[Congressional Record Volume 141, Number 204 (Tuesday, December 19, 1995)]
[House]
[Pages H15167-H15168]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  JOINT ECONOMIC COMMITTEE REPORT SHOWS BALANCED BUDGET WILL IMPROVE 
                             FAMILY INCOME

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from New Jersey [Mr. Saxton] is recognized for 5 minutes.
  Mr. SAXTON. Mr. Speaker, just a few minutes ago the Speaker of the 
House and the President concluded a meeting on which we hope there was 
substantial progress on negotiations toward a balanced budget.
  I take this opportunity this evening to speak of a Joint Economic 
Committee report which shows clearly that there is a marked effect on 
family income and on the economic status of a family because of our 
movement which will eventually conclude in a balanced budget.
  First, Mr. Speaker, it is important to point out, and this is extra 
from the report that I want to talk about today, that the individual 
share of the national debt that we have collectively accrued for each 
of the 280 million people who live in this country is about $18,000. 
That is right, for every man, woman, and child who is a citizen of the 
United States of America, the individual share of the national debt 
amounts to just about $18,000.
  To bring that close to home, to let us see clearly what it means to 
each person, obviously, off in the abstract someplace there is a 
problem because there is an $18,000 debt, but it is kind of out of 
sight until we understand that when we pay our income tax bill each 
year there is interest that must be paid on that $18,000 debt.
  If I went down to the bank to borrow $18,000 and the person at the 
bank said, ``OK, Mr. Saxton, we will lend you the $18,000, but you need 
to know that you have to pay interest on it,'' the interest on that 
$18,000 note that I would take out would amount to somewhere, if it 
were a 7-percent note or thereabouts, it would amount to about $1,060 a 
year that I would have to pay on that $18,000 loan that I took out at 
the bank.
  That is precisely what happens with the $18,000 that we each owe the 
Federal Government. When we pay our Federal income taxes each year, on 
average, about $1,060 goes to pay the interest on our $18,000 share of 
the national debt. Of course, for an average family of four, that gets 
a little expensive, because $1,060 times four comes out to about 
$42,040 a year. So there is a definite economic impact on each and 
every individual and on each and every family.
  Further, the Joint Economic Committee Report, which Members have 

[[Page H15168]]
  access to by calling my office, the Joint Economic Committee report 
that we published shows that there is a further impact on each American 
family that amounts to a very significant amount of money. As a matter 
of fact, it amounts to about $2,308 a year. It is interesting to see 
how this report takes us there, because all of our families have 
certain things in common. If your individual family does not face these 
exact facts, you will at least be able to relate to them, because they 
are not uncommon.
  For example, we believe that balancing the budget, and most 
economists believe that balancing the budget and Alan Greenspan 
believes that our balancing the budget will have a significant impact 
on interest rates. As a matter of fact, on most interest rates they are 
projecting about 2.2 percent lower at the conclusion of our 7-year 
balanced budget plan. So in the plan that we passed, and we provided 
for that economic benefit.
  For a family that has a mortgage on their home, a $100,000 mortgage, 
as is used in the case here, and the interest rate drops by 2 percent, 
it amounts to a whopping $1,456 a year in savings on that home 
mortgage. So we jump right out front with a big savings for the 
individual homeowner of about $1,456.
  It also would not be unusual for a family of, let us say, three, as 
is the case in this example, for a family of three, it would not be 
unusual for that family to have a student loan. If we reduced the 
interest rate on that student loan, like we did for the interest rate 
on the home mortgage, we see here there would be an additional $50 a 
year in savings, another significant amount, as we add up this total 
pie.
  It would not also be unusual for a family like our family to have a 
car loan. That car loan at $15,000 and a lowered interest rate by 2.22 
percent would produce a savings of $108 a year.
  In the plan that we passed to balance the budget, as Members will 
recall, we had a $500 per child tax credit. So in this family, you see, 
we have another 500 savings. There would also be some savings or some 
additional income because we know that if we put our fiscal house in 
order, it will have a positive effect on our economy. We believe that 
it will produce jobs, and we also believe it will produce higher rates 
of wages, higher rates of pay, so our economist friends projected that 
additional income would amount to about $194 a year.
  Adding all of these savings up from a better fiscal situation for our 
government and a better economic situation for our country, in actual 
savings for American families, we come up with a net savings of $2,308 
a year for this family of three.
  The conclusion that we almost draw from this, Mr. Speaker, is that 
the facts presented in this analysis, which, again, is available by 
calling my office, lead to but one conclusion: The price of higher 
spending and greater debt accumulation is far too high not to balance 
the budget. Refusing to bring spending in line with revenue will cost a 
typical American family $192 a month, and over $2,300 a year.
  So I invite all of my colleagues and anyone else on Capitol Hill or 
around the country that is interested to give a call. We will be happy 
to send out a copy of this economic analysis, which shows these facts 
very clearly.

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