[Congressional Record Volume 141, Number 165 (Tuesday, October 24, 1995)]
[House]
[Pages H10704-H10711]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE RECONCILIATION BILL

  The SPEAKER pro tempore (Mr. Blute). Under the Speaker's announced 
policy of May 12, 1995, the gentleman from Minnesota [Mr. Gutknecht] is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. GUTKNECHT. Mr. Speaker, I am delighted to be here tonight with my 
colleague, the gentleman from the Keystone State of Pennsylvania [Mr. 
Jon Fox], to talk a little bit about this reconciliation bill that we 
are going to vote on here in the next couple of days. The debate will 
begin tomorrow. It really is a historic time in American history.
  I note that some of my colleagues from the other side of the aisle 
have had pictures of children with them tonight to show. When we were 
sworn in as new Members of this body, we were given essentially two 
things. One is this nice little card case that included our voting 
card, and which some have said is the most expensive credit card in the 
world, because on this credit card our predecessors have run up 
something like $4.9 trillion worth of debt on our children and 
grandchildren.
  I put into my little card case three of the most important people in 
my life, and they are my three kids. They are all teenagers, and some 
people would say that teenagers are difficult, and all the things about 
teenagers you have heard. Some of it is true, but in truth, they are 
really the inspiration to me about what this is about and what our real 
responsibilities are.

  I carry those picture of my kids with me, because I think when we 
talk about reconciliation, we talk about the budget, we talk about 
balancing the budget, we really are talking about what are we going to 
do for future generations of Americans, what are we going to do on 
behalf of our kids.
  I would like to, before we really get into this, and I want to yield 
to my colleague, the gentleman from Pennsylvania, remind my colleagues 
and some of the folks who may be watching this special order on C-SPAN 
of a quote, and we have heard a lot about children, but one of my 
favorite quotes is from one of our colleagues over in the Senate, 
representative Phil Gramm from the great State of Texas. He has said 
many times that we will hear, especially in the next several days, that 
this is a debate about children. It is a debate about how much we are 
going to spend on education and how much we are going to spend on 
nutrition, how much we are going to spend on medical care.
  The truth of the matter, Mr. Speaker, this is not a debate about how 
much we are going to spend on children or how much we are going to 
spend on education or how much we are going to spend on health care. 
This is a debate about who is going to do the spending. We know 
government bureaucracies and we know families. Some of us on this side 
of the aisle, at least, know the difference. So the debate is about who 
is going to do the spending.
  We are talking about balancing the budget for the first time in 25 
years, and really, it is about future generations, because 
historically, and I do not know, you probably do not represent as many 
farmers as I do, I would say to the gentleman from Pennsylvania [Mr. 
Fox]----
  Mr. FOX of Pennsylvania. We have our share.
  Mr. GUTKNECHT. Back in my district, it is fairly heavily 
agricultural, and those who do not actually live on farms are not far 
removed from living on the farm, and they understand this, that 
historically what Americans wanted to do was to pay off the mortgage 
and leave their kids the farm. But what we have been doing as a society 
and what we have been doing as a government, what this Congress has 
been doing for the last 40 years, is we have been selling the farm and 
leaving our kids the mortgage.

  I think we all know, deep down in our bones, that there is something 
fundamentally immoral about that. For the first time in 25 years, as we 
approach this reconciliation, we are going to do something about that. 
I think it is a very historic moment. Frankly, the people who should be 
the most enthusiastic about this are young people, because it is their 
future that has been mortgaged. I think it is important, that step we 
are going to take.
  Mr. Speaker, I yield to the gentleman from the great State of 
Pennsylvania [Mr. Fox].
  Mr. FOX of Pennsylvania. Mr. Speaker, I thank the gentleman for 
yielding. He has been at the forefront in our freshman class in this 
104th Congress in identifying those issues that are most important to 
Americans, and one of them is to make sure we achieve a balanced 
budget, without forgetting that we have human concerns to be addressed; 
that what we want to see is elimination of waste in the Federal 
Government, but using the moneys we have in the Government to make sure 
we take care of children, that we take care of working families, that 
we take care of seniors. We can do that. By having a balanced budget, I 
believe what we are on the threshold to achieve is to make sure we 
lower housing costs and in fact balance the budget.
  We have heard from the National Association of Realtors that the 
average 30-year mortgage will drop almost 3 percentage points; that if 
we balance the budget, we will be lowering car expenses about 2 
percentage points lower than they otherwise would be. We will be 
lowering the cost of college for students. Student loan rates will be 2 
percentage points lower because we have balanced the budget. A college 
student who borrows, for instance, $11,000 at 8 percent will pay almost 
$2,200 less in schooling costs.
  Mr. GUTKNECHT. That's $2,200 less if we balance the budget?
  Mr. FOX of Pennsylvania. Finally, after 22 years.
  
[[Page H 10705]]

