[Congressional Record Volume 141, Number 65 (Friday, April 7, 1995)]
[Extensions of Remarks]
[Page E879]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


 WHERE WE GO FROM HERE: A DIALOGUE OVER THE TRANSFORMATION TO A BETTER 
                   AMERICAN FUTURE APRIL AND MAY 1995

                                 ______


                           HON. NEWT GINGRICH

                               of georgia

                    in the house of representatives

                          Friday, April 7, 1995
  Mr. GINGRICH. Mr. Speaker, I submit the following for the Record.

       The American Opportunity:
       Creating a Safe and Prosperous Future for our Generation 
     and Our Children.
       The Coming Debate:
       Is not about just the Budget.
       It is about America's Future.
       It is about the Doing the Right Thing.
       It is about an opportunity to create the potential for 
     prosperity, safety and a better life for virtually every 
     American.
       It will take hard systematic work and real change, but it 
     can be done and it will improve our lives and our children's 
     lives.
       ``Doing the Right Thing'' Means:
       Being Truly Compassionate by replacing the Welfare State 
     with an Opportunity Society.
       Restoring Freedom by ending Centralized Bureaucratic 
     Micromanagement.
       Promoting Prosperity, Economic Growth, and Take Home Pay by 
     Reducing Taxes, Litigation and Regulation.
       Creating Opportunity for every American by Leading the 
     Transformation to a Third Wave, Information Age Society.
       Creating a Safe Future for Our Children and Our Retirement 
     Years by Balancing the Budget and Solving the Financial 
     Crises in funding Medicare and Social Security.
       The Majority Party in American Politics Is Responsible for 
     Leading the Civic Discussion About the American Idea.
       It is our Moral Responsibility.
       The Majority Party must lead a New Dialogue to achieve the 
     needed changes. That New Dialogue will lead to a New 
     Partnership with the American People.
       Through our New Dialogue, we can change Today's Public 
     Opinion into Tommorrow's Public Judgment.
       In 1995 we are at a crossroads. America has been in similar 
     situations and always risen to the challenge.
       ``Our Generation has a Renedezvous with Destiny''--Franklin 
     Delano Roosevelt, 1936. (Facing Nazi Germany, Fascist Italy 
     and Imperial Japan.)
       ``We have nothing to fear but fear itself''--Franklin 
     Delano Roosevelt, 1933. (Facing 25% unemployment in the Great 
     Depression.)
       ``We have every right to dream heroic dreams * * * the 
     crisis we are facing today * * * requires our best effort and 
     our willingness to believe in ourselves and to believe in our 
     capacity to perform great deeds, to believe that together 
     with God's help we can and will resolve the problems which 
     now confront us. After all, why shouldn't we believe that? We 
     are Americans.''--Ronald Reagan, 1/81--(Facing 13% inflation, 
     22% interest rates, the Iranian hostage crisis and the Soviet 
     Empire's invasion of Afghanistan.)
       We have the opportunity to improve every American's life 
     through 5 strategic improvements:
       1. Being Truly Compassionate by replacing the Welfare State 
     with an Opportunity Soviety;
       2. Restoring Freedom by ending Centralized Bureaucratic 
     Micromanagement;
       3. Promoting Prosperity, Economic Growth, and Take Home Pay 
     by Reducing Taxes, Litigation and Regulation;
       4. Creating Opportunity for every American by Leading the 
     Transformation to a Third Wave, Information Age Society;
       5. Creating a Safe Future for Our Children and Our 
     Retirement Years by Balancing the Budget and Solving the 
     Financial Crises in funding. To Embrace change on this scale, 
     we must use an appropriate Planning Model: Vision, 
     Strategies, Projects, Tactics.
       We have living proof America can succeed in the 21st 
     Century.
       All around us scientists and entrepreneurs are inventing a 
     better future.
       All around us corporations are re-thinking and re-
     engineering to produce more, better and faster, with fewer 
     resources.
       All around us the private sector and private citizens are 
     changing, adapting and improving.
       When we have our plan thought out, we must lead by 
     listening to others about their plans, their hopes and their 
     fears.
       Listen, Learn, Help, Lead.
       These are the 4 key steps to getting people to implement 
     change on a large scale.
       Five Strategic Improvement will help us create a better 
     government and a better America:
       The First Strategic Improvement Being Truly Compassionate 
     requires: Replacing the Welfare State with an Opportunity 
     Society.
       It is a failed model of delivering goods and services to 
     help people. It actually hurts the poor.
       Its failure is reflected by the violence, brutality, child 
     abuse and drug addiction in every local TV news broadcast.
       The culture of violence increasingly permeates our 
     entertainment and denigrates our civilization.
       The non-working, non-productive part of our society is a 
     factor in the deficit and declining American competitiveness 
     in the world market.
       The Human Cost of the Welfare State Poor Americans are:
       Trapped in Unsafe Housing.
       Maintained in Unsafe Neighborhoods.
       Saddled with rules that are anti-work, anti-family, and 
     anti-property.
       Forced to have their children attend public monopolies that 
     cost a lot but accomplish little.
