[Congressional Record Volume 141, Number 64 (Thursday, April 6, 1995)]
[Senate]
[Pages S5278-S5282]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONGRATULATIONS TO THE HOUSE
Mr. SANTORUM. I want to commend the Senator from Wyoming for his
continued effort to bring the freshmen here to the floor on a regular
basis to talk about where this Senate is going and how we are living up
here in the Senate to what the country said on November 8, and what the
House is obviously very successfully doing in living up to their
promises to the folks that they made when they ran for office back last
year.
The first thing I want to do is congratulate the House, having voted,
pretty strong showing last night, for a tax reform bill and a tax cut
bill--both a tax cut bill and a tax reform bill. It is a progrowth
bill, a bill that is going to create more jobs, it will help families,
eliminate the marriage tax penalty that has existed--which is a
tremendous break--an encouragement for people to marry, an
encouragement to supporting families.
It is a bill that says to seniors that we believe seniors have value
and worth, that seniors can, in fact, work past the age of 65 and earn
a modest amount of money--$20,000, $15,000--and not lose your Social
Security benefits, if you are age 65 to 70.
We think that that is important. It is an important sign to seniors
that we understand that they have value to give to the communities and
to give it their businesses, and that we do not want to discourage
seniors out of the work force and penalize them at a rate of over 50
percent in taxation if they make over $9,600 a year as a senior. We
think that that is a very positive thing that occurred in that tax bill
last night.
The adoption tax credit provision which encourages adoption, we
believe, is also a very, very positive profamily kind of tax change.
And the list goes on.
I want to commend them for the great work that they did in paying for
the program. It is not a tax cut that will increase the deficit. They
offset it, more than offset it, with spending reductions in order to
pay for the tax reductions.
That is the kind of decision that we will have to be making, whether
it is, in fact, better to have a person keep their money or is it
better to have a person send their money here and for Washington to
figure how best to spend it, and of course take the cut for bureaucracy
and write rules and regulations that make no sense, then send it back.
That is the difference.
I think it is a pretty easy call for most Americans. I am not
surprised that it passed over in the House, and I will not be surprised
when it passes over here in the Senate.
On a larger scale, I want to congratulate the House for the great
work that they have done. In 91 or 92 days they passed nine major
pieces of legislation, nine major bills. The amount of work that they
did in working--and I know a lot of folks around do not believe that
Members of Congress and the Senate work very hard. I will say if we
look at what the House of Representatives has done in this first 90
days, and the amount of hours they put in legislation in committees and
in working groups and putting this stuff together to pass this kind of
massive change that they promised, I think a person might think
[[Page S5279]] again as to whether Members of Congress do in fact earn
their keep.
Let me suggest that the most important thing--I ask this question all
the time--the most important thing that came out of the House of
Representatives was not the tax bill, was not the balanced budget
amendment, was not the line-item veto.
The most important thing was they kept their promise. They kept their
promise. They ran and they said, ``If you elect us, we will do 1, 2, 3,
4, 5, 6, 7, 8, 9, 10--we will do these 10 things. We promise you we
will bring them up and we will get a vote and we will work our darndest
to try to make that happen.'' They could not promise passage because
you never know. But they promised they would try their best.
Do you know what? They introduced bills exactly the way it was
written in the contract. They did not change it. They did not say,
look, I am going to cut taxes for middle-income people and then pass a
tax increase. They did not say they were going to be for a balanced
budget amendment and then pass big spending increases. No, they did
exactly--exactly what they promised the American public. And they
succeeded on 90 percent of it.
They are batting .900. Ted Williams would be proud--.900; 90 percent
of what they said they would try to do, they did.
The only one they failed on was the constitutional amendment, which
as most people know takes two-thirds of the body to pass, which is well
beyond the number of Republicans that there are in the House of
Representatives. So: The first ever vote on term limits. They failed,
but 85 percent of the Republicans supported it. They got a majority of
the House to support it. It is building. It is on the track to
eventually pass, probably after the next election. So I think the
country should look at the House of Representatives.
