[Congressional Record Volume 142, Number 46 (Friday, March 29, 1996)]
[Senate]
[Pages S3188-S3190]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




            BIG GOVERNMENT OVER? NO, BIGGEST GOVERNMENT EVER

  Mr. GRAMM. Mr. President, we have received last week the President's 
official budget for 1997 and for the next 6 years thereafter. I would 
like to take some time this afternoon not to do the standard 
presentation that we all make, where we take the President's budget and 
say what in it is phony, what is smoke and mirrors, and what in it has 
no hope of coming true?
  If people took the President's budget this year and did that, I think 
they could make a magnificent presentation because the President's 
budget is based on optimistic assumptions that things are going to get 
better without any change in policy to make them better.
  But that is not what I want to do this afternoon. What I want to do 
this afternoon is to talk about the President's budget proposal from a 
point of view that we don't use enough, and that is, if we assume that 
everything in the President's budget is valid, if every word in here is 
backed up by sound policy, if everything the President assumes will 
happen will happen, if we grant the President every benefit of the 
doubt, then let us look historically at the kind of America that this 
budget will produce. That is what I would like to do for a few moments 
here this morning.
  I would like to set it in historical perspective by using a series of 
charts. On this first chart I compare expenditures on national defense 
starting the day that World War II ended. So I look at the decade of 
the 1940's after World War II, the decade of the 1950's, 1960's, 
1970's, 1980's, and then I look at the Clinton budget as projected for 
the next decade, in his own numbers.
  To simplify the comparison and avoid the impact of inflation or 
overall growth in the economy, I have decided to look at budget 
expenditures as a percentage of the total production of the American 
economy. So when I am going through these numbers, think of it as the 
Nation's overall income, the value of everything we produce and sell, 
and how much of that is going for these particular purposes.
  Looked at in this way, this chart shows that in the second half of 
the 1940's, from 1945 to 1950, 7.9 cents out of every dollar earned by 
every American was spent on national defense. As the cold war 
accelerated, that grew to 10.6 cents out of every dollar. It fell off 
some in the 1960's to 8.9 cents out of every dollar. In the 1970's and 
1980's, it was 6 cents out of every dollar.
  If President Clinton's budget is adopted exactly as it is written, if 
every word in it turns out to be backed up by sound policy, and if 
everything it assumes will happen happens, under his policy we will, in 
the decade of the Clinton budget, be spending 3.4 percent of the 
Federal budget on national defense.
  There are several important points here. First of all, that is the 
lowest expenditure on national defense--3.4 cents out of every dollar 
earned by every American going to national defense--since the 1930's.
  Second, that is 43 percent less than we spent in the decade of the 
1980's, and if every penny that has been cut out of defense had gone to 
deficit reduction, we would have a balanced Federal budget today.
  Let me state it in another way. The whole peace dividend for winning 
the cold war, which allowed us in real terms to spend about $150 
billion less on defense every single year, every penny of the peace 
dividend has been seized and spent by Government. This is the first 
major victory in the history of America where the fruits of that 
victory--whether it was the Civil War, World War I or World War II--
this will be the first time in American history that when the conflict 
ended we did not give the money back to the people we took it from to 
fight the conflict. Every penny of the peace dividend will have gone to 
Government and will have been spent on nondefense programs.

  The second point I want to make is about social spending. Again, 
beginning the day World War II ended and for each of the decades, I 
have the percentage of all of the income in America that was spent by 
Government on nondefense programs, basically social programs with the 
overwhelming preponderance entitlement programs. Again, the level was 
7.4 percent in the 1950's, it rose to 10.2 percent in the 1960's, rose 
to 14.6 cents out of every dollar earned by every American spent by 
Government on social programs in the 1970's. That rose to 17.1 percent 
in the 1980's and, under President Clinton's budget, if we met every 
savings proposal that he has, if all of his assumptions came true about 
saving money--and it would be the first budget in history where that 
ever happened--even under the best scenario,

[[Page S3189]]