  Mr. GUTKNECHT. These are college students. We are talking about 
changing the rules slightly, so some may have to pay $7 more, but over 
a net basis they could be spending over the life of the loan over 
$2,200 less, just because we balance the budget?
  Mr. FOX of Pennsylvania. Absolutely. And another thing that is 
important to senior citizens, what we are going to do under this 
legislation is be able to roll back the unfair taxes applied in 1993 
for Social Security recipients. We will also be able, for the first 
time under this legislation, Mr. Speaker, be able to in fact allow 
seniors who are under 70 who want to continue earning money through a 
job, they are now capped at $11,200. Under our legislation they can 
make up to $30,000 a year without deductions from Social Security.
  Under Medicare plus, not only will they have the options of having 
traditional fee-for-service, but you will also have the managed care 
option, the Medisave accounts, and be eliminating the fraud, abuse, and 
waste, which is $30 million, Mr. Speaker, we will be able to make sure 
that those funds go back in the Medicare lockbox for improvements in 
the health care system, so our senior citizens will have the health 
care dollars that they want.
  Mr. GUTKNECHT. So with the lockbox, we are not using any funds for 
the Medicare savings and reform, we are not using that for the tax cut?
  Mr. FOX of Pennsylvania. Not for any tax cut, not for any government 
program. It must go back for senior citizens, for their health care.
  Mr. GUTKNECHT. Into the trust fund?
  Mr. FOX of Pennsylvania. Absolutely.
  Mr. GUTKNECHT. You understand that, I understand that, and I think 
everybody on the other side of the aisle understands that, yet there 
has been an awful lot of disinformation and misinformation spread in 
the last several months.
  Mr. FOX of Pennsylvania. The fact of the matter is Medicare is very 
important. It was the President's trustees just in April, Mr. Speaker, 
that came out and said if in fact we do nothing by the year 2002 
Medicare will be out of business, so to do nothing would be 
irresponsible, whether you are Republican, Democrat, whether you are in 
the House and Senate, or you are the President. Everyone agrees we must 
do something to improve the system.
  I think by reducing the paperwork costs, which have been 12 percent, 
by eliminating $30 billion a year in fraud and abuse in the system by 
the providers, and by making sure that we have a streamlined system 
that offers options to seniors, so they can have managed care if they 
want to have things like prescriptions filled and eyeglasses included, 
they can design their own health care program. I think that is what the 
objective here is, to make sure seniors have the independence. People 
are living longer, and we want them to live better.
  Mr. GUTKNECHT. In fact, what we are really trying to do is convert 
the seniors from being consumers of medical care into being buyers of 
medical care. We are trying to use market forces, give them more 
choices, do some of the things that are working in terms of the private 
sector right now.
  We know on a national basis right now health care inflation in the 
private sector is running about 1.1 percent. That is what it is running 
in the State of Minnesota, about 1.1 percent in the private sector, but 
then on the government-run side of the health care expenditures, it is 
running 10.4 percent. You do not have to be an MBA from Wharton in the 
State of Pennsylvania to understand that if we can take some of those 
ideas and use market forces, give people more choices, offer the option 
of managed care, medical savings accounts, preferred provider networks 
and some of the things that are working so well in the private sector, 
if we give them those choices, we can dramatically reduce the overall 
cost of health care, give people more options, give people more 
choices, and I think in the long run give them more services than they 
currently get, and control the cost so we eliminate some of the waste, 
fraud, and abuse that is currently in the system and everybody wins 
except some of those providers that have been gouging the system.
  Mr. FOX of Pennsylvania. I thank the gentleman for the recognition.
  And the ones who have been gouging the system, under the legislation 
which we have cosponsored, not only do those providers who have been 
violating the law face a 10-year jail sentence, but they will not be 
able to participate in the system any longer, because they will have 
violated the Medicare law which says you can no longer participate if 
you have in fact violated the fraud and abuse statutes that are in the 
bill.
  Mr. GUTKNECHT. In fact, and I think we need to be honest, because 
under our plan, the total cost to the average senior citizen may go up 
by as much as $7 more than under the President's proposal. That is $7 a 
year. When I have had a chance, and I do not know if you have had a 
chance to talk to some of the seniors in your district, when I explain 
what they are going to get for their $7, with all the options, with all 
the choices, with better managed care and hopefully better services 
available to them, when I explain that to them, and that the real 
benefit is we not only save the system, we do not just patch it up to 
get through the next election, we are trying to save it to get to the 
next generation. This is really about generational equity.
  When I explain that to my senior citizens and they hear all the 
facts, they say ``What are these people grousing about? This is a great 
deal. This is what you should be doing. We are delighted you have the 
courage to finally step up to the plate and do what needs to be done 
with Medicare.''
  Mr. FOX of Pennsylvania. Prior Congresses have said ``We know 
Medicare is in trouble, but we will get around to it sometime.'' But 
frankly, there is not anyone who wants to make sure that we want to 
take care of the system for our seniors more than the people who are 
here. We were sent here, and many of the senior citizens in our 
district have said ``Save Medicare, make it work.'' Believe me, what I 
like about the bill now that was not in the original bill, I would say 
to the gentleman from Minnesota [Mr. Gutknecht], is the lockbox 
feature, making sure all the savings go back to Medicare, and the fraud 
and abuse statutes, which will finally, for the first time, go after 
those who have violated the law and stop them from participating in the 
system.

                              {time}  2000

  You only have to read the Reader's Digest September issue to see the 
litany of cases where people have violated the law, have in fact gotten 
away with it, because we do not have a government system now that will 
enforce existing laws, or have sufficient penalties to discourage the 
waste and abuse in Medicare. $30 billion a year. It is a remarkable, 
unbelievable item.
  Frankly, if we had run this system of Medicare in a private industry 
setting, we would have made the changes we are now doing 10 years ago 
so the system would have worked. Although now, I should think seniors 
need to know that the restrictions that are being placed on the system 
are to providers and not to seniors.
  We are saying to the providers, you must give quality health care at 
a fair price to the Government. We are not going to change one iota in 
the quality of care for our seniors. That must be held to the highest 
standard possible, or else they will not participate in the system any 
longer.
  Mr. GUTKNECHT. Well, the whole key of service networks, provider 
service networks, PPO's, HMO's and the other forms of managed care has 
been to put some kind of a manager in place to help control these costs 
so that we do not have the waste, fraud and abuse, and frankly, we do 
not have the unneeded tests and services that are out there. Right now 
we have a system, and I think most people who participate in the 
system, including many senior citizens, understand that there is an 
awful lot of waste, an awful lot of fraud and abuse.
  We have had 33 town meetings on the subject, and again, I am 
surprised sometimes that our colleagues on the other side of the aisle 
say, we have not had enough meetings. We have literally had thousands 
of meetings with all kinds of people. We have talked to providers and 
insurance companies; we have had meetings with seniors.
  Most of us have had anywhere from 10 to 40 town meetings. I have had 
33, 

[[Page H 10706]]
and at one, the whole issue of waste, fraud and abuse comes up. 
However, the problem has been with the old system and the way it exists 
today, it was like it was nobody's money, and if a senior complains and 
says, wait a minute, I did not get this particular treatment or service 
or whatever, the attitude was, what are you complaining about? It is 
not your money.
  It has sort of been that attitude that I think has become almost a 
cancer on the entire Medicare system. If we can begin to change those 
attitudes and if we can make people more responsible, if we can put 
managers in place to help control costs, we can save the system, we can 
reduce costs dramatically.
  As a matter of fact, if anything, I think we are being entirely too 
timid in the total budget targets that we are looking at for the next 7 
years. Even assuming that only 25 percent of the seniors get involved 
in various forms of managed care, and that is what the CBO estimates, 
we can save the system, not just for the next 7 years, in my opinion, 
but we can save it for long into the 21st century.
  Mr. FOX of Pennsylvania. Mr. Speaker, if the gentleman would yield, I 
think it is important to make sure that the Medicare bills and anything 
dealing with the Government is in plain English.
  Many of my seniors come to me and say, I would like to help you out 
and eliminate the fraud, abuse and waste, but if it was in plain 
English it would help, so that I know the data service and what was 
supposedly given to me. Because I have had the same kind of stories 
that the gentleman from Minnesota [Mr. Gutknecht] has had, where 
seniors have told me, well, I got charged for a service, but I did not 
receive it, or I got charged for it twice.
  Mr. Speaker, what is good about this legislation is that those 
seniors that report fraudulent or over-charged items over $100, they 
will be able to participate in the savings, so hopefully there will be 
an economic incentive to make sure the system works.
  Mr. GUTKNECHT. Mr. Speaker, we do want to give them an incentive to 
say, wait a second. We had a lady who said she had been billed $232 for 
a tooth brush. Those are the kinds of things that are just outrageous.
  Mr. FOX of Pennsylvania. In Minnesota, you have to bring those prices 
down.
  Mr. GUTKNECHT. We cannot afford that, we cannot afford to pay for 
cataract surgeries which were not performed. Those are the kinds of 
things we have to stop, and if we can do that, we can save the system.
  Mr. Speaker, let us talk a little bit about the bigger budget as 
well, because Medicare is certainly a part of it. One of the things 
that I have been proud of, and the gentleman from Pennsylvania [Mr. 
Fox] and I came together as freshmen as part of this historic 104th 
Congress. The great thing, it seems to me, about this Congress is we 
have not dodged the bullet, we have not ignored the big problems, we 
have stepped right up to the plate and started on day one, when we 
changed the way Congress does business, when we downsized the committee 
process.

