[Congressional Record Volume 141, Number 98 (Thursday, June 15, 1995)]
[House]
[Pages H6036-H6042]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                      THE REALITY OF AMERICAN LIFE

  The SPEAKER pro tempore (Mr. Hayworth). Under the Speaker's announced 
policy of May 12, 1995, the gentleman from Vermont [Mr. Sanders] is 
recognized for 60 minutes.
  Mr. SANDERS. Mr. Speaker, I hope in a little while to be joined by 
some of my colleagues.
  Mr. Speaker, as the only independent in the Congress, I think what 
disturbs me most about much of the dialog which takes place here is, in 
fact, that the most important issues facing the American people, the 
reality of life in our country today, is simply not talked about 
enough. Every day there are heated debates that take place here, and 
charges and countercharges, all kinds of issues are raised, but 
sometimes I think that the reality of American life as it exists today 
really is not adequately addressed.
  And before we get into the issue of the budget, which I want to get 
into, and I hope some of my colleagues will be getting into with me as 
well, let us talk about reality in America today, a reality that we do 
not see too much discussed here. We do not see it on CBS too much, or 
NBC or the New York Times or our hometown papers.
  Mr. Speaker, I would argue that the most important issue facing the 
American people is that for the middle class of this country, for the 
average working person of this country, for those tens and tens of 
millions of people who constitute the vast majority of our citizenry, 
for those people this country is becoming a poorer and poorer country.
  Since 1973, when America reached its pinnacle, its high point in 
terms wages and benefits for ordinary working people, since 1973, 80 
percent, four-fifths of the American working people have experienced 
either a decline in their real wages, in their standard of living, or 
stagnation. That means they have worked for over 20 years and they look 
back and they have gotten nowhere in a hurry. That is 80 percent of the 
American people.
  Average weekly earnings from 1978 to 1990 declined, went down by 
13\1/2\ percent.
  In 1979, the average weekly wage in the United States was $387. 10 
years later, in 1989, in terms of real inflation-accounted-for dollars, 
that wage had dropped to $335. People are working, but their standard 
of living is in decline.
  What is perhaps most frightening is that for young workers, their 
real wages have declined even more.
  There was a study done not so many months ago which indicated that 
for young male high school graduates going out into entry-level jobs, 
young men were earning 30 percent less than was the case for similar 
high school graduates just 15 years ago.
  So, when parents look out and they are working hard and they are 
seeing their standard of living declining, what is even more painful 
for them is they look out and they are seeing their sons and their 
daughters going out into jobs which are paying even lower wages.
  Mr. Speaker, between 1988 and 1993, worker productivity in the 
private sector increased by 5.9 percent. That is the good news.
  The bad news is that during that same period, average hourly earnings 
declined by 4 percent. By 1993, the typical family had lost $1,400 of 
the buying power it had in 1991.
  Mr. Speaker, one of the frustrations we talk about, why the American 
people are angry, why the American people are frustrated, a study done 
by Juliet Shaw was done at Harvard University which indicated that for 
American workers to maintain their standard of living, they had to be 
working now an extra 1 month a year, either in overtime or in second 
jobs, and in my State of Vermont it is not uncommon to see people 
working three jobs.
                              {time}  1715

  Mr. Speaker, 40 percent, and this is an important fact, we talk about 
welfare reform, so forth and so on. Forty percent of the families in 
America today who live in poverty have a full-time worker. This is not 
unemployed people, this is not people just sleeping out on the street, 
and one of the reasons that our low-income workers are doing worse 
today than they did 20 years ago is that the minimum wage today, at a 
disgracefully low $4.25 an hour, has a purchasing power which is 26 
percent lower than it was 20 years ago.
  Mr. Speaker, we look in the newspapers, and they tell us that 
unemployment is not such a serious problem. Maybe it is 5 percent, 
maybe 6 percent. Countries all over the world, in Europe or 
Scandinavia, they have higher rates of unemployment, but I would argue, 
Mr. Speaker, and I think many of our leading economists would argue, 
that in real fact unemployment in America is actually double than what 
the official statistics tell.
  Why is that official statistics do not include discouraged workers? 
That means people are living in communities where there are just no 
jobs. They do not go out, so therefore they are not counted as part of 
the unofficial employment statistic, and perhaps even more importantly 
part-time workers who want to work full-time are also not included as 
part of the official unemployment statistic.
  One of the very frightening aspects of the modern American economy is 
that when we look at the new jobs that are being created, are they good 
paying, 40-hour-a-week jobs? No, they are not, not in Vermont, not in 
the vast majority of the States in this country. Many of the new jobs 
that are being created are part-time jobs. You have people who want to 
work 40 hours a week, but they are getting 20 hours a week without 
benefits. Are they counted as unemployed? No, they are not.
  So I would just conclude my initial remarks, Mr. Speaker, and welcome 
the gentleman from Oregon [Mr. DeFazio] here by just simply saying, 
``Before we talk about the budget, before we can talk about why the 
American people are angry, the most important reality is America has 
the right to be angry. Our people are working longer hours for lower 
wages, for less vacation time, for fewer benefits than was the case 20 
years ago.''
  But on the other hand there is another reality which is going on. Are 
all the people in America seeing a decline in their standard of living? 
