[Congressional Record Volume 141, Number 112 (Wednesday, July 12, 1995)]
[House]
[Pages H6906-H6912]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



[[Page H 6906]]


                              {time}  2230
            CONSTITUENT FEEDBACK REGARDING THE NEW CONGRESS

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Ohio [Mr. Chabot] is recognized for 60 
minutes as the designee of the majority leader.
  Mr. CHABOT. Mr. Speaker, we appreciate the opportunity to have this 
hour this evening to have a discussion with our constituents and, 
really, Americans all across this country. I have three other 
colleagues who are here this evening and we are all going to be talking 
during the course of this hour, whatever time of the hour that we take 
up this evening. We wanted to let the American public know what types 
of things that we have been hearing as we have been back in our 
district.
  For example, we spent about the last 10 days prior to this Monday in 
districts all over this country talking with regular people in our 
districts to see what they thought about what we were doing, what 
suggestions that they had, and what kind of modifications they would 
like to see made in this, the people's House.
  I happen to be from the first district of Ohio, which in essence is 
the city of Cincinnati and some of the western suburbs. Rob Portman is 
in the eastern part of the city in some of the eastern areas; I have 
got basically the west side of town.
  I ran, I am a freshman; I was just elected this past November. The 
people really spoke overwhelmingly, I think, all across this country 
and said they were not particularly pleased with what had been going on 
here in Congress. They wanted a change.
  Mr. Speaker, I talked to a lot of people before I ran for Congress 
last year to find out and I asked a basic question. I said, ``If you 
were in Congress, what would you do?'' And there were other Members who 
were running all over the country and they asked basically the same 
question and we all talked last year and we wrote down a document and 
we all signed our names to it, telling the American public if we had a 
majority of Republicans in Congress, what we would do. We told them up 
front what we would do.
  And that is what we have been about for the past 6 months, is 
delivering on what we told the American public we would do if we had a 
majority. We do have a Republican majority here in the House for the 
first
 time in my lifetime. I am 42 years old. I was born in 1953. And the 
last time there was a majority of Republicans here in the House was in 
1952.

  I think the main thing we were told that we heard over and over again 
is we have got to balance this budget. I heard that over and over 
again. And what people said. They said, balance the budget; not by 
raising taxes, but by cutting spending and that is what we are trying 
to do.
  And I heard, and I want to be real clear about one thing in 
particular, because I heard some of our colleagues on the other side of 
the aisle, the liberal Democrats, they talk about one issue in 
particular and that is Medicare. And they keep saying that we have some 
kind of plan to cut Medicare. That is absolutely not true. I want to 
make very clear tonight we have absolutely no intention of cutting 
Medicare.
  In fact, our projections are that we are going to increase Medicare 
spending from $4,800 a year to $6,700 per year per Medicare recipient. 
So there is absolutely no plan to cut Medicare.
  However, the President's own people, his own trustees council, 
indicated that if we do not do something about Medicare, it is going to 
go broke by the year 2002. We want to save Medicare. We want to 
preserve Medicare, and we are absolutely committed to doing that.
  So the scare tactics that quite frankly we have heard were the 
liberal Democrats here in Congress, not all Democrats, but the liberal 
Democrats in Congress are trying to scare senior citizens all over the 
country by saying that we have a plan to cut Medicare.
  I want to make clear that we have absolutely no plan to cut Medicare, 
but we do need to balance this budget and we are going to do it by 
cutting spending, not by raising taxes.
  And one of the reasons I think we absolutely should not raise taxes 
is because the American family is just overburdened with taxes. Taxes 
are too high in this country.
  Around the time when I was born, around 1950, the average American 
family paid 5 percent of what they made to Washington in the form of 
Federal taxes. Now it is 25 percent. So the average American family's 
taxes to Washington have gone up from 5 percent to 25 percent in the 
last 40 years. That does not count the State taxes and city taxes. We 
have got to do
 something about that.

  Mr. MANZULLO. Will the gentleman yield?
  Mr. CHABOT. I certainly will. At this time, I will recognize three of 
my esteemed colleagues in Washington tonight. First of all, I would 
like to introduce the gentleman from Illinois, Don Manzullo.
  Next we have Walter Jones who is from the great State of North 
Carolina and I have a particular fondness for the State of North 
Carolina, because my mother was born and raised in Charlotte, North 
Carolina.
  We also have, tonight, Ron Lewis who is from the State over the Ohio 
River from my State, the State of Kentucky. At this time I yield to my 
good friend from Illinois, Don Manzullo.
  Mr. MANZULLO. Thank you, Steve. When you talk about the tax burden 
growing from approximately 5 percent to 25 percent in Federal taxes, 
there is a chapter in the official U.S. budget called the generational 
forecasts. That states, because of the nearly $5 trillion national 
debt, that if dramatic changes are not made in the manner in which this 
country spends money, that by the time every child born after 1992 goes 
into the work force, he or she will be paying in local, State, and 
Federal taxes, between 84 and 94 percent of his or her income in taxes. 
This is astonishing. It is absolutely unbelievable.
  I mean, this is a part of the official budget. I mean the Democrats, 
you know, CBO prepared this. The Republicans, everybody looks at it and 
says, this is incredible.
  We have to do something about it. And yet, you know Steve, there are 
10,000 programs in this country--10,000 that are run. Every program has 
a constituency and every program has its own special interests.
  And one of the things that I noticed is that whenever I go to cut a 
program, some Federal bureaucrat in Washington calls somebody back in 
the district that I represent, gets them on the telephone, and the 
conversation goes something like this: ``Congressman Manzullo?'' ``Yes, 
ma'am.'' ``This is so-and-so.'' ``Uh-huh?'' ``I live in the district 
you represent.'' ``Yes, ma'am?'' ``I am a Republican and a Conservative 
and I voted for you.'' ``Yes, ma'am.'' ``And I really believe that we 
have got to cut this budget because taxes are too high, the American 
people
 are tired of all the spending.''

