[Congressional Record Volume 142, Number 121 (Friday, September 6, 1996)]
[Senate]
[Pages S10005-S10011]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               TAX RELIEF

  Mr. COVERDELL. Mr. President, as we have heard, there is a great 
national debate in the making with regard to the anxiety in the 
American workplace, anxiety particularly among middle-class working 
Americans. I have often talked about a snapshot of an average family in 
Georgia that makes about $40,000 to $45,000 a year. Several months ago, 
when I took the snapshot of that family--a family of four, with both 
parents now working, with two children--we added up the Government 
obligations that that family had to pay, the total cost of Government. 
At the end of the day, they had 48.2 percent of their gross wages left.
  I can think of no institution, including Hollywood, that has had a 
more profound effect on the behavior of middle-class America than their 
own Government. This morning, I have just been given data that show 
that now they only have 47 percent. Just in the last 12 months, they 
continue to lose the power of the wages and the independence of what 
those wages mean to that family.

[[Page S10006]]

  Maybe the First Lady and Senator Dole have defined our disagreement. 
In Chicago, she said, very defiantly, that it does take a village to 
raise a child. Of course, ``village'' is the Government. Senator Dole 
said that it takes a family. All year, we have been debating the 
subject about whether the resources should go to the village--the 
Government--or whether the resources should be left with the family.
  I believe the empirical evidence is unshakable that those resources, 
those wages, should be left in the family checking account, so that 
that family can undertake the responsibilities that America has always 
asked of them--to get the country up in the morning, get it to school, 
get it educated, get it housed and fed, clothed, transported and, yes, 
in good health and spirits, and to ultimately accept the leadership of 
the country. For us to be here this morning debating the fact that an 
average family in America is now forfeiting over half of its wages to 
the Government at some level, being denied those earnings and the 
independence it gives the families to do the things it is supposed to 
do--if Thomas Jefferson were here today--and I have said it before--he 
would be stunned that we had ever come to a point in America that we 
had confiscated that sum of the earning power of the wage earner and 
sent it off to some government to remake the village. Maybe those two 
sentences have, more clearly than anything else we have heard in a long 
time, defined our two views of the country.
  I see we have been joined by the Senator from Utah. I yield up to 10 
minutes to the Senator from Utah to speak on this subject.
  The PRESIDING OFFICER. The Senator from Utah is recognized.
  Mr. BENNETT. Mr. President, as I contemplate the issue of taxes and 
their impact on the average family, my mind goes back to an experience 
that, for me, was very typical--that is, for my generation--but it is 
becoming increasingly less typical for Americans. I would like to 
recall it as a model for this discussion. When I was in my twenties, I 
was in the Armed Forces. At that time, everyone who was male and in his 
twenties was in the Armed Forces. The law required that. It was a new 
experience, a cultural shock, as they took me to Fort Ord, CA, and cut 
off all my hair. I will stipulate that at that time in my life I had 
some hair to be cut off, unlike my present circumstance. They put me in 
a uniform, put me in a barracks, and changed my life.
  I was an employee of the U.S. Army and, as such, I received the 
monthly salary of $90. People could say to me, ``Well, you can't live 
on $90 a month.'' But the Army would have pointed out to me, if I had 
raised the issue, that the Army took care of all of my food, all of my 
clothing, the Army took care of my housing, and the Army took care of 
my transportation. If the Army did not take me someplace, I did not 
need to go there. The Army would tell me that would be the case, and 
that the $90 a month I had as my salary was spending money. I could use 
it to pay for the haircut that the Army required me to have. I could 
use it to buy some candy bars, or whatever movies I might want to go 
to. But my life was OK, because the combination of cash and Government-
provided benefits together provided me with a standard of living that 
the Army decided was adequate for me.
  Why do I cite that in this discussion about taxes? It is because that 
is the philosophy that I think we are seeing here, where people say to 
us, yes, there is so much coming to the Government in the way of taxes, 
but look at what the Government is doing for you in return for those 
taxes, so that you would want to continue paying the taxes because your 
country needs that money in order to provide you with all of those 
wonderful benefits that you are getting.
  In the debate when Senator Dole raised the issue of possibly cutting 
the tax rate, the first thing we heard was, ``We can't do that because 
we can't afford it,'' to which I echo the question: Who is ``we''? ``We 
can't afford to give up the revenue that is coming from the tax 
rolls.'' Who is ``we''? ``We'' in this case means the average American 
family. The average American family currently spends more for those 
Government benefits, like the food, the uniforms, the barracks, and so 
on that I described when I was in the Army. The current American family 
spends more for Government than it spends for food, housing, and 
shelter combined. Yet, we need more money to run the Government than 
the family needs to feed itself, clothe itself, and house itself. The 
question arises, not where will the money go but who will control it?
  Let me give you an example. One of the things we buy with Government 
money is retraining programs for people who are out of work. In the 
State of Utah, we have a training program that is called ATC--Advanced 
Technology Centers. It is one of the, I think, most effective 
educational programs that has ever been run. I could go on at great 
length and describe how it works. The State pays for it. People who 
need it enroll in it, and they keep the cash for themselves to make the 
decisions with respect to their lives. They enroll in this training 
program not because the Federal Government is running it and the 
Federal Government has decided that it must be offered. They decide in 
terms of their own lives what kind of training they need. They come to 
the program, and they choose which part of the program they will take. 
And when they feel they have gotten what they need, they leave on their 
own. In other words, the decisions on retraining are made by the 
individuals--not by the Federal Government, or the State government. 
But we will take money away from them to fund some 157 Federal 
retraining programs that the Federal Government will then require 
people to go to in order to get their unemployment benefits.
  Which is the more efficient--where the individual makes the decision, 
or where the government makes the decision? The answer is very clear. 
The individual makes more intelligent decisions than the government 
does. Why? Because the individual is concerned about the effect of that 
decision on his or her life, and the government, by necessity, has to 
make these decisions for a whole range of folks.
  Let us talk about tax money specifically. Right now in this country 
real wages are stagnant, and they have been for something like 17 
years. Government is not. Government has been growing in that 17-year 
period. Once again, we are told, ``We can't cut the amount of tax 
burden on the families because we can't afford it.'' Again who is 
``we''? What would happen if we were to say, ``All right, we are going 
to allow families to keep more of what they earn and forego the 
government programs''? An interesting thing would happen. If you were 
to say to families who have children--which almost by definition means 
that they have financial problems--if we were to say to families that 
have children, ``OK, we are going to allow you to keep more of your 
money. What are you going to do with it?'' ``Well, we are going to 
spend it perhaps on a new car because with children we have to have a 
slightly bigger car than the one we had when we were courting. We are 
going to replace the washing machine. With children we wash a lot more 
clothes than we used to. We are going to buy more clothes for our kids. 
We are going to choose so on and so forth.''
  I have had economists say to me, ``Why do you support the $500 per 
child tax credit, because it is not going to do anything in our 
macroeconomic models to increase savings? And the reason you have a tax 
cut to stimulate the economy is because you want to increase the 
savings rate and so on.'' I will not get into all of that macroeconomic 
conversation here. You are right; families will not increase their 
savings if you say we are going to give them a $500 per child tax 
credit. What are they going to do? They are going to go out and buy 
things for their kids. Kids are now consumer kids. There were times 
when they were an economic asset. Now kids are a luxury item. We have 
them nonetheless. But they cost us money.
  What is going to happen when Detroit has to build additional cars 
because people with families want bigger cars, when they have to build 
additional washing machines, when they have to produce more clothes? 
What is going to be the impact of that on the economy and ultimately on 
the amount of money that will come back to government in the form of 
taxes? I have seen some macroeconomic studies that say the $500 per 
child tax credit is going to produce a greater economic