Are we all in this boat together? The answer is probably we are not.
  A recent study in the New York Times: The richest 1 percent of the 
population now owns 40 percent of the wealth of America. We have the 
most uneven distribution of wealth in the entire industrialized world. 
The richest 1 percent owns more wealth than the bottom 90 percent. 
Upper income, 4 percent, earns more income than the bottom 51 percent, 
and, the gap between the rich and poor grows wider, the middle class 
continues to shrink. That is the reality of American life today for the 
middle class for the working class, for low-income people.
  Having said that, I am delighted to welcome, to my mind, certainly 
one of the outstanding fighters for working people in this Congress, 
the gentleman from Oregon [Mr. DeFazio].
  Mr. DeFAZIO. And I guess the follow-up point would be what caused 
these inequities and what can or should we do about it?
  I would say in good part you can lay the blame for the extraordinary 
pauperization of the middle class of this country to two major areas of 
policy, probably three: The tax policy of this country, which has 
heaped more and more burden on middle-income [[Page H6037]] people and 
lightened the burden on those at the very top and the largest, most 
profitable corporations. In fact, the Republican budget, which passed 
the House here, would do away with the corporate alternative minimum 
tax. That means we go back to the days when a corporation like AT&T, as 
they did from 1981 to 1985, earned $1.3 billion in profits and not only 
not paid taxes--we all understand about loopholes and avoidance but--
actually demanded and received a $200 million tax refund for taxes they 
did not pay. That is other Americans, people who work for wages, went 
to work every day, paid their taxes, and guess what? Part of their pay 
check went to give a $200 million tax giveaway to a corporation which 
had made $1.4 billion in the same years, and now we are being told that 
is what will take care of the problems of middle-income Americans. The 
Republican tax break bill repeals the corporate alternative minimum 
tax, and that will put Americans back to work at higher wages; give me 
a break.
  Mr. SANDERS. Is the gentleman--let us go over that once again because 
people may be adjusting their TV dials there to get that straight. Is 
the gentleman suggesting that, if the Republican proposal here in the 
House goes into effect, that the largest corporations in America making 
billions of dollars in profit will pay less in taxes than the average 
working stiff making $25,000 a year? Is that what the gentleman----
  Mr. DeFAZIO. I am saying that will be true, and in fact, if we go 
back to the pre-alternative corporate minimum tax days, the 1980's, we 
could say, in fact, that those same working people will pay taxes so 
that tax credits can flow to those companies.
  The other issue there would be, of course, the United States stands 
alone in the industrial world in not taxing foreign operations in the 
United States or multinational corporations. We have adopted such a 
limp section to the Code of taxation that virtually every major 
multinational and foreign corporation in this country pays no income 
taxes no matter how profitable they are because they upstream or 
downstream their profits to other lower tax countries. They are not 
paying their fair share, yet every day, every week, every American sees 
their taxes go up. They see the deductions out of their paychecks, but, 
no, Honda does not make any money in the United States of America. They 
just sell cars here. Toyota does not make money in the United States of 
America. They just sell cars here.
  Mr. Speaker, if we adopted the same system of taxation that all of 
our major trading partners have adopted, the estimates are we could 
raise $40 billion to $60 billion next year; that is about a third of 
the deficit. We can raise it by just taxing the profits of 
multinational and foreign corporations the same way that every one of 
our major economic competitors does.
  Mr. SANDERS. If I could interrupt the gentleman, would they not be 
upset? Would they then go to Republican and Democratic fund-raising 
dinners and contribute tens and tens of thousands of dollars? I do not 
understand what you are saying. If we tax them, how would they 
contribute huge sums of money to the Republican and Democratic Parties? 
Surely the gentleman must be joking.
  Mr. DeFAZIO. Well, perhaps that is the bottom line here. It is, you 
know, how the money flows in Washington, DC, how the influence flows in 
Washington, DC. As my colleague knows, in the office of the special 
trade representative, a study I saw said that 74 to 75 percent of the 
people who worked in the President's Office of the special Trade 
Representative have become foreign agents; that is, they are now 
representing foreign nations against the interests of the United States 
in trade and economic policy. You know we have got to close these 
revolving doors. We have got to reform campaign finance. We have got to 
reform the gift rule. But somehow it did not fit into the Republican 
Contract on America. No gift reform, no campaign finance reform; those 
things got left out, to be done later, of course.
  Mr. SANDERS. We are delighted to be welcoming the congressman from 
New York City, from Brooklyn, Major Owens.
  Mr. OWENS. I want to congratulate the gentleman for holding this 
special order in response to the latest developments with respect to 
the endorsement of the balanced budget concept by the President and 
your present discussion of taxes, of revenue. I hope that we are going 
to have much more of this kind of discussion and invite the American 
people to take a very close look at revenue measures to produce 
revenues and taxes. We have an era, certainly in the Democratic Party, 
and maybe the gentleman from Vermont [Mr. Sanders], as an Independent, 
does, too. By not talking enough about taxes, we leave that to other 
people, and we have a situation where, when bills were related to the 
revenue taxes have come to the floor of the House, it has always been 
from the Ways and Means Committee, and the rule always was that you 
could not make a single amendment. They always came, and you voted it 
up or you vote it down.