One of the big concerns I had when I came to the U.S. House, 4 years
now, now here in the Senate, is I think the public has lost trust in
our institutions. They do not believe that we mean what we say or say
what we mean; we are here and all we care about is getting reelected
and having some power and being able to throw our weight around. What
the public really wants does not really matter. It is just this big
game down here.
Is it not nice to know that promises can be kept; that people do
sometimes mean what they say? They made some hard decisions. A lot of
this stuff was not easy to do. A lot of it came, as you probably heard
in the last few weeks, with a lot of criticism raining down on how
mean-spirited this Contract With America is.
I know it is mean to cut off a lot of bureaucrats here in
Washington--that is mean--and to give that money back to you. That is
very mean to the people who are here to protect the bureaucrats. I know
it is mean to say people who are on welfare have to work at some point.
That is terrible. It is terrible that we should require people to work.
It is just unbelievable to me that argument was made on programs that
were trying to help people. We are trying to give more responsibility
and freedom and choices back to people, but that is the way things are
in this town. If we do not keep the power then it is mean, because of
course we are the only ones who actually care about people. You do not
care about your neighbor, we do. You do not care about your family, we
do. We care about it more than you do.
I am sitting right behind the desk of the Senator from Texas, Senator
Gramm. I will never forget a statement he made on one of these talk
shows. Ira Magaziner was on and they were talking about the health care
plan of Clinton's a couple of years ago and Magaziner was making the
point he does care about children, he does care about the young people
in this country and the folks who are uninsured. He says, ``I care for
your children as much as you do.'' That is what he said to Phil Gramm,
and what Phil Gramm said, I think, was classic. And that is: ``OK, what
are their names? What are their names?"
You see, we all care. But do we really care about that one person? Do
we really understand what their needs are? Not what ``the needs'' are,
but ``their needs?'' What ``their concern'' is? See, that is the
problem. We cannot deal with ``a concern.'' We deal with ``the
concerns.'' The problem is ``the concerns'' sometimes do not beat ``a
concern.'' And the closer we get to ``a concern'' and the closer we can
tailor and allow the people who have the feeling and the relationship
to deal with that concern, the better our country and the ``gooder''
our country is.
This line has been used a lot around here and it is so true, the de
Tocqueville line. ``America is great,'' he wrote in Democracy In
America, ``America is great because America is good.''
The people are good, they care about each other. They reach out to
their fellow man. There are volunteer organizations that developed here
in the 1800's and 1900's that just did not exist anywhere else in the
world because Americans cared about each other and felt that
relationship and kinship. And he said America is a great country
because it is a good country. ``And when America ceases being good it
will cease being great.'' We are ceasing to be good because we have
delegated everything to this massive bureaucracy here in Washington to
be good for us.
You hear the people, as you will over the next few months, get up and
talk about: How can you be so mean as to not give money to--this or
that. Folks, it is not my money. See, I am taking that money from
somebody else who worked darned hard to make it. And who says I know
best how to spend their money to help somebody else? That is the basic
premise of what is going on here.
If you want to talk about the revolution that is going on, that is
the basic premise. I care as much--I believe more--but I do not
necessarily think I am the best person equipped to make those decisions
for everybody. We can best make those decisions one-on-one, local
communities and groups, as opposed to here in Washington, DC. That is
the fundamental argument.
So, when you look at the first 100 days and you see what has happened
in the U.S. House of Representatives, and I believe what will happen in
the U.S. Senate, if you look at what we have accomplished and the hope
that we have given to Americans that we in fact can change, that
America, again, can be good, that America can be great, I think it is
an inspirational story.
We have done something in the House--and I believe the Senate will
follow--we have done something that is more important than any one
particular thing, and that is, I hope, we have restored the faith that
the American public used to have in their institutions. Because if they
do not believe in us, if what we say is irrelevant, if they do not
believe in anything we say on the campaign trail, that we are just a
bunch of folks who say what we need to say to get elected--if they do
not have any faith in what we stand for, if they think all we are going
to do is change our minds when we get down here, then democracy itself
is in danger.
If people do not believe in us anymore, if we do not stand for
anything anymore, if all we are is symbols of a corrupt institution
that does not respond to what the will of the public is, then democracy
fails. It falls from within.
