[Congressional Record Volume 141, Number 65 (Friday, April 7, 1995)]
[Extensions of Remarks]
[Pages E827-E828]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                    OPPOSING THE REPUBLICAN TAX PLAN

                                 ______


                        HON. CAROLYN B. MALONEY

                              of new york

                    in the house of representatives

                         Thursday, April 6, 1995
  Mrs. MALONEY. Mr. Speaker, I rise to explain my opposition to the tax 
and spending cut plan offered by the Republican leadership.
  There are several individual tax cuts in this bill that I support. 
Unfortunately, all tax cuts were lumped into one bill and could not be 
voted on separately, due to the procedural rule under which the bill 
was debated.
  Therefore, Members were compelled to vote ``yea'' or ``nay'' on the 
entire plan. In the final analysis, the plan as whole was fiscally 
irresponsible, extremely damaging to New York City, and not in the 
long-term best interest of our children and grandchildren.
  Over the next 5 years, this bill will cost more $189 billion dollars, 
and over 10 years--because of the corporate tax giveaways tucked into 
the legislation--that cost will rise to as much as $600 billion.
  The bill provides only the most illusory plan of how to pay for these 
tax breaks in the first 5 years. The specifics that the new leadership 
has provided are devastating to urban areas in general and to New York 
City in particular.
  Further, the plan offers no provision whatsoever to deal with budget-
busting corporate tax breaks in the second 5 years, when the deficit is 
projected to skyrocket specifically because of those tax breaks.
  The plan will eliminate the corporate minimum tax and change the 
rules on depreciation, significantly boosting the deficit beginning in 
the year 2001.
  For example, the depreciation changes will actually increase revenues 
slightly between 1996 and 2000, but cause a revenue loss of more than 
$120 billion between the years 2001 and 2005.
  Only a small fraction of the tax breaks embodied in the bill--like 
indexing capital gains for inflation, which I support--will 
sufficiently stimulate the economy to begin to pay for themselves.
  This year, interest on our national debt totals $235 billion. It is 
the third largest portion of the Federal budget. By 1997, it will 
overtake defense spending as the second largest portion of the Federal 
budget, second only to Social Security.
  Why? Largely because in 1981, the Reagan administration sought to 
provide tax cuts and increased defense spending before deficit 
reduction. And Congress went along with it. The result was an explosion 
in our annual budget deficit from $40 billion in 1981 to nearly $300 
billion in 1992; and an increase in the national debt from 
approximately $1 to $4 trillion.
  With the exception of tax cuts which truly pay for themselves, tax 
cuts should be our reward after we cut the deficit. But until we get 
our fiscal house in order, it is irresponsible to engage in a frenzy of 
tax cuts that are not credibly paid for.
  We have made great progress in deficit reduction since President 
Clinton took office. We have reduced the deficit for 3 consecutive 
years, thanks to the budget package that I voted for in 1993. In so 
doing, we are reducing the cruelest tax of all on our children. Now is 
precisely the wrong time to take a U-turn on our road to successful 
deficit reduction.
  That being said, there are several individual tax cuts in the package 
which I think are important and I might well have supported were they 
stand-alone bills that were responsibly paid for. It is likely that the 
Senate will overhaul this plan, restoring fiscal sanity to it before it 
comes back to the House for a final vote. If so, I will strongly 
consider voting for a bill or bills which include various forms of tax 
relief.
  I have always supported expanding IRA contributions, so that all 
Americans will be encouraged to save. I also support allowing families 
to use their IRA--without penalty--for purchasing their home, in the 
event of illness or to help pay for the education of a spouse, child, 
or grandchild.
  Since I came to Congress in 1993, I have been an advocate of reducing 
the marriage penalty, which charges couples more taxes than if they 
were two unmarried people filing independently. I have worked closely 
with my good friend, Congressman Jim Moran, and have cosponsored 
legislation that would completely eliminate this problem.
  In 1993, I was one of the staunchest opponents of the provisions in 
the Omnibus Budget Reconciliation Act to raise the amount of Social
 Security benefits that could be taxed on recipients earning more than 
$25,000 a year or couples earning more than $32,000 a year. I was very 
proud to play a role in changing those thresholds, thus sparing 
thousands of middle-class recipients around the country from a tax 
increase. And I continue to support rolling back the increased benefits 
tax on those recipients earning more than $34,000 or couples earning 
$44,000.

