[Congressional Record Volume 141, Number 49 (Thursday, March 16, 1995)]
[Senate]
[Pages S4002-S4004]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           TAX CUT PROPOSALS

  Mr. DORGAN. Mr. President, I was intending to come to the floor today 
to speak briefly about the work that is going on in the other body in 
which the majority party is proposing a tax cut of nearly $200 billion 
over the coming 5 years. So I listened with some interest to the 
discussion on the floor of the Senate about the formation of something 
called a 500 Club, apparently a group of Senators who feel that the 
Senate also should move quickly on a tax cut.
  I was especially interested in a couple of things. I was interested 
in the fact that at least a couple of the speakers this morning were 
the same speakers who were on North Dakota radio programs in recent 
weeks talking about the need for a constitutional amendment to balance 
the budget. They talked about their desire to balance the Federal 
budget, the fact that they were the willing warriors, willing to stand 
up and fight and do the right things and have the courage to cut 
spending to balance the Federal budget.
  All this is very curious to me. There must be some arithmetic book 
somewhere in America that tells us that if you are in a very big 
financial hole, what you ought to do is just keep digging. It seems to 
me, if you are in a very big hole, you stop digging and 
[[Page S4003]] start trying to figure a way out of it. And you do not, 
it seems to me, whether you run a business, whether you are operating 
your own family financial situation, or whether you are trying to 
manage the fiscal affairs of the Federal Government, decide that the 
way to address a serious deficit problem is to cut revenue.
  I guess if the question is should we reduce taxes, should we try and 
figure out what is popular and then stand up and proclaim ourselves for 
that, I would say sign up most of the Members of the Senate; they sure 
want to do the popular thing. It is the easy thing to do. But I guess 
the question these days is not so much what is popular but what is 
right.
  I also noted this morning that in this Chamber there rested on an 
easel several charts that showed the popularity of the proposed tax 
cuts. Obviously, people have done polling, and it shows if the American 
people are asked the question, ``Would you like a $500 tax credit per 
child,'' the answer is overwhelmingly ``Yes.'' ``Would you like an 
expanded IRA program?'' The answer is, ``Oh, yes.''
  Well, I happen to think that some of those things are worthy goals. I 
would likely support some of those initiatives in the future. But is it 
believable that those who proclaim most loudly in this Chamber that 
they are for a balanced Federal budget are the first ones to come to 
this floor with their charts showing what their polls have shown--that 
tax cuts are popular? So now they say, ``Now we are forming a club for 
tax cuts.'' What happened to balancing the budget?
  Is 2 weeks a lifetime in the memory of those who proclaim that we 
need to balance the budget? I happen to think we ought to balance the 
budget. I happen to think we also ought to be serious about it. I think 
it is more than just posturing. I think it is performing. I think it is 
heavy lifting. And the fact is those who now say our next step in 
balancing the Federal budget is to cut Federal revenue I think just 
missed the basic arithmetic class.
  Now, I understand that they say, well, this is a families first plan. 
I refer to the Joint Committee on Taxation. The Joint Committee on 
Taxation did an analysis that was disclosed on Monday, and it said that 
three times as much of the proposed tax breaks will go to those earning 
over $100,000 a year as will go to those earning under $100,000 a year. 
So this is for families, apparently wealthy families, or at least it is 
weighted in a way to give most of them to those who already have 
substantial income and substantial wealth. It's an unusual way of 
defining families.
  I guess there is nothing wrong with that, if that is what one 
believes, but it seems to me, if we were in a situation where a tax cut 
would be the first step to balance the budget--and I cannot conceive of 
that being the case, but if we were in that position, it seems to me, 
if one were interested in families, one would construct an approach 
which says the bulk of this benefit will go to working families in this 
country, not that the bulk of the benefit will go to the wealthy 
families.
  Every time you stumble through the forest and come across a stream, 
it seems to run in a predictable direction, and that is what happens in 
this Chamber. It is hard to break bad habits.
  I came here in 1981, serving in the House of Representatives, and I 
recall the discussion about the tax cut proposal then. The tax cut 
proposal was going to balance the Federal budget. An economist named 
Laffer told us so, and of course it turned out to be a laugher. He is 
still an economist, but trillions of dollars of debt have piled up as a 
result of faulty economic strategy. And so we had a very large tax cut 
and a very significant Federal deficit, and the American people will 
end up paying for that.
  The question now is, at a time when our country suffers from a very 
substantial deficit and a massive accumulated debt, what do we do to 
deal with it? Some say, ``Well, let us change the U.S. Constitution and 
that will deal with it.'' Of course, it will not. You can change the 
Constitution 2 minutes from now and 4 minutes from now the debt and 
deficit will be exactly the same as it was when you started.
  Cutting the deficit will require individual actions by Members of the 
Senate and the House. Those individual actions must be, it seems to me, 
a combination of several approaches. You either need less spending or 
more revenue or a combination of both. But it seems to me incredible 
that the first step out of the box, for those who spent the last month 
talking about how desperately they wanted to change the American 
Constitution and how fervently they wanted to balance the Federal 
budget, is to say we are going to do that now by reducing the Federal 
Government's revenue.
  I know they will stand up and say, ``Well, you are heartless. Gee, 
don't you think that tax cuts matter to families?"
