[Congressional Record Volume 141, Number 135 (Friday, August 11, 1995)]
[Senate]
[Pages S12423-S12424]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




 THE 2-YEAR ANNIVERSARY OF THE LARGEST TAX INCREASE IN AMERICAN HISTORY

  Mr. DOLE. Mr. President, I had intended to make this statement 
yesterday. We were so busy until about 11:30 last night that I did not 
have the opportunity. But I did not want the 2-year anniversary of the 
largest tax increase in American history to go by unnoticed. That 2-
year anniversary was August 10. That is the date that the largest tax 
increase in history was signed into law by President Clinton. The 
increase had been passed over the ``no'' votes of every Republican in 
the House and Senate.
  While they may be celebrating this anniversary down at the White 
House, a quick look at what occurred these past 2 years makes it clear 
that there 

[[Page S 12424]]
are not many other Americans who have reason to celebrate.
  Let us begin with interest rates. The President assured us in 1993 
that his tax hike would keep interest rates low. But the prime rate has 
grown from 6 percent in August, 1993, to 8.75 percent today, an 
increase of almost 50 percent. Treasury bills, 30-year bonds, and 
mortgage rates are all up. The bottom line is that Americans are paying 
more to buy a home, a car, and everything else they need to borrow 
money for.
  The President said his tax hike would only hurt the so-called rich. 
The fact, however, is that average wages and salaries for all U.S. 
workers fell 2.3 percent from 1994 to 1995, the largest decline in 8 
years.
  In July 1993, just before the tax increase passed, 155,000 jobs were 
created. In July 1995, only 55,000 jobs were created--a 65 percent 
drop. Last month, factories actually cut 85,000 jobs, the largest drop 
in manufacturing jobs in more than 3 years.
  I am sure all the working people who saw their wages drop or who lost 
a job are delighted to know that the President considered them to be 
rich.
  Two years ago, the economy was chugging along at a healthy growth 
rate of 2.4 percent. In the second quarter of 1995, however, the 
economy grew by only 0.5 percent.
  Wages are down. Job creation is down. Economic growth is down. And 
there is something else that has dropped since the tax increase, and 
that is the dollar. In the past 2 years, the dollar has dropped 13.2 
percent against the Japanese yen and 17.8 percent against the German 
mark. This devaluation ultimately leads to a lower standard of living 
for all Americans.
  Along with interest rates, there is another facet of the economy that 
is rising--the deficit. Under the President's first budget proposal, 
deficits are projected to increase from $175 billion in fiscal 1995 to 
$210 billion in 1996, and increase every year after that.
  Mr. President, those are the facts. We can look back today and say 
that we were right. We were right to oppose the largest tax increase in 
the history of America. And 2 years from now, I believe we will be able 
to look back and say that this Congress was right to have done what we 
have done this year; we were right to set America on a path to a 
balanced budget; we were right to cut taxes for millions and millions 
of hard-working American families.
  Mr. President, there could not be two more different bills than the 
President's big tax increase and our proposal which we hope will pass 
sometime this year for tax cuts, tax decreases.
  So I think, after considering the impact the President's tax increase 
has had on the economy and on family incomes, the Republican budget 
cannot pass a moment too soon because it does contain significant tax 
relief for American working families.

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