  The very first bill that we voted on in this Congress was H.R. 1, the 
Shays Act, which says, Congress is going to abide by the same rules 
that we impose on everybody else. Mr. Speaker, on every step we have 
stepped up to the plate.
  Many times our critics have said, well, you did that, but you will 
not do this. Well, then it came to the budget and Medicare and changing 
the way that Congress does business, we have stepped up to the plate, 
and frankly, I think we as freshmen have to take at least some of the 
credit for that, because we forced our own leadership, and I feel good.
  We look at this budget reconciliation and I think if we take it item-
by-item, because it is a big package, and it includes, frankly, several 
things in it that I do not particularly like and I wish I did not have 
to vote on. However, when you look at the big picture, if you wait 
until all the lights are on green, you are never going to leave the 
House.
  Mr. Speaker, for too long the Congress has basically taken an 
attitude that well, yes, we would balance the budget, but it would mean 
that we might have to cut back a little bit on military spending. It 
might mean that a military base in my district might have to close. I 
would really like to balance the budget, but I do not want to make any 
restrictions here. I really want to balance the budget, but I do not 
want to tackle Medicare head-on. I really want to balance the budget, 
but I do not want to deal with this problem of Medicaid. I really want 
to balance the budget, but.
  We have had all of these ``yes, buts'' for the last 30 years. The 
good news about this Congress is we are moving ahead despite some of 
our personal concerns about particular items that are in this budget. 
So we are stepping up to the plate, we are not allowing the perfect to 
become the enemy of the good.
  The bill that we are going to vote on here in the next couple of 
days, in my opinion, I have to say is not perfect. There are several 
things in this bill that I wish were not in the bill, but on the other 
hand, if we wait until all of the lights are on green, we are never 
going to leave the House, we are never going to get started down the 
part to a real balanced budget.
  Mr. Speaker, as the gentleman said earlier, the real benefactor of a 
balanced budget are not the rich, it is actually middle class and lower 
middle class people. It is children, it is families.
  Mr. Speaker, earlier, one of our colleagues, the gentlewoman from 
Texas [Ms. Jackson-Lee] said something about a family at $30,000 was 
not going to get this benefit. Well, I am sorry, but I think that is 
absolutely wrong. If they have three children, they earn $30,000 a 
year, they are going to get a $1,500 a year tax credit.
  Now, obviously you are rich, $1,500 may not seem like much. If you 
earn $30,000 a year, $1,500 is a lot money, and they are going to get 
that under our tax plan.
  Mr. Speaker, I want to yield to the gentleman from Pennsylvania in a 
minute, but I want to talk about that average family that earns $30,000 
a year, because there are a heck of a lot of them, not only in my 
district but all across America.
  In 1950, that family was paying about 4 percent of their gross income 
to the Federal Government. This year, they will pay about 24 percent of 
their gross income; and I do not think anybody in this Congress or 
anybody in the United States can argue that that family is really 
better off because they are giving six times as much as they were 
giving in 1950 to the Federal Government.
  That is part of what this debate about reforming and downsizing the 
Federal Government and reducing a family's taxes is about.
  So when people talk about giving these big tax cuts to the rich, the 
truth is they are not being very honest with the American people. 
Because the broad base of this tax cut will go to families, in fact, 74 
percent will go to families earning less than $75,000. This is not 
about a tax cut for the rich. This is about a tax cut for the middle 
class. It is about helping families. I think it is time we stand up for 
families here in the United States Congress.
  Mr. FOX of Pennsylvania. Mr. Speaker, I would have to agree with the 
gentleman, if he will further yield.
  Mr. Speaker, the gentleman has been working overtime, I would have to 
say, in trying to help us fashion here for the 104th Congress and the 
reform-minded Members, and I have been pleased to work with you on just 
these issues.
  Balancing the budget, as we said earlier, will not only help working 
families provide opportunities for jobs, opportunities for decreased 
costs of purchasing a car, of paying for a mortgage, but the tax reform 
issues that are before the Congress this week will, besides the way we 
talked about helping seniors by lowering taxes for working seniors and 
providing more seniors with long-term care coverage, our bill provides 
incentives for employers to offer to their employees and for 
individuals to purchase long-term care health insurance.
  Children who are adopted into families, there is a $5,000 tax credit 
to help defray adoption expenses.
  We also have in the legislation what I think will help increase 
savings and increase the opportunity for businesses to grow, produce 
and hire, decreasing the capital gains tax. This is for small 
businesses.
  Mr. GUTKNECHT. Could I talk just a little bit about the capital gains 
taxes.

[[Page H 10707]]

  Mr. FOX of Pennsylvania. There is a lot of misinformation about that, 
I believe.
  Mr. GUTKNECHT. Absolutely. When they talk about the tax cut for the 
rich, many times they are talking about the capital gains tax. But the 
truth of the matter is, and they know this, this is according to the 
House Budget Office, 44 percent of the people who get stuck paying a 
capital gains tax in the United States are rich for 1 day, the day they 
sell their farm, the day they sell their business or the day they sell 
some other investment that they have, in many cases, been paying taxes 
on for many years. So, in many cases, this is ridiculous.
  And I think every economist that I have read in the last several 
months agrees that the United States has among the highest taxes on 
capital and on investment of any industrialized country in the world. 
If we are going to compete in the world marketplace, we have got to 
reduce our cost to capital.
  You can argue, that, yes, the rich will benefit because they pay 
lower capital gains tax; but the real benefactors are those people out 
there looking for jobs. Because we hope, as people invest more, we are 
going to create more capital, more business, more production, more 
jobs.

