[Congressional Record Volume 142, Number 12 (Tuesday, January 30, 1996)]
[House]
[Pages H963-H969]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     REMAKING AMERICA THE RIGHT WAY

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the Chair recognizes the gentleman from New York [Mr. Owens] 
for 60 minutes.
  Mr. OWENS. Mr. Speaker, the front-page article of the New York Times 
today, which talks about the CIA, has implications for the war to 
remake America that is going on in this Capitol now. Speaker Gingrich 
has declared that politics is war without blood, and they have waged a 
relentless war.
  My colleagues who spoke before about the threat of a default have 
indicated how serious this war is. The threat of a default is very 
serious. A default itself, of course, would be a disaster, but even a 
threat shakes the confidence of the world economies in this country and 
shakes the confidence of Americans.
  Already the confidence of Americans has been shaken in their 
Government by two shutdowns of the Government. So I think it is very 
serious.
  The following article that appears on the front page of the New York 
Times certainly has implications for what is going on with respect to 
streamlining and downsizing the expenditure side of the battle to 
remake America. It also has very serious implications with respect to 
the revenue side of the battle to remake America.
  The New York Times article of today, January 30, says that a secret 
agency's secret budgets yield lost billions, officials say. Let me 
repeat that. A secret agency's secret budgets yield lost billions, 
officials say. Budgets, not just one budget. This secret agency has 
several budgets, and it has lost billions. The lost billions have been 
discovered, fortunately, at least as far as we know nothing has been 
stolen and whisked away from the American taxpayers, but it is there.
  This $2 billion slush fund, you know, with the Super Bowl for 
football over, 

[[Page H964]]
but this $2 billion slush fund at the CIA is the super blunder, the 
symbolic super monster of this year's policy struggles. It is a symbol 
that we ought to take a close look at.
  Mr. Speaker, how can an agency of the U.S. Government have $2 billion 
lost in secret funds? How can an agency that has several different 
budgets, and the head of the agency, not know that those budgets exist?
  It is worth reading some sections of this article. I will not read 
all of it, but Mr. Speaker, I ask unanimous consent to enter the 
article in the Record.
  The article starts by saying that the National Reconnaissance Office, 
the secret agency that builds satellites, lost track of more than $2 
billion in classified money last year, largely because of its own 
internal secrets, the intelligence officials say. That they lost $2 
billion, it means obviously that that is $2 billion that they did not 
need, $2 billion that they did not spend.
  This threat of default looms because we have a group in control of 
the Congress, the Republican majority in control of the Congress, that 
is threatening to push the American Government into default because 
they want their version of the remaking of America to prevail. That 
version of the remaking of America is, they say, concerned with cutting 
the cost of Government, cutting the cost of Government, streamlining 
Government, downsizing Government.

