we are in 
the majority next year. Bills like these have been bottled up for years 
by our Democrat brethren.
  To encourage economic growth we propose cutting the capital gains tax 
rate, adjusting depreciation for inflation, and enacting small business 
tax incentives like expensing, reinstating the home office deduction 
and increasing the estate tax limit. We also encourage savings by 
expanding the individual retirement account for all Americans.
  I believe strongly, that if we enact these proposals, along with the 
others we unveil today, the U.S. economy will once again be put back on 
the right track.

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