Whether you agree with what the House of Representatives has done,
whether you agree 10 percent, or 90 percent, or 100 percent, you have
to stand back and say ``Well done. You did what you said you were going
to do. We may not like it but, darn it, you did. And you have to tip
your hat to that.''
Hopefully here in the Senate, while we did not sign the Contract With
America, and no one in this institution did, and that is often
repeated, we have an obligation to do something. We have an obligation
to follow through and let the country know that elections do matter;
that when the country speaks, we here in Washington, in both the House
and Senate, listen.
Mr. President, I yield the floor.
The PRESIDING OFFICER. Who yields time?
Mr. THOMAS. Mr. President, I yield time to the chairman of our
freshman group, the Senator from Oklahoma.
The PRESIDING OFFICER. The Senator from Oklahoma.
The PRESIDING OFFICER (Mr. Kempthorne). The Senator from Oklahoma is
recognized.
[[Page S5280]] Mr. INHOFE. Thank you, Mr. President. I thank the
Senator from Wyoming for giving me some time to talk about this.
I do not think there is any subject nor any issue in America right
now that people are more concerned about than what is happening with
the budget and with the deficit.
I just had an experience a minute ago with two very dear people, and
I would like to deviate a little. It fits very well into this. Two of
the most beautiful women in America are Yvonne Fedderson and Sara
O'Meara. They started many years ago an effort to address the problem
of child abuse. This blue ribbon is in recognition of Child Abuse
Prevention Month that is taking place right now. Here is a bumper
sticker. They started many years ago a program outside of Government to
do something effectively about the problem of child abuse in America.
We saw just yesterday a bill which passed the House of
Representatives that also recognizes that the problems of this country
are not going to all be addressed by Government. In fact, in many
cases, Government is the problem.
This particular program, which was started by Sara O'Meara and Yvonne
Fedderson many years ago, has a hotline throughout the Nation. Anyone
who has an idea about or knowledge of child abuse can call 1-800-4-A-
CHILD.
The reason I bring this up, Mr. President, is because this is a
national problem. It seems to me that in the last 40 years the very
liberal Congress in both Houses has felt that you had to respond to
these problems by starting some new Government program. I suggest to
you that most of the programs which address the problems in the Nation
today are not Government programs, they are programs in the private
sector. This program is a perfect example. They have in every State and
every contiguous State--and perhaps the others too--a program where
people can call a hotline and do something about one of the most
serious problems in America, which is child abuse.
The Government has a number of programs. But I suggest to you when
you look at the effectiveness of these programs it is far more
effective to have one that is run by the private sector, that is
staffed by volunteers, than having one that is a Government program.
Our problem is we have become accustomed to assuming that the problems
can be addressed by the Federal Government better than by the private
sector.
In the bill that was passed yesterday in the House of
Representatives, there is a tax incentive for families to take care of
their own children as opposed to Government taking care of them. There
is a tax incentive--not many people are aware of this--of $500 for
people to take care of the elderly. This is something that many people
did not know was in that bill, which just passed yesterday. The idea is
families in this country can take on a lot of responsibilities that
Government has learned to assume.
I read something with interest the other day. It is an article by
Thomas Sowell. Thomas Sowell is an editorial writer. The name of his
article is ``A Dishonest Slogan.'' This ``Dishonest Slogan'' is the one
that is called trickle down. It seems as if the liberals feel that with
Government, higher taxes are the answer to our problems--and this was
said, by the way, on this Senate floor by the distinguished Senator
from West Virginia, Senator Byrd--that we need higher taxes in America.
Then when they talk about the fact that they are giving tax reductions,
they try to use slogans like ``trickle down.''
Mr. President, I ask unanimous consent that, at this point in the
Record, this article by Thomas Sowell be printed.
There being no objection, the material was ordered to be printed in
the Record, as follows:
A Dishonest Slogan
(By Thomas Sowell)
If there were a prize for the most dishonest phrase in
politics, the competition would be fierce and the outcome
very uncertain. However, my nomination would be the phrase
``trickle-down economics.''