                              {time}  1800

  The President says the era of big government is over and we all agree 
that the era of big government should be over. But when you examine 
today's article on the front page of the New York Times where an agency 
of the Federal Government has a $2 billion slush fund, then you wonder 
where is this streamlining taking place.
  The implications of a blunder here are very important. We must stop 
and take a close look.
  It says to us that if you have an agency of the government that has a 
$2 billion slush fund that has just been discovered, obviously $2 
billion that they did not need, then the streamlining process is not 
really taking place across the board. In fact, the places that have the 
most money obviously are not being streamlined. The downsizing is not 
taking place. There is some kind of hypocrisy going on here. It says to 
us that the era of big government is not over.
  The continuing resolution that was passed last Thursday did not touch 
the CIA budget at all. Last Thursday we passed a continuing resolution 
that keeps the Government in business, I think for about 45 more days, 
and that continuing resolution in my opinion sets the pace, sets the 
tone for what is probably going to prevail for the rest of this year. 
We are not going to move far from those figures, those numbers that are 
passed in that budget.
  I am very dismayed, very disappointed, very angry because that 
continuing resolution cut the budget for education by $3.1 billion. The 
education budget has been cut. The people who want to remake America, 
the Republicans in the majority, have won. They have cut education.
  They said they wanted to cut the Department of Education. They went 
after education with a vengeance, despite previously we have had 
bipartisan support for education. President Reagan initiated the Nation 
at Risk study. President Bush can out with America 2000 and held a big 
conference and set goals. We have always had bipartisan cooperation.
  Suddenly this year the Republican majority came to power and 
education was the enemy, education was under attack. Abolish the whole 
department, they said, When they could not do that via authorizing 
legislation, they went after education in the appropriations process.
  So we have not only the administration of the Education Department 
being cut drastically but you have programs that are proven, the Title 
I program that provides funding mainly to disadvantaged communities 
across the country, but really 90 percent of the school districts in 
America get some part of the Title I funding. So Title I is cut by $1.1 
billion over an annualized figure. That cut stands. It stands as it is. 
Head Start is cut. The Head Start cut stands in the continuing 
resolution.
  What was won in the continuing resolution--and I guess in the present 
atmoshpere, with the revolution to remake America going forward, we 
have to be satisfied with any gains--we did get back Goals 2000, which 
had been reduced to zero in the appropriations bill by the Republicans 
in the House of Representatives here. We did get back some semblance of 
some other programs that were there. I think we got the funding for the 
summer youth employment program back. I am not sure.
  The continuing resolution says that any program that is not zeroed 
out or not specifically mentioned as a program to be defunded will get 
75 percent of the funds it got last year, so I hope the summer youth 
employment program is included. But the language bothers me because the 
summer youth employment program is not specifically mentioned and some 
other programs are mentioned. AmeriCorps is specifically mentioned as 
being one of those programs that will get 75 percent funding. There is 
a fuzziness here about the summer youth employment program which 
troubles me.
  It not only troubles me, it makes me very angry when I look at the 
headlines, the front page article of the New York Times. In the CIA 
slush funds, in the slush fund you have $2 billion that could have been 
applied to education and job training programs; $2 billion are there 
that could be applied to education and job training programs.
  In the continuing resolution, the CIA budget is not touched. The CIA 
budget has certainly been discussed on the floor of this House, because 
I have joined with some colleagues of mine to bring a resolution to cut 
the CIA budget by just 10 percent per year over a 5-year period, so 
that that $28 billion which is the figure that is acknowledged to be 
the minimum that is going to the CIA, the intelligence budget, that $28 
billion would be cut by $2.8 billion per year over a 5-year period and 
the agency would be cut to half its size within 5 years.
  We have had that resolution on the floor twice and it has been 
soundly defeated. We have never gotten more than 60 votes. I think 57 
is the highest number of votes we got for this agency that now has a $2 
billion slush fund that is discovered. So that $2 billion is very 
important.
  What does it say about the sincerity of the people who are staging, 
waging this revolution to remake America? What does it say if they have 
not even bothered to cut any portion of a CIA budget, which is a budget 
obviously which ought to be looked at closely, since it was fashioned 
during the cold war and the cold war was primarily a war with the 
Soviet Union. Half of all of our military and intelligence resources 
were directed at the Soviet Union. Why is it that after the Soviet 
Union has fallen, the CIA budget cannot be cut?
  Well, the Soviet Union's intelligence agency at least is no longer a 
secret agency totally. People say, ``Well, they're only revealing 
certain things to us.'' At least they reveal a few things to us.
  I do not want the CIA of the United States, the intelligence agency 
of the United States, to reveal all of its secrets to us. I would just 
like to know the budget. I think the American people deserve to see the 
budget. We do not want the safe houses revealed, we do not want the 
agents provocateurs named, the femme fatales, we do not want the 
information sources, we do not want any of that revealed. We would just 
like to see the budget.
  The budget is a secret. Because it is a secret, nobody can really 
deal with cutting the budget. It turns out that not only is the overall 
intelligence budget a secret but within the CIA, there are secrets 
within the agency that even the CIA Director does not know about.
  Listen to this article.
  ``Critics of the National Reconnaissance Office, the secret agency 
that builds spy satellites, lost track of more than $2 billion in 
classified money last year largely because of its own internal secrecy, 
intelligence officials say.''
  The National Reconnaissance Office is a secret agency within the 
whole intelligence operation. It is under the supervision and oversight 
of the CIA Director, but it has so much secrecy, even within its own 
confines, the reconnaissance agency, that it lost track of $2 billion 
last year.
  We have heard this story before when it was just germinating, and 
they 

[[Page H965]]
leaked out it was at least $1 billion and then some sources said $1.5 
billion. Now it is up to $2 billion.

  ``Critics of the reconnaissance office said today that the money had 
been hidden in several rainy day accounts that secretly solidified into 
a slush fund.'' Listen to the language. This is not some Monty Python 
novel. This is a description of what the statements were of the U.S. 
Government Intelligence Agency.
  ``Critics of the reconnaissance office said today that the money had 
been hidden in several rainy day accounts that secretly solidified into 
a slush fund.''
  How does a slush fund secretly solidify? How do rainy day accounts 
become a secretly solidified slush fund? Let us look at this from every 
angle. What is a rainy day for the CIA? What does that mean? Can the 
education agency have a rainy day fund? Can we have a rainy day fund 
for the School Lunch Program? What does a rainy day fund for the CIA 
mean?
  To read on from the article itself, ``The NRO,'' the National 
Reconnaissance Office--this is the National Reconnaissance Office which 
is a major part of the whole intelligence operation--``NRO's top 
managers themselves had no idea''--no idea--``how much money lay 
unspent in their classified coffers, Senator Arlen Specter, the 
Pennsylvania Republican who heads the Senate Intelligence Committee, 
and Senator Bob Kerrey, the Nebraska Democrat who is the panel's vice 
chairman, said in a prepared statement.''
  These two Senators have the oversight for the Agency, and they are 
telling us that not only did they not know but the top managers of the 
National Reconnaissance Office themselves said they had no idea. What 
kind of administrators are these?
  I once was the commissioner for the Community Development Agency of 
New York City. The Community Development Agency had responsibility for 
the antipoverty program which was so unpopular with the establishment, 
and we had audiences every day. You had one set of reports required 
from one set of agencies, another set required from another set. At one 
time it was pointed out that for the Community Action program 
nationwide there were 100 major auditors, while at that time the 
Pentagon had three auditors. This was pointed out by an article in the 
New York Times at one point.
  So I cannot see how a small community action program--I think at the 
height of the program we had $70 million in New York City. At the 
height of the program it might have been $1 billion in funding for the 
whole country. That program was constantly under scrutiny.

