[Congressional Record Volume 141, Number 164 (Monday, October 23, 1995)]
[Senate]
[Pages S15432-S15435]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                       THE RECONCILIATION PROCESS

  Mr. DORGAN. Mr. President, I was interested in the comments by the 
Senator from Arkansas. He is correct about this and so many other 
things. It is interesting to me that there are so many special deals 
going on these days for special interests, especially in the 
reconciliation bill and, also, in some of these recent appropriations 
bills.
  It makes me think of going into a shopping center. There you see the 
sign that says, ``Food Court.'' You look around at the food court, and 
the entire thing is full of all these little places where you get food. 
Well, we 

[[Page S 15433]]

ought to mark off a little place somewhere here in the Capitol and call 
it the Favor Court, special interests looking for favors line up here. 
And by the way, it does not matter how long the line is, you are going 
to be sure to get them in with this new majority because they happen to 
agree with virtually all the things special interests want.
  This is the Baskin-Robbins of special interest. Do not try one, try 
all the flavors. This reconciliation bill and the appropriations bills 
that come to the floor of the Senate now are loaded, loaded with 
special deals. Do you think it is special deals for mom and pop? No. 
No, it is not special deals for mom and pop or mom and pop businesses. 
It is special deals for the biggest special interests, the most 
powerful special interests, and the wealthiest special interests in 
this country. And that is a fact.
  I want to talk a little today about the reconciliation bill and the 
plan, where we are headed, where we are going. Last week I read to some 
colleagues on the floor of the Senate a letter of October 18 from the 
Congressional Budget Office, from the Director of the CBO, June 
O'Neill, who wrote to Senator Domenici. They proudly brought it to the 
floor of the Senate and proudly held it up and trumpeted this letter 
saying, ``This letter from the Director of CBO, the Congressional 
Budget Office, shows that our reconciliation bill will now result in a 
small budget surplus in the year 2002.'' That was on October 18. And 
boy, you know, you almost saw them busting their buttons on their 
double-breasted blazers here on the floor of the Senate. ``We have 
produced something that will produce a small surplus.'' October 18.
  Now, the next day, October 19, I actually wrote to the CBO and said, 
``Well, I saw that letter you sent over here. I am wondering if you 
computed this the way the law requires you to compute it, in other 
words, if you do not misuse or loot the Social Security trust funds for 
the operating budget revenue, then what would you have in the year 
2002?'' Same person, same agency, different letter, one day later says, 
``Excluding an estimated off-budget surplus of $108 billion''--and what 
that means in English is that if you do not use essentially the Social 
Security trust fund surplus and a couple others--CBO would project an 
``on-budget deficit of $98 billion in 2002.''
  Let me say that again. The next day the agency said, if you do not 
count the Social Security trust fund, then you have $98 billion deficit 
in the year 2002. Same person, different letter.
  Now, the next day, the day after, October 20, a third letter. The 
same agency said they made a mistake in the second letter. They now say 
that the estimated off-budget surplus of $115 billion, from the 
calculation, would result in an on-budget deficit of $105 billion in 
2002.
  So here is what we have: Three days, three letters, three different 
estimates. Presumably the last is the right one, saying that if you 
misuse the Social Security trust funds in the first letter, you 
actually get a budget surplus, but if you do not loot the Social 
Security trust funds you have a $105 billion budget deficit in the year 
2002.
  So the next time someone comes to the floor and says, ``Boy, haven't 
we done a good job? We have been patting ourselves so hard on the back 
we have a wrenched elbow here,'' just ask about the letter of October 
20. Do you have more than a wrenched elbow? Do you have a $105 billion 
deficit in the year 2002? The answer is clearly yes.
  Now, the reconciliation bill will come to the floor of the Senate, 
and I intend to offer a couple of amendments. I would like to discuss 
just briefly what those amendments are.
  We have not had the opportunity to address tax legislation on the 
floor of the Senate this year except in this reconciliation bill, and 
then only for the members of the Finance Committee, apparently, 
because, you know, the rules prohibit certain amendments--so I am going 
to offer an amendment on the issue of so-called runaway plants or the 
tax break we now give to companies that move their plants overseas.
  I want all Members of the Senate to express themselves on it. Should 
we close the tax break or should we not? If you have a company in this 
country and you decide on Wednesday, let's shut the doors, let's close 
this company up in the United States and move it overseas to a tax 
haven country, make the same product hiring foreign workers and ship 
the product back to the United States, we save money, guess what? We'll 
give you a special deal if you do that, if you close your company in 
the United States and move it overseas, make the same product and ship 
it back here. We'll give you a tax break. We'll give you a special tax 
break.
  I think we ought to take that tax break out of the Internal Revenue 
Service Code and be done with it. And I am going to give every Member 
of this Senate the chance to decide, do they want to end the tax break 
for people who move their plants outside this country to use foreign 
labor to ship it back in? I hope Members will think it is not good for 
this country.
  Second. There are two amendments I will offer on capital gains. I say 
to the Senator from Arkansas, the capital gains issue is an issue that 
is very controversial, and I recognize that. Sometimes inflation plays 
on the value of an asset such that you are now paying, not so much for 
the increased value of the asset, you are paying taxes on the increase 
built up. I understand that. I would like to do something to deal with 
it.
  But I am not interested in doing something that substantially 
improves the well-being of people who already have millions of dollars 
at this point. They have done very well. They have done better than 
almost all other Americans recently.
  Take the last 10 years. The rich have gotten much richer. That is 
fine. I am just saying we do not need to give them a big tax cut now.
  Capital gains, shall we do something on capital gains? Yes, I think 
for small business owners, family farmers, people who invest in stocks 
and buy something for kids to go to college in assets and sell it. 
Should we do something on capital gains? Yes. The capital gains 
proposal in the bill contains a 50-percent exclusion benefit. That is 
in the bill coming to the Senate floor. That is not surprising. They 
always provide big benefits to the biggest interests.
  So, I will have two alternative proposals. One is, no capital gains 
tax, no tax at all, zero, no 50 percent exclusion, a zero tax rate on 
$250,000 of capital gains income on assets you have held for 10 years 
during a taxpayer's lifetime, during your lifetime; if you have held 
the assets for 10 years, $250,000 in capital gains, you can pass those 
through with zero tax rate, provided you held it for 10 years. That is 
a much better capital gains tax proposal for most Americans than the 
one that will come to the floor. It is twice as generous. But it does 
not give away the farm to the wealthiest Americans.
  Second, if you do not like that, then take the capital gains proposal 
that is in the bill and say, ``All right, let's do that, 50 percent 
exclusion, but let's limit it to $1 million of capital gains income 
during a taxpayer's lifetime.'' Is $1 million not enough? Would that 
not be sufficient, $1 million of income in capital gains during your 
lifetime at a preferential tax rate of 50 percent?
  Or are you saying, ``No, that's not enough. I stand here representing 
the interests of the little millionaires or the little billionaires'' 
these days. We have billionaires in this country, which is fine, too. 
Much of that is a sign of success, but we do not have to, at a time 
when we are up to our neck in debt, decide to give very significant tax 
cuts to people whose incomes yearly in capital gains is in the 
millions, tens of million and hundreds of million.
  The question is going to be, no capital gains at all, no tax on 
capital gains up to $250,000 during your lifetime, or limit the 
taxpayers to $1 million of capital gains at the preferential rate 
during their lifetime?
  Those are three of the amendments that I intend to offer on this 
legislation. I hope that my colleagues will listen and evaluate and 
come to a judgment that makes some sense. I think all of these make 
great sense.
  Mr. PRYOR. If the Senator from North Dakota will yield just for a 
moment, I want to compliment him for his statement. I sat through 2 
days last week of pretty excruciating--and I see my colleague, Senator 
Conrad of North Dakota, here now. We joined in that effort of seeing if 
we could not return some degree of fairness to the proposal 

