[Congressional Record Volume 141, Number 165 (Tuesday, October 24, 1995)]
[Senate]
[Pages S15591-S15592]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE RECONCILIATION BILL

  Mr. PELL. Mr. President, as we all know, the Senate is about to 
embark on a massive reordering of national priorities under the rubric 
of the reconciliation process. In the short space of the 20 hours 
prescribed by statute, we will decide the fate of Medicare, Medicaid, 
welfare programs, education assistance, and a host of other Federal 
programs and agencies.
  We surely did not anticipate such abbreviated consideration of a 
sweeping reconfiguration of government when we enacted the 
Congressional Budget and Impoundment Control Act of 1974, which 
established the reconciliation process. It is regrettable that we must 
do so now, and I suggest that in doing so we exceed the spirit if not 
the letter of the act.
  But we are now confronted with the determination of the majority to 
proceed nonetheless, and in anticipation of the time constraints, I 
would like to state my continuing reservations about the bill. I have 
already expressed my distress and concern about the decimation of hard-
won Federal education programs and the emasculation of the Medicare and 
Medicaid programs.
  What remains to be said is that this mammoth bill embodies priorities 
in many other areas which are diametrically opposed to my own. It 
overturns decades of progress in social policy and it imposes a 
regressive tax plan that is both misguided and untimely. It bears 
unfairly on children, on poor people and on the elderly and the 
disabled. And it would undo environmental gains and open pristine 
wilderness areas to commercial exploitation.
  It would do all this in a headlong pursuit of a goal which I believe 
has been blindly accepted, namely the mantra that the budget must be 
balanced by a date certain. To my mind, this is an unrealistic 
objective that results not from careful and rational assessment, but 
from well-orchestrated sloganeering in the guise of the so-called 
contract devised by the House majority leadership. And that, I would 
submit, has led to false expectations in the electorate as well as 
among some legislators themselves.
  Far more preferable, in my view, would be a measured and continuing 
effort to reduce deficit spending, while at the same time preserving 
the essential gains in social policy of the last half century.
  It is unrealistic to assume, I submit, that some $900 billion can be 
cut from Federal spending levels provided under present law between 
1996 and 2002 without imposing unacceptable hardship on many segments 
of the population. Here, the arbitrary goal has dictated the cuts; 
again, the more rational course would be to to decide what can and 
should be reduced and then arrive at a figure.
  And it is equally unrealistic--and absurd on the face of it--that tax 
cuts of $245 billion could be proposed at the very time the stated 
objective is to reduce deficits. Inevitably, such as proposal suggests 
that spending cuts have been inflated to accommodate the tax cuts. It 
seems appalling to me that the proposed tax cuts will actually add to 
the deficit in some years, meaning that the Treasury will actually have 
to borrow funds to make up for the lack of revenue. Overall, these 
unwise tax cuts will add some $93 billion to the national debt, 
according to the Wall Street Journal.

  Here again, a far wiser course would be one of moderation. While I 
reject 

[[Page S 15592]]
most of the proposed tax cuts as untimely at best and pandering at 
worst, I would agree that there is one area of tax relief that could be 
reasonably undertaken at this time, and that is reduction in the 
capital gains tax rate. The provisions of the bill allowing individuals 
to exclude 50 percent of capital gains from taxation, while dropping 
the corporate capital gains rate from 35 to 28 percent, would cost the 
Treasury some $40 billion in revenue foregone over 7 years.
  As I see it, this would be a worthwhile expenditure. It would help 
release some $1.5 trillion in locked-up capital gains to pursue 
investment opportunities that create jobs and growth in the U.S. 
economy. By one estimate, this would result in a rise in gross domestic 
product of 1.4 percent and result in $12 million in increased Federal 
tax revenues.
  And I might note that the individual beneficiaries of capital gains 
tax relief are by no means limited to wealthy stockholders. A recently 
updated U.S. Treasury study shows that nearly one-half of all capital 
gains are realized by taxpayers with wage and salary incomes of less 
than $50,000. And these would include every homeowner who has benefited 
from an increase in the value of his house over recent years.
  Notwithstanding my support for this one tax provision, I must 
reiterate my view that the overall tax package is untimely and 
inappropriate. Together with the other major flaws of the bill, there 
is compelling reason to vote against the bill, and good cause for the 
President to veto the measure, as he has promised to do, in the 
likelihood that Congress approves it.
  Our task will not end there. Assuming the probability that the 
President's veto cannot be overridden, the real work will have to begin 
to devise a compromise that can be enacted. My hope is that reason, 
compassion, and responsibility will prevail and that the many excesses 
of this bill will be recast into a more moderate measure.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Jersey is recognized.
  Mr. LAUTENBERG. I thank the Chair.

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