President Clinton has promised the largest expenditure on social 
programs in the history of the United States of America. By his own 
numbers he will spend 17.3 cents out of every dollar earned by every 
American in Washington DC, through the Federal Government, on social 
programs.
  So, when our President says the era of big Government is over, and 
when we are trying to assess what that really means, I do not know what 
he means when he says it but his budget spends 69 percent more on 
social programs, as a percentage of the income of all Americans, than 
we spent during the decade the great society programs began under 
Lyndon Johnson.
  Taxes: Beginning the day that World War II ended, the American people 
have borne the following tax burdens. From 1945 to 1950, on average, 
Americans paid 16.5 cents out of every dollar they earned in taxes to 
the Federal Government. That has steadily risen, and under President 
Clinton's budget, if fully implemented, we would have the highest 
Federal tax burden in the history of the United States of America.
  Under President Clinton's budget, if implemented, Americans would 
send 19.3 cents out of every dollar earned by every American, on 
average, to Washington to be spent by the Federal Government.
  Let me sum this up on these three charts. President Clinton's budget 
calls for the lowest level of expenditure on defense since World War 
II--since the 1930's, the highest level of expenditures on social 
programs in the history of the United States of America, almost 70 
percent higher as a percentage of our national income than we had in 
the mid-1960's at the peak of the Great Society, and Clinton's own 
budget calls for the largest tax burden in American history.
  This is what the tax burden looks like if you plot it out, adding up 
State and local government. What you see by this chart is that, if 
implemented, President Clinton's budget would give us the largest tax 
burden ever borne by Americans at any time in the history of our 
country.
  The President talks about a tax cut in his budget, but what really 
happens in his budget is that the tax cut is sunsetted and ends while 
the tax increases continue. By the time you get to the year 2001, we 
have actually a tax increase in the Clinton budget.
  But now, to get down to why all this is relevant. What difference 
does it make that the Clinton budget has the highest social spending in 
American history? What difference does it make, other than to the 
taxpayer, that it has the highest tax burden in American history?
  What I have plotted here is economic growth. This represents the rate 
of growth in the production of income and opportunity and jobs in 
America. These numbers are very revealing.
  In the 1950's, the American economy grew at 4 percent a year on 
average. What that means is that in the aggregate, the average family 
in America was seeing its income grow by roughly 4 percent a year.
  In the decade of the 1960's, that grew to 4.4 percent, most of that 
growth in the first half of the 1960's.
  By the 1970's, it was down to 3.2 percent.
  In the 1980's, it was down to 2.8 percent, and in President Clinton's 
own optimistic assumptions, with his Government spending burden and his 
tax burden, his own budget concludes that, on average, for the next 10 
years, we would have 2.3 percent economic growth, meaning that, whereas 
in the 1960's the average family could look forward to its income 
growing at 4.4 percent a year, under the President's program of taxing 
and spending, the average American family will be able to look forward 
to economic growth at roughly half the rate that we experienced in the 
1960's.
  Why is that relevant? Let me give you a figure. If the American 
economy for the next 20 years grew at 4 percent a year, which is about 
the rate it grew in the fifties and sixties, rather than at the rate 
that it will grow under the Clinton budget by his own assumptions, that 
would mean that the average family of four in America 20 years from 
now, would have $40,157 more of income than they will have at President 
Clinton's growth rate.
  Why is this budget proposed by the President so destructive? It is so 
destructive because it is giving America a future that is shortchanging 
the people who do the work and pay the taxes and pull the wagon in 
America. It is giving American families an economy that is growing at 
roughly half the rate it grew in the 1950's and the 1960's.
  What that means is that when families sit down around their kitchen 
table every night and they dream the American dream and they make hard 
choices to make it come true, only roughly half as many families are 
going to achieve the American dream under the Clinton budget as would 
have achieved the American dream if we could go back to the kind of 
economic growth that we had for the first 20 years after 1945.
  What really happened in the 1960's, and it happened roughly in 1965 
when you look at the figures, is that America made a decision--a 
decision that was never debated and that there never was one single 
vote on it--but we made a decision that has profoundly affected our 
country. Prior to that point, for all of the 20th century, the American 
economy had grown at over 3 percent a year. From 1950 to 1965, the 
American economy had grown at over 4 percent a year. But beginning in 
the mid-1960's, we traded in an economy growing at 4 percent a year for 
a Government that has grown at 9 percent a year ever since.