[[Page S 15434]]
as sent from the Finance Committee that would be embodied in 
reconciliation.
  I have another idea that I proposed and it failed on a party-line 
split. I think that the small business owner, the self-employed, should 
have a greater deduction in trying to buy insurance for himself and his 
employees.
  Simply put, our colleagues on the other side are now trying to bring 
capital gains for corporations, the biggest corporations in America, 
from 35 percent down to 28 percent. My amendment was simple. I said, 
``If you want to give a capital gains tax to corporations, let's go not 
from 35 to 28 percent, let's go from 35 to 32 percent, still give them 
a little break but list also in that, not a 30-percent deduction for 
health insurance premium, but a 50-percent deduction.''
  I would like to do 100 percent, and I think we should do 100 percent, 
but the dollars are not there. We could, by shaving this little benefit 
off the major corporations, give 10 million self-employed individuals a 
50-percent tax deduction when they pay for insurance for themselves and 
their employees.
  I think it would be one of the best things that we could do. I think 
we would find a lot of people agree that it makes sense and certainly 
it represents fairness.
  Mr. DORGAN. I certainly support that. I think it makes a lot of 
sense. They ought to have 100 percent deduction on health insurance 
costs. I know the Senator has been working on that. So have I and 
others. It makes a lot of sense.
  I would like to summarize a couple of points, because the Senator 
from New Mexico wants to speak and the Senator from North Dakota, 
Senator Conrad, does as well.
  I want to make a couple of points about the reconciliation bill more 
generally. I listened with interest for an hour this morning to people 
who came to the floor and said what this is about is demagoguery. 
Anyone who comes to the floor and disagrees with them somehow is trying 
to scare somebody.
  Well, this is not about demagoguery, it is about choices. We can, 
should and will balance the budget. The question is how do you balance 
the budget? What choices do you make to balance the budget? I will show 
you the choices this Congress is making. Not pretty choices, in my 
judgment, but they are making the choices nonetheless.
  They are saying we cannot afford Head Start; 50,000 kids in Head 
Start, all of whom have a name, will be kicked out of the program. All 
of them have a name and all of them in their hearts hope they get a 
chance, a better start in life because they come from a home of low 
income or troubled circumstances. Fifty thousand kids, we cannot afford 
them. B-2 bombers, we can afford that, 20 more for $35 billion.
  Five hundred million dollars for displaced workers at a time we are 
saying to displaced workers, ``Get a job.'' What about the training? We 
cannot afford that, but we can afford the star wars program.
  Let us go down to veterans' health care, $989 million cut. Congress 
had to make a decision about two amphibious ships, which to buy, which 
to build, one $900 million, the other $1.3 billion. Do you know what 
the Congress said? Build them both, the sky's the limit. Let us stuff 
both pockets with money. So we can afford the two amphibious assault 
ships the Pentagon did not order, but we have a little trouble with 
veterans' health care.
  Low-income home energy assistance, we cannot afford that, but more 
money for fighters the Defense Department did not order.
  I do not have blimps on here, but they did give $60 million for 
blimps. Low-income home energy, that is a fancy way of saying that this 
is providing some heat for a house on a cold winter night in North 
Dakota, some low-income person who needs a little help to get some heat 
in their house, that is what this is about.
  These are choices. The other side says this is all scare tactics. It 
is not scare tactics, it is about the choices we have made.
  Let me tell you about another choice. This is a Wall Street Journal 
piece yesterday: ``Tax Analysis Now Shows GOP Package Would Mean 
Increase for Half the Payers.''
  Which half? Can anybody guess, with a Republican-controlled Congress, 
which half of the American taxpayers will be paying more in taxes?
  There are only two choices, but can anyone guess which half the 
majority party would choose to ask to pay more? That is right, the 
bottom half. Why would that be the case? Because they need to find ways 
to finance a self-help program for the top half. Actually not the top 
half, really the top 5, 6, 7 percent.
  These are choices. This is not demagoguery. It is choice, and all 
choices come down to an impact on people.
  I want to read to you a couple of letters. These happen to come from 
some young Indian children who I talked with the other day. I visited 
these children. They are at a boarding school. They come from 
dysfunctional backgrounds, backgrounds of significant poverty and 
trouble. I want to read to you what some of these kids say, because 
they are the victims of bad choices.
  Here is a 14-year-old. They were asked, ``If I had one wish for my 
family'': ``I wish my grandmother would be alive so I don't have to 
live in a foster home anymore.''
  Wishing for a grandmother.
  A 13-year-old: ``If I had one wish for my family, I wish we were all 
a family again.''
  ``If I had one wish for my family,'' this 12-year-old says, ``for my 
mother and brother to be happy together. He lives in Oregon someplace 
and I haven't seen my father since birth.''
  A 14-year-old says, ``My wish for my family would be for my mother 
and my father and for my brother and sisters to be together on 
Christmas Day.''
  And a 13-year-old says, ``My wish is for my real father to quit 
drinking and my grandmother, too.'' Think about what people wish for--
amphibious ships, bombers, star wars--and then a 13-year-old wishes 
that her mother, brother, father, and sister could be together on 
Christmas Day. That is something most of us take for granted.

