[Congressional Record Volume 142, Number 124 (Wednesday, September 11, 1996)]
[Senate]
[Pages S10345-S10346]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           IF WE WERE SERIOUS

   Mr. SIMON. Mr. President, when Richard Darman served as The 
Office of Management and Budget Director, I sometimes disagreed with 
him; but I always had great respect for him.
  He had an op-ed piece in The New York Times on September 1 that 
contains a great deal of common sense; and as we know, common sense is 
all too often the last thing that gets discussed during a political 
campaign.
  He says correctly that we have to look at the entitlement picture. To 
pretend that we can balance the budget without looking at entitlements 
is living in a dream world, even if both political parties were not 
asking for tax cuts. The request for tax cuts simply compounds this 
problem.
  Second, he suggests that we have to look at urban problems. If I can 
expand that to say we ought to be looking at the question of poverty, 
which is what he is really suggesting. That means looking at education 
and some other basics.
  I have long favored having a WPA type of jobs program where we would 
pay people the minimum wage for 4-days a week. The fifth day they would 
have to be out trying to find a job in the private sector. When people 
cannot read and write, we would get them into a program. If their 
literacy and educational background was woefully inadequate, we would 
get them into a program to get their GED. If they have no marketable 
skill, we would get them to a community college or technical school.
  The reality is there is no way of achieving the kind of society we 
should have on the cheap, as Darman points out.
  The third reality that he mentions in his article is that we are 
growing older and obviously that has a huge impact on the entitlement 
scene.
  There is one other reality that he does not mention that ought to be 
put on the table and that is in terms of taxation. Contrary to the 
general myth, the percentage of our taxes that goes for government 
support is lower than any of the countries of western Europe or Japan, 
Australia, and New Zealand, if the Japanese industrial compact is 
considered. The lone exception to that is Turkey.
  We ought to be looking at a value-added tax; we ought to be looking 
at a more realistic gasoline tax; we ought to be raising cigarette 
taxes, both for our economic health and our physical health.
  In any event, the Darman discussion should move us a little more 
toward reality.
  Mr. President, I ask that this article from The New York Times be 
printed in the Record.
  The article follows:

                [From the New York Times, Sept. 1, 1996]

                           If We Were Serious

                          (By Richard Darman)

       The prime-time convention shows have come to their balloon-
     drop endings. The mini-movies, zingers and dramatic speeches 
     are over. What follows now, we are told, is the ``serious 
     campaign.''
       That is a notion which many would dismiss as oxymoronic. 
     But it has the virtue of suggesting an interesting question: 
     What important issues might the candidates address if the 
     campaign actually were serious?
       The question is not put to dismiss what has been presented 
     so far. Bill Clinton and Bob Dole have both recognized that a 
     governing majority requires far broader appeal than either 
     party's traditional base provides. They have both broadened 
     their reach.
       Bob Dole has distanced himself from the dour anti-
     government focus of the House Republicans by selecting Jack 
     Kemp--signaling an interest in growth, while underlining his 
     commitment to equal opportunity, inclusiveness and tolerance. 
     Bill Clinton has adopted a Reaganesque command of symbols and 
     ceremony, declaring ``hope is back.'' And he has again 
     reversed himself on welfare and taxes, asserting ``the era of 
     big government is over.''
       How much of this is to be taken seriously, others may 
     judge. Choices have been framed: whether to continue on the 
     current path or pursue a bolder reach for growth; to rely on 
     government or ``trust the people''; to ``bridge'' forward or 
     back to the future. The problem is that such formulations, 
     though important, are abstract. As presented by the major 
     candidates, they barely touch fundamental issues America must 
     face.
       One such issue, growing middle-class entitlements, was 
     mentioned in a convention speech, but not by any of the 
     candidates. Colin Powell warned of ``condemning our children 
     and grandchildren with a crushing burden of debt that will 
     deny them the American Dream.'' He noted, ``We all need to 
     understand it is the entitlement state that

[[Page S10346]]