  How do you have a multibillion-dollar agency where the top managers 
themselves can have no idea how much money is unspent in their coffers? 
And how do you accept that calmly? How many people are being fired 
today? They used to close down agencies, and they used to bring in the 
FBI and investigate small agencies who had a few thousand dollars that 
they could not account for, and people sometimes went to jail for a few 
thousand dollars that they could not account for.
  How does it happen that the National Reconnaissance Office can have a 
solidifying slush fund where the top managers cannot account for it and 
we are not in motion all over this Capitol to deal with it? How many 
hearings are being called to look into this National Reconnaissance 
Office's top managers' failure to keep account of billions of dollars?
  Whitewater, we are spending millions of dollars to conduct a hearing 
on Whitewater. I am told that $60 million was lost by the taxpayers 
when they went in to bail out Whitewater. $60 million is a lot of 
money, I have heard that said over and over again in the Whitewater 
hearings. Yes; it is.
  I wonder why they did not have hearings about Silverado. Silverado 
was a savings and loan in Colorado that failed and they lost $2 
billion. The taxpayers lost $2 billion. We have not had any hearings on 
Silverado.
  Neil Bush, the son of former President George Bush, was involved. He 
was on the board of the bank of Silverado. I think he was later fined a 
few dollars for some conduct of that board with respect to the failure 
of that savings and loan association. But we never had hearings here in 
Washington to go on and on about Silverado. Whitewater is suddenly 
important.
  I mention this only because it is important for the American people 
to get into perspective what is going on. If a $2 billion failure of a 
savings and loan bank called Silverado did not elicit any hearings at 
all, then why do you think we are having hearing after hearing about 
Whitewater when $60 million is involved? There must be something else 
they are looking for. They are not concerned really about the integrity 
of the Federal Deposit Insurance Corporation. They are not concerned 
about the vast sums of money that Americans have had to spend to bail 
out savings and loan associations.
  The sum that we spent to bail out savings and loan associations is 
probably totaling something now close to $300 billion. Has any hearing 
been held to take a look at all of the Resolution Trust Corporation's 
operations? Where are we? Is there a progress report that is 
comprehensive about the billions of dollars we lost in the savings and 
loan associations?
  I know I am diverting from the subject, but the savings and loans is 
the biggest scandal in the history of mankind. Civilization has never 
had a swindle near that proportion.

                              {time}  1815

  Even this National Reconnaissance Office scandal pales beside the 
savings and loan scandal, but maybe we can comprehend the hypocrisy of 
what is going on if you come back to the National Reconnaissance 
Office.
  What I am saying is that while we are cutting Head Start by $300 
million, while we are cutting title I by $1.1 billion, which is one-
seventh of the total, while we cannot clarify the funding of a summer 
youth employment program that provides jobs for the poorest young 
people in the country, while we have difficulty doing all that, while 
this revolutionary majority in the House is threatening to push the 
country into default in order to get their way in cutting Government 
expenditures. While all this is going on, $2 billion cannot be 
accounted for, and there seems to be no excitement about it. I have not 
heard of a press conference being called by the leadership in the 
Senate or the House to deal with the implications of this super-blunder 
under the present situation.
  Let me just continue to quote from the article that appeared in the 
New York Times today, January 30:

       The amount of money was larger than anyone had known, well 
     over $2 billion, or more than the annual operating budget of 
     the State Department, several military and intelligence 
     officials said.

  Just the language, just absorb the description of what is going on, 
the amount of money is larger than anyone had known, well over $2 
billion, or more than the annual operating budget of the State 
Department.
  It is hard for people to conceive. What is $2 billion? What is $2 
billion? How many welfare families can live for a year on $2 billion? 
How many school lunches will $2 billion buy? How many persons on 
Medicaid can receive medical attention for $2 billion?
  Let me just continue with the article:

       One Senate Intelligence Committee aide described the 
     misplaced money as a severe accounting problem.

