[Congressional Record Volume 141, Number 176 (Wednesday, November 8, 1995)]
[House]
[Pages H11914-H11915]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          THE 7-YEAR BALANCED BUDGET RECONCILIATION ACT, 1995

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentlewoman from California [Mrs. Seastrand] is recognized for 5 
minutes.
  Mrs. SEASTRAND. Mr. Speaker, it is an exciting time in my estimation 
to be a Member of this House of Representatives, because 25 years or so 
have passed since we talked about balancing a budget for our Nation. I 
would just like to remind people why we need a balanced budget for 
America.
  I have two children. My son Kurt is 25. He graduated from college. He 
is a new entry into the job market, concerned about perhaps getting 
married, having a family and buying a home. My daughter Heidi is going 
to be graduating from college this semester, and she is very concerned 
about entering into the job market. Will there be opportunities for 
her, as there have been perhaps in the past for our graduates from 
college?
  Sometimes we talk in terms I think in this House that really do not 
address the concerns of people back home. I would just like to remind 
Californians back home that overall, American taxpayers pay almost 
$3,300 billion just to service the debt we have already accumulated, 
and that every child born in America today will be greeted with a tax 
bill of $187,000 just to service the debt over his or her lifetime, an 
amazing amount of money.
  The national debt as of 2 days ago, and as we know it is ticking 
away, was $4,984,737,460,958.92. Now, I do not know about people who 
are home on the central coast of California. All I can say is my 
checkbook, my personal checkbook, does not go up to those figures. 
Sometimes it is hard to relate with these figures. Sometimes it is hard 
to relate with these figures, but I would like to remind the people, 
especially on the central coast of California, when we talk about why 
it is important to balance the budget and to achieve a balanced budget 
so we can pay off the creditors of our Nation, and perhaps bring down 
the interest rates. The experts tell us we are going to see a drop of 2 
percent in interest rates.
  I would like to tell Californians that that means 497,000 new private 
sector jobs in California. We have suffered very much in California. We 
have been in the doldrums. I know what it means for people looking for 
jobs. It is very disappointing to know that in the past, the moving 
vans were leaving California, and not many people were using those vans 
to move back into California. But that is going to mean that the 
taxes of California families are going to be reduced by $23.8 billion 
over the next 7 years.

  What does it mean to, perhaps, families looking at a home in Santa 
Barbara County, one of my counties in my district? A 2-percent drop in 
interest rates means that an average 30-year home mortgage will save 
families, as I said, in Santa Barbara County, my southern constituents, 
$111,000 over the life of a loan for a $225,000 home.
  People might say, ``My gosh, $225,000.'' I might remind people that 
in Santa Barbara, this is an average type cost for a home.
  In San Luis Obispo, the median price for a home in 1995 was $163,000. 
Again, if we were to look at a 30-year home mortgage, we are going to 
save people with a 2-percent reduction in mortgage rates nearly 
$100,000 on a 30-year home mortgage, so it is very important for our 
families.
  We have two big universities, Cal Poly in San Luis Obispo and the 
University of Santa Barbara in Santa Barbara. I know our students are 
looking at student loans. Let me tell you, a 2-percent drop in interest 
rate on an average 10-year student loan of $11,000 means that a 
graduate is going to save $2,160 over the life of the loan. Maybe there 
are some people out there that think, ``Well, these are 10- and 30-year 
type loans we are talking about.'' On 

[[Page H 11915]]
an average 4-year car loan of $15,000, a 2-percent reduction in 
interest rates will save families $9,300 over the life of that loan.
  I would just say that, overall, we are going to save dollars in our 
Republican balanced budget plan, and I would remind my home State of 
California that total Federal spending in the Republican balanced 
budget plan will increase, and I want to underline that, increase, a 
plus sign, from $177 billion in the fiscal year of 1995 to $215 billion 
in the year 2002, an increase of 22 percent.
  Over the past 7 years, the Federal Government's spending in 
California was $1.1 trillion. Under our plan, the total Federal 
spending in California will be $1.46 trillion, an increase of 31 
percent. So while we hear a lot about cuts of this budget, what we are 
trying to do is slow that growth, the rate of growth down.
  And Social Security payments to my senior citizens? In California we 
are going to see an increase of $15.9 billion over the next 7 years. 
Medicare payments to Californians will increase $9.2 billion over the 
next 7 years.
  All of this is important to a State that, as I had mentioned earlier 
suffered, and we want to see California yet again become the Golden 
State. I am just looking forward in the next few weeks to discuss the 
balanced budget and to see that we do vote for a balanced budget in the 
next 7 years.
  Why the need for a balanced budget?
  Each year American taxpayers pay almost $300 billion just to serve 
the debt we have already accumulated.
  Without the Seven Year Balanced Budget Reconciliation Act, the share 
of the $1.2 trillion in additional new Federal debt placed directly on 
the backs of California's children over the next 7 years will be $140 
billion. Each child born in America today will be greeted with a tax 
bill for $187,000 just to service the debt over his or her lifetime.
  The national debt as of November 6, 1995, was $4,984,737,460,958.92.