       In the name of ``compassion'' we have funded a system that 
     is cruel and destroys families.
       A Failed Welfare State.
       Welfare spending now exceeds $305 billion per year, for a 
     total of $5 trillion since 1965--more than the cost of 
     winning WWII.
       This $305 billion is roughly 3 times the amount needed to 
     raise all poor Americans above the poverty line.
       Since 1970, the number of children in poverty has increased 
     40%.
       Since 1965, the juvenile arrest rate for violent crimes has 
     tripled.
       Since 1990, the number of unmarried pregnant teens has 
     nearly doubled and teen suicide has more than tripled.
       As Welfare Spending has Grown, So has illegitimacy.
       As Education Spending has Risen, SAT scores have fallen.
       The failure of the welfare state strikes at the heart of 
     the American belief that every citizen is endowed by Our 
     Creator with certain unalienable rights among which are life, 
     liberty, and the pursuit of happiness.
       No Civilization can survive with:
       12 Year olds having babies, 15 year olds killing each 
     other, 17 year olds dying of AIDS, and 18 year olds receiving 
     diplomats they can't read.
       Furthermore, no civilization can survive with parents and 
     grandparents cheating their children by refusing to Balance 
     the Budget and live within their means.
       The legacy we're leaving to our children: Moral and Fiscal 
     Bankruptcy.
       A program for a Better American Future begins with 
     replacing the Welfare State with an Opportunity Society. A 
     cheap Welfare State is an inadequate response.
       Transforming the Welfare State into an Opportunity Society 
     for the Poor requires:
        Shift from caretaking to caring--Morris Shechtman, 
     Working Without a Net.
        Welfare Reform that emphasizes work, family and 
     opportunity--Charles Murray, Rethinking the Social Welfare 
     System, Losing Ground.
        Volunteerism and Spiritual Renewal--Marvin Olasky, 
     The Tragedy of American Compassion.
        Renewing the Basic Values of American 
     Civilization.
        Tax Incentives for work, investment, and 
     entrepreneurship--Jack Kemp, An American Renaissance, Desoto, 
     The Other Path: Introduction.
        Re-establishing property ownership and full 
     citizenship for the poor--Manhattan Institute, City Journal, 
     Spring 1993.
        Learning as the focus of Education--Polly 
     Williams, Wisconsin State Legislature.
        Government protection for the poor against 
     violence and drugs--James Q. Wilson, Crime; William Bennett, 
     Heritage Foundation, Policy Review.
       The Second Strategic Improvement Restoring Freedom by 
     Ending Centralized Bureaucratic Micromanagement by the 
     Government in Washington.
       The Centralized, Washington-based system of bureaucratic 
     micromanagement has failed in a diverse, continent-wide 
     country.
       Reforms should emphasize decentralization from Washington 
     and return authority to state and local governments.
       [[Page E878]] A general rule for decision making: For local 
     problems, local government is better than national government 
     and the private sector is better than local government.
       The private sector includes non-profits as well as for-
     profit activities.
       Elected Leaders have Four Roles in this New Opportunity 
     Society:
       Visionary Definer and Value Articulator.
       Symbol of Community Power and Standing.
       Recruiter of Talent and Energy for Private Sector 
     Solutions.
       Administrator and Manager of the Government.
       When Re-Thinking the Federal Government, we must ask:
       1. Does the Community Leadership have an interest in making 
     this happen even without Federal intervention?
       2. Is it something which is morally and spiritually more 
     appropriate in a nonprofit, voluntary system?
       3. Does the project symbolize and communicate the values we 
     want the society and culture to be reinforcing?
       4. Can a private, for-profit business achieve the same goal 
     as well or better than the government?
       5. If there a Third Wave Information Age technology that 
     improves service or lowers cost or does both?
       6. If government is the best place to do it, can it be done 
     at the state or local level?
       7. If the Federal government is the best place to do it, 
     where is it on the priority list? Can we afford to do it?
       8. Have we thought through the least expensive, most 
     citizen oriented, most entrepreneurial way to do it with 
     maximum satisfaction and minimum resources?
       The Third Strategic Improvement Promoting Economic Growth, 
     Jobs and Prosperity by Reducing Taxes, Litigation and 
     Regulation.
       The American Economy needs to grow within an increasingly 
     competitive world market: to provide more jobs and increased 
     take home pay, to provide resources for charities, local and 
     state governments, to increase revenues so the Federal 
     government budget can be balanced without raising taxes, to 
     pay for Social Security and Medicare in the 21st Century.
       As Washington Grows, the Economy Slows.
       The Middle Class Squeeze:
       Today most families are working harder--they're just not 
     getting ahead.
       Federal Taxes as a Share of Median Household Income have 
     risen steadily.
       Middle Class Anxiety is Justified.
       Creating more effective government that needs fewer 
     resources will allow us to lower taxes and increase take home 
     pay for working middle class families.