The trickle-down theory is supposedly the notion that the
way to benefit the poor is to have the government provide
benefits to the rich, which will then trickle down to the
poor. But there is simply no such theory--not in Adam Smith,
not in John Maynard Keynes, not in Milton Friedman. Not in
anybody.
My specialty within economics is the history of economics
theories--but there is no history of any such theory.
Still, no political campaign is complete without liberals
accusing conservatives of applying trickle-down theories to
benefit the rich, instead of having the government give
benefits directly to the poor. With Republicans likely to
raise the issue of reducing the capital gains tax in the next
Congress, Democrats will no doubt cry that this is a ``tax
break for the rich'' based on ``trickle-down economics.''
Let's go back to square one. There is no investment income
to tax until after an investment has been made and people
hired--and after it all works out successfully, which is by
no means guaranteed. In short, the benefits to investors come
after the benefits to those they employ, not before.
When investments finally pay off, perhaps years later, it
would make no sense to call the eventual profit simply income
for the year in which it is received. That is why capital
gains are taxed differently from ordinary income.
Often there is no real capital gain at all, except on
paper. If you bought an asset back when the price level was
half of what it is today, and you sold the property for twice
what you paid for it, then you have just kept up with
inflation. If you sell it for 50% more than you paid for it,
you have actually lost part of the real value.
Even when your capital ``gain'' does not keep up with
inflation, the government still taxes you on it. Moreover,
these kinds of ``gains'' go into the statistics supposedly
showing that ``the rich are getting richer and the poor are
getting poorer.''
Despite tilting against the windmills of a nonexistent
trickle-down theory, the last thing the liberals want to do
is to give benefits directly to the poor. They may not have a
trickle-down theory, but in practice they make sure that any
benefits to the poor trickle down through layers of
bureaucracy and are siphoned off to pay the salaries,
consulting fees and research grants of all sorts of
``experts'' with degrees.
That is why studies have shown that every man, woman and
child in America could be raised above the official poverty
level by direct transfers of money, at less than half the
cost of all the government's antipoverty programs. Lots of
people who are not poor by any stretch of the imagination
have to be taken care of out of antipoverty money.
Proposals to replace public housing programs,
``retraining'' programs and other social experiments with
hard cash given directly to the poor have repeatedly run into
a buzz saw of opposition from liberals. They don't mind more
money being given to the poor--or to anybody else--but not at
the expense of programs that employ bureaucrats and
``experts.''
These anomalies are not accidental. The welfare state is
ultimately not about getting more money into the hands of the
poor but about getting more power into the hands of
government. In program after program, the poor are to benefit
only insofar as they allow themselves to be directed and
manipulated by their self-anointed saviors.
When people get private sector jobs instead of government
handouts, the situation is completely different. Capital
gains tax reforms are needed simply to stop the government
from discouraging the investment that provides employment.
It is nonsense to call this ``trickling down'' because the
investment has to happen first, and workers have to be hired
first and paid first, before the investor has any hope of
reaping any gains. Since capital gains come last, not first,
they do not ``trickle down.''
Obviously, the higher the capital gains tax rate, the less
the incentive to invest and hire. If you want more Americans
employed, you don't punish people for employing them.
Otherwise, the investors have every incentive to invest their
money in some other country that doesn't have such high
capital gains taxes--or doesn't have capital gains taxes at
all.
But the liberals are so politically dependent on class
warfare, and on their own role as saviors of the poor, that
they are very slow to admit that there wouldn't be so many
poor for them to save if there were more jobs created by the
economy. On the other hand, if they are not playing the role
of saviors of the poor, how are they to get re-elected?
Mr. INHOFE. Mr. President, the idea is that nobody benefits from a
capital gains tax or some of these tax reductions until they have
actually provided a stimulus to the economy. For example, if you have a
capital gains tax, the individual who will eventually benefit from that
tax cannot benefit until he has already started a company, already
invested his money, already met a payroll, and already hired people.
What the liberals in Congress refuse to recognize is that for each 1
percent increase in economic activity in America, it produces an
additional $24 billion of new revenue.