  And then comes the long, pregnant pause followed by the word ``but,'' 
which is underlined, italicized and emboldened with the comma behind it 
followed by three ellipses. ``But . . . let me tell you about this 
program which is an investment.''
  And it goes on and on and the American people realize that every 
single one of these programs, every single one, I will give an example. 
I sit on the Committee on International Relations with you, Steve, and 
we found out that the American taxpayer pays $30 million a year to 
bring over 6,000 high school students for the former Soviet Union on a 
cultural exchange.
  You think about that. There are about 19 different agencies in this 
Government spending about $2.5 billion on all these agencies. In fact, 
there are universities in this country that are getting incredibly 
large grants for the purpose of bringing over journalists from Latvia 
and Estonia and teaching them about fairness in journalism. I wonder 
who their professors would be. But all this at a cost of billions of 
dollars.
  And I moved, and you voted for that measure in the Committee on 
International Relations, I said, ``Let us do away with these Fulbright 
scholarships. Let us do away with all of them. Most of the programs are 
good. Bringing over these Russian kids, that is a fantastic program, 
but we cannot afford it.''
  So we lost in committee and came back and came up with an amendment 
and ended up being able to knock off $20 million in spending. I was 
editorialized saying ``Well, we have got to cut 

[[Page H 6907]]
spending, but Mr. Manzullo who is involved in trade issues should 
understand the necessity of keeping these cultural exchanges.''
  Everybody says cut somebody else's program, except mine. And I bet 
you gentleman have had the same things happen.
  Mr. CHABOT. That is right. And just to clarify as far as voting for 
the measure, we voted for the measure to cut, not to fund the program.
  Mr. MANZULLO. That is right. We moved to cut it.
  Mr. CHABOT. Now, we would like to turn to the gentleman from North 
Carolina, Walter Jones. What have you been hearing in your district 
back home and what do you think the people are thinking now?
  Mr. JONES. Steve, when I have been home, I have
   seen people on a daily basis speaking to groups and senior citizens 
in the 19 counties that I have the privilege to serve. I can tell you 
that what we are doing in the new Congress is helping to rebuild the 
trust that the citizens and the voters have lost because the past 
Congresses were not listening to them.

  I can honestly tell you I get so upset when I am on the floor, as a 
member of the theme team, to hear the other side, particularly the 
liberals, trying to scare the senior citizens. And as I said, and 
everyone has been saying since we started talking about the Medicare 
trust fund, that we have no other alternative. We want to protect and 
save and guarantee for the future needs of our senior citizens.
  I do not know how in the world they can continue to say that when you 
go from, 1995, from roughly $4,700 to the year 2002 to $6,300 that that 
is a cut. But I can honestly tell you that back home the senior 
citizens that I have had a chance to talk to really understand what we 
are trying to do and they support us.
  So I can say that in the 6 months that we have been here I have been 
home every weekend but one. Every time I went home I was having the 
opportunity to meet and to speak with people. And I can tell you, 
frankly, that as long as we stay focused, we keep trying to balance the 
budget by the year 2002, then I think every day that we are here in the 
Congress as a new majority we are helping to rebuild the trust that has 
been lost.
  Mr. CHABOT. I think those are excellent, excellent points, Walter. 
And something in particular that you said about Medicare and the fact 
that the liberal Democrats up here in the Congress have been scaring 
senior citizens about alleged cuts that are nonexistent, but they keep 
talking about them.
  Senator Paul Simon, who is a Democrat, said that the greatest threat 
to Social Security and Medicare is this huge debt. The fact that the 
budget is not balanced. That is the greatest threat to both Social 
Security and Medicare.
  That is why it is absolutely critical that we balance this budget. We 
have got an almost $5 trillion debt that we have got to finally 
balance. And that is what we are about.
  Mr. LEWIS of Kentucky. Will the gentleman yield?
  Mr. CHABOT. I will certainly yield to the gentleman from Kentucky, 
Ron Lewis.
                              {time}  2245