       Re-engineering government to cut out waste, lower costs, 
     increase productivity and increase quality will also allow us 
     to lower taxes on entrepreneurs and inventors so we can 
     create more Economic Growth.
       Economic Growth is the consistently underestimated 
     contributor to our economic well-being.
       In 7 years, the difference between the high and low 
     economic growth projections means:
       $1,826 billion swing in the size of the Federal budget 
     deficit, $1,432 billion swing in Federal revenues.
       $19,007 swing in what individuals could make over 7 years.
       High Growth Rates can be achieved and sustained and are a 
     response to following the right policies--just as good health 
     comes from good nutrition and exercise.
       Example:
       Japan 1975--1993: 18 Years without a Recession; 4.3% Annual 
     Growth Rate; 3.7% Annual Personal Income Increase.
       Compared with America's performance: 1975-1993: Three 
     Recessions during that period; 2.6% Annual Growth Rate; 1% 
     Annual Personal Income Increase.
       Imagine if America had matched the Japanese in Economic 
     Growth over a similar period:
       Real GDP would have been $1.7 trillion greater.
       Per Capita Income would have been $8,519 greater.
       Federal Revenues would have been $365 billion greater.
       The Federal Budget Deficit would have had a $179.6 billion 
     Surplus rather than a $185.7 billion deficit in 1984.
       Greater American Competitiveness and Increased Economic 
     Growth Requires:
       A Tax Code that favors work, savings and investment.
       Less litigation.
       Less regulation and Red Tape.
       Lean and Effective Bureaucracies.
       Lifetime learning.
       Entrepreneurial culture.
       Sensible government investments in infrastructure.
       Government research and development leading to corporate 
     product development and marketing.
       More aggressive U.S. government support of exports and more 
     effective enforcement of trade agreements.
       The Fourth Strategic Improvement Creating Opportunity by 
     Leading the Transformation to a Third Wave, Information Age 
     Society.
       America needs to lead the world into the emerging Third 
     Wave Information Revolution and its new technologies.
       The Information Age will create opportunities in a wide 
     range of areas:
       Computers.
       Worldwide Electronics.
       Molecular Medicine.
       Breakthroughs in Material Technology.
       Exploring and Manufacturing in Space.
       Microminiaturization.
       Virtual Reality.
       In the Third Wave Information Age, we can do Far More for 
     Far Less.
       All over America, companies and institutions are finding 
     ways of doing more for less.
       Over the last 15 years, one major automotive company has 
     transformed itself through new technology and a new culture 
     of quality and productivity.
       They produce the same number of cars at 2\1/2\, but \1/2\ 
     the work-force.
       Consider what a government that matched that standard would 
     look like.
       Consider how much we could improve services, reduce 
     spending, reduce taxes and balance the budget with this 
     approach.
       Re-inventing the old government isn't good enough.
       New Breakthroughs do not fit into the traditional model of 
     government.
       New Breakthroughs require Bold Rethinking based on Druker, 
     Deming and others.
       We must apply these New Breakthroughs as part of replacing 
     the Welfare State with an Opportunity Society.
       In a Successful 21st Century government, we can replace the 
     wasteful bureaucracies of today with programs that serve 
     citizens and save tax dollars.
       The Fifth Strategic Improvement Creating a Safe Future for 
     Our Children and Ourselves by Balancing the Budget and 
     Solving the Financial Crises in Medicare and Social Security.
       The Budget Deficit combined with the Baby-Boomers' coming 
     retirements will cause a crisis of Historic Proportions 
     unless the problem is honesty faced and managed well in 
     advance.
       The Debt Consumes America.
       The defenders of the Welfare State know a crisis is coming.
       ``Social Security will face a cash deficit in 2013, the 
     unified deficit will increase unless taxes are raised or 
     benefits reduced and (it) could come even earlier (1999).''--
     OMB Director--Alice Rivlin, 10/94.
       Their debt numbers actually understate the problem because 
     they fail to account for 4 additional powerful factors:
       1. The taxpayers' burden in paying interest on the debt;
       2. The cost of higher interest rates caused by federal 
     government's borrowing;
       3. The imminent financial crisis in Medicare;
       4. The soon to be retiring Babyboomers and their effect on 
     the Social Security Trust Fund.
       Fact: Every Citizen will have to pay a lot in taxes for 
     interest on the debt.
       The Current Budget Deficit is Projected by to continue 
     growing into the future without solution.
       Debt in 1995 $4,800,000,000,000.
       Interest for Debt in 1995 $235,000,000,000.
       Debt in 2005 $7,533,000,000,000.
       Interest on Debt in 2005 $412,000,000,000.
       Cumulative Interest, 1995-2009 $5,212,000,000,000.
       Over the next 15 years, we'll pay as much in taxes just to 
     pay interest on the debt as today's entire debt:
       Debt in 1995, $4.8 trillion.
       Interest on the Debt, 1995-2009, $5.2 trillion.
       The following Americans will pay a lot just on interest on 
     the debt that builds up over their entire lives:
             Interest payments over a lifetime of 75 years.