      effects of spending cuts of the seven year balanced budget 
                           reconciliation act

  Although the doomsayers will have you believe otherwise with their 
false scare tactics, the Congress is not imposing draconian cuts; we 
are just curbing the amount of wasteful spending Congress has been in 
the habit of authorizing over the past 40 years.
  Our Medicare Preservation Act saves Medicare from bankruptcy, keeping 
our Government's commitment to traditional Medicare. It increases the 
average per beneficiary spending from $4,800 in 1996 to $6,700 in 2002. 
The Preservation Act simply slows the rate of growth of Medicare.
  Under the Republican balanced budget plan, total Federal spending in 
my home State of California will increase from $177 billion in fiscal 
year 1995 to $215 billion in 2002, an increase of 22 percent. Over the 
past 7 years, the Federal Government spending in California was $1.1 
trillion. Under the Republican balanced budget plan, total Federal 
spending in California will be $1.46 trillion, an increase of 31 
percent.
  Breaking these costs down.
  Social Security payments to Californians will increase $15.9 billion 
over the next 7 years.
  Federal welfare spending for food stamps, child care, cash welfare, 
child protection, school nutrition, and other such programs will 
increase $40 billion over the next 7 years.
  Medicare payments to Californians will increase $9.2 billion over the 
next 7 years.
  Medicaid payments to California will increase $3.4 billion over the 
next 7 years.


 long-term effects of the seven year balanced budget reconciliation act

  The balanced budget legislation will put our financial house in order 
while, it is estimated, creating 6.1 million new job opportunities in 
the early part of the 21st century. Income per family will rise by 
$1,000 a year and interest rates will decline by up to 2 percent, 
making loans for homes, cars, education, and start-up businesses more 
accessible. Most important of all, a balanced budget will give our 
children and children's children a higher standard of living, more job 
opportunities, and a country free from ever-increasing debt.
  Again, breaking down the long-term benefits of this measure:
  A drop of 2 percent in interest rates will create 497,000 new private 
sector jobs in California; in addition, it will reduce the taxes of 
California families by $23.8 billion over the next 7 years.
  A 2-percent drop in interest rates means that an average 30-year home 
mortgage will save families in Santa Barbara County, CA, my southern 
constituents, $111,000 over the life of the loan for a $225,000 home. 
This is the median price for a home in that county in 1995; my northern 
constituents in San Luis Obispo County where the median price of a home 
in 1995 and $163,000 would save nearly $100,000 from a 2-percent 
reduction in mortgage rates.
  On an average 10-year student loan of $11,000, a 2-percent reduction 
in interest rates means graduates will save $2,160 over the life of the 
loan.
  On an average 4-year car loan of $15,000, a 2-percent reduction in 
interest rates will save families $900 over the life of the loan.
  Lastly, I would like to elaborate on Chairman of the Federal Reserve, 
Alan Greenspan's thoughts on the GOP goal of balancing the budget by 
2001.
  In a speech earlier this month to the Concord Coalition, Greenspan 
said he believes that ``progress this year in coming to grips with the 
budget deficit has been truly extraordinary.'' He attributes falling 
long-term interest rates with this recent progress.
  In addition, Chairman Greenspan stated that ``Unless the budget 
deficit is brought down before foreign funds become increasingly 
costly, domestic investment will be impaired, economic growth will 
slow, and pressure on monetary policy to inflate could re-emerge.''
  With such rosy predictions of the economic effects of our plan, I ask 
the doomsayers what are the true draconian effects of our plan to 
balance the budget over the next 7 years? Are your concerns legitimate 
or are they simply false scare tactics motivated by envy for not having 
your own legitimate plan? I tend to believe the latter.
  In summary, the Seven Year Balanced Budget Reconciliation Act 
incorporates the most dramatic changes in Washington in more than 40 
years. It balances the budget in 7 years, provides significant tax 
relief to American families, preserves, protects, and strengthens 
Medicare and replaces the current welfare bureaucracy with 
compassionate solutions that restore the dignity of work and strengthen 
families. This legislation provides a better future for our Nation's 
children. Thank you, Mr. Speaker.

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