  Mr. LEWIS of Kentucky. I would like to just emphasize the scariest 
thing about the Medicare situation is that the liberals seem to want to 
just put their head in the sand and say there is no problem and trying 
to scare senior citizens by saying that we are going to cut Medicare, 
that we are going to cut it and give the money to the wealthy, which is 
the furthest thing from the truth.
  The truth is, as has been mentioned here tonight, that the 
President's advisory group, the task force on Medicare, has said that 
Medicare will be broke by the year 2002 and that next year it will 
start to go on that downward slide, that downward path to bankruptcy.
  So we are being responsible and we are going to save Medicare. We are 
going to protect it. We are going to make sure that it is going to be 
secure and that we are going to make it strong for the senior citizens 
that are coming on in the years ahead.
  As I said, the scariest thing is for our friends on the other side of 
the aisle, the liberals, talking about the conservatives, there are 
those that really know that we have to do something and are involved in 
that. But some of the things that we heard tonight, that Medicare is 
not in trouble, that we can go on the way that we are going and there 
will be no problem, the fact is, it is going broke. And we are 
responsible and we are going to do something about it. And even the 
President, the other night, after denying it for quite some time, in 
his budget plan said that we needed to do something about Medicare.
  I am glad to see that he is willing to admit it now. If we can work 
together, then we can save it, we can protect it and we can strengthen 
it and provide for our senior citizens.
  Again, there are no cuts. We are going to be moving from $4,800 to 
$6,700 per beneficiary by the year 2002. That is an increase in 
anyone's book. We have to slow the growth.
  Same thing with the budget. We are going to be spending more money 
over the next 7 years. We are slowing the growth so that we can reach a 
balanced budget and have a strong financial future for our children and 
our grandchildren.
  It is important. We have to start now. We cannot wait 7 years. We 
have to do it now. And the American people, the people in my district, 
I have 23 counties, and I have been through all those counties.
 And the people are telling me, you are doing the right thing. Keep on 
going; do not let up. We want to see a balanced budget; we want to see 
a strong future for our children.

  And I just wanted to mention something else. We keep hearing that we, 
the Republicans, are trying to take money from the poor and give to the 
wealthy. We are giving, we are trying to give to the family a $500 tax 
credit, and we are trying to provide a capital gains tax cut so that we 
can infuse into the economy a tremendous amount of money that is going 
to help everyone and is going to allow for job growth. It is going to 
allow for a stronger economy. It is going to allow actually for more 
money to be coming into our Federal Treasury. It will help us balance 
the budget.
  Mr. JONES. I would like to add to the point the gentleman made. The 
election last year, the people said we want less government, less 
taxes, and they realize, as you just stated and the gentleman from 
Illinois, that we must balance the budget.
  The average family in America today will spend more on paying taxes 
than that same average family will spend on clothing, housing or food. 
And yet, the other side keeps saying that the Republican Party only 
cares about the rich. Again, I want to make this clear, we care about 
the working man and woman in this country, and that is why I think 
every day we are helping to rebuild that confidence that I mentioned 
earlier.
  One other point that the gentleman from Kentucky made reference to, 
the Medicare board of trustees, which includes three of Clinton's own 
cabinet members, released a report last April stating that the Medicare 
hospital insurance trust fund, part A, will be bankrupt in seven years. 
If that is allowed to happen, more than 37 million Americans will lose 
their hospital insurance. That is why this Republican majority is 
working so hard to do what we can to ensure and to protect the Medicare 
Trust Fund.
  And we will do it, because the American people sincerely believe what 
we are saying and they want to see us protect the Medicare Trust Fund. 
And I believe that we have got the support of the majority of the 
senior citizens.
  Mr. MANZULLO. When I was a young college student, age 20, thinner, 
dark hair, I worked for the House of Representatives, for the Member 
that represented the
 district in which I have lived my entire life. I was 20 years old. 
That was at the time that Medicare passed. It was 1965, I believe.

  And the original cost of Medicare for 17 million people was, I think, 
$2.5 billion. And the number of recipients has doubled today, but it 
now costs $140 billion a year for Medicare. And the estimates as to 
what Medicare would cost in 1993, the estimates that were made back in 
1965, I think it was estimated to cost about $9 billion. And it costs 
in excess of $100 billion. So these projections are just way totally 
off.
  It is due to many things. People are living longer. The cost of 
medical technology has risen and things of that nature.

[[Page H 6908]]