[[Page S10007]]

stimulus than even the cut in the capital gains tax rate. I am not sure 
how that all works out. Frankly, neither are they. Because the one 
thing we have to recognize is that we are dealing with a $7 trillion 
economy, and the size of the $500 per child tax credit in terms of the 
impact on the economy as a whole is less than 1 percent. That is true, 
Mr. President. If you take the size of the economy as a whole and add 
it up for the next 6 years--because 2002 is our target date--you are 
talking about roughly $50 trillion worth of economic activity in that 
6-year period. The size of the $500 per child tax credit is less than 
$500 billion over that same 6-year period, considerably less. So it is 
less than 1 percent.
  Mr. President, I ask unanimous consent that I proceed for an 
additional 2 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BENNETT. Mr. President, we are talking about a tax credit that is 
less than 1 percent of the entire economy. But look at what it means to 
the families with children. Look at what it means to those who will 
make the decisions themselves--that instead of all the benefits like 
the Army used to give me in uniforms, barracks, and mess hall 
privileges, I say, ``Thanks. Just give me the cash and let me decide 
where I am going to live, what I am going to wear, and what I am going 
to eat.'' I will make wiser decisions, and the impact on the economy 
will be better.
  So this is where it ultimately comes down to, Mr. President. Again, 
the question: Who is ``we'' when we say we can't afford a cut in tax 
rates? The ``we'' is the American people, and I believe the American 
people left to handle the cash rather than the so-called ``benefits'' 
can make a wiser use of that money than the Government can.
  I am glad my experience with the Army is over. It was a good 
experience. But I prefer the freedom I have to have the money and make 
my own choices, and I think most Americans feel the same way.
  I yield the floor.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Arizona.
  Mr. COVERDELL. Mr. President, I yield 5 minutes to the Senator from 
Oklahoma.

