[Congressional Record Volume 141, Number 164 (Monday, October 23, 1995)]
[Senate]
[Pages S15488-S15490]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          BALANCING THE BUDGET

  Mr. GREGG. Mr. President, I heard earlier a discussion on this floor 
from a number of Members on the other side, specifically the Member 
from California and the Member from North Dakota about the effects of 
the coming debate or the implications of the coming debate on the 
matter of balancing the budget relative to tax policy.
  First, I think it should be noted once again for the record that for 
the first time in 25 years this Congress, this Senate, is going to get 
the opportunity to take up the issue of balancing the budget. For the 
first time in 25 years there will be on the floor of this Senate a 
reconciliation resolution which, if passed by this Congress and agreed 
to 

[[Page S 15489]]
by this President, will lead to a balanced budget by the year 2002.
  That fact is certified by the Congressional Budget Office, the fair 
arbiter, as we have all agreed around here, including the President 
during his first speech to Congress, of the number-scoring process.
  We have a major opportunity, probably the most significant 
opportunity--clearly the most significant opportunity in the last 25 
years to bring under control the spending of this country.
  The purpose of doing this is really rather simple, as has been 
discussed before. It is to give our children a chance to have a 
prosperous lifestyle, to pass on to the next generation the opportunity 
to live in a Nation which is fiscally solvent.
  If we do not take this action, I think the matter has been well 
debated, and generally agreed to, that the next generation will have 
very little opportunity for prosperity, that they will be given a 
country which is insolvent, that they will be faced with a Nation where 
we will probably have to grossly inflate our money supply, creating 
economic havoc as children move into their earning years, as our 
children move into their earning years, in the period of their twenties 
and on.
  So we as a Congress stepped up to this matter. At least as a party we 
have stepped up to the matter. We have produced a budget which is in 
balance. As a result of producing that budget in balance, certain very 
good things happen.
  First, of course is the point that our children will have a shot at 
an economically solvent future. A more immediate event occurs, which 
will assist almost all Americans, or at least all Americans who borrow 
money--which is I suspect almost all Americans.
  That is, that under a generally accepted view of economists and once 
again the Congressional Budget Office, the interest rates in the 
economy generally will drop as a result of passing a balanced budget 
and having it be in law by approximately 2 percent.
  What does that mean? It means if you are borrowing to buy a new home, 
that the interest rates you will have to pay on that new loan will be 2 
percent less. That translates into literally thousands of dollars for 
middle-income Americans seeking home ownership.
  It will mean if you are going to school as a student that your 
interest rates will probably be at 2 percent less than what they are 
today, meaning you will be able to go to school longer or get out of 
school with less debt--either one being a very positive aspect of this.
  It means if you buy a car or household goods or you improve on your 
home or you are simply borrowing money because it is necessary due to 
some circumstances of your lifestyle, that the cost of borrowing that 
money will drop rather significantly.
  It also means good news for the Federal Government. It means that our 
rate of interest will drop by 2 percent.
  As a result, CBO has said that we will receive over the next 7 years, 
because we have put in place this balanced budget, a windfall, if you 
wish to describe it that way, or dividend if you wish to describe it 
that way, or approximately $170 billion in savings on the cost of 
paying for the Federal debt, the interest.
  We have taken that $170 billion and we have passed it back to the 
taxpayers of this country. We have said--the Republicans in this 
Senate--that if we are going to balance the budget and we are going to 
reduce the size of growth of the Federal Government, we ought to return 
to the people who support this Government and who are the underpinnings 
of our Nation, the taxpayers specifically, that they ought to be able 
to participate in the benefits of this event of balancing the budget.
  So we have decided to use this economic dividend, this drop in 
interest rates which generates $170 billion, and return it, return it 
directly to the taxpayers.
  Now we have heard a lot from the other side about the fact we should 
not have any tax cut, that there should not be any tax cut at all, that 
there should be no return to the taxpayers of this country of putting 
in place a balanced budget.
  Of course, they do not want a balanced budget, so you can probably 
understand the fact they do not want to return the money to the 
taxpayers, but it seems to me a little crass and unfeeling and unkind 
to say to the taxpayers of this country who have been supporting the 
largess of this liberal Government for the last 40 years when it 
finally gets its act together those taxpayers will not receive any of 
the benefit.
  We are not going to take that on this side of the aisle. We are going 
to suggest that that money flow back to the taxpayer.
  We also heard first they do not want a balanced budget, or a real 
balanced budget, put it that way. They want something like the 
President sent up here that CBO scores as being out of balance for as 
far as the eye can see--for at least $200 billion a year, adding $1 
trillion of new debt to our children's backs over the next 7 years.
  They do not want a real budget. They want some sort of gamesmanship 
budget. They will not support our balanced budget which has been scored 
as a real balanced budget. They do not want a tax cut.
  Furthermore, not only are they opposed to a balanced budget and 
opposed to a tax cut, they come to the floor and misrepresent the tax 
cut that is before the Senate. I heard a number of Members on the other 
side, or at least two, state that that tax cut is just going to the 
wealthy, that this economic dividend which we are going to use to send 
back to the taxpayers of this country which is their right and due 
reward for having a balanced budget, is just going to go to the 
wealthy.
  Somebody ought to refer them to real figures. Maybe CBO figures, for 
example, rather than OMB figures. Under those figures, we will talk 
about where the benefit of that tax cut goes.
  Mr. President, 84 percent--84 percent of the benefit of that tax cut 
flows to people with incomes under $100,000; 77 percent of the benefit 
of that tax cut goes to people with incomes under $75,000. Maybe we 
have a new definition of ``wealthy'' coming from the Members of the 
other side of the aisle. If you make up to $75,000 in this country you 
are suddenly wealthy. I do not think so.
  If 77 percent of the economic benefit of the tax cut goes to people 
with incomes under $75,000, I say a vast majority of the tax cut, at 
least three-fourths of the tax cut goes to people with moderate and 
lower incomes.
  This is only logical, because if you look at what the terms of the 
tax cut are, they are clearly targeted progressively on assisting 
especially moderate income families. First, of course, is the $500 tax 
credit for children.
  This does not in any way put the average family into the type of 
position that they were in, say, back in the 1940's and 1950's, when 
you could have a single earner in a household and maintain a family, 
and about 3 percent of your income went to the Federal Government. 
Today, unfortunately, 24 percent of your income goes to the Federal 
Government.
  But, in order to try to alleviate in some minor way--and actually it 
should be fairly significant for many people--the cost of raising a 
family in this country, and especially the tax cost of being a 
moderate-income family, we have said we are going to put in place a 
$500 tax credit. That is a fairly reasonable proposal.
  So, if you have children--one, two, three, four--you can multiply the 
number of children you have by $500 and that is how much you are going 
to get back as a tax credit. This tax credit, by the way, phases out as 
your income goes up. For very high-income people there is no tax 
credit. So it must be fairly logical, since this is the largest part of 
the tax cut, it clearly flows to people with moderate incomes, under 
$75,000, who have families. So when you say the tax cut is going to the 
wealthy, when I hear that statement from the other side of the aisle, 
it is either, first, disingenuous; second, uninformed; or, third, 
potentially misleading.
  Then look at some of the other proposals we have. We have a spousal 
IRA. Again, it phases out as your income goes up, so high-income people 
do not have the benefit. So, clearly, low- and moderate-income 
individuals will have that benefit.
  We have elimination of the marriage tax penalty, again for middle- 
and low-income individuals who find themselves, because they got 
married, actually paying more taxes than if they had remained single 
and been filing the 