  Yes, they do. I understand the genesis of all this. This is about 
polls and popularity. This is about doing the easy thing and also, 
incidentally, doing the wrong thing. I do not think the President ought 
to propose tax cuts, and I do not think the majority party of the House 
or Senate ought to propose them. And I do not think anybody on this 
side of the aisle ought to propose them either. Our job at this point 
is to deal responsibly with the Federal budget deficit. We ought to cut 
spending and use the money to cut the deficit. When we have done that 
job and only then should we start talking about cutting revenue.
  Let me say that again because I think it is important. I know the 
easiest thing is to sort of waltz over to the floor and talk about our 
new plan to cut taxes. Well, gee, that is popular, but it is wrong. Our 
first responsibility is to decide to cut Federal spending, and all of 
us ought to be involved in that. And I would say to my friends on the 
majority side of the aisle that many of them have a willingness to do 
that. I applaud them for it. And I think many on our side of the aisle 
have a similar willingness to cut Federal spending. Cut Federal 
spending and use the savings to cut the Federal deficit. When we have 
finished that job, and only when we have finished that job, should we 
then decide that it is time to cut some taxes.
  I think a number of the proposals to cut taxes are good proposals and 
have merit, and I would support them under the right circumstances at 
the right time. But I have to say that to hear again today and to hear 
for the last several weeks those who were boasting the loudest about 
their determination to cut the Federal deficit and to change the 
Constitution to do so, to hear this I think misses a few steps along 
the way in our desire in this country, in our understanding that we 
must in this country reduce the Federal deficit. They then come to the 
floor a week or two later and say, now, our next step is not to push 
for a constitutional amendment; our next step is to push for a tax cut, 
and then they come to the floor and put charts all over the back of 
this room to tell us how enormously popular these tax cuts are.
  Well, spend some more money for those polls and tell us something we 
know next time. We know that. Tax cuts are enormously popular. So poll 
again. Spend a little more money and put up another chart. Tax cuts are 
popular.
  The popular thing is not always the right thing. The right thing at 
this point is to understand the bull's eye of this target. The bull's 
eye is to deal with the Federal budget deficit. And most people back 
home in Montana, Oklahoma, North Dakota, and elsewhere, in my judgment, 
believe the responsible approach would be to aggressively cut spending, 
use the money to aggressively cut the deficit and then turn to the next 
item on the agenda which would be to find ways to change this Tax Code 
that give some benefit to families, that preserve an incentive for 
savings.
  Understand that I am not someone who objects to the goal. But I am 
someone who believes that this is the wrong time. This is the wrong 
time for this kind of policy to be proposed to this Congress. I would 
also say when we talk about things like the capital gains tax cut and 
we say this is just for families out there, I am going to give them a 
chance at some point to show if it is for families. We will find out if 
it is for families. I am going to offer an amendment.
  If we really have, at this point, some discussion about capital 
gains, I am going to offer an amendment and say: OK, let us have 
capital gains; you have 
[[Page S4004]] the votes to have capital gains. I will give you an 
amendment that says you can take up to $1 million in capital gains 
during your lifetime, but no more than $1 million. Of course, $1 
million does not mean very much to the people in this country who are 
going to benefit from the suggestions we are seeing, but I want to see 
who supports families that have less than $1 million and who supports 
families that have more. Because if we are going to construct tax cuts 
that help families, let us target them, let us help American families 
who are out there working and struggling and trying to make ends meet.
  Again I say, at the risk of being overly repetitive this morning, I 
hope all of those who spent the last couple of months talking about the 
dangers of the Federal deficit would stay in harness and be part of the 
team, keep marching and keep pulling when it comes to dealing with the 
deficit. We must not be diverted by polls and charts and by the 
attractiveness of deciding now is the time, with the kind of deficit we 
have, to propose nearly $200 billion in tax cuts during the coming 5 
years.
  I read my children children's books from time to time. They love the 
Berenstain Bears. The one I read them most often, perhaps, is the ``The 
Berenstain Bears Get the Gimmies,'' and in that book the parents can 
simply never seem able to control the habit of the Berenstain cubs 
saying ``Gimmie this, gimmie that, gimmie this.'' It is the way I feel 
about the tax cut proposals in the House and Senate by people who talk 
about the need to deal with the deficit and come to the floor saying: 
Gimmie this tax cut, gimmie that tax cut because it will gain favor 
with the American people.
  That is not what this is all about, it seems to me. Our 
responsibility is to do the right thing. And I hope it will be agreed 
by everyone in this Chamber that the right thing is to aggressively 
work to cut Federal spending and then to decide to use that savings to 
cut the Federal budget deficit, and then, when we finish that job, to 
decide that we will turn our attention to dealing with the tax issues 
as they affect families--yes, all American families, and, yes, families 
that work and struggle and spend most of their day trying to make ends 
meet. That, it seems to me, represents the priorities all of us have an 
obligation to pursue here in this Chamber.
  I yield the floor.
  Several Senators addressed the Chair.
  The PRESIDING OFFICER (Mr. Burns). The Senator from Oklahoma.
  Mr. INHOFE. Mr. President, I ask unanimous consent to proceed for 5 
minutes as in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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