  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. INHOFE. I changed my 3 to 5, Mr. President, after listening to 
the distinguished Senator from Utah. I shared the same experiences in 
the Army, and I know exactly where he is coming from.
  Mr. President, when he stated that Jefferson would have been stunned 
if he would have known what we have here today, some who were around 
back then would not have been so stunned. It was de Tocqueville who 
made the observation after writing the book about the great wealth of 
this country and what made it so wealthy. He said that once the people 
find that they can vote money out of the public treasury, the system 
will fail. And I think we are getting dangerously close to that.
  As I watched the Chicago convention and all of this emphasis on the 
family, I was thinking, ``How in the world could any administration 
with such a dismal failure in their treatment of family values be 
talking about the family?'' Maybe that is the whole reason they are 
doing it.
  I think if you go back and look, Mr. President, at the tax increase 
that took place in 1993, it was characterized by then chairman of the 
Senate Finance Committee, Senator Moynihan, the distinguished Senator 
from New York, as the ``largest single tax increase'' in the history of 
public finance, or any place in the world. That is exactly what 
happened.
  What was the nature of that tax increase? It was a tax increase on 
the American family. It was a gasoline tax increase. That is not just 
for fat cats. That is for everyone who drives a car, drives a truck, or 
drives a tractor. It was a tax increase on small business and on 
individuals, and even retroactive--going back and saying, ``It is not 
enough that we go ahead and tax you from this point forward, but let us 
go back to January.'' I think that is the first time in history that 
has been done. It was a 70-percent tax increase on the Social Security 
recipients who cared enough to prepare for some of their senior years 
so they would have as much as $22,000 of income. It was an increase in 
estate taxes. And what is interesting about this is we passed a bill, 
several provisions that would have been geared just to the family, the 
$500 per child tax credit, the capital gains tax reduction, repealing 
some of our laws that penalize people who get married, who if you stay 
married--actually right now under the law on the books two individuals 
who are happily married, if they will get a divorce, can increase their 
take-home pay by reducing taxes. Is that what Government is supposed to 
do?

  Anyway, I enjoyed the statement by Senator Dole when he talked about 
doing something about the overtaxation. And if you will analyze what he 
was suggesting in repealing that Social Security tax increase, the $500 
per child tax credit, the reduction of taxes by 15 percent, the 
reduction of capital gains taxes and the repealing of the estate tax, 
all he is saying there is let us go back and see what happened in 1993 
and let us repeal a portion of that tax increase.
  So I would suggest that anyone today who was not supportive back in 
1993 of the tax increase should be supporting what Senator Dole is 
proposing to do now.
  The Senator from Utah mentioned we cannot afford it. I would like to 
make one comment. I heard the distinguished Senator from Arizona quote 
John Kennedy several times on the fact that back when he was President, 
he said we have got to increase revenues and the only way to increase 
revenues is to reduce the tax rates. He reduced the tax rates and that 
did increase revenue.
  So I suggest to the Senator from Utah that we can afford to do this. 
We can effectively increase our revenues by reducing taxes. The formula 
works out that for each 1-percent growth in economic activity it 
increases revenues by $24 billion.
  However, we do not have the same kind of Democrat in the White House 
today that we had when we had John Kennedy. It was Laura Tyson who said 
there is no relationship between the level of taxes a nation pays and 
its economic performance. And if you have that philosophy, then you can 
say, yes, we cannot afford it.
  Indeed, history has shown us in three decades in the last 100 years, 
the twenties, the sixties, and the eighties, when we had dramatic 
reductions in tax rates, each time we increased our revenues. So I 
think it is a question now of are we really concerned about the family, 
are we really concerned about doing something about the lessons of 
those times? I think the time is here, and we have a Congress that is 
willing to do it.
  I applaud the Senator from Georgia for bringing up this subject to 
discuss today.
  Mr. COVERDELL. Mr. President, I appreciate very much the remarks of 
the Senator from Oklahoma--as always on this subject precise and on 
target, and I am glad he was able to be with us this afternoon.
  The Senator from Arizona is here and would need up to 5 minutes. So I 
extend 5 minutes to the Senator from Arizona.
  Mr. KYL. I thank the Senator.
  Mr. President, during the last few weeks, as the Presidential 
election campaign has gotten underway, the American people have heard a 
great deal about two very different tax plans for the country.
  One of the plans proposed by President Clinton involves token relief 
if--and I stress if--people spend their money in ways that the 
Government deems most appropriate. The other plan represents the most 
ambitious, progrowth economic program since the beginning of the Reagan 
administration, a program that puts faith in the American people to 
spend their money in ways that are best for themselves and their 
families and their communities.

