[Congressional Record Volume 141, Number 171 (Wednesday, November 1, 1995)]
[Senate]
[Pages S16463-S16464]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE REPUBLICAN TAX PLAN

  Mrs. HUTCHISON. Mr. President, I appreciate hearing from my friend, 
Senator Thompson from Tennessee, who differentiates between the new 
Members and the not-so-new Members. And I do not know in which category 
I fall. But I am pleased to be on the same side of this issue because I 
think some of the new Members are standing up and trying to talk the 
way people are talking back home.
  I was really struck the other day when I was listening to C-SPAN in 
one of the call-in programs, and a woman called in with a very simple 
question. She said, ``My husband and I are working two jobs, and we 
make $25,000 a year. How is this going to help us?'' I think what 
Americans are saying is that it is the way Americans are talking. They 
are saying it is a legitimate question, simple and to the point. And we 
can answer her question, and we can give her a good answer.
  What happens to her? Under the new budget, a single mother with one 
child working two jobs making $15,000 a year will have more money to 
feed her family and make ends meet. Instead of an EITC check of $864, 
which is what she would get this year, next year under the Republican 
plan she will get a check for $1,425. If she has two children, that 
will go up to $2,488. So she is not going to pay taxes at all. It is 
going to be how much she gets as an incentive for doing what she is 
doing, and that is working two jobs instead of being on welfare. She is 
going to have the incentive of getting a check back from the 
Government, and not paying taxes, if she is a working mother with one 
or two children.
  What about the married couple? This is the woman who called into C-
SPAN the other day. For this year, a married couple with two children 
and an income of $25,000 will pay $929 in income tax. That is this 
year. With the new Republican budget, next year that couple will not 
pay taxes at all. Instead, they will get an EITC check of $171.
  So we are going to eliminate taxes on 3.5 million families that would 
pay taxes today, that will pay taxes for 1995--3.5 million families in 
America that are paying taxes this year under our plan will not pay 
taxes at all next year.
  That is what it means in real terms. This is what we are trying to 
do.
  In 1974, families spent 33 percent of their income on the necessities 
of housing, health care, and utilities. In 1995, that is 46 percent of 
a person's income, a family's income. We have heard people talking on 
the floor about what the real income is. People are making more. But 
they do not feel like their quality of life is as good. They do not 
feel like they are able to buy as much for their families, or go out to 
eat once a week anymore, or go to a movie once a week like they used to 
be able to do. Yet, they are earning more. What is wrong? That is what 
is wrong. Instead of 33 percent of their income going to necessities, 
it is 46 percent. That does not count clothes or food.
  So what we are trying to do is put the money back into the pockets of 
our families, and we are putting money into the pockets of our working 
poor.
  Let us talk for a minute about the marriage penalty. Right now in our 
country, unfortunately, we have a marriage penalty. We should be 
encouraging young couples to get married. But, instead, we discourage 
them with a marriage penalty.
  I heard someone on the floor say, ``Oh, if we can do away with the 
marriage penalty, it will cost the Treasury $25 billion.'' Well, the 
Wall Street Journal, I think, puts it in perspective. They said wait a 
minute. To do away with the marriage penalty will save the taxpayers of 
America $25 billion.
  This is money that belongs to the person who worked for it. It does 
not belong to the Treasury. It belongs to the person who worked for it.
  Now, everyone in our country is here because we want to pay our fair 
share. 

[[Page S 16464]]