  So the real issue is, how do you create more jobs, a world-class 
economy as we go into the 21st century? I think lowering the cost of 
capital gains is a very important tax cut.
  We are now joined by our colleague from the great State of Georgia, 
Mr. Kingston, and I would be happy to yield to him a few minutes.
  Mr. KINGSTON. Mr. Speaker, I certainly appreciate that.
  I wanted to follow the train of thought of the gentleman from 
Minnesota [Mr. Gutknecht] on this capital gains tax. I represent an 
area that is a big growth area and, actually, a lot of waterfront 
property. I represent the entire coast of Georgia. One of the things 
that I found is that you have a lot of people who moved out toward the 
coast 30 years ago to escape the city or just to kind of get closer to 
the marshes and the ocean and so forth. And now they are empty-nesters, 
in many cases widows living in those houses now that maybe in the 1950s 
they paid $25,000 for, probably a lot less than that, actually. Now 
they are worth $500,000. But that widow who is out there on a fixed 
income cannot sell it, because she would be taxed as if she was making 
$500,000 a year.
  So when we talk about the capital gains tax cut and reduction, who is 
it going to help? It is going to help a whole lot of people like that 
widow on the fixed income. And, certainly, in terms of job creation, 
the numbers are incredible in terms of people investing money and 
turning around.
  I do not know what it is about this administration that they seem to 
have a class war fetish: If you are rich, if you are successful, if you 
have done something, if you live the American dream, you are horrible 
as far as the crowd on Pennsylvania Avenue goes. I wish I had that Ted 
Turner, Steve Jobs, Colonel Sanders entrepreneurial genius. I love it. 
The fact is, we all do not have it.
  However, think about all of the people who have gotten jobs because 
those entrepreneurs put the dream, put the money, put the material, put 
the product together and made a heck of a lot of people happy through 
the use of those products. Yet the administration cannot get enough of 
rich bashing and class warfare.
  Mr. FOX of Pennsylvania. Mr. Speaker, if I could just add on to what 
Congressman Kingston just said, and I appreciate his joining us for 
this discussion on the issues of the day.

  Frankly, by having the capital gains tax reduction, which is even 
greater for individuals than it is just for businesses, 19 percent for 
individuals and 25 percent for businesses, by creating those jobs, 
which are private sector jobs, as you were pointing out. If we do not 
give entrepreneurs and those great creators of new ideas the chance to 
build those new businesses here and provide jobs for our constituents, 
then those people can go overseas to countries that would gladly, with 
open arms, take them.
  Let us make sure we do what you were talking about, Congressman 
Kingston, get those capital gains tax incentives there for businesses 
to grow, produce and hire. Therefore, we do not have the dependency on 
more jobs in the Government-sponsored positions, which do not 
necessarily help the economy and do not necessarily provide the kinds 
of improvements to our society and the new impetus to expansion that 
really is the vitality of America.
  Mr. KINGSTON. That is right. There is so much in this reconciliation 
package that will bring us towards business prosperity and the creation 
of new jobs.
  This is the first time I believe in 25 years that we have had a 
balanced budget to vote on on the floor of the House; and it is 
something that President Clinton, June 4th, 1992, pledged to the 
American people on Larry King Live that he would have a balanced 
budget, a 5-year plan, when he was president. So we clearly have 
bipartisan support on it. Now, I understand that the President has 
somewhat backed off of that promise, and he is not the first member of 
either party to do so.
  Now is the time for everybody to come to the table and say, if you 
are interested in a balanced budget, if you are interested in turning 
this thing around, now, probably the month of November, is maybe one of 
the most critical months in terms of legislative history in our country 
in the last 100 years.

                              {time}  2015

  Mr. GUTKNECHT. The people who care about this, I think it is 
important in the next week or two that they contact their Members of 
Congress, and tell them, ``We've heard one excuse after the other. The 
time has come, we've got to stand up and say, enough is enough, it's 
time to balance the budget, let's keep your promises.''
  If it means you have to limit the growth in entitlements, then so be 
it. If it means you have to put a flexible freeze on defense spending, 
then so be it. If it means that you have to make some changes in the 
way Congress has done business over the years, then so be it. But you 
cannot use all of these, ``Well, I would balance the budget except.'' 
The yes, buts. I think that has to change. I think that is what the 
American people want, that is what they tell us. Frankly I hope they 
will call, I hope they will write and let their Members know that the 
time has come to bite the bullet. We have met the enemy, the enemy is 
us, let us balance the budget and let us do it now.
  Mr. KINGSTON. That is right. This is a debate that is an American 
debate. Everybody needs to be involved in this. It might be a little 
more exciting right now to be watching that baseball game that is being 
played in Cleveland, but this is something that is going to keep 
everything afloat. I wanted to switch gears a minute to welfare, 
because so much of H.R. 4 is still in this budget, and it is the 
welfare reform plan. As you know, we have 4 basic goals with welfare 
reform--discouraging teenage pregnancy, a work requirement so that 
those who have the ability are required to work, State flexibility, 
because we may do it different than you guys do it in Minnesota and in 
California and in Pennsylvania, Georgia may want to do something a 
little bit differently; and then the fourth and final component of 
welfare reform is no benefits to illegal aliens. The gentleman from 
California I see is on the floor. He knows there were 37,000 babies 
born in Los Angeles County, CA last year whose mothers were not 
American citizens but as soon as they were born, they had dual 
citizenship and were entitled to $620 a month in California welfare 
benefits. We want to help the folks who are here, the needy, but if you 
are not an American, what we want to do is give you immediate medical 
attention, then get you home, because we do not want somebody who is 
just coming here for the benefits.

  I have a welfare case that actually I became familiar with yesterday 
that I am watching closely. This is a typical case of the things that 
are out there.
  I am not going to say which city this is in, I am not going to say 
the name of the family, but this is a real situation, two girls living 
with a surrogate father. The father is actually the common-law husband 
of their biological mother. The biological mother is addicted to crack 
and not living at home anymore. She only comes by occasionally to steal 
things. One occasion, when the common-law lover did not give her money, 
she threw potash in 

[[Page H 10708]]
his eyes and blinded him, so he is not on disability.
  The two girls are on disability, or SSI because their biological 
father was killed when they were toddlers. They also have a brother who 
is in jail right now, he is 20 years old, sentenced for 7 years on a 
number of charges. He is from the same biological mother but has a 
different biological father, but that father was killed when the boy 
was 1 year old.
  One of the girls is 18. She is in 10th grade. The other girl is 15. 
She is in 8th grade. The 18-year-old 10th grader, which is the year she 
should be graduating from high school, as you know, has a 2-month-old 
baby.
  Why do we need flexibility in welfare? Because the case that I have 
just given you is absolutely true, not embellished a bit. If you got 
confused, it took me a long time to realize it, but that welfare 
caseworker is trying to help these folks become independent, give them 
hope for tomorrow. He may need a little more flexibility than people in 
Washington, DC, are saying that he can have. We want to give them that 
flexibility.
  More importantly, the bureaucrat in Washington who is telling the 
caseworker in Georgia what to do is commanding a salary and not a small 
salary but a large salary. I want the bureaucrat in Washington to lose 
his job and give that money back here so that we can get these folks in 
the socioeconomic mainstream. They are going to need a lot of help, 
some psychological help, some medical attention, some extra tutoring in 
school. This is a bigger problem than these kids and this family can 
get out of by themselves.
  We need to have the compassion to help them. Yet, most importantly, 
that caseworker has to have the flexibility to do what works to get 
these folks independent