I am so sick and tired of sitting on the floor here listening to the
liberal Members of Congress talk about how it did not work in the
1980's, how we tried tax reductions in the 1980's and look what
happened to the deficit. Well, the deficit went up during that decade,
but
[[Page S5281]] it did not go up because we had tax reductions. It went
up because the Members of the House and the Senate have an insatiable
appetite to spend money that is not theirs and are borrowing it from
future generations.
I will give you an example. Back in 1980, the total revenues that
were derived from the marginal tax rates in America were $244 billion.
Then, in 1990, the total revenues that were derived from the marginal
tax rates in America were $466 billion. What happened during that 10-
year period? During that 10-year period, we had the greatest tax
reductions in this Nation's history. Remember, the highest rate went
down from 70 percent to 28 percent. We had capital gains tax
reductions. We had reductions all the way down so that people knew they
could keep more of the money that they made. This stimulated people to
invest in equipment, in company, in employment, and it did, to borrow a
phrase that is often abused by our President, it did ``grow America.''
So we almost doubled the revenue during that 10-year period when we had
the largest tax reduction.
I would like to mention one of the things that I told the Senator
from Wyoming, Senator Thomas, that I would make a reference to; that
is, the moral issue that we are dealing with right now. I gave a talk
not long ago where I had the pictures of two beautiful children on an
easel behind me. Those two beautiful children I identified in the first
hour as being my two grandchildren, Glade and Maggie. Each of them will
be celebrating their second birthday this month. They are beautiful
little children.
When people talk about the programs they say are going to be cut when
we have passed a balanced budget amendment--and we will try to reach a
balanced budget--and they try to pull on the heartstrings of America
and say that all these great, wonderful Government social programs are
going to be cut, they neglect to tell you who is really going to be
punished by these programs, who is really going to be punished if we do
not do something to bring the budget into balance, which we are going
to do. And I do not want to sound partisan here, but by Republicans
taking over the House and the Senate, you are going to see some cuts.
You are going to see come growth caps. But you will see our budget come
back into balance, and we are targeting right now the year 2002.
Let us look at what is going to happen if we do not do this in
America. According to the CBO and all the other analysts, where are we
in America today if we do not have some type of a change in the program
that we have had? They have said that, if we continue to go on as we
have gone in the past, if we do not pass a balanced budget amendment,
if we do not bring it into balance, that a person who is born today,
during his or her lifetime, will have to pay 82 percent of his or her
lifetime income for taxes to support the Government programs. Stop and
think about that.
The other day, we had an interesting visitor. We had a number of
visitors from all over the world. This was during the National Prayer
Breakfast. We had people from all over the world there. I was in charge
of a group of the national visitors from the Ukraine, from Eastern
Europe and some of that area. One man was here from Moldavia. He asked
me a very interesting question. He said, ``Senator Inhofe, here in the
United States, how much can you keep?''
I said, ``Pardon me? I do not understand what you are saying.''
He said, ``Well, when you earn something, how much do you have to
give the Government?''
I said, ``Well, that is a real interesting question.'' I kind of
established a guess because there is not really a very simple answer to
that question when you stop and think about what the Government really
absorbs.
But he said, ``We are celebrating in Moldavia. We are so thrilled
that finally, after all these years of communism, we now have a free
economy. We now have a free society. We now can own property. We now
can buy businesses and we can work hard and pass on to future
generations that which we reap.''
I said, ``In your country, how much do you have to give the
Government?''
He said, very proudly, ``We get to keep 20 percent.'' I said, ``How
does that work?'' He said, ``Well, when you earn money, if you earn a
dollar, you have to give 80 cents of that dollar to the Government.''
They do not wait until year end, Mr. President. This is something that
is ongoing. And then we looked around at each other and thought, here
are these people, seeking their freedom, so excited about this, they
are all through with communism, and they can benefit and they can
enrich themselves and future generations and how happy they were, and
yet they have to give to Government 80 percent of what they have.
Mr. President, that brings it really to the surface of where we are
today. If we do not do something to change this path, we will be behind
Moldavia. It will cost our future generations 82 cents on the dollar.