  A lot of people in this country live in a fair amount of poverty and 
trouble. We ought not turn our backs on them. We ought to make the 
right choices for them.
  Last week, I told of a woman who met me at the Minot Airport about a 
week or two ago. She asked to speak to me and took me to one side. She 
was in her late seventies. Her chin began to quiver and her eyes teared 
up as she spoke in a low voice, because others were around, and she 
said her husband has been in a nursing home for 3 years. They had a 
small farm that they lived on for half a century. She sold most of the 
farm to pay for the nursing home care. She wants to continue to try to 
live in the house. This woman is in her late seventies. She had tears 
in her eyes because she is worried she may not be able to stay in her 
home because her husband is in a nursing home.
  These are real problems faced by people who are not the caricature of 
what we hear about welfare. Sometimes the debate rises above the 
caricature, but sometimes not. The caricature is some slothful 
indolent, overweight, lazy, shiftless, no-good bum sitting in a La-Z-
Boy, legs up, watching a 32-inch television, watching Oprah and Montel, 
drinking two quarts of beer and munching on nachos, refusing to go to 
work.
  Well, here is welfare, really: Two-thirds of welfare recipients are 
children under 16 years of age.
  Do you know where the need is in this country? It is 75-year-olds or 
80-year-olds who are no longer working and who wonder whether they are 
going to have enough money to keep their home or pay the nursing home 
for their spouse. That is where the low-income problems are in this 
country.
  These choices that are made time after time in this Chamber by the 
majority party, regrettably, have been choices that say to those 
people: We are sorry. What you have is something we call ``tough 
luck.'' The majority's response to that is ``tough luck.''
  But to the other bigger interests, the response has always been to 
try to see if we can give you benefits. Do you want a capital gains tax 
cut, 75 percent of which goes to people with $100,000 or more income? 
Do you want to build more bombers? How about some F-15's or F-l6's? 
What about amphibious ships?
  Those choices are not the right choices for this country. We can, 
should, and will balance the budget, 