  So the Ways and Means Committee has been in charge of tax policy for 
the Congress for the last 20 to 30 years, and they are responsible for 
something which the American people ought to take a very close look at, 
and that is the great swindle of the American taxpayer by reducing the 
amount of the tax burden borne by the corporate sector, reducing it 
drastically, from almost 40 percent, 39.8 percent in 1943, down to 8 
percent in 1980, and then presently it is 11 percent even after 
President Clinton has taken steps to get it back up.
  So you look at that on the one hand. They reduce the corporate income 
taxes, and the individual taxes have gone up from 27 percent in 1943 to 
the present 44 percent in 1995.
  So there has been a great swindle in terms of reducing the revenue, 
the portion of the revenue burden borne by the corporate sector and 
raising the portion borne by the individual.
  While we are on the subject of balanced budget, let us invite all of 
America to take a very hard look at the way we derive our revenues.
  Mr. SANDERS. The gentleman is absolutely right. Between 1979 and 
1989, when the rich were getting richer, the number of taxpayers 
reporting adjusted gross incomes of $200,000 a year or more grew by 8 
times. A lot more people were getting rich. Meanwhile, according to the 
House Ways and Means Committee, tax savings in 1992 for families in the 
upper 1 percent income bracket, total tax savings, totalled $41,886, a 
result of the drop in the effective tax rate for those families--it is 
the upper 1 percent--from 35.5 percent in 1977 to 29.3 percent in 1992.
  So the point that the gentleman makes is absolutely right. When we 
talk about why we have a $4.7 trillion debt, how can we not talk about 
the huge tax breaks given to the wealthiest people in America and to 
the largest corporations?
  Mr. DeFAZIO If the gentleman would yield for a moment, perhaps we can 
bring the discussion to what we are confronted with today.
  The House Republican budget starts out moving the United States 
toward a balanced budget by first further reducing taxes on the most 
wealthy, those who earn over $100,000 a year, and on the largest, most 
profitable corporation by $353 billion.
  So they first start with a--here we are. We are in the hole. We are 
all agree we need to have fiscal responsibility and move toward a 
balanced budget. First thing we do is we make the hole $353 billion 
deeper in order to benefit people who earn over $100,000 a year and in 
order give further tax relief to the corporations, and, as the 
gentleman from New York pointed out, who were paying taxes at about--
what is it? About a quarter, a third of the rate----
  Mr. SANDERS. Let us repeat that once again. Let me just ask the 
gentleman this question: Every day we hear about the crisis of our 
national debt, every day, every day, and we all understand the 
importance of that. Is the gentleman suggesting that one of the major 
ways the Republicans are proposing to deal with our national debt is to 
give huge tax breaks? Is that a strategy to deal with the deficit?
  Mr. DeFAZIO. We are revisiting trickle-down economics, the theory 
that, if we give those people who are much smarter than we are, who 
earn, you know, over $200,000 a year and control these corporations 
more money, that they will create more jobs and the 
[[Page H6038]] effects will trickle down. We are right back to the 
failed trickle-down policies of the mid-1980's. Those policies brought 
us record debt, record deficits and, as the gentleman pointed out, 
consistently caused the decline in the standard of living of middle-
income families.
  Mr. SANDERS. Let us review, if I might. Let us review again who is 
getting those tax breaks. Obviously, one would think that, if one 
decided to give tax breaks, and that is a debatable issue, clearly you 
were giving it to the working people, the people who are in most 
trouble. Interestingly enough, if you look at the Republican budget, 
the wealthiest 1 percent, the people who need the tax breaks the least, 
are getting more in tax breaks than the bottom 60 percent.
                              {time}  1730

  Mr. DeFAZIO. You are talking at the top, generally the people in the 
top will be getting breaks that average up to $40,000 off of their 
taxes, compared to $500 for a $40,000 a year family. This is not 
restoring equity to the tax system.
  Mr. OWENS. What is important for the American people to understand, 
and you ought to listen carefully and ought to demand from your 
Congressman an explanation as to why this is happening, why are you 
giving these tax breaks to the rich? Why are you continuing the 
trickle-down theories of Reaganomics?
  Ronald Reagan's explanation, he had an explanation, and he gave it, 
and it has been proven to be totally wrong, that if you will give the 
appropriate tax cuts and tax breaks to the rich and to the 
corporations, their investments will create activities which will in 
turn create jobs. The investment activities, will create jobs.
  It is obvious, the empirical evidence showed it did not happen under 
Reagomics. It will not happen now either. We have wealth being 
accumulated in this country at unprecedented rates. The very rich are 
getting rich faster. Wall Street is booming. Yet no new jobs are being 
created. The jobs are going the other way. You have a jobs economy over 
here and a Wall Street economy over here, and there is no relationship 
between the two, because as they invest more money they can buy more 
automated equipment or take their operations overseas and manipulate in 
many, many different ways to make additional money off their 
investments without creating jobs. They are downsizing the jobs, they 
are streamlining, they are doing all kinds of things where they have no 
bargaining power. We are all going to end up being suburban peasants or 
urban serfs, who have no choice almost, because of the tremendous power 
of these corporations.