  Mr. President, the ambitious program that I am talking about is the 
one that Bob Dole has made the centerpiece of his campaign. It is a 
plan that would cut income tax rates across the board by 15 percent, a 
plan that would provide families with an additional $500 per child tax 
credit, and an opportunity to save in new education investment accounts 
for college education. It would repeal the President's 1993 tax

[[Page S10008]]

on Social Security, and it would provide important incentives for job 
creation through capital gains tax reduction.
  What does all of this mean for the average American family? For a 
family of four earning $35,000 a year, it would mean a savings of over 
$1,400 a year, a 51.8 percent reduction in that family's tax bill. In 
other words, it cuts the tax bill in half. For a family making $75,000 
a year, it means a savings of 26.7 percent. It cuts that family's tax 
liability by a quarter. In other words, it provides real tax relief and 
targets it to those families who need it the most.
  Unlike the plan that President Clinton has proposed, the Dole plan 
offers broad-based relief and allows all taxpayers--those who are 
married and those who are single, those with children, those without 
children--to decide for themselves how they can best use their savings 
to help themselves and their communities. Maybe they could use the 
money for new school clothes, as Senator Bennett pointed out, or for 
books so children can do some extra reading. Maybe they need the money 
to put a new roof on the house or put savings aside for a downpayment 
on a home so they, too, could fulfill their dreams to own a home. Maybe 
someone would use the funds to start a new business or to create new 
jobs for young people entering the work force.
  The issue is trust. Do we trust the people enough to decide how to 
use their own hard-earned income or do we need the Government to decide 
for us how to spend our money. The Dole plan puts faith in the people 
and so do I.
  History shows that when we put our faith in people, the country's 
economy as a whole does much better. The Senator from Oklahoma pointed 
out that I frequently quote John F. Kennedy in this regard, and I do. 
He proposed a tax cut in the early 1960's to help stimulate economic 
growth, and that plan ultimately led to one of the few periods of 
relatively strong economic growth in our country since World War II.
  The economic effects of the Reagan tax cuts in the 1980's were just 
as dramatic, leading to the longest peacetime economic expansion in the 
our Nation's history. In fact, by the end of President Reagan's second 
term in office real gross national product had risen by more than 4 
percent a year. Nearly 19 million new jobs were created, more than 85 
percent of which were full-time jobs in occupations with average annual 
salaries of over $20,000. Real median family income grew every year but 
one between 1982 and 1989, rising $4,564 or 12.64 percent. That is real 
median income, extra money in people's pockets to help meet their 
everyday needs. That is what the Reagan program accomplished.
  By contrast, the high tax policies of the 1990's have had exactly the 
opposite effect. Real median family income has declined $2,108 or 5.2 
percent for the average family. People are caught in the trap of 
stagnating, declining wages and higher taxes, and they are hurting. No 
wonder it takes two adults in the family working to support the family. 
One supports the family; the other supports the Government.

  I know that some people are asking whether tax cuts are an option 
today in an era when voters and public officials alike are seeking to 
balance our Federal budget. Well, John Kennedy also answered that 
question noting, and I am quoting:
       An economy hampered with high tax rates will never produce 
     enough revenue to balance the budget just as it will never 
     produce enough output and enough jobs.