  Since the mid-1960's, the American Government has grown twice as fast 
as the income of the average American family and, in recent years, 
three times as fast.
  The net result is we have had a decline in jobs, in growth, and 
opportunity. When you ask Americans, ``Are you confident your children 
are going to have a brighter future than you had?'' and when over 60 
percent say no, they clearly perceive what is happening in America.
  I am opposed to the President's budget. I intend to work to defeat 
it. I intend to adopt an alternative, because I do not want the highest 
growth rates in American history for social programs. I do not want the 
highest tax burden in American history, and I do not want the lowest 
level of opportunity for working people in this country that we have 
ever had in the history of the United States of America. That is what 
this budget promises.
  Budgets represent a vision for the future. They define a relationship 
between the Government and the people. The relationship that is defined 
in the Clinton budget is a relationship of Government getting bigger, 
of Government spending getting larger, of taxes getting higher and of 
opportunity getting smaller. That is not the future that I want.
  Let me conclude by reminding my colleagues and anyone who might be 
listening that the President earlier this year vetoed a budget that 
balanced the Federal budget. The President vetoed a budget that, 
because it balanced the Federal budget, would have brought interest 
rates down by 2 percent, that would have saved the average family in my 
State in Texas $2,754 a year on their mortgage payments because of 
lower mortgage rates, and would have given an average family of four a 
tax cut of $1,000 a year which they could have invested in their own 
family, in their own future. If we had adopted that budget, we would 
not be looking at the lowest economic growth rate in American history.

  I think it is vitally important, Mr. President, that we reject the 
Clinton budget, not because it is phony, not because most of its 
figures are made up, not because the numbers do not add up--all that is 
true--but the reason we should reject that budget is because it does 
not paint a future that America wants. Americans do not want higher 
Government spending, higher taxes and less growth. They want less 
Government. They want more freedom.
  Our job is to see they get it. That is why I am opposed to the 
Clinton budget. That is why I am in favor of balancing the Federal 
budget by cutting spending. I thought it was important to come over 
today and talk about these numbers and give this speech because later 
this afternoon we are going to be voting on a spending bill that spends 
$4 billion more than we set out in our appropriations earlier this 
year. The President is saying that he is going to veto this bill 
because it does not spend $8 billion more than we set out in our 
appropriations earlier in the year.

[[Page S3190]]

  Somehow there is a disconnect between what we are saying in 
Washington and what we are doing. If we want the return of jobs, growth 
and opportunity--if we want to restore the kind of opportunity that was 
routinely available to America when the Presiding Officer of the Senate 
was growing up and when I was growing up--we are going to have to 
change the way we do business.
  We are going to have to spend less of the taxpayers' money in 
Washington, so that the taxpayer can keep it, so the taxpayer and the 
taxpayer's family can spend it, so that they can invest it in their 
future and, therefore, America's future. That is the difference between 
the Clinton vision and the vision of Republican Members of the House 
and the Senate.
  I yield the floor, and I thank my colleague. I want to apologize to 
him. During the speech of our colleague, Senator Gorton, I had walked 
into the anteroom, and he did not see me here on the floor. I am sorry 
for the inconvenience.
  Mr. SPECTER addressed the Chair.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. I thank my colleague from Texas for those comments. We 
try on the floor to respect those who have arrived earlier. I had not 
known that the distinguished Senator from Texas had been awaiting 
recognition. I walked in; he was not on the floor. But I learned a 
little by listening to Senator Gramm, which I do when I listen to 
Senator Gramm. I have had occasion to listen to Senator Gramm a great 
deal over the past year and have learned from the Senator over the 
course of the last year in other activities I have undertaken.

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