  The power we have as voters in this democracy is to demand that we 
begin to reverse this by forcing those who are making the wealth to pay 
more into the general funds that are needed in order to promote the 
general welfare and provide for the public sector investments that are 
beginning to drive the economy in a different direction.
  Mr. SANDERS. The gentleman makes a very important point. The theory 
of giving tax breaks to the rich and to large corporations is if we 
give them tax breaks, they are going to reinvest in our communities and 
create jobs. It sounds like a good theory. Unfortunately, all of the 
facts indicate that that theory is totally bogus, given the reality of 
what is happening. The gentleman from New York points out that major 
corporation after major corporation, the same ones that got huge tax 
breaks in the early eighties, the same ones the Republicans want to 
give huge tax breaks to now, what they have done is use those tax 
breaks to develop more automation. Major corporation after major 
corporation has laid off huge numbers of American workers. We are 
talking about millions of workers.
  The other thing they have done after we give them tax breaks, is they 
invest abroad. They are investing in Mexico. Why do you want to pay an 
American worker ten bucks an hour, fifteen bucks an hour, when you have 
a Mexican working for a buck an hour? How about China? How many 
Americans know that American corporations are investing tens of 
billions of dollars in China. Do you know what the wages are in China? 
Twenty cents an hour. Last year American corporations invested $750 
billion abroad. Every major in America, every Governor in America, is 
begging on their hands and knees for corporations to reinvest in their 
communities, and these corporations get the tax breaks and they go 
abroad.
  Mr. DeFAZIO. If the gentleman will yield for a moment, I would like 
to point out it was the esteemed Speaker of the House of 
Representatives who said that in fact we cannot raise the minimum wage 
for the American working people because of our competition with Mexico. 
Of course, the Speaker supported the North American Free Trade 
Agreement, which I bitterly opposed and have introduced legislation to 
repeal. Just to recap on that, we were told it would create jobs in 
America. We were told that it would help the United States balance of 
trade, it would stabilize Mexico.
  Those of us who opposed it said we believe we will export jobs, we 
believe that we will run a trade deficit with Mexico, and we believe 
that it will further destabilize Mexico. We were a little bit wrong, 
because we could not realize that not only would it destabilize Mexico, 
continue the current corrupt system, that the peso would be devalued 
and the standard of living would fall by nearly 40 percent
 for every Mexican worker, but that we would be running already this 
year, we are headed toward a $20 billion trade deficit with Mexico, 
which means we will export 400,000 jobs to Mexico this year. We never 
could have predicted we would have to pay for the privilege of 
exporting our jobs to Mexico, which is what we are doing today with the 
bailout of the speculators who were so actively engaged in the Mexican 
economy and the few billionaires who run the Mexican economy and the 
corrupt political system they have.

  U.S. tax dollars are going to bail these people out. We are paying 
for the privilege of running a trade deficit. The Speaker tells us we 
cannot raise the minimum wage for the American workers because they 
have to compete with the Mexican workers, whose salaries just went down 
by 35 percent. And then on another day he said, ``By the way, the 
competition is in south China.'' So apparently we have already quickly 
moved from Mexico, because those people are earning as much as a dollar 
an hour, and now suddenly the American workers not only have to compete 
with them, the American workers are not supposed to compete with slave 
labor in China, or those who are paid at the rate of 20 cents an hour.
  Mr. OWENS. Could the gentleman just linger for a minute on Mexico. I 
hope that, again, every American voter ought to be angry. There is good 
reason to be angry. But we ought to focus and direct our anger in ways 
which are more effective and at the real source of the problem.
  I said before we ought to be angry at the fact that corporations have 
gotten away with so much over the last 30 years, and certainly they 
have dropped all the way down to now paying 11 percent of the tax 
burden while individuals and families are paying 44 percent of the tax 
burden. That is enough to be angry about.
  But Mexico in particular, it ought to make us turn red, all of us, 
with anger, because we first have NAFTA, a situation which was created 
by a sweeping change in public policy, that created a situation which 
was even under the best circumstances going to hurt the American 
workers. It was designed to make the rich get richer, to have the 
corporations have every advantage in terms of export, import, 
exploitation of cheap labor in Mexico. All of it was designed to help 
those same people that the Republican tax cut is going to help.
  On top of the inevitability of it hurting working people comes an 
additional burden of us having to bail out the Mexican economy to the 
tune of $20 billion. It is enough by itself for you to be angry at the 
Government. When I say government, I do not mean just President 
Clinton, I mean also the leadership of the House and the Senate, and 
all of those great majority of the Members of Congress who went along 
with NAFTA and GATT. You ought to be angry, you ought to talk to them 
about the mistakes that they have made, and they have to reverse those 
mistakes. They have to now focus on an economy which is going to 
promote the general welfare of America. [[Page H6039]] 
  The Japanese are being criticized for their protectionist trade 
policies, their closed society. The Japanese protects its middle class 
society. It almost has no poverty class as a result of the fact it 
takes the necessary actions to guarantee everybody is going to be able 
to make a living. So be it. Let the United States also. As voters we 
can demand a series of public policy decisions which lead to the 
protection of our way of life, of our standard of living, and we can 
make contributions to the rest of the world in terms of holding up that 
model.