  I should say so, a severe accounting problem, ``that had grown 
because of a lack of accountability.'' Listen to the language, you have 
a severe accounting problem that has grown because of a lack of 
accountability, in turn created by the extraordinary secrecy under 
which the Reconnaissance Office works. A team of auditors was 
dispatched by the Director of Central Intelligence, John Deutsch, and 
found the money in a series of investigations nearing completion. 
Great, Mr. Deutsch, I hope we can recover some of that money. Maybe you 
can give $300 million to Head Start, maybe give a billion to title I. 
More than $1 billion was tracked down and identified last year, in 
1995, you know, less than 30 days ago.
  Now that the money has been found, it will be used to help pay for 
Pentagon programs, we are told. I do not know how those decisions are 
made. Does the Congress have to get involved in making, after you 
discover that you have squirreled away $2 billion? You know, in an 
atmosphere when we are trying to streamline and downsize Government, in 
an atmosphere where we want to show the American people that the era of 
big government is over, why do we let an agency that has squirreled 

[[Page H966]]
away a slush fund of $2 billion decide how they are going to spend it? 
When do we come in? Can we use this money to guarantee that there will 
be a summer youth employment program in the big cities of America where 
the poorest children are where they need those jobs? Can we use the 
money to guarantee we will not cut the Head Start Program?
  I am concerned, because the education deal that was made last 
Thursday was a shocking one. The protestations that came out of the 
White House, the leadership, everything indicated that education was a 
high priority and would be protected in negotiations, and then, you 
know, there was a rapid deterioration of the situation, and before we 
knew it, we were on the Floor voting for a continuing resolution which 
drastically cut education. It just so happened a few days before the 
continuing resolution was brought to the Floor there was a poll which 
was dramatized and publicized highly on the front pages of USA Today. A 
USA-CNN poll showed that the American people had rated education as the 
No. 1 priority concern. The No. 1 concern of the American people was 
education. I think that education had 68 percent over 67 percent of 
crime. Crime is still a great concern. Large numbers of people, 67 
percent said that was No. 1, but a slightly higher number said that 
education was a primary concern.
  People have great anxiety about their own education in order to keep 
up with the changing job environment, the downsizing, the layoffs. 
People have greater concern about the education of their children, 
whether or not their children are going to receive an education that is 
adequate to keep pace with this increasingly complex society. So when 
you consider that the polls that all politicians are supposed to look 
closely at, the polls show education is a No. 1 concern, it was just 
incomprehensible to me how we could come to the Floor and vote for a 
continuing resolution which cut education by $3.1 billion, there is 
something wrong in this democracy.
  On the other hand, we get news that the National Reconnaissance 
Office has squirreled away $2 billion.
  Let me just continue for a moment with the article:

       This same National Reconnaissance Office is the agency that 
     secretly spent more than $300 million on its new headquarters 
     outside Washington, a sum that the Senate Intelligence 
     Committee said in 1994 was a shock to discover.

  The Central Intelligence Agency, which has oversight responsibility 
for the National Reconnaissance Office which is part of the Central 
Intelligence Agency's responsibility, said it was shocked. The National 
Reconnaissance Office spent $300 million on a building. You know, this 
is a physical structure. They were actually building a building outside 
this city of Washington. I think it is near Dulles Airport. They were 
spending $300 million to build a building. That was a secret. How can 
you have a secret building? You must bow to the skills of an agency 
which can produce a secret building for $300 million, and the people in 
Washington who are supposed to oversee it not know anything about it.'' 
The reconnaissance office still operates in the deepest secrecy of any 
Government agency financed by the $28 billion a year black budget, or 
classified above top secret, or military intelligence programs. It 
spends an estimated $5 billion to $6 billion annually, outside analysts 
say. This sum varies from year to year depending on how many satellites 
the agency is funding or building.