[[Page S 15435]]
but we have to make the right choices to do that. I regret to say that 
this reconciliation bill that comes to the floor of the Senate is 
filled with special interest deals--the flavor of the month for all of 
the special interests. Regrettably, it does not make the right choices.
  I would like to leave you with one question that I think we need to 
answer during the next hour or so. It is interesting to me that the 
analysis of the House bill provides that the $270 billion cut in 
Medicare extends the solvency of the Medicare Program for the same 
length of time that the $89 billion cut in Medicare does. Question: Why 
would that be the case? Answer: Because at least part of the money is 
used to provide a tax cut. That is a simple answer--the only answer.
  The Senate does it differently. They cut Medicare $270 billion and 
then use the money twice in a lockbox, and they do exactly to Medicare 
what they do to Social Security--that is, misuse the trust funds so 
they can use the money twice. Double-entry bookkeeping is one where you 
can use the money twice. That is for not only restoring solvency of the 
Social Security trust fund, but for triggering a device that says you 
have reached a balanced budget and, therefore, you can proceed with a 
tax cut.
  I will finish with this observation, which is the one I started with. 
I have three letters in my hand, one dated October 18, one dated 
October 19, one is October 20, all written by the same person, signed 
by the same person, all addressed to me. In the October 18 letter it 
says this reconciliation bill reaches a slight budget surplus in the 
year 2002. The next letter says that if you do not take the Social 
Security trust funds, if you are prevented from using Social Security 
trust funds as revenue for operating budget deficits, then the CBO 
would project an on-budget deficit of $98 billion in 2002. The next 
day, in the October 20 letter, it said we were wrong about that as 
well. Actually, the budget deficit in 2002 would be $105 billion.
  Mr. President, this, I think, describes what is happening with the 
reconciliation bill. I hope that we will have a significant debate in 
the coming days about these issues. It is not fear mongering. It is not 
trying to scare anybody. It is talking about priorities. What are the 
priorities for this country? What advances this country's interests? 
What moves us ahead? Who should pay and who benefits? Those are 
questions all of us should ask in the coming days.
  Mr. President, I yield the floor.
  Mr. BINGAMAN addressed the Chair.
  The PRESIDING OFFICER (Mr. Craig). The Senator from New Mexico.

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