[Congressional Record Volume 143, Number 27 (Wednesday, March 5, 1997)]
[House]
[Pages H748-H754]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               THE FEDERAL BUDGET AND THE BUDGET PROCESS

  The SPEAKER pro tempore (Mr. McInnis). Under the Speaker's announced 
policy of January 7, 1997, the gentleman from Georgia [Mr. Kingston] is 
recognized for 60 minutes.
  Mr. KINGSTON. Mr. Speaker, what I wanted to talk about a little bit 
is the budget and the budget process, the situation that we are in, 
because recently the Senate Democrats voted down the balanced budget 
amendment. All the balanced budget amendment really said is that the 
Congress of the United States and the President would each year pass a 
budget that was balanced. No mystery to it, Mr. Speaker. All it meant 
was whatever we bring in, that is what we spend. I would love to see us 
spend less than what we bring in. I would certainly settle right now to 
say just, ``You don't spend more than you bring in.'' But I guess the 
President and the Senate thought that was too controversial of a 
concept for us to pass a balanced budget so they voted it down and 
great for them.
  What is the situation that we are in right now? Well, for the 
children of America, I have got four kids and I know the Speaker has a 
large family, also. We are concerned about our children and their 
future. What will this leave for the kids? Today our national debt is 
$5.1 trillion. We have not had a balanced budget since 1969. If we look 
at that in terms of what it will mean to kids, kids who are graduating 
from school and going to work today will have a higher tax burden than 
any other graduating class in the history of the United States of 
America. They will have higher interest rates as a result of a budget 
that is not balanced, and they will have less job opportunities.
  Now, if we would balance the budget and pass a balanced budget, they 
are two different things. Passing the balanced budget amendment would 
ensure to the children in the future that we would not get in this huge 
deficit situation year after year again, and it would also say that we 
would have no more deficits and we would start paying down the national 
debt.
  Currently, Mr. Speaker, the interest on the national debt, I think, 
is at $231 billion each year. That is around $20 billion a month, give 
or take, because the interest rates change. I do not know what the 
annual budget is for the State of Colorado but I know that Colorado is 
a little bit smaller than the State of Georgia. The State of Georgia 
has a budget of about $11 billion a year. So for Georgia, we have a 
budget of $11 billion a year and we are paying $20 billion each month 
in interest on the national debt.
  We have obviously got to get this under control. Our children, Mr. 
Speaker, are paying higher interest rates and higher taxes as a result 
of this massive debt.
  I have with me the gentleman from Arizona [Mr. Hayworth] who has been 
a leader on the Committee on Ways and Means trying to put some sanity 
in our tax policies and we want to talk about the IRS and taxes in a 
minute,

[[Page H749]]

but right now let me yield to the gentleman on the balanced budget and 
the need for it.
  Mr. HAYWORTH. Mr. Speaker, I thank my colleague from Georgia for 
yielding.
  I have listened with great interest to so many points of view, but 
one thing, Mr. Speaker, that comes through loudly and clearly from the 
American people is the notion that we must move to put our fiscal house 
in order. Regrettably administrations of both parties, and indeed this 
institution in previous years have failed to live up to the 
responsibility that every American family must follow, and, that is, to 
live within our means. It is an exercise every family practices sitting 
around the kitchen table. When families are outspending their rate of 
income, they have to make changes.
  What we talk about here is not shrouded by mysteries of micro or 
macro economics. There are no hidden agendas or anything that should 
stunt or scare us as a people. No, simply what we must do is live 
within our means. As my colleague from Georgia pointed out, many of the 
respective State constitutions in this union of 50 sovereign States 
mandate that those States operate within the parameters of a balanced 
budget. Indeed, it is unconstitutional according to those State 
constitutions for those States to do otherwise.
  What we are saying is that that measure of fiscal sanity, simply 
living within our means, be done here at the Federal level. It has been 
28 years since Congress, working with the President, has balanced the 
budget.
  Mr. KINGSTON. Let us talk about 1969 for a minute. In 1969, Jimi 
Hendrix was probably coming out with ``Are You Experienced?'' That was 
his album. The Beatles, I think, were coming out with the White Album. 
They had just probably found Paul. There was the ``Is Paul Dead/I Am 
the Walrus'' debate with the Beatles. The Beatles had not broken up 
yet. Elvis was making his comeback. Elvis was still alive and doing 
fine in Graceland and all over America. Neil Armstrong was about to 
walk on the Moon in July 1969. Richard Nixon was in the White House and 
serving his first term in the White House. Nineteen sixty-nine. That is 
when we are talking about we had the last balanced budget.
  This is absurd. This is the United States of America. This is not the 
value system that you and I were raised with that says Congress could 
go on spending money, more than it brings in year after year and do 
what I call the kids' tax.
  Now, the way the kids' tax works is a real popular tax in Washington. 
That is when we in Congress spend more money than we are bringing in on 
new programs to get us reelected and we send the bill to the kids. It 
is the equivalent of going out to eat and having a big time on the town 
and on the way out the door the man says, ``Your bill comes to $78.''
  You say, ``Don't worry about it. Send it to my 4-year-old 20 years 
from now. He'll pick up the tab.'' It is the kids' tax and that is what 
we have gotten comfortable with since 1969 passing on the debt to the 
children of America.