  And as I travel my district, I do not know about the district that 
you gentlemen represent, I start over on the river, Mississippi River 
and represent a county by the name of Jo Daviess County, which is heavy 
in tourism, number one in hay production in the state. Next county is 
Stephenson County where the Freeport doctrine was debated, the Lincoln-
Douglas debates. That county has the highest milk production and a 
third of all the dairy cattle in the State of Illinois live in 
Stephenson County and they eat all the hay that comes from Jo Daviess 
County.
  Next to that county is Winnebago County that has over 1,000 
factories, incredible, over 1,000 factories. This is the county that 
led the nation in unemployment in 1980. We lost 100 factories and 
10,000 highly skilled jobs, but it is now the tool and die center of 
the world, fastener center of the automotive industry.
  Below that is Ogle County, a little factory there, Eaton Corporation, 
makes most of the cruise controls for Chrysler Corporation. And it is 
just a beautiful town, a beautiful county. In fact, we live outside of 
Egan, a town of 42 people where the Leaf River converges into the Rock 
River, the Leaf River Valley converges into the Rock River Valley and 
that makes part of the Mississippi Basin.
  Then you go eastward and Boone County picks up Belvidere where 
Chrysler makes the Neon and then to the east of that is McHenry County, 
which is the fastest growing county in the state. It has to be one of 
the most diversified congressional districts in the area, probably the 
United States. It is one of the leading export districts.
  As I travel that district, I just love to walk the districts. You 
walk the areas and sometimes you stop at somebody's house and knock on 
the door and go in there and exchange howdies or you go into the 
business district.
  Everybody is saying the same thing: Continue the revolution that 
began in November of 1994. Do not get downtrodden. Do not get 
disheartened because sometimes the press will come after you because 
you are trying to balance the budget.
  Everbody has this sense of awesome corporate responsibility that we 
have got to do something and something big in order to save this 
nation.
  I had the opportunity, as many of you did, to speak at the Fourth of 
July events. I spoke at the prayer breakfast in Rockford, incredible 
driving rain storm. It was unbelievable. It was buckets of water were 
pouring down. And people were out there in the gazebos and with the 
umbrellas. Fortunately, there was not any lightning going on.
  I could tell just looking at the people, look at the people, 
especially in mid-America, they are standing there with their little 
kids, and they are turning out in the rain to hear their Congressman 
talk about why this country is great.
  I quoted James Flexnor who had written a book called The 
Indispensable Washington, the life of George Washington. In fact, it 
served as the text for the three series that were made about the life 
of Washington. And he said something very remarkable.
  He said, for the first time in history people gathered together and 
set about to prove that people could rule themselves. It had never been 
done before. Never before in American history had that been done. And 
now 219 years have come and gone since the scriveners got together and 
penned their names to that Declaration of Independence.
  You know, it takes speaking at the Fourth of July celebration to make 
you realize how magnificent the American people are and how willing 
they are to give and how willing they are to go along with the programs 
and how willing they are to say, we are willing to go the extra mile in 
order to balance the budget because it is worth it for the kids in this 
country.
  Mr. CHABOT. From what I am hearing here from all three of my 
colleagues, it sounds like the people, even though our districts may be 
a little bit different, they are all four in different states, the
 people are I think essentially giving us the same message. They are 
saying the same thing; that is, to move forward with what you are 
doing, do not stop. Do not look back, just keep moving forward.

  I think the people of this country are ahead of this Congress. I 
think we need to keep following that direction. That direction is to 
balance this budget, again, not by raising taxes but by cutting 
spending. That is what we have to keep doing.
  Again, when you look at the taxes, the average American family is 
sending 25 percent of their taxes here to Washington. But when you add 
it to the State and local and all those taxes, it is 40 to 50 percent 
of the average American family's money goes in taxes. And that means 
the lifestyle that they have and that their children have is not as 
good as it should be. You have many fathers and many mothers that are 
working. They want to give the best life, the best education to their 
kids they possibly can. But they have to give too much of their money 
to the Government. That is what we have to turn around.
  The good thing is, we can reduce the level of taxes, we can do that 
and we can still balance this budget. And the liberal folks on the 
other side of the aisle said it could not be done. They said that, you 
cannot balance the budget and cut taxes at the same time.
  We have proven that it can be done. We passed a budget resolution 
just a couple of weeks ago which balances the budget by the year 2002 
and cuts taxes. And most of those tax cuts go to middle-class 
Americans. They do not go to the wealthiest people in this country, 
although we have heard it time and time again, from the liberals on the 
other side of the aisle. Seventy-five percent of the tax cuts go to 
people who make less than $75,000 a year.
  I think that is important, because that is really what we are about. 
We are for relieving the overburdened taxpayers of this country and 
balancing this budget so their children can have a better standard of 
living than they did. I think that is what all Americans want.
  Mr. LEWIS of Kentucky. As you said, with local, State and Federal 
taxes, the average family is paying 40 percent of their income into 
taxes. And that can increase, with the hidden taxes, up to around 50 
percent or more. Thirty-eight percent of our gross domestic product is 
consumed by government. And the one common theme that I heard all 
through my campaign and through my visits back home to the district has 
always been, government is too big.
  The American people feel the burden of too much government, too many 
taxes. And if we would have seen the Clinton health care plan go 
through last year, it would have pushed us over 50 percent of our gross 
domestic product that would be used by the Government. That would have 
put us into the socialism category.
  We have to start moving in the other direction. We have to reduce the 
taxes, give the families their money back. So many times money that 
comes into the Federal Treasury is talked about as the Government's 
money.
  Mr. LEWIS of Kentucky. It is the family's money, it is the worker out 
there that produces products, that puts in the time and the hours. It 
is their money, and we need to give it back to them.
  I think sometimes the liberals think that when we give tax breaks, 
tax cuts, that that money just stops somewhere out there, that it never 
goes any further. In fact, it goes out into the economy and it is spent 
and it is used and it produces, and it allows the money to grow. We 
have seen that many times before.
  President Kennedy, in his administration, he cut taxes and we saw an 
increase in revenue into the Federal Treasury. Ronald Reagan, he cut 
taxes; we saw an increase in the Federal Treasury. There are many 
examples in State government where taxes were cut and there would be an 
increase in the Federal Treasury. Because people use that money to 
better their own circumstances a lot better than some bureaucrat here 
in Washington can do.
  Mr. JONES. Will the gentleman from Ohio yield for just moment.
  Mr. CHABOT. I will be happy to yield to the gentleman from North 
Carolina.
  Mr. JONES. You touched on a point that I wanted to pick up on. One 
theme throughout this campaign, when I was campaigning for Congress, 
people were telling me, we are working longer and harder and taking 
home less, and that is exactly what the gentleman said.
  The American family and retired people who have worked, are working 