[[Page S 15490]]
same type of returns. That is an unfair and unique quirk of our tax 
laws which has existed too long and needs to be changed.
  So, we have put in place in this tax package the tax benefits which 
are targeted directly on, essentially, the middle- and moderate- and to 
some extent low-income families, to the extent they pay taxes, in this 
country. So it is a blatant misrepresentation to come to this floor and 
say this tax cut goes to the wealthy. It is equally unfair and 
inappropriate to come to this floor and suggest there should be no tax 
cut at all if we actually have a balanced budget, when you are not even 
willing to vote for the balanced budget. There seems to be something 
inappropriate in taking that position.
  So, as we go forward on this debate, I hope he will look at the hard 
numbers, at the real substantive action rather than the political 
hyperbole. I hope we will step back from this attitude, which the White 
House seems to be taking, which is to pick a constituency a day to 
scare through misrepresentation, and, rather, inform people as to what 
is actually happening. Because, if people look at the facts of this 
situation, they will come to two very clear conclusions. First, if we 
do not do something fairly soon, this country is going to find itself 
unable to remain financially solvent; and, second, if we follow the 
program put forward by the Republicans in the Senate and in the House, 
which leads to a real balanced budget, we will be able to pass on to 
our children a country which is financially solvent and one where they 
have an opportunity for prosperity. We will be a generation which 
passes on to the next generation opportunities that exceed even those 
that were given to us by our parents.
  If we fail to take this action, we will, of course, be the opposite, 
the first generation in the history of this country which will pass 
less on to our children than was given to us by our elders. That is not 
acceptable, it is not right, and it is not fair. That is why I strongly 
support the reconciliation bill that will be coming forward toward the 
end of this week.
  Mr. President, I appreciate the courtesy of the Chair and yield such 
time as I may have.
  Mr. President, I make a point of order that a quorum is not present.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. HOLLINGS. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  A reminder to the Senator from South Carolina that, under unanimous 
consent, 20 minutes of debate will begin at 20 minutes before 6, 
equally divided between both sides, dealing with the Dorgan amendment 
to S. 1322.
  Mr. HOLLINGS. Very good. I thank the distinguished Chair.

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