So I would like to think that this is not a fiscal issue. It is a
moral issue. We are going to see in the next few weeks the Republicans
coming out in the House and the Senate with a program, with a budget, a
proposed budget that would eliminate the deficit by the year 2002. I
disagree with the way we are doing it. I hate to be the one who
disagrees with my own party. I have talked to different people who are
on the Budget Committee, and I say I think we are making a mistake when
we come out with a budget and say exactly where we are going to cut
programs, where we are going to expand programs. Why not do what we
know would work? Let us put spending caps on. If we initiate a
resolution that says we are not going to let any Government program
increase more than 2 percent, we would not touch one program, not have
a reduction in one program, not have elimination of one program, and we
would be able to balance the budget by the year 2002.
That is because--and most people do not realize it and you are not
going to hear it said by a lot of the liberals here in Congress--our
problem is not where to cut programs but how to stop the accelerated
growth. And when you hear people like the President standing up and
saying proudly, ``We are cutting the deficit,'' that is garbage.
There is an article everyone should read. It was in the Reader's
Digest last year. It was called ``Budget Baloney.'' And in it they
described how Members of Congress say they are cutting the deficit.
They described it this way: They say let us say you have $5,000 but you
want to buy a $10,000 car. All you have to say is I really want a
$15,000 car, but I will settle for a $10,000 car and I have cut the
deficit by $5,000.
That is the way they do things around here.
Let me suggest to you that there is going to be a come-home-to-roost
time. There is going to be a time when these individuals who have
habitually voted for expanded Government into our lives and are not a
part of the revolution of November 8 are going to have to come back and
take the consequences.
I would like to show you just two charts that we put together back
when we were debating the balanced budget amendment to the
Constitution.
This chart shows the characterization of those Members of the Senate
who were voting for an amendment called the Right To Know Act. Now,
what this was was an amendment to the balanced budget amendment to the
Constitution, and it said show us exactly where you are going to cut
every program. Obviously, you cannot do that 7 years in the future. But
we analyzed the voting behavior of the 41 Senate cosponsors of this
bill. We find that every one of them voted yes on the $16 billion
President Clinton tax stimulus program which was the largest increase
in spending that we have had in one bill, I believe, in the history of
the Congress; that every one of the 41 who had signed on as cosponsors
to this amendment was ranked by the National Taxpayers Union as either
a D or an F. In other words, the people who were behind this were the
people who were the big spenders in Congress.
Then the most revealing chart is the one that shows what is going to
happen to a lot of these people by showing what did happen to them in
the revolution of November 8.
On November 8, there were either defeated or retired in the Senate
eight Senators. Of the eight Senators, all eight voted for the spending
increase. This was the spending increase that put all kinds of
subsidized programs in
[[Page S5282]] there, supposedly to stimulate the economy. All of them
voted for the tax increase. The tax increase was the 1993 tax increase
that President Clinton had. It was characterized as the largest single
tax increase in the history of public finance in America or any place
in the world, and those are not the words of conservative Republican
Jim Inhofe. Those are the words of Patrick Moynihan, who at that time
was chairman of the Senate Finance Committee.
Further down here they all had either D or F ratings by the National
Taxpayers Union. In other words, they were the big spenders, and those
are the ones who were defeated. They are not here. Look around. They
are not here.
In the House of Representatives, 66 of them went out. Almost all of
the 66 voted yes on the stimulus bill, voted yes on the tax increase,
and had a D or F rating by the National Taxpayers Union.
So I just suggest to you, Mr. President, that we make it abundantly
clear to the liberals in Congress, the few liberals who are left,
because most of them were wiped out in the November 8 revolution, there
is going to be another wave coming up in 1996, and this is the
opportunity for us to be fiscally responsible, for us to be able to
stand up and say no to some of these useless programs that have
outlived their usefulness and say yes to future generations, including
my two grandchildren, Glade and Maggie Inhofe. This is what is going to
work for America, and this is probably the centerfold of the revolution
of November 8.
Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will please call the roll.
The legislative clerk proceeded to call the roll.
Mr. LEAHY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. LEAHY. Mr. President, I understand that the parliamentary
situation is that we are in morning business; is that correct?
The PRESIDING OFFICER. Technically speaking, the Senate is on H.R.
1158.
Mr. LEAHY. Mr. President, if no one else is seeking recognition, I
ask unanimous consent to proceed as though in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________