[[Page H 6909]]
  hard and have worked most of their lives and want to save and try to 
invest, under the liberal Democrats of the past as the majority party, 
and they have penalized people for saving and investing. Again, the 
average working man in my district feels that he and she are finally 
being represented in the Congress by people that will listen to them.
  That is something that the gentleman from Ohio said a while ago. We 
finally have a Congress that is listening to the people, and that is 
going to make the difference in the success of this new 104th Congress, 
because again, as we go home, we continue to hear it. People will stop 
me in a grocery store and say, Walter, or Mr. Jones, or Congressman, we 
like what you are doing. These are the people that work hard every day 
trying to do for their families and finally, they are getting some 
relief from Washington, thanks to the new majority.
  Mr. CHABOT. That is right. I think again, something that the 
gentleman touched on that is important, is that we are working for all 
Americans, whether they be poor, whether they be middle class, whether 
they be better off, and I think what we have to be careful of is that 
many of the liberals are trying to divide people, to put them into 
certain categories. That is why we keep hearing over and over again, 
the Republicans just want to cut spending on poor people or seniors or 
whatever to give tax cuts to the wealthy.
  That is just not true. As we said before, the tax cuts, 75 percent of 
the tax cuts go to middle-class people. We should not be dividing 
Americans, we should not be scaring senior citizens. All Americans are 
going to have to work together in order to solve the problems that we 
have.
  Mr. MANZULLO. One of the things that really amazes me as I hear our 
colleagues of the liberal persuasion say well, we cannot afford a tax 
cut. You stop to think about it, to whom does the money belong? The 
money does not belong to the government, the money belongs to the 
people. It is the people's money, and the tribute that they pay to 
support some basic government services should be in the area where they 
can still have enough to afford to keep their family.
  Let me give you an example on this capital gains. A good friend of 
mine several years ago, they bought a house in the suburban Chicago 
area. The price of houses went up and they made some money on their 
house.
  Being wise and frugal, they moved to an other city. Not that it was 
wise and frugal to move from a Chicago suburb, but they were leaving 
the area. So being wise and frugal, they invested in a house; they 
downsized to a house that they could afford. They ended up paying 
capital gains taxes on that money, even though during the period of 
time they owned it, inflation crept up, which was not figured into 
capital gains; there is no indexing going on. It took away more and 
more of their money, and now they sold their home again because they 
are having a very difficult time finding work in the Rockford area and 
are moving elsewhere. Now they have to pay capital gains tax
 again on this house that they bought just a few years ago.

  These people have no money. They are living, they are living on 
borrowed capital. By selling their home, they are trying to get a fresh 
start, and when people tell me that capital gains tax are for the rich, 
that is a bunch of nonsense. Because it is hard working people in this 
country that are the beneficiaries of an appreciation of value in their 
homes, and they are trying to move somewhere or downsize to another 
house and they get penalized because of that. This is the only nation 
in the world that has a confiscatory high capital gains tax. It does 
not make sense, and it is not the wealthy that are being hit.
  There is something else, the way the Democrats figure the rich. They 
are saying well, the rich will gain so many dollars in taxes. Let me 
give you an example. Let us say a person is of substantial means. That 
person has a building that he or she wants to sell, but under the 
present capital gains tax structure, he may have to pay $50,000 in 
capital gains. I mean it just does not make sense to sell the building. 
I mean we are talking about a purchase of, maybe the sale of a $200,000 
building. So by cutting the capital gains tax in half, he or she might 
want to sell it.
  Then the Democrats say well, you just gave a $25,000 break to the 
rich. That person wasn't going to sell the property in the first place, 
because the capital gains tax was too high. I would rather have $25,000 
now come into the Treasury than money that may come somewhere down the 
line. What is that person going to do? He turns over that property, 
gives $25,000 as opposed to $50,000, which he may never give, to the 
Government for taxes. Whenever a building is sold, generally another 
one is built, because he or she is going to go out and build another 
building.
  The person that comes in and buys that building, do you know what 
they are going to do? They are going to remodel it. I mean this 
incredible type of solid growth takes place.
  If you analyze the capital gains tax structure since the 1950s, there 
are about five epochs in there where whenever capital gains taxes were 
reasonable, that the economy grew; I am sorry, that the actual amount 
of money that came into the Treasury increased
 each year by between 5 and 7 percent. Since 1986 when capital gains 
taxes were increased, each year the Federal Treasury sees 2.1 percent 
less dollars coming in in capital gains taxes.