  Coupled with that change, I believe that we should also increase the 
amount that Social Security recipients can earn without losing their 
benefits. I think that raising that ceiling from $11,000 to $30,000 
over the next 5 years is a good idea.
  I emphatically support a meaningful capital gains tax reduction. I 
strongly believe that such a cut would provide a major boost to 
economic investment in the country and would be beneficial to 
individuals of all income levels.
  Both individuals and corporations hold on to assets that have 
appreciated because they are unwilling to pay the Government almost 40 
percent of the profits from their investment. This means that money 
that could be used for new investment or reinvestment remains locked 
into these assets and thus unavailable for the kinds of purposes that 
would help boost economic growth across the country.
  But as much as I support these particular items, I could not, in good 
conscience, vote for a tax cut bill that will explode the deficit and 
result in massive tax increases to our children and grandchildren.
  What few specific cuts that the new congressional leadership has 
specified to partially pay for these tax breaks will have a drastic, 
negative impact on New York City's economy.
  Overall, the Republicans intend to squeeze $62 billion from their 
welfare reform bill to pay for a portion of their tax cuts. In my 
opinion, that bill--which among many other things, cuts school lunches 
and takes away protection for children in foster care--is an 
unmitigated disaster.
  I voted for a Democratic welfare reform bill that offered welfare 
recipients the tools of economic empowerment--training, education, 
child care--to help them get back to work and take charge of their 
lives. The bill demanded work, responsibility, and child support. That 
Democratic substitute could be described as ``tough love.'' The 
Republican bill just told defenseless children, ``tough luck.''
  It won't fix what is wrong with the welfare system. It won't empower 
people to go to work. It will only put families with children out on 
the street, which will increase homelessness and desperation in New 
York City and damage quality of life for all of its residents.
  The cuts from the GOP welfare plan will take more than $6 billion in 
Federal aid from the city and will cost tens of thousands of children--
including many in my district--their basic nutritional benefits.
  I recently issued a study on the welfare plan, which was reported in 
the New York Times, that stated the following:
  Through cuts to Aid to Families with Dependent Children:
  New York City will lose $1.3 billion because title I freezes Federal 
funding at fiscal year 1994 levels over the next 5 years. That will 
result in over 280,000 New York City children losing their AFDC 
benefits through the planned Republican family-cap and time-limit 
provisions.
  New York City will lose $62 million in child care assistance because 
of the proposal's funding level cuts for fiscal year 1996 to 2000, 
resulting in 10,504 New York City children losing child care.
  [[Page E828]] New York City will lose $200 million in funding for 
child nutrition provisions, including the school lunch and school 
breakfast programs, meaning that 60,000 New York City children will be 
dropped from the school lunch program because projected funding levels 
under the welfare plan won't be able to keep up with annual 3.5 percent 
inflation and annual 3-percent increases in school enrollments by 
fiscal year 2000.
  Of the 641,000 New York City children enrolled in the school lunch 
program, 522,000 of these children, the children who receive free 
lunches, may be forced to begin paying for lunch, with money they 
simply do not have.
  Of the 170,000 New York City children enrolled in the school 
breakfast program, 154,000 of these children, the children who receive 
free breakfasts, may be forced to begin paying for breakfast, with 
money that they simply do not have.
  New York City will lose over $35 million in funding for family-based 
nutrition provisions.
  The 316,000 children who participate daily in the Summer Food
   Program will see their food budgets cut by 50 percent as the result 
of massive cuts under the House-passed provisions.

  The 85,000 children who participate daily in day care food programs 
will also see their food funding drop by 50 percent.
  New York City would lose $1.75 billion in food stamp assistance 
through the Republican funding level cuts over 5 years.
  One million four-hundred thousand New York City food stamp recipients 
would see their food stamps allotment decrease beginning in fiscal 
1996; 640,000 of these recipients are children. By the year 2000, food 
stamp authorizations will decrease by at least 30 percent compared to 
current projected levels of need.
  New York City would lose over $760 million in SSI benefits over 5 
years under the welfare plan which means that 22,500 blind and disabled 
children in New York City alone would lose all benefits over 5 years, 
including AFDC and JOBS work training.
  This litany describes just one-third of how the Republicans plan to 
pay for this tax plan. To make matters worse, the lion's share of the 
cuts--$100 billion--are coming through broad reductions in spending 
caps.
  Although the individual, specific cuts are to be made later, the 
Budget Committee has offered some suggestions concerning what programs 
to cut in order to meet these new spending cap reductions. These so-
called suggestions add to the damage done to New York City by the 
Republican welfare bill.
  The chairman of the Budget Committee proposes slashing mass transit, 
which all New Yorkers need to get from one place to another. The 
suggested cut will take almost $.5 billion out of New York City over 
the next 5 years.
  The Republicans suggest eliminating LIHEAP, which provides heat in 
wintertime to low-income senior citizens and low-income families who 
are among our most vulnerable citizens. This ill-advised proposal will 
take close to $520 million out of New York City over the next 5 years.
  They suggest cutting medical research by the National Institutes of 
Health, which will take more than $153.6 million out of New York City's 
research institutions like Rockefeller University, Sloan Kettering and 
NYU.
  The Budget Committee's scheme to eliminate the National Endowments 
for the Arts and Humanities will not only result in a nation that is 
culturally poorer and spiritually malnourished, but will result in New 
York City losing a total of $259.1 million in grants over the next 5 
years.
  This is just a sample of what Republicans are suggesting that 
Congress cut in order to pay for this tax cut plan. And when all of 
these harsh cuts are made, this country will still be saddled with a 
growing deficit that the new House leadership does not even make a 
pretense of addressing.
  And, this bill contains one final indignity for New York City. Tens 
of thousands of families, including more than 6,000 in my district 
alone, will have to pay for a $10 billion tax increase through changes 
to the retirement system that will more than triple the cost to Federal 
workers.
  Mr. Speaker, as I said earlier, none of these spending cuts will go 
to deficit reduction. While it is widely recognized by both political 
parties that the deficit is the cruelest tax of all, the Republican 
plan provides absolutely no tax relief from it.
  We must not repeat the irresponsible tax cuts of the 1980's, which 
have been so disastrous for our economy. And I believe that yesterday's 
vote will result in greater deficit increases.
  I have little faith that having now passed some harsh cuts to pay for 
the popular part of the Contract With America, the Republican majority 
will not have the stomach or incentive to vote for even more unpopular 
cuts to Federal programs to further reduce the deficit.
  Reinforcing my concerns about repeating the mistakes of the 1980's is 
the fact that the Republicans have pledged to increase defense spending 
again.
  In all, Mr. Speaker, April 5 was a lost opportunity.
  A lost opportunity for those of us who wanted to vote for tax cuts 
that would be both prudent and beneficial to the economy.
  And, most importantly, a lost opportunity to help future generations 
of Americans who will pay for this tax folly. Ultimately, it is our 
children and grandchildren who will suffer the ill effects of the 104th 
Congress excesses here yesterday night.


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