  Unfortunately, we have let the situation deteriorate to the point 
where we are headed rapidly to the bottom in terms of the standard of 
living of our workers, while Germany has the highest standard of living 
in the world. And I am not criticizing that. The German worker gets 6 
weeks vacation, family and medical leave off with pay. They have very 
high wages. I am not criticizing them for that. It could happen here, 
if we had a different set of public policies and took control of our 
Government.
  Every person who votes has an opportunity to have an impact on this 
public policy. America, we should stop sitting by as spectators while 
the Committee on Ways and Means and the White House and NAFTA, GATT, 
and all these other institutions weigh down upon us and force our 
standard of living down.
  Mr. SANDERS. The gentleman makes two, I think, very, very important 
points. He explains that in America we are angry, and we have good 
reason to be angry. But what the Rush Limbaughs of the world and the 
Republican leadership are trying to do is getting us all angry at each 
other.
  Every day it seems like there is a new group that we are supposed to 
hate. On Monday we are supposed to hate the gays, and on Tuesday we are 
supposed to hate the immigrants, and on Wednesday we hate the welfare 
recipients, and Thursday it is antiblack day, and Friday it is 
antiwoman day, and on and on it goes. And yet we are never focusing on 
the real group of people who hold the power in this country, and that 
is the very, very wealthy and the large multinational corporations who 
contribute huge sums of money to Members of this Congress, who control 
this Congress and write the agenda for this Congress.
  I think what all of us are saying, in different ways, is that maybe 
the time is long overdue when the middle class and the working people 
and the low-income people and the women and everybody else began to 
stands together and say that there is something wrong when our standard 
of living is going down and when the richest people get richer.
  The gentleman from New York made a good point. There are some people 
who still hold the illusion that we are No. 1 in the world, we are the 
wealthiest country in the world. Not for working people you are not. 
Germany, manufacturing workers in Germany now make 25 percent more than 
our manufacturing workers.
  Do you know why corporations from Germany and Scandinavia and Europe 
are investing in America? Cheap labor. We now can give them cheap 
labor. That is what is happening. And that is a real shame.
  What I would like to do now with my colleagues, if we might, we want 
to talk about the budget, the Gingrich budget, the Clinton budget. We 
are trying to give some background as to how we got to where we were. 
We talked about the fact that one of the reasons for the national debt 
is huge tax breaks for the rich and the largest corporations. There is 
another area that is worthy of at least some discussion, given the vote 
today, and that is the role of military spending.
  Remember, $4.7 trillion debt. Obviously the cold war is over. The 
Soviet Union does not exist. Clearly I would imagine that today, having 
voted on the military budget, there was a major decrease in military 
spending. Is that correct, Mr. DeFazio?
  Mr. DeFAZIO. Well, the gentleman knows that in fact the second part 
of the major part of the plan of the new Republican majority to bring 
us to a balanced budget after the massive tax break for the wealthy and 
the large corporations is the increased military spending. It is 
obviously an absurd formula. You
 cannot spend another $92 billion over the next 7 years on the military 
to build weapons that even now the Pentagon said it does not want, it 
does not need, and have no practical purpose.

  The House voted this week, with very little exposure to the public. 
This bill was brought forward under a very restrictive rule and we were 
allowed one amendment on the B-2 bomber. At $1.5 billion each for 
bombers which the Pentagon says have no purpose in the post-cold-war 
world, and yet the House of Representatives voted by a substantial 
margin, lockstep on the Republican side, followed by a number of 
Democrats, to build another 10 B-2 bombers at the cost of $1.5 billion 
each, something the Pentagon said it does not want, does not need, and 
cannot use, in addition to putting more money into the star wars 
fantasy.
  We have spent $36 billion on star wars since Ronald Reagan first 
unveiled this vision in the early eighties and you know what the net 
result is of the money on star wars? One faked test over the Pacific 
Ocean, and the Pentagon admits they faked it. They could not hit the 
incoming missile. One missile, not a fleet. They put explosives in it, 
they hit a button, it blew up, and they said look, star wars works. It 
does not work, and it is a very expensive fantasy.
  Mr. OWENS. I want to linger for a moment on the B-2 bomber, the cost 
of building the B-2 bombers. I think is a $31 billion price tag over a 
5-year period.
  Now, the B-2 bomber, the Air Force said we do not want it, we do not 
need it, it actually is counterproductive because it will mean funds 
will be spent for an item that we do not need and they will be taken 
away from many items we do need.

                              {time}  1745

  So the Air Force says that. The Joint Chiefs of Staff says that we do 
not need it. We do not need it. We do not want it. The Secretary of 
Defense: We do not need it, we do not want it. It is not in the 
President's budget. He does not need it and he does not want it.
  I am sorry, but I think every voter out there ought to ask their 
Congressman, did you vote to continue the funding for the B-2 bomber? 
If you did vote to continue the funding for the B-2 bomber, in light of 
the fact that all of the experts, all of the military, everybody says 
we do not want it, we do not need it, it is a waste, then you have no 
right to talk about waste in Government ever again. You have no right.
  That was a perfect example. Why would anybody vote for the B-2 
bomber? It is the worst kind of pork. It is the pork from the military 
industrial complex, the people have been absorbing much too much of our 
budget over the last 20 years. It is pork, pork, pork. It will generate 
a profit for the people who manufacture the bomber. It will generate a 
profit for the stockholders who will have invested in that corporation. 
