[Congressional Record Volume 141, Number 62 (Tuesday, April 4, 1995)]
[House]
[Pages H4143-H4144]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


              THE TAX CUT PACKAGE IS GOOD FOR THE ECONOMY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman for Indiana [Mr. Hostettler] is recognized for 5 minutes.
  Mr. HOSTETTLER. Mr. Speaker, I rise this afternoon because Americans 
are overtaxed. Because of this, I support my colleague Mr. Archer's 
bill to lower taxes.
  There is a growing realization in this country that we cannot afford 
to operate on deficit budgets. We spend too much money primarily 
because we are involved, at the Federal level, in too many things. If 
we really want to control spending, we must come to grips with the fact 
that the Government is entirely too big. Day after day, special 
interest groups file through this city claiming that they understand 
the need to reduce Federal spending but that their program only costs a 
little relative to the size of the budget. This reminds me of the 
chairman of the Council of Economic Advisers' boast that progress is 
being made regarding the size of the national debt as it relates to the 
national economy, while the national debt gets larger and larger and 
larger. These interest groups, and some of my colleagues, are missing 
the point. Government is too big.
  But the mindset that still has a formidable presence in Congress is 
to see how little in Federal spending we can get away with cutting. Oh, 
they say, the voters are really mad about the deficit and debt, so 
we'll have to cut some things, but maybe not too much. Even among 
Members who say they want a balanced budget, there seems to be a large 
group that isn't interested in cutting $1 more than needed to do this.
  The chief reason why there is resistance to cutting taxes, even among 
those who campaigned in favor of tax cuts, is that if you cut taxes, 
but are striving for a balanced budget, you have to cut spending that 
much more. The current argument against cutting taxes is that it is 
irresponsible to do so in the face of a $5 trillion national debt. My 
response is this: We have this debt not because of the tax rate but 
because of this body's insatiable lust for spending. What is 
irresponsible is for 
[[Page H4144]] us to continue spending like we have. We spend too much 
because we have developed a mindset that Uncle Sam has to do 
everything.
  I am willing to trade being called draconian and mean spirited by the 
liberal media and the liberals on the other side of the aisle in 
exchange for being about to tell my constituents that I voted to cut 
spending enough to balance the budget. I am willing to tell voters I 
voted to cut their taxes while at the same time voting for heavy 
spending cuts. I am willing to do this because I have come to a 
conclusion after 3 months in this city--the powers that be in this 
city--and I am not referring to Members of Congress--don't care about 
the taxpayers of my district. The powers that be in this city don't 
care about the future of my children. The powers that be in this city 
don't care about balancing the budget. The powers that be in this city 
only care about feeding their faces in the Federal trough. As a result, 
since the powers that be in this city have set their faces against the 
taxpayers in my district, against the future of my children and against 
balancing the budget and retiring the debt quickly, I am setting myself 
against them. So when you tell me that if we cut taxes that means we 
will have to cut spending that much more to balance the budget, my 
response is: ``That's the whole point.''
  You have heard and will hear from our friends on the left that we're 
about to repeat the same cycle that brought massive deficits and debt 
in the 1980's. Let's look at what the Kemp-Roth tax cuts did and what 
happened to spending at the same time.
  Early in the 1980's, President Reagan delivered on his promise of 
deep, across-the-board tax cuts. Aside from the 20 million new jobs and 
the longest and largest uninterrupted economic recovery in postwar 
American history, the tax cuts brought 14 years of increased Federal 
revenues. Total Federal revenues went from $517 billion in 1980 to $1.1 
trillion in 1993. Total individual income tax revenues went from $244 
billion in 1980 to $509 billion in 1993. Congress cut taxes 
considerably and doubled Federal revenues. You can't blame increasing 
deficits and debt on something that caused revenues to double.
  So why did the deficit go up by 250 percent? Because during this same 
time period spending went up by $800 billion or 130 percent. The 
increase in spending was $200 billion greater than the increase in 
revenues caused by the tax cuts. That's why the deficit and the debt 
went up. Remember this when our friends on the left tell you that 
cutting taxes will increase the deficit. That's only true if we 
abrogate our responsibility to cut spending, and I'm not going to do 
that.
  Now, let's remember just what is being proposed here. The American 
Dream Restoration Act stated that families should receive a tax credit 
of $500 for each child under age 18. This credit is available to 
families earning up to $200,000. A segment of that credit is available 
to families earning up to $250,000.
  That there is an earnings limit at all is in itself a compromise. 
That there is an earnings limit at all--make no mistake about it--
constitutes redistribution of wealth, albeit on a small scale.
  The opponents of this bill say it is wrong to offer a tax credit to 
families earning up to $200,000. That means they believe it is OK to 
exclude these families, no matter how many children they might have, 
solely on the basis of the fact that they earn more money.
  Although these families are just as capable to taking the $500 or 
$1,000 or $2,000 or $3,000 and investing it or spending it, the mindset 
on the left says the Federal Government needs that money more and that 
those families do too well to qualify for tax relief.
  Now, this idea to sock it to the so-called rich is nothing new. 
Yesterday's Wall Street Journal quoted some IRS statistics showing 
that, in 1992, before the Clinton tax increase, households making more 
than $100,000 accounted for 3 percent of all tax returns but paid 39 
percent of all Federal income taxes. The same editorial notes that 
households making more than $100,000 reported a total income of $858 
billion, of which $512 billion remained after taxes and deductions. If 
each of those families was forced to pay everything past $100,000 in 
taxes, which everyone in this Chamber would agree is an asinine 
concept, the Government would have collected an additional $135 billion 
in tax revenues, less than half of the budget deficit that year.
  The point is that the effort to exclude families because they make 
more money is simply caving in to the shrill, yet baseless--the much-
publicized yet anemic and the intimidating yet foolish cry from the 
left that the tax credit favors the rich. The fact is, those of us who 
know the tax cut package is good for the economy should have the 
courage to vote for a package that includes the provision to give a 
$500 per-child tax credit to families making up to $250,000, a 50-
percent capital gains tax reduction, a front-loaded IRA, a repeal of 
the Clinton tax increase on social security benefits and an increase in 
deductions for small businesses. We can do this and balance the budget 
if we have the courage to cut spending and ignore the special interests 
that dominate this city.


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