Year of birth:
  Robert, 1959..................................................$75,851
  Mary, 1974....................................................115,724
  Sally, 1995...................................................187,150

       Our spending today saddles our children with debt tomorrow. 
     Sally will have to pay $187,150 in taxes for interest on the 
     debt to finance her parents and grandparents' Medicare and 
     Social Security before she begins paying taxes for any 
     government services that benefit her.
       In 1997, we will pay more for interest on the debt than 
     we'll pay for National defense.
       In just 17 years, spending on entitlements and interest on 
     the debt will consume all tax revenues.
       The only item in the budget we'll be able to afford is 
     interest on the debt and entitlements--discretionary spending 
     will be beyond our means.
       Fact: Budget deficits raise interest rates and cost 
     everyone additional money.
       What a Balanced Budget will mean for most Americans:
       One recent estimate is that a balanced budget would reduce 
     interest rates up to 2%. 2% lower on your car, your mortgage, 
     your credit card, your family farm. These lower interest 
     rates will make America a much more competitive economy in 
     the world market.
       With a Balanced Budget lowering interest rates (the 
     Balanced Budget Dividend), experts believe the American 
     economy will:
       Create 4.3 million more jobs in 10 years.
       Increase per capita incomes 16.1%.
       Generate $235 billion more revenue for the Federal 
     Government without a tax increase.
       Generate $232 billion more revenue for State and Local 
     Governments without a tax increase.
       Fact: The imminent crisis in Medicare funding is real and 
     unavoidable. It must be corrected within the next few years.
       Medicare Spending will soon outrun Revenues, and its 
     deficit will climb.
       Medicare goes bankrupt in 6 years.
       Because a centralized government monopoly is inherently 
     inefficient, wasteful and 
     [[Page E879]] too slow to adopt to new ideas and new 
     solutions.
       Medicare Must be Transformed.
       Fact: When the Baby-Boomers begin to retire, they will put 
     enormous pressure on the Federal Budget.
       The Baby-Boomers' retirement threatens the Social Security 
     Trust Fund.
       It drains the Social Security Trust Fund, and adds to the 
     already massive deficit.
       Faced with combined deficits on this gigantic scale, the 
     politicians of 2013 will only have four choices:
       Ruthless Spending Cuts of Unprecendented Depth.
       Massive Tax Increases.
       Cuts in Social Security.
       Financial crises leading to inflation.
       Recap: The Four Fiscal Facts that make change in the 
     Federal Government unavoidable are:
       1. Rising cost to taxpayers of interest on the debt;
       2. Cost to everyone of higher interest rates caused by the 
     deficit;
       3. Imminent crisis in Medicare funding;
       4. Shift in Social Security from surplus to deficit as the 
     Baby-Boomers start retiring.
       5. Strategic Improvements define ``Doing the Right Thing'':
       Restoring Freedom by ending Centralized Bureaucratic 
     Micromanagement.
       Promoting Prosperity, Economic Growth, and Take Home Pay by 
     Reducing Taxes, Litigation and Regulation.
       Creating Opportunity for every American by Leading the 
     Transformation to a Third Wave, Information Age Society.
       Creating a Safe Future for Our Children and Our Retirement 
     Years by Balancing the Budget and Solving the Financial 
     Crises in funding Medicare and Social Security.
       The story of two children provide questions about the 
     future:
       Danny: A successful suburban 18 year-old whose family is 