  The question is not whether we can afford a tax cut. The question is 
can the American people, many of whom are working two jobs just to make 
ends meet, afford a Government that continues to take more of their 
hard-earned income every year? Can the next generation afford the tax 
burden that will be imposed upon it just to pay the debts our 
Government is accumulating today? Can we do better for our children 
than to leave them with a sputtering economy, falling income and rising 
taxes?
  The Dole plan is not simply a tax cut but an overall economic plan to 
revitalize the Nation's economy by putting faith in people to save and 
invest their hard-earned money in ways they deem best for themselves 
and their communities. President Clinton has promised that the era of 
big Government is over. Bob Dole's economic plan will help keep that 
promise.
  Mr. COVERDELL addressed the Chair.
  The PRESIDING OFFICER (Mr. Frist). The Senator from Georgia.
  Mr. COVERDELL. I thank the Senator from Arizona. I think maybe it 
will be useful to step back for a moment, to help frame what it is we 
are talking about. In 1993, the Clinton administration imposed the 
largest tax increase in American history, $491 billion. That resulted 
in the highest tax burden, 19.3 percent of the entire economy, that is 
being consumed by Government.
  So the stage has been set. These are very large numbers, and they 
tend not to get brought down to what the effects are on everyday folks 
out here. What is happening is the median income for America's average 
families is continuing to fall and has been falling for some time. From 
1986 to 1993, it dropped $3,800, and continues to fall. These are the 
reasons. As Government grows, and grows unfettered, the resources have 
to come from somewhere. The families that are most affected are middle-
income families. The very wealthy are able to adjust their lives 
accordingly. The very poor are using the safety net. But middle America 
is paying these bills.
  I am reading from an article that appeared on July 22 in the Atlanta 
Constitution. It says:

       To fend off that decline and maintain a middle-class 
     lifestyle, many women who might prefer to remain at home 
     have, instead, entered the workforce. But even that strategy 
     has begun to pay lower dividends. In families headed by a 
     married couple in which the wife is in the workforce, median 
     income peaked in 1989 and has declined noticeably since.

  Another article on this subject:

       In particular, declining earnings have fueled the rapid 
     increase in labor force participation of women, including 
     women in 2-parent families. Whereas, in 1950, only 20 percent 
     of married women with children, and 12 percent of those with 
     preschool age children, worked, by 1990, 40 years later, two-
     thirds of married women with children were employed.

  A survey, I believe it was done by Rand, was recently released about 
the second spouse, or women in the workplace. It said 85 percent of the 
women in the workplace would like to alter how they are in the 
workplace if they could. Of course they cannot because of the economic 
burden that our governments have placed on their families. They are so 
high that the option is removed. It is not a decision, to make a choice 
to go into the workplace. The Government is forcing it.
  Of the 85 percent who said they would alter it, one-third of those 
said they do not want to be in the workplace at all, they want to be at 
home; one-third said they would like to work just part-time so there is 
more time for the family; and one-third of them said they would only 
volunteer. They would just work as a volunteer. They do not have that 
choice. Congress and the administration, over the last several years, 
have made that choice for them as we have ratcheted up the burden.
  A moment ago I was talking about the Georgia family and I pointed out 
they are forfeiting half their income to some government at this point. 
That is enormous. It is just hard to comprehend. During this 
administration, that average family's checking account has shrunk by 
$200 a month, anywhere from $2,200 to $2,600 a year. That is the impact 
on this average family in my State of the policies of this 
administration. When they raised the taxes to the record level and 
produced this highest tax burden ever, the effect on an average family 
in a little town in my State is that their checking account has $2,400 
less a year. That is just like removing something like 10 to 15 percent 
of their total disposable income.
  Is it any wonder that these average working families in our country 
are not saving money? Are we surprised they do not save money like they 
should, to prepare for a rainy day, prepare for retirement, prepare for 
their children's education? What is left to save, after the Government 
has marched through your living room and taken half the assets?
  Are we surprised that credit card debt is at an all-time high? Are we 
surprised that the payments on delinquencies on credit cards have 
plummeted? Are we surprised that, if you work from 9 in the morning 
until noon every day for the Government, and this

[[Page S10009]]

tax burden has been made so high that you have to have both spouses and 
in some cases their children in the workplace, and in some cases not 
only do both spouses now work, but, indeed, they have to have two and 
three jobs each--Are we surprised that the behavior of that family has 
been modified? That the children are left without the kind of attention 
those parents would like to give? That they are not there to be the 
guide and beacon for those kids? They call that latchkey children. Of 
course they are latchkey children. The Government policy from 
Washington has increased the burden, increased the burden. We have 
pushed both spouses into the workplace. We have now got them to where 
they have to have two and three jobs. We have created stress. It is no 
wonder there is so much anxiety in middle-class America.

  I am reading from another periodical: ``Work and family 
integration.''

       It is increasingly common for all adult family members to 
     spend a greater number of hours at work in order to make up 
     for declining median family incomes. Married women with 
     children have entered the labor force in record numbers. 
     They, therefore [it doesn't take a rocket scientist]--they, 
     therefore, have less time for care-giving in the home. Many 
     parents, both mothers and fathers, feel conflicted and torn 
     between spending time with their families and meeting 
     workplace demands. ``It's like you are caught between a rock 
     and a hard place, because if you want to have a family, you 
     want to have a couple of children, and you cannot do that 
     unless you have lots of money to support them.''