  Mr. GUTKNECHT. But what we do not need is a bureaucratically 
centralized system that is centered here in Washington, DC. We need to 
get it out to the local communities where they understand the problems 
and they can help.
  But I think also an important point when you talked about welfare 
reform and you talked about the goals, we have got to emphasize work, 
we have got to emphasize families, and we have got to emphasize 
personal responsibility. Because the system that we have today tends to 
consume the participants. You do not have to go very far from this 
building to see the results of spending over $5 trillion over the last 
30 years on the war on poverty. We know right here in Washington, DC, 
for example, with the federally run housing projects.
  I learned this just last week. I am on the Washington, DC, Oversight 
Subcommittee. Eighty percent of violent crime in the city of 
Washington, DC, is committed within two blocks of a Federal housing 
project. You can see it every day. You can see it in the hopelessness, 
the despair, the dependency that we have created with the Federal 
programs; and we have got to decentralize it, not just because it saves 
money. This is not just an exercise. This is not about saving money as 
it is about changing the system to help save people. The system we have 
today is wrong, it is destroying the participants, and it needs to be 
changed. If we really care about those people, then we will have the 
courage to reform the system we have now.
  Mr. KINGSTON. I want to make one point, also.
  I am on the Washington, DC, oversight on the appropriations side. The 
gentleman from Virginia [Mr. Wolf] and the gentleman from Virginia [Mr. 
Davis], the chairman, have offered kind of a cleanup Laurelwood, the 
Laurelwood Prison, which I understand that when people go to Laurelwood 
Prison that most of them have already been there. Absolutely no one 
comes out rehabilitated. What is seems to do is be a criminal think 
tank rather than any sort of positive rehabilitation facility.
  While we are looking at things in Washington, DC, that is one more 
example of things that we have just got to change to make this Congress 
make a difference.

  Mr. GUTKNECHT. And it is going to take some courage, because some of 
our friends on the other side are going to argue if you change welfare 
you are going to hurt people. I think some of us should argue unless we 
change welfare we are going to destroy even more human beings.
  I want to yield to our colleague, the gentleman from California [Mr. 
Riggs]. I am delighted to have him join us tonight for this special 
order.
  We are talking a little bit about reconciliation, balancing the 
budget, some of the things that it is going to take, some of the tough 
votes it is going to take in the next several days if we are really 
serious about balancing the budget.
  I yield to the gentleman from California [Mr. Riggs].
  Mr. RIGGS. I thank the gentleman for yielding. I especially thank him 
for organizing this very important special order, and I thank the 
gentleman from Georgia for his participation and leadership, because I 
have had the opportunity to witness him down on this floor after hours 
participating in special orders over the last several weeks. He has 
been a very important member of what we call our theme team as we 
endeavor to get our message out to the American people and expose the 
scare tactics and this whole smoke screen of fear and deception that 
has been thrown up by the minority party.
  I had to hustle over here, and it is unfortunate because I did not 
get here in time to catch the gentlewoman from Houston, TX, who had 
earlier tonight the audacity to stand over there on the other side of 
the aisle and say that we were going to completely eliminate the earned 
income tax credit.
  As I said on the floor a few weeks ago, no matter how long I serve 
here, I do not believe I will ever be cynical enough to keep up with 
official Washington and this notion that you can literally say or do 
anything in this body and in the realm of Washington politics and not 
be accountable for what you say or do.
  Really, I ask my colleagues, what is more mean-spirited or more 
extreme, the majority party that wants to responsibly govern and in the 
process give us the first balanced budget in 25 years, reform a failed 
welfare system that traps too many of our people in poverty and leaves 
too many of our young people far behind their peers, a majority party, 
as we proved last week, that is absolutely committed to saving and 
protecting Medicare for future generations and making that fund, both 
Medicare part A and Medicare part B, solvent well into the next century 
and a party that wants to cut taxes, that wants to undo the tax 
increase that was imposed upon American families and American 
businesses by the last Congress, the Clinton Democratic tax increase?

  In fact, if you look at how much the Democratic party, which was the 
majority party in the last Congress, increased taxes, you will know 
pretty much how we arrived at the figure that we want to use for 
providing tax relief. The two figures are roughly similar.
  So what is more extreme or mean-spirited? Our approach to responsibly 
governing as the new majority in the Congress for 9 months or those 
people on the other side of the aisle who apparently are unable to 
accept their status as the minority party, unable to make a 
constructive contribution in that capacity, report to these constant 
scare tactics and this whole fearmongering campaign that panders really 
to the worst instincts in the American people, actually encourage the 
American people to be cynical and suspicious of their elected 
representatives?
  I want to set the record straight, because this is a terribly 
important issue. It is been demagogued all over this town in recent 
weeks. I want to talk just for a moment about the earned income tax 
credit.
  Mr. KINGSTON. I want the gentleman to do one thing, define earned 
income tax credit, because I know there are a lot of people like myself 
unfamiliar with this.
  Mr. RIGGS. I thank the gentleman for asking that question, and I 
thank the gentleman for continuing to yield.
  I want to point out that when we take up budget reconciliation on 
this floor in a couple of days, it will be Thursday of this week, that 
several of us intend to enter into a colloguy with the gentleman from 
Ohio [Mr. Kasich], chairman of the House Committee on the Budget, and 
the gentleman from Texas [Mr. Archer], chairman of the 

[[Page H 10709]]
House Committee on Ways and Means, who will be managing that very 
important bill out here on the floor.
  The purpose of the colloquy is going to be to ensure that we get 
language in the Congressional Record that will protect every American 
family. That is to say, we have worked long and hard and both chairmen, 
I believe, have agreed to engage in a colloquy that will assure the 
American people that no family will be worse off as a result of our 
efforts to reconcile and balance the Federal budget and almost all 
American families will be far better off as a result of our reducing 
taxes on American families through the $500 per child tax credit.