It will generate some jobs for some workers. But you could create three 
times as many jobs for $31 billion in the civilian sector if you choose 
to spend the money to create jobs than you can create by building B-2 
bombers.
  Mr. SANDERS. I want to keep the discussion moving in this direction. 
All of us, the three of us, and almost everybody in the Congress 
recognizes that we have a very serious deficit problem, very serious 
national debt. But what we are talking about and wondering about is how 
do you move to lower the deficit when you give huge tax breaks to the 
rich, when you expand military spending, despite the fact we do not 
quite know who our enemy is, when you build planes that the Pentagon 
does not want.
  But if you are going to move toward a balanced budget in 7 years, as 
Mr. Gingrich wants, or 10 years, as the President wants, something has 
got to give. If you give tax breaks to the richest people in America, 
you are going to have to cut someplace. If you build $31 billion of B-2 
bombers that the Pentagon does not want, you are going to have to cut 
someplace. Let us briefly talk about some of the areas where there will 
be cuts. OK?
  Medicare. What are they doing to Medicare in order to give tax breaks 
to the rich?
  Mr. DeFAZIO. It is interesting, we had a lot of discussion of health 
care [[Page H6040]] here last year. We had considerable opposition on 
the Republican side of the aisle and they said there was no problem 
with the health care system. It did not need a Federal fix. They did 
not mention Medicare as being in deep trouble or being bankrupt.
  They came up with a Contract on America to run for election. There is 
nothing in there about health care or Medicare. Earlier this year we 
passed emergency legislation, the rescissions legislation and the 
emergency spending for disasters. No mention of a disaster impending in 
Medicare or a need for changes in Medicare.
  It was only after legislation had been adopted to cut taxes, 
predominantly for people who earn over $100,000 a year and the largest, 
most profitable corporations by $350 billion that suddenly we found 
that we need to reduce Medicare spending by nearly $300 billion.
  A cynical person would say there was some linkage between the sudden 
need to reduce Medicare spending and the huge tax giveaways. Of course, 
that is denied. They want to reduce Medicare by $300 billion in order 
to improve the program for seniors, the same seniors now who cannot 
afford prescription drugs, if they can afford the co-payment to go to 
the doctor and get the prescription. We are going to improve the system 
with no plan but just by reducing it by $283 billion over the next 7 
years.
  Mr. SANDERS. So what are we talking about? Again, please follow the 
discussion: huge tax breaks for the rich, significant increase in 
military spending, major cutbacks in Medicare, which will undoubtedly 
mean that elderly people who today cannot afford the cost of health 
care will have to pay more out of their own pockets, major cutbacks in 
Medicaid to impact on the elderly and the poor, major cutbacks in 
veterans' programs.
  I always get a kick out of whenever there is a war, everyone tells us 
how much they love our soldiers and the veterans. But let us be clear. 
In the Republican budget and in Clinton's budget, we are talking about 
many billions of dollars in cutbacks for our veterans, many of the 
people who fought in World War II, they defeated Nazism, the VA needs 
more help, not less money.
  Also we are talking about major, major cutbacks in student loans and 
in education. I know that Mr. Owens and his community are very 
concerned about the high cost of education. We want our people to get a 
college education. What does this budget do to the ability of your 
constituents and mine to get a college education?
  Mr. OWENS. Well, New York City has a long tradition of having 
education available at the higher education level for great masses of 
students. New York City has been the place where large numbers of 
immigrants have come in and found opportunity. Our City University was 
established at the height of the Depression, so we were able to 
maintain City University during the Depression, and now we are saying 
we cannot do it. We have to increase the tuition cost.
  First of all, for years there was no tuition at all, and then we 
imposed tuition, and now we have to increase the tuition cost because 
we are getting less aid from the Federal Government and less aid from 
the State government. So at a time when the society is far more complex 
than ever before, at a time when we
 are stating clearly that any person who does not have a high education 
is at great risk in terms of being able to be employed for most of his 
life, and on the other hand those that do have higher education, 
statistics and studies have shown they cannot be employed, they put 
back in the economy, they give back to the government through the 
payment of income taxes and they are more productive citizens. All of 
those things are highly desirable. Yet in the Republican budget they go 
so far, not only do they make it more difficult for college students by 
adding to the burden of their college loans, they eliminated the 
Department of Education totally.

  The elimination of the Department of Education means you have no 
coordinated approach to education and a situation every day where 
education becomes more important.
  I would like to backtrack for just a minute to make a comment on 
Medicaid. Very little is being said about Medicaid because it is 
assumed that Medicaid is for the poorest people in the country. 
Therefore, Medicaid has no political clout. We are just going to dump 
them overboard. The Republicans are proposing to take away the 
entitlement to Medicaid. Entitlement means that everybody who gets 
sick, who is eligible because they do have to pass a means test and 
they have to be income eligible. That person is guaranteed to have 
assistance from the government on health care once they qualify.
  To take away that entitlement means that if people get sick near the 
end of the budget cycle they will be told by the State that there is no 
more money. Medicaid is being cut more drastically than Medicare, and 
Medicaid is not just a program for the poorest families. Two-thirds of 
the Medicaid funding goes to the elderly and to the disabled.