  That quoted a woman in her twenties in Salt Lake City.
  So, Mr. President, Senator Dole has come forward. There is a lot of 
talk about what each of these proposals means, but the bottom line is 
this: He is saying that Government, Washington in particular, has put 
too much financial pressure on these fragile families. It is creating 
havoc, and it ought to be a conscious, fundamental, sound policy to 
give them relief, to allow them to keep more of what they earn so that 
they can do what they are supposed to do in that home. And, yes, he is 
saying we think that the best caretaker of those children is their 
parents and the family in the comfort of the home, and, no, a village, 
a government is no replacement for that policy.
  So he has stepped forward and said, ``I intend, with a cooperative 
Congress, to effect lowering the economic burden on the average 
family.''
  Mr. President, I know that you, the Presiding Officer, would like to 
speak on this subject. So I am going to suggest the absence of a quorum 
so I might assume your duties so that you can speak on this subject and 
then replace me afterwards.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mr. FRIST. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Coverdell). Without objection, it is so 
ordered.
  Mr. FRIST. Mr. President, I rise today to continue on the topic that 
was begun so admirably by yourself, the Senator from Arizona and the 
Senator from Oklahoma on the benefits of significant tax relief for all 
Americans, for individuals, for their families, for their children, for 
the next generation.
  Whenever we seem to debate tax policy in this body, we seem to begin 
with different premises, and I think we really must focus over the next 
year on a principle which I feel should govern our decisionmaking. That 
is, that there is no such thing as ``Government money.'' Money today 
through taxes comes from individuals, hard-working individuals. It 
comes from a person, it comes from a family, it comes from a business, 
and it comes to Washington, DC, and not the other way around.
  For far too long, the Federal Government has treated the income of 
American people as its own money. This practice absolutely must stop.
  I want to refer, as I develop this principle over the next few 
minutes, to a recent editorial by Washington Post columnist James 
Glassman. The editorial is entitled ``It's Your Money.'' I will alter 
it a little bit and say ``It's the People's Money,'' because that is 
the underlying principle I think we must come back to as we discuss tax 
and tax policy.
  In that editorial, Mr. Glassman pointed out that there are two 
schools of thought on tax policy. Under the first one, using the words 
of Mr. Glassman:

       We use an old-fashioned business model to think about 
     taxes. Taxes are revenues, like sales. The objective for the 
     Government is to match up those revenues with its expenses so 
     that it doesn't lose money. Under that model--

  According to Mr. Glassman--

     the Government dispenses tax cuts as a gift from Washington.

  But I do not think the American people view their tax dollars in this 
fashion. They tell you that. All of us travel around our respective 
States and around the country, and they tell you they don't view their 
tax dollars that way, so we need to stop viewing them that way in 
Washington, DC.
  Mr. Glassman described it in the editorial in the following way. He 
said the average American, and I begin to quote him, ``views taxes not 
merely as bloodless revenues but as the real, hard-won earnings of 
individual Americans.''
  He says:

       Tax dollars begin life as personal dollars. They're yours, 
     not Washington's.

  He goes on to say:

       You do agree through the political process to turn over 
     some of your income, but that deal is transitory and 
     renewable and it depends on Washington providing good value 
     for your money.