  Remember, this is a tax credit that comes right off your bottom line 
in terms of your tax liability on your Federal tax return. For a family 
of four, the tax credit works out to a $1,000 per year tax break.
  In fact, a couple of months ago, I was doing an editorial board back 
in my district, meeting with the editors of one of the daily newspapers 
in my district and this rather liberal assistant editor asked me, 
``Well, what's in it for me, this $500 per child Republican tax 
credit?'' I said, ``Do you have any small children?'' And he said, 
``Well, as a matter of fact I have two very young children.'' I said, 
``I'll tell you what's in it for you, a $1,000 tax break for those two 
children each and every year until they reach the age of 18.''
  Mr. GUTKNECHT. It is $1,000 to them. It is not a $1,000 deduction. 
This is a credit.
  Mr. RIGGS. That is right. It is more of their hard-earned money that 
they keep, that they decide how to spend.
  Mr. KINGSTON. Did you tell him he did not have to take the $1,000 and 
buy more food and clothing? He could send it to the ACLU, the American 
Civil Liberties Union.
  Mr. RIGGS. I did not, but I could see his eyes widen as he realized 
what we were talking about. I daresay that gentleman would probably 
object to being described or depicted as a wealthy or rich individual.
  The fact of the matter, and I want to get to the earned income tax 
credit in just a minute, but I want to explain that most of our tax 
cuts or tax relief go to middle- and lower-income families. If anyone 
on this side of the aisle takes issue with that, I defy them, come over 
now and we will debate this particular issue. Because the facts bear us 
up.
  Let me stress again that the $500 per child tax credit will eliminate 
Federal income taxes for those families making less than $25,000 per 
year in adjusted gross income. You might call those families 
working poor or very low-income families, and the $500 per child tax 
credit will completely eliminate the Federal tax liability for those 
families, which are roughly estimated at 4.7 million American families.

  So we talk about being heartless. We are accused of being heartless 
on this side of the aisle. Is anyone on that side of the aisle so 
heartless that they will come over here now and tell the American 
people and tell those 4.7 million working poor, very low-income 
American families, that they are not entitled to the $500 per child tax 
credit for their dependent children? I do not think that will be the 
case.
  Furthermore, our $500 per child tax credit means those making between 
$25,000 a year and $30,000 a year in adjusted gross income will have 
their Federal taxes cut in half. So the majority of our tax cuts go to 
families that, by anyone's definition, even I daresay the objective, 
honest definition of those on the other side of the aisle who 
desperately want to demagog this issue, desperately demagoguing 
Democrats I guess you would have to call them, they would have to 
acknowledge this: The great majority of our tax breaks go to low- and 
middle-income families.
  The gentleman asked an important and pertinent question about the 
earned income tax credit.

                              {time}  2030

  Let me just point out to him that spending on the earned income tax 
credit has increased 1,000 percent. You heard me right: 1,000 percent 
over the last 10 years, making it the single fastest-growing 
entitlement in the Federal Government.
  When Ronald Reagan described the earned income tax credit as ``the 
best antipoverty program ever devised,'' it cost $2 billion a year and 
gave a modest tax rebate to low-income working families with children. 
Sounds very much like our $500-per-child tax credit, does it not? 
Except, again, ours is a tax credit. You can actually keep that money. 
You do not have to wait for a rebate from the Federal Government.
  Mr. KINGSTON. Let me speak to that for a second. Is the gentleman 
aware on the earned income tax credit you can prefile before you have 
actually earned the money?
  Mr. RIGGS. Yes. That is my understanding.
  Mr. KINGSTON. In January you can get the tax credit on work you have 
not done. Then if you do not do the work, as I understand it, there is 
no mechanism for collecting that money.
  Mr. RIGGS. That is exactly right.
  The point I wanted to make, this program has actually exploded in 
cost and growth. I mentioned it has grown a thousand percent over the 
last 10 years in real dollars. That means it has grown from $2 billion 
a year in spending to offset the earned income tax credit to $20 
billion a year. It gives a large cash rebate to people who do not even 
have kids.
  So we want to target our tax relief to families. We want to 
strengthen the American family. The question is not about, you know, it 
is not the good old class warfare politics, the politics of envy. It is 
not about where we establish that income threshold, although that is, 
you know, as to where to cap the $500-per-child tax credit, even though 
that is a matter of ongoing discussions between the House and the 
Senate. The real issue is kids and families, and that is where we want 
to emphasize our efforts at tax relief, and as the gentleman from 
Georgia points out, the earned income tax credit is a program which 
today is riddled with fraud and has error rates that far outstrip those 
benefits.
  Mr. KINGSTON. I wanted to say one other thing about this. You know, 
we have this frank privilege, the franking privilege, which is a fancy 
way of saying Members of Congress get free postage by signing their 
name where the stamp would be. Not long ago I saw a flier that was a 
franked mailing of one of our colleagues, and it looked like a lottery. 
It looked like Readers' Digest sweepstakes. It said in bold print, 
``The government has some of your money. Call us. Come get your check 
now.''
  I looked it over. I mean it really looked like a Readers' Digest 
sweepstake. What the Member of Congress, with taxpayers' dollars, was 
sending out was a franked piece saying, ``Come get your earned income 
tax credit. Come get it right now. It is free money''. And it was 
franked to every single person in his district.
  Mr. RIGGS. If the gentleman would yield again, I happened to see 
that. I believe actually that was a recommended ploy in the last 
Congress, let us be honest about it.
  Mr. KINGSTON. So why would you want to give away that? You know, hey, 
you see me; you are giving out money. I mean, of course, it would not 
be my money, and it certainly would not be money of a Member of 
Congress. They way this was, is, ``I am going to get you your money.'' 
And you talk about appealing to the basest instincts of people. It was 
just a horrifying flier. But to think that that was sent out at 
taxpayers' money just is disgusting.

  Mr. RIGGS. The gentleman makes a crucial point because I will be 
happy to point out, as I will be happy to debate with our colleagues on 
the other side of the aisle, we actually propose to increase spending 
in its 7-year House-Senate balanced budget plan, what is now going to 
be incorporated into the budget reconciliation plan. We propose to 
increase spending on Medicare, Medicaid, welfare, the earned income tax 
credit. But we are reducing the size of those programs because at the 
same time we are trying to help people who have traditionally been 
dependent, in many cases, for several families, going back several 
generations. We are trying to help people make the transition from 
government dependency to independence and self-sufficiency, and, yes, 
we are looking long and hard at all Federal taxpayers, which subsidize 
dependency, but the fact of the matter is we are increasing spending. I 
want to make sure the American people, seeing us tonight, understand 
clearly that in the last Congress when the Democratic 