                              {time}  1515

  Mr. HAYWORTH. In addition, as my colleague from Georgia points out, 
Mr. Speaker, in the process what we have done is something that is 
remarkably reckless and fundamentally unhelpful and unhealthful to 
generations yet to come, to generations who have yet to exercise their 
franchise as voters, to young people who have no voice at the ballot 
box, and it is this:
  What I hold here in my hand, Mr. Speaker, is the voting card given to 
me as a Member of Congress, and, Mr. Speaker, some folks around this 
institution, in an effort I suppose to laugh to keep from crying, have 
taken to calling this card the world's most expensive credit card, and 
there is a reason for that nickname for this card. It is because when I 
received this copy, it came with a debt of $5 trillion, and to put that 
on our children is one of the greatest tragedies and one of the 
greatest derelictions of duty that this, the world's greatest 
deliberative body, could fail to act on.
  And of course we are indebted to our President, to his own budgeteers 
who a couple of years ago in laying out the administration's budget 
offered a page in their preamble to those numbers called generational 
accounting, where the President asked his budgeteers to try to 
calculate for the next generation of taxpayers, Mr. Speaker, for kids 
like John Michael Hayworth who is now 3 years old, 25 years from now 
when he enters the working world, by that time at age 28 moving toward 
what we hope is a steadily increasing paycheck, heading toward his 
prime as a working adult. The President's own budgeteers, forecasting 
what those average taxpayers would have to surrender a quarter of a 
century hence, found these disturbing numbers. The President's own 
budgeteers tell us that if we do nothing to change the rate of spending 
in Washington, DC, if we fail to balance it--
  Mr. KINGSTON. If the gentleman would yield.
  Mr. HAYWORTH. If we fail to balance the budget, that generation of 
taxpayers would have to surrender in excess of 80 percent of their 
incomes.
  I would gladly yield.
  Mr. KINGSTON. I want to make sure that you understand. You are 
talking about your child and my child, and any parent out here in 
America hearing this should pay attention. Children will be having to 
pay an 80 to 83-percent tax rate just to sustain the current level of 
goods and services.
  Now here is a summary of the Clinton budget. I hope that we can get 
this on camera for the folks back home, but one thing that is 
interesting is after the administration torpedoed the balanced budget 
amendment in the Senate, then they said we do not need the amendment to 
balance the budget. They introduced a bill that they call the balanced 
budget, and in a year, if the gentleman can read this, I am not sure 
that he can, but in the year 2002 we would have a deficit of $69 
billion. So there is nothing balanced about the Clinton budget.
  Mr. HAYWORTH. And the other disturbing fact about this, and first of 
all let us thank the President for putting a budget on the table as a 
starting point, but there is a long way to go, the other disturbing 
fact about this, Mr. Speaker, is that 98 percent of the cost savings, 
98 percent of the hard work would have to come in the final 2 years of 
that cycle.
  Now, Mr. Speaker and my colleagues, I can put this into everyday 
language in terms of going on a diet. I think it is safe to say that 
people can take a look at me and, as the attorneys would say, there is 
a preponderance of physical evidence to indicate that I need to change 
my eating habits, I have to slim down; I would be the first to admit 
that. But you do not slim down by losing maybe a gram a week, or saying 
you are going to lose 50 pounds and saying you are going to lose a gram 
a week for 4 years time, and then in the final 2 weeks of the diet lose 
48 pounds or 49 pounds to get to that level of loss.
  It does not work that way, and I insist even as we try to tighten our 
belts, so to speak, and act in a fiscally responsible way to help 
future generations to help this Nation, we have to get on a process 
that is very simple: Where we do not spend any more this year than we 
did the preceding year, where we move with fiscal sanity and 
responsibility to address these problems.
  Mr. KINGSTON. If the gentleman from Arizona will yield again, getting 
back to this chart a minute, as you say, here is where it is: 98 
percent of the deficit reduction allegedly comes in the last 2 years. 
Well, that would be well beyond the current administration's service in 
the White House.
  So there is absolute hypocrisy in such a budget to call it a balanced 
budget.
  The other thing is that it actually increases the budget next year by 
an additional $24 billion in terms of deficit spending--another $24 
billion in debt. So you have raised some good points.
  We have been joined by the gentleman from California [Mr. Cunningham] 
who has been a very active Member of the Education Committee, moved 
over to the Committee on Appropriations this year so he can get a 
little better angle at tightening the belt some, and, Mr. Cunningham, 
we would certainly like to yield to you and are delighted to have you 
with us.
  Mr. CUNNINGHAM. I thank the gentleman and my colleague from Arizona 
as well.
  I saw the special orders, and I think it is important to bring up 
just a couple of other points.