  Mr. Glassman's words, ``good value for your money.''
  I don't think we in this body can express this principle enough. It 
is the taxpayers' money. When we Senators meet with our constituents in 
our home States, we have to remember it is their money. That is where 
it originated. And every time we pass a spending bill on the floor of 
the U.S. Senate, we must be able to go home and look our constituents 
in the eyes and say, ``Here is how we spent your money.''
  I brought two charts with me, again, to illustrate how taxes have 
taken a bigger and bigger bite out of the family budget. So many people 
think so often in the short term and they say, ``Well, taxes are high 
now, yes, but they have always been that way. There really hasn't been 
much change, and there's not much we can do about it.''
  Our responses have to be the facts. We do not have to look that long 
ago when people were paying out of their family budget as much as they 
are paying in taxes today. We have to look back.
  This is taxes out of a typical family budget. This is not an 
aggregate figure of billions of dollars, this is a family budget, 
something each of us can touch, feel, experience.
  The pie on the left shows in 1955 the family budget, this circle 
being 100 percent. Total taxes were 27.7 percent in 1955.
  If we look in 1995, we see that total taxes are 38.2 percent. All 
other parts of the family budget are shrinking as the red part of the 
pie has gotten bigger and bigger over time, just over a 40-year period.
  You can also look at this at how many hours you work during the day. 
If you say this is an 8-hour day that likely you and your spouse are 
working, look, 3 hours out of that 8 hours is spent working for 
Government today.
  Going back to Mr. Glassman's words, we need better value for your 
money.
  On the second chart, we see a typical family budget, how that budget 
of that working family with two children breaks down. This is the 
overall family budget, and, once again, in red, we see total taxes. I 
just said that 38.2 percent of that typical family budget goes to 
paying taxes. Where does the rest of it go?
  Just very quickly. House and households, about 15 percent in yellow. 
In the blue, medical care about 10 percent. Food, 6 percent. 
Transportation, 6 percent. Clothing, 4 percent. And everything else 
about 17 percent. This might be education for your children, might be 
savings, might be investment for your retirement.
  But look, compare what we pay in taxes to medical care, food, 
transportation, and clothing, and we can see that what you pay in taxes 
far surpasses the 27 percent total of medical care, food, 
transportation, and clothing today.
  Most Americans do not think of it in that concrete of terms. It is 
time we take broadly across this country this process of educating 
people, to look at what you do when you increase that red, which has 
been done, as we saw, by

[[Page S10010]]

our distinguished colleague from Georgia. We have seen that this red 
has been growing and growing over time. What does it squeeze out? It 
means that you spend less money on food or transportation or clothing 
or savings or investment in your children's future.
  You know, in this Congress we have done a number of things, and much 
of it gets lost before it gets out to the people broadly. We passed a 
$500-per-child tax credit for families making under $75,000 a year. We 
passed a marriage penalty relief which increased the standard deduction 
for couples filing jointly. We passed a student loan interest credit to 
make college more affordable. We passed an expanded individual 
retirement account that would allow penalty-free withdrawals for first-
time home purchases, for medical expenses, for periods of unemployment, 
for college expenses.
  Yes, unfortunately, though this body representing the American people 
passed all of that, they were vetoed by the President of the United 
States. Well, despite this setback of a way, we now must review our 
commitment to allow individual Americans, individual hard-working men 
and women, not the Federal Government, to keep more of those hard-
earned earnings.
  To those who say that tax relief will blow a hole in the deficit, I 
say, join with us as responsible stewards of taxpayer dollars in our 
commitment to finding offsetting spending cuts. If we are going to 
allow the American people to keep more of what they earn, we have to 
slow down this incessant, almost unstoppable growth of Government. 
Going back to Mr. Glassman's comments, who said, ``providing good value 
for your money.''
  We can begin this process by passing a balanced budget amendment to 
the Constitution. That way the American people would have a 
constitutional assurance that tax cuts would fully be paid for with 
spending cuts.
  In closing, our challenge is to boil down this large debate of taxes 
and economic policy to something that the typical American can 
understand. The data speaks very strongly to the typical American. The 
tax debate will rage on. We need to come back to that underlying 
principle: It is the people's money. I do urge my colleagues to 
remember that we--we--we are the trustees of the American Treasury. 
Building that trust is one of the most important duties we have as U.S. 
Senators. If we always remember that it is the people's money, I 
believe we will be responsible trustees.
  Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. COVERDELL. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Frist). Without objection, it is so 
ordered.
  Mr. COVERDELL. Mr. President, how much time is there remaining?
  The PRESIDING OFFICER. There are 8 minutes remaining.
  Mr. COVERDELL. Mr. President, I really enjoyed your presentation, as 
I told you when you approached the Chair. You raised some questions 
that I am going to pursue, even beyond this afternoon, by the pie chart 
of the breakdown of the expenditures for the average family. I want to 
point out again, an average family in Tennessee cannot be a lot 
different than one in Georgia. It is about $40,000, $45,000 that this 
average family is earning in Georgia. I assume that is about what it is 
here. When you take 40 percent of that amount, you do not have a lot 
left. That is not a lot of money.
  A point I wanted to make is this is a bit deceptive. It shows that 
38.2 percent is paid in total taxes, which, as you pointed out, was 
larger than what that family is spending for its house and household, 
medical care, its food, its transportation, and clothing. It is just 
unbelievable that the Government burden can be that large. But the 
point I want to make is that it is even larger than the 38.2 percent. 
Maybe we can collaborate on this and we can produce another chart. But 
built there is another 12-plus percent that is hidden in the price for 
the house and household, medical care, and food in the cost of 
Government regulation and management.