[[Page H 10710]]
Party controlled both Houses of the Congress, and obviously we had a 
Democratic President and a Democratic administration, they raised taxes 
by $258 billion, the largest tax increase in history.
  Actually, the President tried to raise taxes even more. He originally 
proposed $359 billion in new taxes. So it is not quite true that he had 
to actually increase the amount of new taxes because of the ability to 
get any Republican votes on this side of the aisle. The reality is he 
proposed a much higher figure in new taxes, $359 billion, as I say, 
then came back down to $258 billion in new taxes.
  Our tax relief package, as it is currently crafted right now, is $245 
billion in tax relief. And why? Because none of us, in fact, probably 
no one on that side of the aisle has ever had a constituent come up to 
them at a town hall meeting or, for that matter, any other public 
appearance, and say, ``You know, Congressman, I'd really like to pay 
more taxes. I really believe we are an undertaxed society.'' That is 
obviously not the case. We have 42 percent of our $6 trillion gross 
domestic product going to taxing authorities of one kind or another, 
local, State, Federal. We are trying to provide a little tax relief, 
again especially targeted to families.
  Mr. KINGSTON. Last week, the President said he went too high, and he 
is now on record saying he raised taxes too much. So, you know, 
hopefully we have got an ally.
  Mr. GUTKNECHT. I think I have that quote. That was a week ago tonight 
down in Texas. He said, ``I think I raised your taxes too much,'' and, 
you know, that said it all. We agree. There are two questions we talk 
about taxes that I think are so critically important that do not get 
asked very much in this town. The first question is: Whose money is it 
in the first place? The second question, more importantly: Who can 
spend it more efficiently? I think the average American family knows 
the greatest health and welfare system ever created is the American 
family, and what we are really trying to do is strengthen families, 
improve the economy, create more jobs, so more people can be self-
reliant. The real answer is not more welfare checks. The real answer is 
more payroll checks. That is what we want.
  I am delighted to have the gentleman from Arizona [Mr. Shadegg], a 
fellow freshman of mine, to join us, and I yield to the gentleman. We 
are talking about budget reconciliation, balancing the budget and 
related matters.

  Mr. SHADEGG. I am thrilled to be with you tonight. I appreciate this 
opportunity.
  First let me commend you and your colleagues here on the floor for 
carrying on this debate, talking out in front of the American people 
about this issue, particularly about the issue of tax cuts.
  I have got to tell you I am here tonight to discuss that issue. I am 
here because I think it is a critical part of reconciliation. It is a 
hot debate before the American people.
  I want to begin by imploring our colleagues to just stop in their 
tracks for a minute and consider a few of the facts that are before us, 
and then I want to urge them to do what I did, which is to quit 
accepting kind of the public view that they have in their own mind 
without checking it out and go out and ask people.
  Let me explain what I mean by that. First of all, I heard here on the 
floor of this House and in the halls of Congress over and over again 
this rhetoric, ``Well, we have to focus on deficit reduction. We should 
not be cutting taxes right now.'' You hear it clearly from the other 
side. You hear it occasionally from our side, Members genuinely 
concerned about should we be cutting taxes right now.
  I have had a theory about that. I went home recently and went to an 
event in my district, an evening event. After the event was over, two 
different people came up to me, one a woman in probably her late 
seventies, the other a man in is sixties, and both of them came up to 
me and implored me not to cut taxes. They said, ``You should not be 
cutting taxes. What you ought to be doing is focusing on deficit 
reduction.''
  I looked them right in the eye. I said, ``You know what, I really 
appreciate that. I appreciate that because what you are saying is what 
you honestly believe. But let me tell you, you are dead, absolutely, 
100 percent wrong.''
  When you say that to constituents, you get a little shocked reaction. 
They said, ``Well, why?'' I said, ``Well, let me tell you why you are 
saying that and where we are in America. Let us start with the fact we 
have all heard 100 times,'' and I said probably a thousand times in my 
campaign, I was born in 1949. The year after I was born, in 1950, the 
average American family with children paid $1 to the Federal Government 
in taxes out of every 50 it earned. You earn a hundred-dollar bill, you 
send $2 to the Federal Government.
  You know and I know, but I wonder how many people out there know and 
how many of our colleagues even think about the fact that in 1993, the 
figure is not 1 out of 50, it is 1 out of 4. Earn $4 and send 1 of 
those 4 to the Federal Government in taxes. We are not talking State 
Government. We are not talking local government. We are not talking 
fees to get into a park. We are talking taxes to the Federal 
Government. 1 out of 4; 1 out of 50 in 1950, 1 out of 4 in 1993. I tell 
audiences, ``Have you gotten that much more out of the Federal 
Government for this mega tax increase we have had over the years?'' And 
they are suddenly stunned, as these two constituents were.
  Then I have this theory, and I have been telling it to our colleagues 
around here time and time again, and they kind of do not buy it. So I 
decided to prove it. My theory was we are hearing from people who come 
to our town halls, and we are hearing from people at Kiwanis Clubs and 
Rotary Clubs, where we go give speeches. Let me tell you, I love this 
Nation, and I admire the people that come to my town halls, and I 
respect the people who join a Kiwanis Club and care to go and make 
their part of making America better by being a member of a Kiwanis 
Club. But real America does not have time to come to my town hall. They 
do not. Real America does not even have time or the money to join a 
Kiwanis Club or a Rotary Club. It is a financial burden.

  It costs my friends who are Kiwanis Club members $20 or $30 a week to 
go be part of that club, pay for lunch, take time out of work and 
support charitable things that club does. That is not America.
  Mr. RIGGS. And be fined.
  Mr. SHADEGG. And be fined. They get fined for whatever they do 
because that supports the club and they are helping society and they 
are helping charities in their community. You know what, that is not 
America.
  Real America struggles to get their kids out of bed in the morning 
and get them dressed and get some Cheerios in them and get them off to 
school. Then they rush out the door to get to work. They struggle 
through their 8 hours of work or maybe 9 or 10 and maybe a second part-
time job, then back home, pick up the kids from school or day care. You 
know what they have got to do, get the kids back home, take care of 
Little League, a couple different things. They have got to do their 
homework, get them back to bed and do it again.
  They are not at John Shadegg's town halls. They are not at the 
townhalls of the gentleman from Minnesota [Mr. Gutknecht]. They are 
struggling to get by. Those people are not saying, ``I am undertaxed.'' 
You said it right.
  But you know what, we do not hear from them. We all go out and say, 
``Well, my constituents say, `Don't cut my taxes, take care of the 
deficit. I am a big charitable person.' '' They are right, we do have 
to take care of the deficit. That is for our children and our 
grandchildren.
  But you know what we have to do today, we have to cut taxes because 
the burden is oppressive. I have been saying that whole thing about the 
people at town halls and Kiwanis Clubs are not real America around here 
for 3 months or maybe more. I finally said, you know what, with my 
colleagues saying, ``You are wrong, Shadegg. They are real people.'' I 
said I am going to test this. You know where I was at 2 o'clock 
yesterday afternoon? I grabbed one of my staffers. I said, ``We are 
going out.'' I called last Friday, told my scheduler to put time on my 
calendar. We went last Friday. We went to an ABCO, a grocery store in 
my district, we went to a Walgreen's, a drug store in my district on 
the east side of my district. The east side of my district is a pretty 
good side of the district. They have some money. They are 