  I am just going to conclude now the reading of the article by going 
to the last two paragraphs. ``Mr. Deutsch, who is now the head of CIA 
who has responsibility for oversight of the National Reconnaissance 
Office, states when Mr. Deutsch took over as director of Central 
Intelligence last May, he vowed to control these classified accounts. 
On paper he is the chairman of all intelligence agencies as well as the 
CIA. In reality, the Reconnaissance Office has been its own fief for 
more than three decades, the critics like Mr. Pike say. Mr. Deutsch has 
sought and may receive.'' He may receive, ``Mr. Deutsch,'' who is in 
charge of the intelligence operations of the United States, ``has 
sought,'' and the article says he may receive real power over the 
budgets he now controls in name only. Presidential and congressional 
panels studying the intelligence community are likely to recommend 
that.
  Just listen to the language in this great democracy of ours, with 
very responsible people making decisions. How do you get language like 
that, that the head of an agency may receive, even now with the scandal 
obvious and public is not certain that he will receive power over these 
secret budgets, and yet we go on with the blitzkrieg against programs 
for low-income people. The blitzkrieg rolls on.
  Welfare as we know it, aid to families with dependent children will 
fall in the next 10 years. Certainly when this continuing revolution is 
over, I do not expect to see aid to families with dependent children 
still standing as an entitlement. I am sorry to be pessimistic. All the 
protestations that are being made lead in that direction, in my 
opinion. I think that will fall.
  I hope we can protect Medicaid as an entitlement. It is very 
important to at least hold onto Medicaid as an entitlement, because it 
Medicaid is not an entitlement for poor people, then there is no hope 
ever of having universal health care.
  Education, I hope, can be renegotiated back to a level that is 
acceptable in terms of the continuation of Head Start and title I and 
some other very important programs in the labor budget, especially the 
Summer Youth Employment Program.
  I hope all of those things can go forward, but when you look at this 
phenomenon of the super blunder of the CIA which has received so little 
attention here, none of the members of the Republican majority 
leadership have made any statements about this, and yet they vehemently 
insist that school lunches must be cut, aid to families with dependent 
children must be cut, meaning the poorest children in America have to 
pass a means test, you have to prove you are poor before you can get 
the aid to families with dependent children, you know, all of these 
things are indications that this struggle, this war to remake America 
is about more than money. If they are really concerned about money, 
they would be very concerned about the CIA's $2 billion.
  The concern is not about money. The concern is about the destruction 
of a certain class of people. There is not a class war in America. 
There is a class massacre going on. A war means you have two contending 
parties.
  The poorest people in this country cannot defend themselves and they 
are being massacred by this new majority in the Congress. The massacre 
goes on. If we were concerned about streamlining government, we would 
be talking downsizing the Pentagon. We would have some rooms in the 
Pentagon available for the homeless soon.
  We would be talking certainly about the National Reconnaissance 
agency changing drastically. The last thing we would be talking about 
is cutting education if we were concerned about really an American that 
is going to go forward and be able to carry its own weight.
  Education is the primary tool by which that is accomplished. People 
help themselves when they get an education. In New York City, they have 
always understood that. Even during the Depression we had a city 
university which was totally free. During the Depression, where did the 
revenue come from to keep it a totally free university even during the 
Depression? Now, of course, there are tremendous cutbacks new tuition 
increases, et cetera.
  I want to spend the rest of my time, the second half of my 60 
minutes, discussion the implications of the CIA super blunder on the 
revenue side. You know, we have a discussion that ought to be always 
conducted with two major components.
  Where liberals or progressives have lost out in the past is that they 
have left the revenue discussion, the tax discussion, to the 
conservatives. Somehow that has been dirty business for us, and we have 
not spent enough time discussing revenue.
  The flat tax is a major issue within the Republican primary. Tax 
proposals were first initiated by Republicans. The dominant discussion 
is about ways in which really you can fashion the taxes, the revenue 
gathering process, to benefit the richest people in America. Where is 
the revenue counterproposal from the other side? Where are the 
proposals for revenue to be 

[[Page H967]]
gathered and how it should be gathered and how we can maintain a 
revenue stream that finances all programs that are important to the 
American people? And what does that CIA problem have to do with that?
  Well, the National Reconnaissance Office is an example of a 
tremendous investment made by the American people in new technology, 
new technology. Billions of dollars have already been poured into the 
National Reconnaissance Office. They use new technology. They got it to 
maximize the use of satellites and other electronic devices in the 
spying operations across the globe.

                              {time}  1830

  They perfect computers, they perfect radar. Everything that is 
happening in the state-of-the-art technology you will find in the 
National Reconnaissance Agency or the taxpayer-financed space program. 
As you have found it in years past in all sectors of the military, the 
Air Force, the Navy, the Army, they have perfected new technology with 
the dollars that Americans have generated through their taxes.
  So what does this have to do with revenue? A major problem we have in 
terms of the quest for new revenue or the quest for a revenue stream is 
that we are always talking in terms that are obsolete. The only place 
that new revenue can come from we believe is from the pockets of the 
American people. The workers must pay income tax, and income tax is the 
primary way we finance the Government.
  Should the income tax continue to be the primary way to finance the 
Government? I do not think so. Even if you have tax justice and 
corporations begin to pay more taxes, a greater share of corporations 
are now not paying their fair share of the income taxes. As I have said 
many times on this floor, individuals and families are paying about 44 
percent of the income taxes. Corporations are now paying 11.4 percent. 
Corporations at one time under Ronald Reagan in 1983 were paying as 
little as 6.4 percent of the total tax burden. That year, the tax 
burden for individuals and families went up to 48 percent.
  There are figures that need to be repeated over and over again. So we 
need to have corporations pay a greater share of the taxes, because an 
undue burden has been placed on families and individuals. A tax cut for 
families and individuals is long overdue. We need a tax cut for 
families and individuals.
  But can we get revenue which can pay for Medicare? Can we get revenue 
you need to pay for Medicaid? Can we get the revenue we need to pay for 
education? Can we get the revenue we need to pay for the system that 
President Clinton mentioned in his State of the Union Address? I think 
we heard him say in California they had a pilot project going where 20 
percent of the State schools would be wired up so they could 
participate on the information superhighway. They would be able to join 
the Internet and do other things because they have computers, proper 
wiring for those schools. The President also said by the year 2000, he 
expected all of the schools of America to be able to participate in 
this program. We are going to have all the schools wired up with 
computers, and they will be able to join the information superhighway 
by the year 2000.