     well-off and his otherwise bright future is threatened and he 
     doesn't even know it. If Danny can't provide for his own 
     future, how can he provide for America's?
       Theresa: A poor inner-city 15 year-old whose life is bleak 
     and future uncertain. If Theresa is unable to break the cycle 
     of poverty, violence and drug addiction, how will she be able 
     to contribute to America's?
       All of the world's children rely on American leadership for 
     a safe, free and prosperous future.
       There is no alternative Leader.
       The alternative to a strong America is a dark and bloody 
     planet: Bosnia, Somalia, Rwanda, Haiti, Chechnya.
       For our Children's sake, our country's sake, and the 
     world's sake, we must wrest control from those who refuse to 
     take responsibility and insist on a plan to create a Safe and 
     Prosperous Future for our children and our own retirement 
     years.
       The Steps to a Do-able, Practical, Common Sense Balanced 
     Budget Plan Follow:
       1995 Revenues--$1.419 Trillion.
       2002 Revenues--$1.788 Trillion.
       2002 Spending=2002 Revenues.
       $1.788 trillion=$1.788 trillion, Budget Balanced.
       Total Spending for Last 7 Years 1989-1995: $9.5 Trillion.
       Total Spending for Next 7 Years Under a Balanced Budget 
     1996-2002: $11.7 Trillion.
       Social Security is off the table.
       Social Security Spending:
       1989-1995=$1.997 Trillion.
       1996-2002=$2.892 Trillion.
       Non Social Security Spending will still go up every year:
       1989-1995=$7.5 Trillion.
       1996-2002=$8.8 Trillion.
       The Key to getting to a Balanced Budget is to be 
     sufficiently Innovative, Creative and Transformational to 
     meet America's Key needs while spending $11.7 trillion over 
     the next 7 years.
       If we Fulfill our Destiny, we'll achieve: Our Vision of a 
     21st Century America.
       Every American safe from violence and drugs.
       Every person will be integrated into the world of work, 
     property, and achievement.
       A healthy environment will be managed through sound science 
     and a common sense, effective and economical approach.
       New technologies and new approaches will extend 
     opportunities in learning, health and jobs to the poorest 
     rural and inner-city neighborhoods.
       Government will be lean, customer responsive and effective.
       A Renewed American Civilization with a renewed 
     understanding of ``Our Creator'', our traditions and our 
     institutions and in voluntary and non-profit charities and 
     activities.
       The best system of health in the world.
       Effective lifetime learning.
       New technologies and approaches to create the fullest 
     possible participation of every American with disabilities.
       A pro-entrepreneur, pro-science and technology, pro-savings 
     and investment America that is inventing the best products 
     with the highest values in the world.
       Job opportunities for every American with the greatest 
     value-added, highest productivity, largest incomes and best 
     job security in the world as the best exporting country that 
     creates American jobs through world sales.
       Low taxes so incomes translate into take home pay and the 
     family budget has precedence over the government budget.
       A regularly balanced federal budget with declining national 
     debt so money will maintain honest value without inflation, 
     taxes to pay interest will be declining and interest rates 
     will be low.
       The Time for Cheating our Children has Ended.
       The Time to Balance the Budget has Arrived.
       America's Future requires a New Dialogue and a New 
     Partnership with the American People.
Vol. 141


WASHINGTON, FRIDAY, APRIL 7, 1995

No. 65


House of Representatives