[[Page H 10711]]
comfortable with life. They are doing all right. I started asking, ``We 
have got this debate going on.'' I stood in one corner and he stood on 
the other and in front of a different store. We talked to them. We 
stopped everybody who would talk to us. We asked, ``We have got this 
debate going on in Washington. Do you think we should be focused just 
on deficit reduction, this huge deficit we have that does bear on our 
children and grandchildren, or do you think we ought to also be doing 
tax cuts?'' Well, on the east side of my district, kind of an even 
split, although somewhat favoring tax cuts. Interesting, these people 
said, ``I need tax relief.''
  As a matter of act, I did some verbatims from them. We took down 
notes on what they said. One lady said, ``Tax cuts are always good for 
people.'' Another one said, ``The average person is paying too much in 
taxes, but I don't think we will ever see a tax cut.''
  So you know what we did after the first half-hour or 45 minutes at 
that location? We drove across to the west side of my district. Now you 
are in a more working-class society. You are in America. You are where 
people are struggling to get out of bed and pay their bills, and the 
numbers were dramatic. In front of the store where I stood, 11-to-1 was 
ratio; for 12 people I talked to, 11 said, ``I need tax relief.''

                              {time}  2045

  You talk about our friends on the other side of the aisle talking 
about tax cuts for the rich. This is not a tax cut for the rich. This 
is a tax cut for Mr. and Mrs. America who just got slapped with a tax 
increase by Bill Clinton. You know what he said? He looked the American 
people in the eye, just like I am looking you in the eye, Jack, and he 
said ``We need a middle class tax cut.'' And you know what? He broke 
his word. And you know who is paying for it? Those people I was talking 
to on the working class side of my district, where they are struggling 
to get their kids out of bed in the morning, get them fed, get them to 
school, get them home and get their homework done, and get back to work 
again tomorrow. 11 to 1 they said we need a tax cut.
  My staffer across the aisle, in front of a MegaFoods, as a matter of 
fact, that is a kind of get-groceries-cheap, those people are hurting, 
17 to 1 was the ratio in front of that store.
  Overall, we talked to 55 different individual people. Of that 55, 8 
said they ought to be looking just at, said you and I and our 
colleagues watching tonight, ought to be looking at deficit reduction. 
32 of the 55 said they wanted deficit reduction and tax cuts. 13 of the 
55 said ``I need a tax cut. I do not know about the deficit. I know I 
am going under.''
  Let me read you one of those quotes. ``I pay taxes on everything. I 
just barely scrape by as it is. I need a tax break.''
  The bottom line, the number was out of 55 respondents, 45, or 82 
percent, said they needed a tax cut, either as part of deficit 
reduction or as a part of just lowering the burden on them. Why? 
Because they cannot bear the burden any longer. They are not 
undertaxed.
  You said, Frank, not many of them come up to us and say ``I am 
undertaxed.'' You know, the truth is, a great philosopher once said 
America is great only because America is good. If America ever ceased 
to be good, it will cease to be great.
  America is good, and the average taxpayer does not want to walk up to 
you and say ``I need a tax cut,'' because he cares about the other 
people in society who are not doing quite as well as he is. But you 
know what? For him bucking up and not coming to us and saying ``I need 
a tax cut,'' in his heart of hearts he is struggling to get through, 
and we are making him pay bills for all kinds of things for which there 
is no justification.
  I cannot tell you how many people in that conversation came up to me 
and said ``Well, I pay my taxes, and I am not too worried about it, 
but, boy, I hate the way you guys spend it.''
  They hate the way we spend it. They do not have faith any longer. We 
have said as a party, and I am going to get partisan, for a long time 
we have said that the Federal Government is too big and it taxes too 
much and it spends too much. Before we do tax cuts, we have been doing 
something about cutting spending. And that is part of what we believe 
in.
  But you know what? We told them for 40 years we also believed they 
were overtaxed. Now it is time to prove it. And that side of the aisle 
that said these are tax cuts for the rich, they are dead wrong. They 
are tax cuts for middle Americans who need it, but who cares so much 
about their brothers and sisters, they ain't raising it.
  Mr. KINGSTON. If the gentleman will yield, let me say this: After the 
Reagan tax cuts in 1982, the revenues were $500 billion. At the end of 
10 years, they were over $1 trillion, with 18 million new jobs.
  Mr. SHADEGG. Revenues will grow.
  Mr. KINGSTON. Give money to the people, they buy more; when they do, 
goods and services, demand goes up, small businesses have to expand, 
jobs are created, more revenue goes in. So, frankly, if I was a 
dictator and did not care about the people, I would have a low tax rate 
just to keep the economy going.
  Mr. SHADEGG. Mr. Speaker, I implore my colleagues, if you are in 
doubt about this vote two days from now, do what I did: Call a staffer 
back in your district, if you cannot get home, and do what I did. Go 
stand in front of a grocery store, go stand in front of a K-mart, or 
have a staffer do it, and ask them. And they will tell you, if you let 
them open up to you, they are overtaxed and they need a break. This is 
the right thing to do for America and for the American people and the 
American taxpayer.
  Mr. RIGGS. Mr. Speaker, I thank the gentleman for organizing this 
special order and look forward to joining him again on the floor over 
the next couple days. I would just point out, our budget reconciliation 
balanced budget plan clearly shows we are going to keep our promise to 
the American people to balance the Federal budget for the first time in 
25 years, without touching Social Security and while providing the 
American people with much needed tax relief.
  Mr. GUTKNECHT. I would just close with a quote from Governors Weld, 
Engler, Thompson and Christine Todd Wittman, a letter they sent to 
Speaker Gingrich on March 31 of this year. ``As governor, we have all 
cut taxes. At the same time we have balanced our budget. We have not 
accepted the false dichotomy that claims governments at the State or 
Federal level can only balance their budgets or cut taxes but not both. 
There is no reason Washington cannot walk and chew gum at the same 
time, too.''
  We can balance the budget, if we are willing to limit the growth in 
entitlements, if we are willing cut discretionary domestic spending, as 
we have, by $44 billion this year. We eliminate over 300 departments 
and programs. And if we are willing to have a flexible freeze in the 
Defense Department, we can give tax relief to families and we can 
balance the budget, and the real winners will not be the rich. The real 
winners will be those blue collar folks out there, who get up every 
day, who do the work, who pay the bills. They are the glue, they are 
the mortar that hold the bricks of this society together. And they are 
going to be the big winners, because there will be more jobs, more 
income, lower interest rates and less debt only to them and their kids.
  I think we can all be winners. I do agree, I hope more Members on the 
other side will join us in this historic vote for the first time where 
Congress is going to balance its budget and we are going to give tax 
relief to families and make it easier for businesses to grow and invest 
and create more jobs.
  I want to thank you all for joining me tonight. This has been a great 
special order. I think this is going to be a very historic week for the 
American people.

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