  Many people who start out as middle class citizens when they get ill 
and are ill over a period of time, they are forced to spend so much 
money until they end up in nursing homes, and those nursing homes are 
paid for by Medicaid. The largest percentage of Medicaid funds are 
going to nursing homes. So we are not, I hope that the voters in 
general frown on creating a second class health care system for poor 
families, but you are not just hitting poor families in that second 
class health care system. You are hitting people who will become, that 
they will drop out of the middle class and become nursing home 
patients, and Medicaid will have to pay that bill.
  Mr. DeFAZIO. Just on the education issue which the gentleman raised, 
we adopted in the last Congress an innovative idea. That is, why not 
have the schools make direct loans to the students, take out the banks 
as middle persons. The banks have been getting very high rates of 
interest for loans that have no risk. The idea is you get interest 
because of risk. The president of the University of Oregon at the time 
came, did calculations and he said that for the same amount of Federal 
money we could give another 600,000 students full entitlement to 
student loans if we just took the banks and the bank profits out. The 
Federal Government lends the money through the schools and, you know, 
the Federal Government knows how to collect money. They know where 
everybody is.
  So I am not worried about defaults. But do you know what, the 
Republican budget wants to do away with direct student loans and put 
the banks back in the middle. That means take away the loans of 600,000 
students so that the banks can make a guaranteed profit on a risk-free 
loan backed by the Federal Government.
  That is just one more form of corporate welfare,
   and that I think segues us back into what is a better vision for a 
balanced budget. And I would just like to, I have to leave the floor; 
if I could just lay out a couple thoughts and then I will yield to the 
gentleman.

  The idea that we have talked about earlier which is that the largest, 
most profitable corporations are not carrying their fair share, that 
foreign corporations are virtually paying no taxes in this country, 
that the largest gold mining operations in the United States on public 
lands are foreign owned and paying no taxes to the United States of 
America. There are estimates that there is $150 to $200 billion a year, 
credible estimates that come from the far right, the Cato Institute, to 
the Progressive Policy Institute that say there is about $150 to $200 
billion a year of corporate welfare out there. And if we went after 
just a fraction of that, we would not have to see any of these cuts in 
order to get to a balanced budget. Just a fraction of those revenues 
linked to reductions in military spending would move us dramatically in 
the direction we need to go.
  Mr. SANDERS. I applaud the gentleman's remarks. He is absolutely 
right. I know the three of us and many others have been trying to focus 
this Congress on the issue of corporate welfare. When most Americans 
think about welfare, they say, my money is going to those poor people. 
Wake up. More money is going to the rich and to large corporations in 
terms of Federal subsidies and tax breaks than are going to the poor 
people.
  I know Mr. Owens worked on the issue of corporate welfare. I know you 
have some thoughts on it. Would you share some of those?
[[Page H6041]]

  Mr. OWENS. Again, the burden that was borne by corporations in 1943 
was 39.8 percent of the total tax burden. The burden that corporations 
have, the portion of the tax burden that corporations bear now is only 
11 percent. Individuals started in 1943 about 27 percent, and now 
individuals are paying 44 percent of the tax burden. That is a fact 
that I cannot emphasize too much.
  I think Mr. DeFazio has said before that one way you can gain a large 
amount of revenue, I do not have the actual figures before me, but they 
were all listed in the Congressional Black Caucus budget, we listed 
specifically where we would find the money, which added up to almost 
$600 billion over a 7-year period, $600 billion that would have come 
from such items as one mentioned by Mr. DeFazio, if you change the way 
you tax foreign corporations, if you change, just make a change from a 
tax credit that you utilize at one point and make it a tax deduction, 
you gain enormous amounts of money.
  If you close a lot of various loopholes that have been made over the 
years, the oil depletion allowance is still there, it has been there 
forever. There are numerous loopholes that have been developed because 
the corporations have literally owned the Ways and Means Committee and 
the Ways and Means Committee, whether Democrat or Republican, has had 
the same approach of being the servant of corporations. So down, down, 
down has gone their portion of the tax burden, while the individual's 
portion has gone up.
  Mr. SANDERS. Let me just pick up and give you a few more examples.
  We talk about Federal aid to housing. The leadership here in the 
Congress says, we cannot afford affordable housing anymore. In fact, 
one of the lovely proposals was to cut back on Federal aid to homeless 
people with AIDS. We just cannot afford to provide any money to keep 
those people alive.
  Let us talk about another interesting Federal housing program. That 
is the mortgage interest deduction up to mortgages of $1 million. Now, 
most of the people that I know in the State of Vermont, they do not 
have million dollars homes. Maybe it is $100,000 a house; maybe it is a 
$200,000 house. That is true throughout America. But interestingly, if 
you got a million dollar mortgage, the house can be worth more than a 
million dollars, you can deduct the interest on a million dollars of 
your mortgage.
  Who gets that benefit? Think it is low income people? Middle income 
people? No. Obviously, upper income people who own the large houses are 
the major beneficiaries of that program. That is called welfare. But 
that is a different type of welfare, because you are helping the 
wealthiest people in America.