  So if you want less money to come in to the Treasury, raise capital 
gains taxes. If you want more actual dollars coming in, decrease 
capital gains taxes. It is so simple. It is the biggest boost; I mean 
this is real growth. This is not make believe government jobs, this is 
not Americorps, this is not some government give-away, this is actual 
sales taking place.
  Do you know what? Just look at it. A building sells, you have a 
realtor involved, you have a title company involved, you have an 
attorney involved. Even down to the guy that sells flowers, because a 
lot of people do not realize that whenever there is a real estate 
transaction, at least back home, it is customary to send flowers to the 
new buyer of a building or of a home. It is a mushrooming that takes 
place in the economy, because the taxes are cut.
  Mr. CHABOT. Speaking of taxes, I am sure, as I am sure all three of 
you gentlemen have had town meetings, back in my community I have 
spoken before a lot of different groups, and one thing that comes up 
time and time again is how confusing it is when people have to fill out 
their income taxes, how really the whole system is kind of a mess and 
needs to be changed.
  To kind of give the folks that may be watching C-SPAN a heads-up on 
what is happening here in Congress, there seems to be two schools of 
thought that I see up here right now about how we ought to change the 
tax law. One has been proposed by Congressman Dick Armey who is the 
majority leader here. Most people have probably heard of it, and that 
is the flat tax. Congressman Armey has suggested that rather than have 
a whole lot of deductions and the confusing tax forms that we all have 
to fill out every year, that we just have a straight flat tax of 17 
percent or thereabouts, which would certainly simplify the system.
  Many, many people in my district think that is a good idea. In fact, 
back in Cincinnati, we have two principal newspapers, the Cincinnati 
Enquirer and the Cincinnati Post. There are some others, but those are 
the two major papers. The Cincinnati Enquirer a while back had people 
give their opinions about the flat tax, and it was overwhelming that 
people basically liked the idea that they could fill out their tax on 
basically a postcard and send it in.
  The other concept is what Congressman Bill Archer, who is the 
chairman of the Ways and Means Committee, is pushing, and that is to 
basically eliminate the IRS altogether, eliminate income taxes 
altogether and substitute some sort of consumption tax, like a sales 
tax. So no income taxes at all; a sales tax in its place.
  Both of those ideas, it may be some years as we deal with these two 
issues, but I have a feeling that there is going to be a momentum built 
up here in the Congress to support one plan or the other. So those that 
might be watching this at home now, I would like them to really follow 
these issues and be thinking about this in talking with their Member of 
Congress to let them know what they think about these plans. I think 
both plans are very interesting. I 

[[Page H 6910]]
think both would be better than what we have now. But I can't really 
predict which one is going to win out.
                              {time}  2310

  Mr. JONES. If I could ask the gentleman, do you think that this true 
tax reform, whether it is the flat tax or consumption tax, would even 
be discussed in the U.S. House of Representatives if it were not for 
the Republican majority?
  Mr. CHABOT. That is an excellent question. I do not think there is 
any way that we would be seriously considering this at all. Perhaps 
people might talk secretly in the hallways about it in the old days, 
but we certainly would not be talking about it on the floor of 
Congress.
  Just think of that concept, eliminating the IRS, income taxes, 
altogether, and substituting something else that would be much more 
simple, many would argue fair, or really the chance of having a flat 
tax. The fact that we are talking about these things now, I think, is 
pretty unprecedented in this House. I think it is very encouraging, 
because I think the system that we have got now is just a mess.
  Just think of the number of hours that the average American spends 
filling out their tax forms and sweating about it or paying somebody 
else, whether it be H&R Block or whatever, paying somebody else to do 
them for them. It is just a mess and something we are going to have to 
change.
  We are all going to have to give a lot of thought to this and talk to 
the people back home to see what they think is the best plan, but I 
think we do really need to change what we have got now.
  Mr. JONES. I can honestly say that it is a hot topic back in my 
district and has been for the last 6 months. You might also find this 
of interest. I have had at least two CPA's to tell me that they would 
like very much to see a much simpler and fairer system. We do have a 
great deal of support throughout this country in my opinion.
  Mr. LEWIS of Kentucky. I just wanted to say, it is a new day when 
this Congress is talking about tax cuts, talking about tax reform. When 
we look back over the history of this Congress for the last 40 years, 
it has been tax-and-spend and big growth in government.
  I just want to go back for a second and go back to the capital gains 
tax and give an example. I talked to a farmer that was really thrilled 
about the possibility of a capital gains tax cut because he told me--
and this, if the liberals want to call him rich, I do not think he 
would agree with them--because he told me he would like to sell his 
farm. He is an elderly gentleman. He wants to retire.
  He would like to sell his farm and retire, but if he sells his farm, 
by the time he pays the taxes, the capital gains tax, and by the time 
he pays the debt on it, then he has nothing. This is not my idea of a 
wealthy person. To hear the rhetoric from the other side about tax 
breaks for the wealthy, when I am in my district, I am seeing people 
that need tax breaks.
  Mr. MANZULLO. Do you know how many people earn about $100,000 in this 
country? Two percent. It is 2 percent. That is the national figure that 
was calculated for the district that I represent. Somehow I hear all 
this rhetoric, as you say, talking about the wealthy. We are talking 
about people mainly earning under $75,000 a year.
  It is a lot more expensive here on the East Coast than it is back 
where I live in northern Illinois. Out here a house is double the 
amount, and it presumes that both husband and wife have to work in 
order to pay the mortgage on a house.
  When I go to town meetings, we have like open houses. We let the 
newspaper know that from 7 to 10 on an evening, that Congressman 
Manzullo is going to have an open house and you can stop by. We will 
run anywhere from 150 to 200 people who will stop by the office, have 
cookies and coffee, and sit there and discuss the issues. Those that 
have particular problems can meet with our legislative aides in private 
rooms there.
  One of the things that I like to do whenever I am with these groups, 
I say, let me ask you a question here: How many of you live in a 
household where both you and your spouse work? There is about half to 
60 percent who raise their hands.
  I said, do you realize that one of you is working solely to pay 
taxes? Just one of you. One of you is working just to pay taxes. Every 
day, every year, the Tax Freedom Day just gets moved back and back and 
back and back. I just wonder, how long can a nation endure, how long 
can this republic be free when the tax burden continues to grow and 
grow and grow and grow?
  I shudder to think about that. I think what we talked about earlier, 
about the tax burden, about these babies now that have a guaranteed tax 
rate of between 84 and 94 percent.
  We had a vote here on the floor a couple of days ago. I cannot 
remember exactly what it was but somebody said, well, we owe it to such 
and such to fund this program. I said, ``We owe it to the children of 
this country not to fund this program and to cut back on the 
spending.''
  They said, ``Well, we had a contract with such and such a group.'' I 
said, ``And I have got a covenant with my children and with the people 
that I represent in the 16th Congressional District of Illinois.''
  We represent the babies and those not even born yet. I mean, we have 
to make decisions that are going to impact the lives of those who have 
not even been thought of being born yet.
  Mr. JONES. I think each one of us know this figure that I am going to 
share with the viewers, but if we do not balance the budget, a child 
born today that lives to be 75 years of age, she or he will have a 
responsibility of $187,000 to pay on the interest on the debt. That is 
how important it is that we balance the budget.
  Mr. MANZULLO. That is just the interest on the national debt, not the 
total amount of the debt.
  Mr. JONES. Just the interest.
  Mr. CHABOT. Like the gentleman says, that is only the interest. The 
scary part about this whole thing of debt and how large it has gotten, 
that interest on the debt within a couple of years, we are going to be 
paying more just on the interest on that debt than we are for our 
entire military expenditures.
  Just think of that, the Army, the Navy, the Air Force, the Marine 
Corps, the Pentagon, all those things, you can imagine all the ships we 
have, all the soldiers, all the planes, et cetera, how much that costs.
  The spending on the interest on the debt will be more than the whole 
military. I mean, that is just a mind-boggling figure. We have got to 
do something about it.
  Mr. MANZULLO. We are talking about what we learned back home over the 
Fourth of July recess. Just prior to that break, I met with a group of 
university presidents. One of the Democrats in the group said, ``Oh, 
the Republicans are destroying student loans. They're ending student 
loans.''
  He went on and on and on and on and on. That is an outright, bald-
faced lie. That is the only way I could say it. One of the university 
presidents said, ``We have got to protect student loans, this isn't 
right.''
  Afterwards, I talked to him. I said, ``Doctor, let me ask you a 
question. Does your university have a business school?'' He said, 
``Yes.''
  I said, ``Do you teach in the business school that interest begins to 
accrue from the time that the person gets the money, not 4 years 
later,'' as is how the student loan program is presently run. He said, 
``That's correct.''
  I said, ``Do you realize that a college graduate earns at the minimum 
$600,000 more in his lifetime than a noncollege graduate? He said, ``I 
understand that.''
  I said, ``And do you also realize that all the Republican plan says 
is this: That if a college student borrows $30,000, which is the 
maximum amount of money, and beings to pay it back 4 years after he 
gets the initial amount, that the additional amount he is going to pay 
is 55 cents a day in interest until that is paid off''? That is a cup 
of coffee.