[[Page H750]]

  I listened to a Republican Governor the other day, and what does this 
mean to the future, not only to our senior citizens, but to our 
children as well, as far as a balanced budget? He said that his father 
took home 82 percent of his paycheck, his brother and his sister only 
take home 45 percent of their paycheck, and that under the current 
spending of Congress, an increase in taxes, he can expect his children 
to take between 16 and 18 percent of their paycheck home.
  That is a pretty sad commentary, that if we do not turn this around, 
what is the impact it is going to have on every American in this 
country to the negative?
  When we talk about a billion dollars a day going just to pay for the 
interest on the national debt, and not one cent of that goes to pay for 
Medicare, not one cent goes to education, not one cent of it goes for 
law enforcement or the rest; what could we not do with $365 billion in 
a year for the American people in the same areas that many of us--that 
I believe the liberals want better education, I believe they want 
better national security. But they want to do it from a government 
level which has spent money.
  I would also like to cover the history, when you talk about 28 years, 
some of the initiatives, Mr. Speaker, that they have gone through to 
try and balance the budget. Remember there was a commission put 
together to balance the budget prior to the Grace Commission that said 
we are going to balance the budget; they were not able to do it. Then 
Congress came forth, and this is when the Democrats were in the 
majority. They said, ``We are going to give you Gramm-Rudman,'' and the 
deal was that for every tax dollar you take in, we are going to cut 
spending by three, and we are going to balance the budget. Of course it 
did not work.