  That is a great program. I heartily endorse it. I do not think we 
should reduce I in the meantime or Head Start, but we need to go 
forward with a program to lead our schools into the 21st century and 
have them become a part of the information superhighway.
  That is going to cost money. Any investment in education will cost 
money. No matter how much you downsize, as you should be doing in the 
Pentagon or should be downsizing in the CIA, the downsizing and the 
streamlining of our expenditures so that we get rid of the real waste 
in places like the CIA, we get rid of a $2 billion slush fund, that 
kind of downsizing will not end the necessity for more revenue.
  So we need a program. Progressives, liberals, and Democrats, and I am 
a liberal, proud to be a liberal, we need to tackle the revenue problem 
head on. I proposed in a bill that I introduced on October 24 of last 
year to create a Revenues Commission, a Creative Revenues Commission. 
The Creative Revenues Commission would facilitate the reform of the 
Federal tax system. The Creative Revenues Commission would go beyond a 
flat tax on the incomes of corporations or individuals and look at the 
whole situation.
  We are now in 1996. We are just 4 years away from the beginning of 
the 21st century. Let us look at the whole tax situation, look at the 
whole revenue producing situation. Let us determine whether or not we 
need to continue to throw overboard large segments of the population. 
Do we have to, in America, throw overboard young people that need an 
education and help from the Federal Government in order for their 
schools to function properly? Do we have to continue to throw overboard 
young people who do not have the proper wherewithal, for various 
reasons, and they need aid to dependent children? Do we need to 
continue to throw overboard elderly people who will have Medicare, but 
in the States Medicare is already being reduced? New Jersey just took 
away prescription allowances. New York took away certain benefits 
several years ago, eyeglasses, prescriptions, a number of things. More 
cuts like that are going to take place. Do we need to keep trimming the 
health care in order to have a viable economy in order to balance the 
budget?
  Balancing the budget is not my favorite remedy, but balancing the 
budget seems to have caught hold. Let us have a balanced budget. If we 
are going to have a balanced budget, then let us look at the revenue 
side and be more creative about the revenue we produce.

  So I introduced a bill, H.R. 2526, to create a Creative Revenues 
Commission. This commission will deal with the whole spectrum of 
possible revenue sources. In the findings we state that many proposals 
have been offered to reform the Federal tax system, including a 
national sales tax, a flat tax, a value-added tax, and a tax system 
exempting savings from taxation.
  These proposals have merit and they deserve to be examined. 
Nonetheless, none of these proposals address the fact that the Nation's 
tax burden has shifted dramatically over the past five decades from the 
shoulders of corporate America to the backs of American workers.
  Ways to correct this imbalance must be developed and implemented. For 
the first time in American history, median wages of full-time male 
workers have fallen for more than two decades, therefore making it 
necessary to reduce taxes on wages. For the first time in American 
history a majority of workers have suffered real wage reductions, while 
the per capital domestic product has advanced.
  Then I state, what is new. Technology advances have created important 
potential new revenue sources. Important potential new revenue sources 
have been created by technology. We can now derive revenue from the 
selling or leasing of the radio frequency spectrum.
  When I first proposed that on the floor of the House, a member of the 
majority later that day called it a joke. He said ``Here is a Democrat 
who proposes taxing the air above us.'' There is a spectrum up there. 
There are frequencies up there. There are valuable things up there in 
the air above us. The air above us is owned by all of the American 
people. I see no reason why we cannot derive revenue from the people 
who are going to use that for various profitmaking endeavors. Why 
should not the Government and all the people benefit from what happens 
to the air above us?
  These must be thoroughly explored. It was a joke, but I noticed that 
when the President came in with his balanced budget proposal, he had 
added quite a bit of money to the possible revenues to be derived from 
the selling or the leasing of the spectrum. So it is a joke that 
already has become a serious matter.