                              {time}  2320

  Mr. MANZULLO. I said, now, you tell me to my face that that is going 
to keep somebody from enrolling at your school. And he couldn't answer 
that question. And I said, what the Republicans are trying to do is to 
save that college trust fund so there is more money in it, and the more 
money that 

[[Page H 6911]]
is in that trust fund, the more money there is to spread around to kids 
who want to go to school and the more interest that comes in. That 
spreads the pot out. I said, that is all we are trying to do. We are 
not trying to destroy it.
  So we always meet with these incredible arguments that we are trying 
to destroy, cut out and hurt and be cruel to college students. The 
farthest thing from the truth.
  Mr. CHABOT. You know, I have to mention one other area that I wanted 
to touch on because it is something that I keep hearing back in my 
district, and that is the fact that one area that I think we really 
have wasted a lot of money, at least previous Congresses have wasted a 
lot of money, is in the area of welfare payments where much of the 
money that has been spent has been counterproductive.
  You know, the area of welfare was something where it was supposed to 
be temporary help for the truly needy, and this was something back 
during the depression, back during the 1930's when it started. It had 
the best of intentions, to really help people who needed that help.
  Unfortunately, over the past 60 years, far too often, rather than 
temporary help, it has become a permanent way of life. And I have had a 
number of people that have said we did the right thing here in the 
House when we did what President Clinton said he wanted to do back when 
he ran for President, and that is change welfare as we know it, and 
that is what the Republicans in the House did.
  Now, the Senate is working on that piece of legislation and hopefully 
they will be acting upon that soon. But I just think that the way 
welfare has been run in this country for the past 60 years has wasted 
billions and billions and billions of dollars and much of it has 
encouraged people unfortunately to stay on welfare and not get off.
  People that are on welfare, I believe very strongly, ought to work 
for their welfare check and they ought to be in jobs programs, in 
education programs so that they can get off welfare, and welfare should 
be temporary. It shouldn't be something permanent. We have got third 
and fourth generation of people who basically just assume that that is 
how you get by, that people just get welfare every year. We got kids 
that grow up in homes all over this country that never see an adult in 
the home go to work, and so that is an example of a program that truly 
needs to be changed.
  And it is funny, I was in three senior citizens homes last week in 
one day talking with seniors and I was hearing that from an awful lot 
of seniors. One thing they really objected to was the fact that there 
were so many people taking advantage of the welfare system.
  Mr. LEWIS of Kentucky. Will the gentleman yield?
  Mr. CHABOT. I will yield.
  Mr. LEWIS of Kentucky. We have had the great society in place for 30 
years, the welfare system. There has been $5 trillion spent. There are 
more people in poverty now than when that started. Five trillion 
dollars down the drain and more people on welfare, more people that 
are--well, let's look at the statistics. The highest crime rate in the 
world, more teenage pregnancies, more poverty. I mean, it hasn't 
worked. And you are exactly right. The help is to be temporary, not an 
ongoing thing, and let's look at our debt. We are $5 trillion in debt. 
We spent $5 trillion in 30 years to try to solve the poverty problem.
  Mr. MANZULLO. Will the gentleman yield?
  Mr. LEWIS of Kentucky. Yes.
  Mr. MANZULLO. I don't know if the gentleman has read Martin Alaska's 
book of the Tragedy of American Compassion. It should be a textbook, 
and in that book he talks about sometimes simply by giving people 
money, you can really hurt them in the long run. And he talked about 
early in this country when the role of the churches and the synagogues 
recognized that it was the primary responsibility of the people, not 
the government, to take care of those who were involved in poverty. 
Obviously there are exceptions to everything, people that are disabled 
or handicapped, obviously our hearts go out to them and it is a matter 
of priorities to make sure that they are in fact taken care of, and he 
talked about the wood piles in the bigger cities where men who are 
unemployed would come to work. They would come to get food, but they 
were
 always expected to go out back and chop up wood, which of course was 
used for heating, and there was nothing demeaning about it because they 
needed wood to keep the facilities going, and the men willingly would 
cut the wood because they knew it was short term and there were duties 
for the women to do that were also on welfare, and the whole purpose of 
that was that the churches and the synagogues that administered the 
welfare program wanted to make sure that the people never got used to a 
life-style where everything was given to them because that robs them of 
their incentive.