 We want to participate in paying taxes for the things that we cannot 
do ourselves. Everybody has that attitude. It is when the taxes 
encroach so much on the quality of life and when the family does not 
really see what that does for them that we start getting people saying, 
``Wait a minute. I am paying 39 percent; I am paying 27 percent; I am 
paying 15 percent,'' whatever it is, ``and I do not see the results. 
And I don't feel that my taxpayer dollars are being spent wisely.'' 
That is when people step up and say, ``Let's put this in perspective.'' 
And that is what we are trying to do.
  Under the Republican plan, we increase the standard deduction for 
married couples that are filing jointly. By the year 2005, the marriage 
penalty will be eliminated for couples that do not itemize their 
deductions. That is the right approach. That is encouraging families.
  Also encouraging families is homemaker IRA's. This is something that 
I and other women Members on both sides of the aisle have been very 
active in pursuing, and that is because we are saying we value the 
American family unit. The family unit is the core of our society. And 
yet, if you are a homemaker working inside the home, doing your part to 
strengthen society, you cannot set aside $2,000 a year in an IRA for 
your retirement security. If you work outside the home, you can. But if 
you work inside the home, you cannot.
  We are going to change that with the budget reconciliation package 
that has passed both Houses of this Congress. We are saying the 
homemaker makes a contribution to the strength of our country that is 
every bit as important, if not more so, than the contribution made by 
people who work outside the home.
  So we are going to correct an inequity that has been in our system. 
That helps the one-income working family. Many people sacrifice for the 
homemaker to stay home with the children. And when they sacrifice, they 
also are going to have to make a sacrifice for retirement security, and 
I think that is wrong and so did a majority of both Houses of Congress.
  Then there is the homemaker who becomes displaced after 25 years of 
marriage; she becomes divorced or she loses her husband. She, too, is 
discriminated against in retirement security because she does not have 
that nest egg to build up for her retirement, which she is entitled to. 
This is in the bill that has passed both Houses.
  We also add to other investment savings opportunities. America has 
one of the lowest savings rates of any industrialized country of the 
world. Why is that? One reason is we tax it twice. We tax savings when 
you earn it, and we tax it while it is in a savings account. It is 
taxed twice. Most industrialized countries do not do that.
  We are going to provide more savings alternatives in this bill so 
people can put money into an account and the savings will mount tax 
free, so that when they need it, when their income levels are such that 
they need it, they are going to be able to pull it out tax free. Or, if 
they do not wait until retirement because they have an emergency need 
such as education for children, or first home or health care emergency, 
that is going to be provided for as well.
  So it gives people an incentive to save because they know they can 
draw it out for an emergency and yet they are going to be able to earn 
money tax free either for their retirement security or for their 
emergency needs. This is going to be a savings incentive bill that is 
also, besides helping the family that is trying to take care of its 
retirement needs or emergency needs, going to spur economic activity 
which creates new jobs for people coming into our system.
  So this is a new approach. That is for sure. And many times when you 
have something new, people are scared. They do not know what to expect, 
and so they wonder: what is all of this new action going to produce? We 
are trying to have some simple and basic themes. We are trying to help 
to encourage the American family. We are trying to encourage the 
working families that are having a hard time making ends meet but they 
are not on welfare. They are working to make ends meet, and we are 
encouraging them by taking more of them, 3.5 million more of them off 
the tax rolls completely. We are going to do away with the marriage 
penalty. We are going to try to spur investment to create new jobs in 
this country. It is very simple. We are trying to save Medicare for our 
citizens that are on Medicare now as well as for the future.
  The Medicare trust fund is going broke. The President's own Cabinet 
people say it is going broke. Our plan is going to save it--not by 
cutting it but by slowing the rate of growth from 10 percent per year 
to 6.4 percent per year. Even 6.4 percent per year growth is more than 
we have in the private sector health care industry now. That is why we 
think it is reasonable. We are going to save the system. But we are 
going to do it over a 7-year period so that we can grow gradually 
rather than having a meat-ax approach. We are doing the responsible 
thing for this country. We are also keeping a promise. We are doing 
what we said we would do. We told the people in the 1994 election: Here 
is what you can expect if you vote for me. The people did vote for us, 
and now we are giving them what they expected and what they asked for.
  Did we make a few mistakes? Probably. Do I agree with everything in 
the bill? No. Probably no one on this floor does either. But we can 
afford to come back again and correct mistakes that we might have made. 
What we cannot afford to do is nothing. That is the only mistake that 
we cannot afford to make. We cannot afford not to fix the Medicare 
problem. We cannot afford not to balance this budget. And we cannot 
refuse to keep the promises that we made--for tax cuts, for encouraging 
the American family, for encouraging the working families of our 
country. It is going to help the working people of our country and the 
elderly as we save the Medicare system.
  I thank the Chair. I thank him for his leadership, and the Senator 
from Wyoming and others who are speaking to try to set the record 
straight. It is scary. There is no question that people not knowing 
what to expect are afraid. We have to let people know exactly what we 
are doing and hope that their common sense makes them understand that 
this is going to be good in the long term for our children and 
grandchildren so that we do not give them this $5 trillion debt that we 
are bumping up against in 2 weeks in this country.
  I thank the Chair.
  Mr. THOMAS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. THOMAS. Mr. President, I thank the Senator from Texas.
  I think it is extremely important that we walk through this bill; it 
is a large bill; it covers lots of things; but to talk about how it 
will affect each of us as citizens of this country. And so I 
congratulate the Senator on doing that.
  Let me just observe that one of the principal things we are doing is 
thinking about young people, is talking about what kind of shape we 
want this country to be in when we go into a new century. We have maxed 
out on our credit card. We charged it to the young people who are 
coming, and it is time we do something about that.
  I now yield our time remaining to the Senator from Washington State.
  Mr. GORTON. Mr. President, I have been informed by the Senator from 
Missouri that he has a brief interruption which he would like to make. 
I yield to him for that purpose.
  Mr. ASHCROFT addressed the Chair.
  The PRESIDING OFFICER. The Senator from Missouri.

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