  I want it go further than just to look at the environment, the air 
above us. By the way, for the American people to derive an income from 
the air above us is nothing new. The land that was here when we got 
here, the Government still owns part of that land, and we are deriving 
some revenue from grazing lands, we are deriving tiny amounts of 
revenue from mining. All of those kinds of possible revenue sources 
have to be reexamined. A great debate has been waged here. The interior 
appropriations bill has been held up here because we are tired of 
having mining lands given away. Mines which bear millions of dollars of 
ore gold and various other substances, those mines 

[[Page H968]]
have been almost given away in the past 20 or 30 years because of deals 
that have been cut with often foreign mining companies. So we should 
realize revenue from those mines and from any other lands still owned 
by the Federal Government.
  The Government once regulated the way land was given out, the great 
land rush and stakes for land a number of processes were used to parcel 
out land in early America. I might note, however, that even after the 
slaves were freed by the Civil War and the 13th, 14th, and 15th 
amendments were passed, blacks were not allowed to lay claim to such 
lands. Nevertheless, the land was there and the Government regulated 
how the land was given out.
  So why cannot the Government regulate what happens to the air above 
us? Why can we not have as much income for all the people derived from 
what happens to the resources the Government still controls as we can? 
It belongs to all of us.
  What I am proposing in connection with the technology is a bit more 
complicated. I am saying that one of the things that the Creative 
Revenues Commission ought to look at is the establishment of a system 
of royalties. Royalties ought to be paid by companies that are 
benefiting from publicly financed research and development. The 
technology that is being used to make billions of dollars, and Wall 
Street is booming, technology stocks are way up, various other profits 
are being maximized by automation, by computerization, by 
miniaturization, all of these things were developed by the U.S. 
citizens through the financing of research and development in the 
military.
  We would not have radio as we know it today if the Navy had not taken 
a great interest in the new inventions related to radio. The U.S. 
Navy played a major role in the development of radio, and all the 
things that came from radio could not have happened without that.

  Radar was a military concern, and whatever happens with radar is a 
military product. All of these ventures were financed by the American 
people, by the taxpayers. We should be able to derive some continuing 
amount of money from the investment that the taxpayers made. There 
ought to be royalties on products that clearly come from a stream of 
research and development activities run by the Government.
  The National Reconnaissance Agency, which has all this money 
squirreled away, the National Reconnaissance Agency, which is wasting 
money, is also producing some very useful technological products. The 
satellites that they generated and developed and pioneered, satellites 
are now used in civilian purposes more than for military purposes. 
Satellites made it possible for 750 million people to watch the Super 
Bowl all over the globe. Satellites make it possible for us to 
communicate in a matter of minutes to all parts of the globe.
  Those satellites, privately owned up there, were made possible by the 
research and development costs financed by the American taxpayers. 
Every satellite ought to have some sort of surcharge on it. The profits 
made from the satellites ought to have an a surcharge, a royalty. 
Something should be done to derive some income from the investment made 
by the American people.
  In private life, in business, nobody makes investments and suddenly 
allows the abrogation of their investment, the returns on their 
investment. You make an investment ad you do not expect anybody to 
tamper with your right to receive the return on that investment to the 
degree you have invested. The American people have invested in 
technologies that are making tremendous amounts of profits, and there 
ought to be a royalty considered, some kind of way to tap into the 
products, the sales of each product, or to tap into the profits made on 
these products that are financed by the American people.
  There ought to be some laws related also to companies that have grown 
very big and as a result of technology have begun to absorb their 
competitors and establish monopolies. We have laws against monopolies. 
Why not take a look at monopolies and certain companies as they grow 
big, and if they have monopolies in certain areas and there are no 
competitors on the products they are selling, to the degree they lose 
the competition, perhaps they should have a surcharge, a surcharge on 
monopolies.

                              {time}  1845

  Mr. Speaker, maybe beginning at 25 percent when a company gets 25 
percent of the market, maybe we can begin a surcharge. Certainly if it 
has a 100-percent monopoly, it ought to be paying some kind of 
surcharge, which relates to the fact that its expenses are less. It has 
access to a market, total access to a market.
  All of these may seem like far-out ideas, but I wish to put them 
forward in order to have a creative revenues commission examine them. 
We do not need to continue to listen to the cries that the Medicare 
fund will be insolvent by the year 2002. The Medicare fund can be 
partially financed by other revenues if that is necessary. We do not 
need to listen to the cries that the American people cannot afford to 
invest in education.
  Sure, education is not one of the items mentioned as a function of 
the Federal Government in the Constitution. Education is not mentioned 
at all, but the promotion of the general welfare means that we have to 
do whatever is necessary to promote the general welfare.
  The national security is a major concern of the Constitution, and all 
avenues of the Federal Government, all of the agencies of the Federal 
Government are concerned with national security. Education becomes one 
of those ways in which the general welfare is promoted and the national 
security is maintained. We cannot survive, and I think it has been said 
over and over again that, probably education has become more important 
in our national security than the military might of America. The threat 
to America and its institutions, the threat to America and its economy, 
is no longer a military threat. Unless we are predicting that there is 
some superior intelligence in outer space that might come in, there is 
no threat on the Earth that makes it necessary for us to maintain the 
kind of military power that we have now, or to be fearful of ever being 
overwhelmed by any other military power.
  I know that all of us have read recently where certain planets have 
been discovered that we did not know about before. Obviously there are 
certain solar systems that are there that we did not know about before. 
The universe is larger and more mysterious than we thought it was. It 
is possible that out there in outer space there are some creatures who 
might be able to come in and attack the United States. That is a 
possibility. Maybe we ought to take a closer look at that.
  In the real world of the solar system that we inhabit right now and 
on the planet Earth, there is no force that can overwhelm America 
militarily, but there are forces at work all the time undermining our 
economy. Therefore, we should deal with the period between now and the 
year 2000 as a transitional period, a period where you can have maximum 
profits being made on Wall Street. Corporations are booming, going 
forward because technology is feeding the profits.
  We can have that at the same time we have maximum dislocations 
beginning in the workforce, at the same time that we have large amounts 
of workers that are being laid off. Those who are working find that 
their wages are stagnating. Those who are at the bottom of the level in 
terms of wages find that there is no way to get an increase in even the 
minimum wage.
  So, the creative revenues commission appointed by the President or 
appointed by the Secretary of Treasury, or some method by which we get 
some of the most experienced people in the country--experts in 
taxation, the economy, whatever--we need a cross-section of very 
brilliant minds. That commission would be allowed to come back with 
recommendations, given a finite period of time. It should be a short 
period of time.