  And we have a welfare advisory board back home, some of the most 
fantastic people in the world, a couple of women on welfare themselves. 
And you know, one of the startling things I found out, completely 
changed my mind, revolutionized my mind as it was going on, do you know 
who wants off welfare the most? It is the recipients. They realize they 
are trapped. They realize they are trapped, and most of them--I mean, 
these are not the stereotypes of people who are, you know, the 
stereotype that we see of the welfare recipients. It is not that. Most 
are single moms who are desperately trying to break that cycle and to 
get some schooling done and to get off that welfare roll. So they are 
willing to do it, and they just need the right tools to be able to 
break that cycle.
  Mr. CHABOT. And I think that the people that are ultimately the 
victims of this welfare trap is those children.
  Mr. MANZULLO. That is right.
  Mr. CHABOT. Because they see a check comes from the Government every 
month and just assume that is the way people get by, the Government 
sends a check every month, and it just doesn't work that way. And you 
know, the thing that is unfair also is where does that money come from 
that is going to the welfare recipients? It is coming oftentime from 
hard-working, middle-class people, oftentime through both the mom and 
the dad in the home. Both have to work, just as you said before, Don, 
to pay their taxes. And where are a lot of those taxes going? 
Unfortunately, to failed programs like the welfare system in this 
country.
  Mr. MANZULLO. Will the gentleman yield?
  Mr. CHABOT. I will yield to the gentleman from North Carolina.
  Mr. JONES. Does the gentleman from Ohio feel as I do that as we begin 
to tackle the welfare reform which we passed on the House side and 
hopefully the Senate will follow suit, but we are also looking to work 
closer with the States to take over the welfare program because we 
think the States can do a better job, a more efficient job than the 
Federal Government has done? Does the gentleman agree?
  Mr. CHABOT. I do agree, and as a matter of fact, as the gentleman 
from North Carolina understands completely, much of the money is block 
granted to the States. Some of the most creative programs that we have 
had in the area of welfare has come at the State level, at some of the 
governors--my governor in Ohio, Governor George Voinovich, has been a 
leader in welfare reform, and what they are trying to do is to wean 
people off, to break that mind-set where people just assume that the 
Government supports people on welfare basically from cradle to grave.
  People need to realize that it is basically their own responsibility, 
people are responsible for their own lives, and if they depend upon the 
Government, both they and their children are going to have, over their 
life-span, a much less standard of living than they will if they work 
for themselves.
  Mr. MANZULLO. Will the gentleman yield?
  Mr. CHABOT. Yes.
  Mr. MANZULLO. Our colleague, Congressman Weldon, is in your freshman 
class from Florida, was quoted in the Washington Times about a 
conversation he had with a constituent. This constituent was talking to 
some young people, and recalled the following story. He asked them, he 
said, what do you want to do when you grow up? One said a fireman. What 
do you want to be when you grow up? One said a policeman. What do you 
want to be when you grow up? He said, I want to collect checks. Isn't 
that sad?
  Mr. CHABOT. It is.
  
[[Page H 6912]]

  Mr. MANZULLO. What a sad commentary.
  Mr. CHABOT. I realize that our time is drawing to a close and I just 
want to thank Don Manzullo from Illinois and Walter Jones from North 
Carolina and Ron Lewis from the great State of Kentucky for this 
colloquy here this evening.
  I think it has been very helpful for all of us and hopefully very 
insightful to those that happen to be watching this evening.

                          ____________________