  Then when George Bush famously moved his lips and increased taxes, 
the Democrats were still in power, and the deal that they proposed to 
the President, President Bush, was again, ``For every tax dollar that 
we increase, we are going to cut spending by three to balance the 
budget.''
  Mr. Speaker, there were only 13 Republicans that voted for that bill 
to increase taxes that year before I got here, and if you look when 
George Bush, what they also told him, they were going to put, of the 13 
appropriations committees, they were going to put fire walls between 
each one of those committees so you could not take from one committee 
and take to another, and to even secure it more, they were going to put 
a cap on that so there is no way that you could increase spending.
  Well, what we found, and I was here in this body at the time, is that 
the way that the majority of the Democratic majority got around it is 
they put everything on emergency spending, which was exempt. They also 
had continuing resolutions which meant they carried over the spending 
to the next year and then the next year and the next year so that they 
could get around the caps and that spending keeps increasing.
  It is very, very important to note that the President says he wanted 
a balanced budget when he ran for Congress within 5 years, but at the 
same time the President in the 104th Congress, to tell you the smoke 
and mirrors, the President gave us three balanced budgets that 
increased the deficit by over $150 billion, and when it finally-- the 
pressure came on the President to give us a balanced budget scored by 
CBO, that 70 percent of the cuts came in the last year. This budget 
that the President is recommending that we look at makes 98 percent of 
all the cuts in the sixth and seventh year when he would not even be 
here.
  So when we look at about an honest balanced budget with numbers, 
there is no realistic chance of that particular budget ever balancing, 
and I would like to make one last point on it.
  The President said that he is going to increase modernization of our 
national security assets that we keep pushing out into the outyears, 
and guess what? That takes place in the years 6 and 7 of his balanced 
budget.
  Now do you think that Members on the other side of the aisle are 
going to decrease with 98 percent of the cuts in social spending and 
increase defense spending at that time? It is not a legitimate budget, 
Mr. Speaker, and I thank the gentleman for yielding.
  Mr. KINGSTON. Well, let me yield to the gentleman from Arizona and--
but can I jump in for 1 second? I have got some things just for the fun 
of it here.
  On a trillion dollars, just our budget right now, is $1.6 trillion, 
thereabouts. Now the Office of Management and Budget director had 
calculated a couple of years ago. Since the gentleman here is an old 
top gun, I want a young top gun, but it has been awhile.
  Mr. CUNNINGHAM. Long in the tooth.
  Mr. KINGSTON. That if Mr. Cunningham's jet was flying overhead at the 
speed of sound and spewing out a roll of dollar bills behind it, the 
plane would have to fly for more than 15 years before it wheeled out 
$1.6 trillion, and I do not think you have that much fuel in any plane.
  And here is another way to look at it, and this is from the Wall 
Street Journal 2 years ago. Newspaper tabloids say that O.J. Simpson 
paid about $55,000 a day in legal bills, $55,000, and actually this is 
for the criminal trial and not for the civil trial. The trial would 
last 26 million days or about 100,000 years before O.J. had spent $1.6 
trillion.
  Let me yield to the gentleman from Arizona.
  Mr. HAYWORTH. I thank my colleague from Georgia for illuminating the 
sheer volume of $1 trillion--$1.6 trillion because the danger, Mr. 
Speaker, is that we become numb, or we are numbed, to these totals and 
these figures as they are bandied about, but we are talking real money, 
and we are talking real people, and we are talking about a real debt 
that will hang over the heads of our children, a debt that as we have 
seen with yearly deficits actually adds to our spending a debt tax, if 
you will, in terms of higher interest rates.
  I often have occasion to visit high schools across the width and 
breadth of the Sixth District of Arizona, and I was at the new Fountain 
Hills High School last Friday morning for a townhall meeting listening 
to the perspective of these young people, some of whom have already 
gained their franchise to vote having celebrated their 18th birthdays, 
others looking forward eagerly to the opportunity to engage in the 
national debate and have a voice at the ballot box, and we talked about 
what this deficit tax, if you will, actually means with the higher 
interest rates when they want to get a student loan, when they want to 
have a car loan. The fact is that they are paying more and more money 
on that loan because of higher interest rates, and that is money that 
is likewise taken out of their pocket in addition to the taxes they 
encounter and the taxes their parents encounter and the taxes that now 
on average working families in America actually account for more of the 
family budget than food, shelter, and clothing combined.