                              {time}  1800

  Another program that I have paid a little bit of attention to is 
called OPIC, the Overseas Private Investment Corporation. The gentleman 
from New York [Mr. Owens] and I were talking about the decline in our 
economy for working people. We are seeing corporations investing $750 
billion abroad while they are throwing American workers out on the 
street.
  The American taxpayers would be delighted to know that they subsidize 
this Federal agency, OPIC, $50 million a year, and what does this 
agency do? Its main job is to help American corporations invest in 
politically unstable countries abroad.
  We have AT&T, DuPont, GTE, Ford, the largest corporations in America, 
while they are busy throwing American workers out on the street, they 
are getting taxpayer help in order to invest in politically unstable 
countries. If there is revolution or civil war in those countries, we 
have provided insurance for them, and in fact have a $6.3 billion 
insurance liability, and on and on it goes.
  The point that the gentleman from Oregon [Mr. DeFazio], the gentleman 
from New York [Mr. Owens], and I are trying to make is that we can move 
toward a balanced budget, but we can do it in a fair way. We do not 
have to savage Medicare, Medicaid, Head Start, WIC, student loans, food 
stamps, and many, many other programs that tens of millions of 
Americans depend upon.
  One of the programs that the Republican leadership has proposed to 
eliminate is the LIHEAP program, which provides fuel assistance for 
low-income people; 40 percent of the recipients are senior citizens.
  In my State of Vermont it gets pretty cold in the winter, 20 below 
zero, 30 below zero. We have a lot of low-income senior citizens who 
cannot afford the money for oil and gas to heat their homes. That will 
be eliminated. However, we can continue to provide an enormous amount 
of money for corporate welfare.
  Mr. OWENS. Mr. Speaker, I just want to go back to the corporations' 
swindle in terms of their reduction of their share of the tax burden 
over the years, and mention that if you change the way you tax 
investments, income from investments, and the way you tax capital 
gains, which they are always trying to change, of course the 
Republicans want to lessen the rate on these items.
  The Bible says man shall earn his living by the sweat of his brow. 
Those people who really sweat to earn their living, they are charged 
the highest rate. They are taxed at a higher rate than people who never 
sweat.
  They make investments, they sell and buy items, and they make 
enormous profits, and that income is taxed at a much lower rate than 
the income earned by the guy out there is the plant who goes to work 
every day. Why? What is the justification?
  There is no justification, except that the people who make the 
investments and who have the greatest gains from capital gains, they 
have the power. They have the power, and public policy allows them to 
be taxed at a rate which is much smaller than the rate of the person 
who works hour by hour for wages.
  The wage earner has seen his taxes go up tremendously over the last 
12 years. They do not call it taxes, as in the payroll taxes, the 
Medicare. There are various ways in which the take-home pay of the wage 
earners has been drastically reduced, at the same time we have had all 
these various programs to subsidize and to help increase the income of 
people who earn their income from investments and from sales or capital 
gains. Enormous amounts of money can be realized by changing the way we 
tax the capital gains.
  Mr. SANDERS. The gentleman is absolutely right. What we have here is 
the Robin Hood proposal in reverse. We take from the middle-class and 
working people, and we give to the very, very wealthy.
  I think the main point that we wanted to make this evening is that we 
also are concerned about a $4.7 trillion national debt and the very 
high deficit that we have, but we think that it is extraordinarily 
unfair to move toward a balanced budget on the backs of the middle 
class, the working people, and the low-income people, when at the same 
time we are giving huge tax breaks to the wealthiest people in this 
country, expanding military spending at a time when we do not need to 
do so.
  Mr. Speaker, our hope is that the American people begin to focus on 
this issue and demand a little bit of justice in this Congress, so we 
can deal with the budget and with our deficit in a fair and reasonable 
way.
  Mr. OWENS. Mr. Speaker, I would like to close on an upbeat note. 
America has a great future. The civilization of the Western world has a 
great future. Science and technology now drive wealth in the world. The 
more educated people we have, the more we build on the base of science 
and technology, the faster the wealth will increase.
  The great injustice is that only a few people share in the benefits 
of this science and technology. It was created by people whose names we 
never know, by people whose names we do know, but they never derive any 
direct wealth from it, and we have built on it.
  A lot of science and technology has been created by the American 
taxpayers. Many of the investments that are being made so profitably 
now on Wall Street related to the telecommunications industry, the 
computer industries, those were built upon research and development 
done by the military using the money of the American taxpayers.
  All of us have a stake in this wealth that is being created by 
science and technology. The future of the world lies in this direction. 
If we focus on education and increase the number of educated people in 
the country, we can generate enough wealth to be able to meet all of 
the needs of all Americans. [[Page H6042]] If we use new revenue 
techniques, more creative techniques for getting revenue, so we derive 
the revenue from the areas where the greatest increases in wealth are 
taking place, then we can always meet all of the needs of all Americans 
without pain and suffering.
  I think we can look forward to the future and not see a doomsday 
scenario of inevitable, ongoing deficits forever and ever, or suffering 
by the American people as a result of trying to reduce the deficit.
  Mr. SANDERS. I thank the gentleman from New York for his thoughts, 
and I thank the gentleman from Oregon. What we are fighting for is an 
America which will provide well for all of our people, and not an 
America in which the rich get richer, and most of the people see a 
decline in their standard of living. I thank the gentleman.


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