     must be reformed, and not just the welfare state.'' Virtually 
     all serious analysts agree: if entitlements are not reformed 
     before the baby-boom generation reaches age 60, the feel-good 
     talk about recent progress on the deficit will be replaced by 
     a sense of crisis.
       The sensible course is to avoid a baby-boomer retirement 
     shock by addressing the problem well in advance. But the 
     major candidates either pretend the problem does not exist, 
     propose to hand it to a commission, or wish it away with 
     heroic assumptions about economic growth. Indeed, while 
     sidestepping the problem, the candidates actually act as if 
     government were going to be long, not short, on revenue. 
     Without providing credible proposals for spending reduction, 
     both candidates offer the voters attractive tax cuts--what 
     Ross Perot has termed ``free candy just before elections.''
       The facts are these, however: There are good reasons public 
     policy should seek to increase growth. These range from 
     interests in reducing the deficit and financing Social 
     Security to increasing opportunity for the poor and improving 
     the quality of life for all. But growth is limited by labor-
     force participation and the rate of increase in productivity. 
     These can and should be improved by cutting marginal tax 
     rates and the tax on capital gains. But significant 
     improvements in productivity also require radical 
     improvements in education and training, and major 
     breakthroughs in research and development. These, in turn, 
     require the expenditure of political and financial capital. 
     Even with these, the likely increase in growth would not 
     suffice to offset too much free candy.
       In any case, major improvements in long-term productivity 
     growth take time to achieve. Meanwhile, the deficit cannot be 
     eliminated by focusing on non-entitlements and using the new 
     line-item veto. The ``anti-government'' public and 
     politicians care too much about expenditures for law 
     enforcement, immigration control, drug abuse prevention, air 
     safety, environmental protection, biomedical research, and so 
     on. So if the baby-boomers are to avoid a shock, if the 
     deficit is to be kept under control, and if a tax increase is 
     to be avoided, entitlement reform will have to be faced 
     promptly.
       This issue is at the heart of the budget problem. Yet if it 
     were merely budgetary, it would long since have been solved. 
     The dilemma is that entitlements principally involve the 
     broad American middle that is key to electoral success. That 
     is why entitlements are the ``third rail'' of American 
     politics and lend themselves to demagoguery. They are treated 
     simplistically though they involve complex questions: Who in 
     the middle class should be protected against exactly what 
     risks? What should be the relative responsibility of 
     government and individuals in assuring risk protection? What 
     are the obligations of working generations to generations too 
     young or too old to work? Leadership is needed to help frame 
     responsible answers to just such difficult questions. Yet no 
     candidate has trusted the people enough to risk a serious 
     discussion.
       A second fundamental problem is as obvious as the first and 
     as unattended: America's deposing inner cities. Clearly, talk 
     of hope, history and the American Dream is hollow if it does 
     not address the large population trapped in ghettos. Urban 
     ghettos represent a moral failure and a substantial economic 
     cost. Indeed, if left unattended, the decivilizing effects of 
     urban neglect may pose a more widespread threat to the 
     American Dream. Yet this problem, too, has difficulty 
     attracting a serious word.
       Jack Kemp deserves credit for being among the few major 
     politicians to put the urban problem on the national agenda. 
     But, unfortunately, putting this problem on the agenda and 
     offering viable solutions are not necessarily the same. Jobs 
     must be created near blighted areas, and tax incentives could 
     help. but they cannot possibly suffice. A zero capital gains 
     rate will not counter the fear of random violence or 
     organized mayhem. Low marginal rates alone will not produce 
     healthy role models or families, effective education, a 
     reduction in drug abuse, or the basics of a civilized 
     infrastructure. Given the scale of the urban problem, very 
     large amounts of public and private investment are required. 
     And while the investment may pay for itself over generations, 
     in the near term it means that in addition to tax incentives 
     there must be significant spending. Yet these days, no major 
     politician seems willing to admit publicly that great dreams 
     cannot be achieved on the cheap.
       A third fundamental problem is not quite as obvious as the 
     first two. It is the flip side of a good thing: Americans can 
     expect to live longer. The Census Bureau estimates that, in 
     2010, there will be more than 40 million Americans aged 65 
     and over. Six million will be 85 and over--and that is before 
     the baby-boomers reach 85. with breakthroughs in biomedical 
     research, these numbers will be even more compelling. There 
     is not only a very large generation headed toward retirement. 
     But in the move from the 20th to the 21st century, something 
     close to an additional generation is being added to expected 
     life.
       This will necessitate a minor cultural and economic 
     revolution. It is not merely an issue of entitlement finance. 
     Retirement ages will have to increase. Job and retraining 
     opportunities will have to be developed. New community-living 
     arrangements will have to be expanded. Profound issues of 
     morality will have to be confronted.
       Bob Dole has spoken eloquently of the ``gracious 
     compensations of age.'' At 73, he is healthy and active--a 
     symbol of the enormous potential represented by the growing 
     numbers of healthy older Americans. He is perfectly 
     positioned to raise national consciousness about the risks 
     and opportunities presented by the aging of America.
       As the campaign moves into its ``serious'' phase, however, 
     it may be naive to imagine that candidates might actually 
     treat us as if we could face serious problems seriously. Bill 
     Clinton has had four years to address these problems and has 
     not yet done so. And while elections elicit new proposals, 
     they rarely produce serious discussion. The politicians are, 
     naturally enough, trying to get elected. To get them to be 
     serious, we ourselves would have to be serious. And if 
     balloons, simple nostrums and promises of free candy are all 
     we demand, that is probably about all we will get.

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