  Instead of Steve Forbes being the expert on the flat tax, and the 
only people who can challenge him are candidates who are running 
against him with their own point of view and their own vested interest 
in wanting to knock down his version of the flat tax, let us have some 
kind of commission that every American voter and taxpayer can look at 
and make a determination as to what is reality, and 

[[Page H969]]
what is credible and what is useful. Let us have a commission that 
says, we have a National Reconnaissance Agency that can afford to hide 
$2 billion and nobody discovers it.
  If we have a National Reconnaissance Agency that is going forward 
creating satellites and new technology, spending billions of dollars 
per year, then not only do we need to look at downsizing that National 
Reconnaissance Agency and bringing it under control as we do every 
other aspect of Government, if we are going to have the end of the era 
of big Government with respect to expenditures, then certainly the CIA 
and the National Reconnaissance Agency ought to be part of the 
downsizing, part of ending the era of big Government.
  In addition to looking at the National Reconnaissance Agency and the 
superblunder and what the implications are, look also at the revenue 
implications, all of that investment by the American people in the 
National Reconnaissance Agency and how many ways can the American 
taxpayers realize a profit from their investment, a dividend from their 
investment? How can that investment pay off for us? How can we make the 
previous investments in technology through the space agency pay off in 
terms of revenues for the American people?
  How can we make the investment by the military in radar, in radio, in 
television, in computers? How can we make all of those investments pay 
off for the average American instead of just feeding billions of 
dollars into the coffers of the richest Americans who happen to be in a 
position to make use of the technology?
  Those are relevant points as we go forward contemplating, fearing a 
shutdown of the Government. There is going to be a default. The worst 
kind of shutdown would be a default. If the issue of that default is 
the determination of the majority party to get their agenda across, 
they want to downsize the Government, they want to streamline the 
Government, if this is the issue, then let the majority in this House 
address itself to the superblunder of the day, the CIA's discovery of 
$2 billion in a slush fund.
  If we are serious about addressing the era of big Government, let the 
President come forward with a special commission to investigate what is 
going on in the National Reconnaissance Agency.
  Let us take a look at where our great investment is being made. If we 
are not investing in education, if the American people have indicated 
in a poll that they want a greater investment in education, they want 
education to be a priority for the Government, then we are ignoring the 
priorities set by the American people.
  We are going forward not only in the Federal Government, but at the 
State level. In New York, Governor Pataki has a series of cuts in 
education, not only cuts in the elementary and secondary schools but 
also big cuts in the university system. In New York City, we have the 
mayor projecting another round of cuts for the city's schools, many of 
which are literally falling apart physically. Overcrowding is the 
dominant factor in many of the schools.
  Mr. Speaker, all this is going forward in an era when we are able to 
have Government agencies squirrel away $2 billion and nobody asking any 
questions about how it happened and why it happened and why we cannot 
recapture that $2 billion for worthwhile programs like education.
  The superblunder of the year is the blunder of the CIA. The 
superaction of the year would be to take some real steps to correct 
that kind of blunder, to seriously downsize our Government for the 
benefit of the American people, and to examine the activities of major 
Government agencies like the National Reconnaissance Agency, as they 
move technology forward, and create with American taxpayers' dollars 
new technological advantages for companies that make tremendous profits 
and give nothing back to the American people.
  Everybody deserves to benefit from both the downsizing of wasteful 
agencies like the National Reconnaissance Agency and the CIA. Everybody 
deserves the benefit from the good work that these agencies do in terms 
of new technology that we all have a stake in and we should all be able 
to receive some benefits from.

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