[Congressional Record Volume 141, Number 62 (Tuesday, April 4, 1995)]
[House]
[Page H4107]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                       CROWN JEWEL OF THE CONRACT

  Mr. GIBBONS. Mr. Speaker, this week we are going to vote on what 
Speaker Gingrich has called the crown jewel of the contract. I am here 
to tell you this morning why you should not vote for this crown jewel.
  This crown jewel is a $700 billion tax cut. This is not the right 
time to cut taxes. This is the right time to cut the budget deficit.
  Every economist that appeared before the Committee on the Budget, 
every well-known economist in this country will tell you that the 
business of Congress today should be cutting the budget deficit, not 
cutting taxes. So this is the wrong cut at the wrong time.
  Let us go first to where we are in all of this. The chart that I have 
here to my right shows what has happened to all Americans during the 
last 20 years. These are families, family incomes divided into fifths, 
the lowest fifth on the far-right side, the highest fifth on the left-
hand side.
  If the cameras will look closely at this chart, you will see that the 
upper one-fifth has gained family income of almost 30 percent in the 
last 20 years, while the lowest fifth of American families have lost 
income of almost 15 percent, and the middle income right here in the 
middle has stood still. That is why American are upset.
  And the principal reasons for this chart being as it is are two: One, 
the tax policy of the United States; and, two, the budget deficits that 
have run on chronically has stolen all of the gains that have been 
made, the losses that have been made have been contributed to by the 
budget deficits and by the tax policy. So this is the wrong time to cut 
the taxes. It is the right time to cut the deficit.
  Why is it the wrong time? America's economy has been at full 
employment for the last few months and has had rising employment ever 
since 1991. We are right at full employment now.
  Two, the second reason we should not be cutting taxes now is that we 
are at maximum capacity utilization in our industrial plant. That is 
the reason why the Federal Reserve has over the last 12 months raised 
interest rates by 7 percent, by seven times. The Federal Reserve in 
fighting inflation has raised the interest rates seven times in the 
last 12 to 14 months. So America's economy is bubbling along.
  We want to continue that strong economic growth, but if we cut taxes 
now and do not cut the deficit we run a real chance of kicking off a 
serious round of inflation.
  The second reason why we should not vote for this crown jewel, as Mr. 
Gingrich calls it, is that it is the wrong kind of tax cut.
  Now, let us have the next chart, please, This chart shows you who 
will benefit by this plan.
  You will notice here on the right side in the upper chart, these are 
households in America, starting with the ones under $30,000 and ending 
with the ones over $200,000. The very strong green line on the left of 
this chart shows you what those with more than $200,000 worth of annual 
income will get per year out of this tax cut. They get over $11,000 in 
tax cut. While those ones under the $30,000 will get $124, maybe.
  The figure, the chart below the top chart shows how many families are 
involved in this, and you will notice that all the families are down 
here on the right; 44 million families at the bottom will get nothing; 
2.8 million families at the top get an average of $11,300 a year.
  Now, most of the families down here get very little in the tax cut, 
while the upper families get all of the tax cut.
  Mr. Speaker, this is the wrong time to be cutting taxes. We should be 
cutting the deficit. This is the wrong tax bill because of inequitable 
distribution of the benefits of the bill.


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