  We would all agree that there is certainly a role for safety and 
health and the like. But that has been growing at an astronomical 
level. It costs this family $7,000 a year. That is on top of the 38.2 
percent.
  On top of it--and I have dealt with this a couple times--when I tend 
to say they are forfeiting half their earned wages in Government costs 
and burden, well, 38.2 percent is actual tax, but there are more costs 
than that. As a result, the burden on that family is just phenomenal, 
and it is leaving them in a condition that is very difficult.
  I have been reading several statistics here. This is one that I find 
most alarming. Net savings and investment average 10.7 percent of the 
gross domestic product. I will finish.
  We have been joined by the Senator from Michigan who has been at the 
forefront of tax relief since his arrival in the U.S. Senate. I want to 
acknowledge him.
  I just want to make this one last point, that savings and investment 
constituted about 11 percent of the gross domestic product in the 
1960's and today it is 3.75 percent. That is where the capital to run 
this economic engine comes from. That is where the protective device 
for all these families is, in their savings. These burdens have pushed 
those savings down to one-third of the level they were just 30 years 
ago. And that is flirting with fire. That is making a family unable and 
the Nation unable to protect itself.
  Mr. President, I grant the balance of my time to the Senator from 
Michigan. I suspect that is about 4 minutes or so.
  Mr. ABRAHAM. That is fine.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. ABRAHAM. Thank you very much, Mr. President. And I thank the 
Senator from Georgia for his continuing leadership in providing us 
opportunities to address issues of importance.
  Today I am glad that we are talking about the burdens that face 
American families, because young families confront a lot of challenges 
as we move to the end of this century and into the next one. In my own 
family, we have added a new member since the last time I spoke in this 
Chamber, just yesterday afternoon. So we, as is the case with all other 
families that are growing in number, are looking at the challenges we 
have, and they are challenges in a variety of areas. One of them is 
obviously the financial challenges that new families and young families 
confront.
  When I am in my State of Michigan, and I suspect the same is true in 
Georgia, Tennessee, or any other of the 50 States, what I hear from my 
constituents, from working families, is a very common theme. It is the 
theme that even though people seem to be working more they find they 
have less and less to show for it. We have heard it described as a 
squeeze on the middle class. We have heard it described in a variety of 
other ways, but we have heard it described consistently in my State for 
a number of years.
  I have sat down with the families to try to find out exactly why they 
feel this way and what it is that has led to this situation. The very 
simple fact is, Mr. President, a major reason why our working families 
are having a harder time making ends meet is that the tax burdens they 
are confronting, each going up at a pace that is faster than the family 
income is going up. That, indeed is exactly the case for most people in 
America. Indeed, during the last 3 to 4 years, family incomes have been 
absolutely stagnant. Meanwhile, Federal taxes have been going up. In 
many States, State taxes and local taxes have been going up, as well.
  Indeed, it is interesting to note, Mr. President, that across the 
board we see families confronting a higher and higher responsibility in 
terms of their paychecks headed to Washington than ever before. Right 
now, the Federal tax burden is the largest portion of the family 
budget, 26 percent, which is more than housing, food or education 
costs. When you add on the burdens of State and local taxes, the 
percentage goes from 26 all the way up to 38 percent. When you think 
about that, Mr. President, you think about almost 40 percent of the 
average family's income being sent to government to pay for programs 
and services, you realize the extent to which families do feel the 
crunch.

[[Page S10011]]

  The crunch has created a very interesting set of changes. It has 
meant that where in the past one person was working was enough for the 
family to stay ahead of the game, today, often it is two people working 
at more than one job. At least in the case of the people of my State of 
Michigan the solution, it seems to me, is quite clear. Unless we are 
going to get to the point where families working two jobs and two 
breadwinners working two jobs is inadequate to allow working families 
to keep up, we have to give them some relief. The one way the Federal 
Government can provide that relief is by reducing the tax burden that 
these families face.
  Mr. President, I do not have the time today nor do I intend today to 
go into a variety of ways by which we can ease that burden. But I think 
the kinds of plans that have been put forth by Bob Dole and Jack Kemp, 
calling for across-the-board tax relief, combining that with a $500-
per-child tax credit is a step in the right direction. I think that is 
what the families of Michigan, the families of America can benefit 
from.
  I add, Mr. President, in closing, in our State of Michigan we reduced 
taxes 21 times in the last 5 years. That has produced record levels of 
employment and it has not caused a budget deficit. We have balanced the 
budget and created a surplus at the same time. We need to give families 
that relief. I look forward to working within the Senate to accomplish 
that. I yield the floor.

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