                              {time}  1530

  Mr. KINGSTON. That is absolutely ridiculous. As a result, the 
American middle class families now pay an average of 24 percent just in 
Federal income taxes, compared to their counterparts 20 years ago, who 
paid about 16 percent, and 30 years ago they paid about 5 percent. The 
average tax burden right now is 38 percent on average middle class 
families.
  Mr. Speaker, I want to talk to my colleagues about the IRS and about 
tax simplification and so forth, but before I do that, let me give my 
colleagues two more perspectives on $1 trillion. Shaq O'Neill makes 
about $30 million a year, $30 million a season, if you will. He would 
have to play 33,000 seasons to make $1 trillion. The man makes $30 
million a year. He would have to play 33,000 seasons to make $1 
trillion. That is ridiculous.
  Another definition. Our national budget each year is about $1.6 
trillion. If you stuck $1 bills inside 50-foot boxcars on a train, that 
is about $65 million per boxcar. How long would the train be? Would you 
care to guess?
  Mr. HAYWORTH. I would not conjecture.
  Mr. KINGSTON. It would be 240 miles long. Think about that.
  Let me yield to the gentleman from California.
  Mr. CUNNINGHAM. Let me give my colleagues, Mr. Speaker, some food for 
thought on how we can balance the budget and not cut some of the 
valuable programs that we are looking for.

[[Page H751]]

  Let us take, for example, education. I was the subcommittee chairman, 
basically K through 12 during the 104th Congress. In some areas, in 
some school districts, we get as little as 23 cents on a dollar out of 
Federal education programs.
  The gentleman from Michigan [Mr. Hoekstra] the other night in a 
special order was pointing out that there are 760 Federal education 
programs, all with bureaucracies, all taking money away from getting 
the dollars down to the classroom. The average is around 50 cents on a 
dollar for most areas, but in some areas it is as little as 23 cents on 
a dollar. That is cutting education because the dollars are not going 
the way the American taxpayers sent it to Washington to improve 
education, but it is going to support a bureaucracy and large numbers 
of programs.
  The President in his budget wants a new $3 billion literacy program. 
There are 30 current literacy programs in those 760 programs, and only 
14 are funded. Title I, for example, is our war against illiteracy. But 
yet the President wants to come up with a new $3 billion program with 
new bureaucracies in the Department of Education, and why do we not 
eliminate the programs that are not working of the 30, focus on the 
ones that are, and drive the money down to the local areas? That is one 
way.
  Mr. KINGSTON. Mr. Speaker, if the gentleman will yield, but what is 
interesting is when I talk to employers in my area and I say, what do 
we need to do in our education system to prepare our kids to go out and 
compete in the world market against Japanese, British, German children 
and so forth, they say, you need to have reading and math backgrounds, 
very strong. Federal education, of all of those 700 education programs, 
we have 14 reading programs, we have 39 art education programs, we have 
11 mathematics programs and 27 environmental programs.
  Now, I think environmental and art education are very important, but 
if you want a job you better go in with math and reading. If we want 
our children to be able to compete on a global market, we have to do 
that. That is what you are saying, it would not cost a dime just to 
redirect funds, but it would produce people who are going to be better 
assets to the job market.
  Mr. CUNNINGHAM. Mr. Speaker, at the same time, taxpayers do not have 
to pay for the extra bureaucracy that is not actually going down to 
education, so it lessens the burden of taxes and at the same time 
reduces the size of government that we do away with wasted 
bureaucracies. It is common sense.
  Let me give you another example. How can we balance the budget and 
actually enhance money to education? The President's direct lending 
program for student loans was capped at 10 percent during the 104th 
Congress. When the Government shut down, the President, one of his 
goals was to take that to 100 percent. We balked and went to 40 
percent. At 10 percent it cost $1 billion, not $1 million, but $1 
billion more in administrative fees. This is a GAO figure. Fact, not 
Republicanism. It takes $4 billion more to collect those dollars, and 
that was only capped at 10 percent.
  So when it went to 40 percent, when the Government shut down at the 
request of the President, we limited the administrative fees which 
basically go to pay for a higher bureaucracy. And what we did in the 
subcommittee is we drove an increased Pell grants for poor children to 
the highest level ever. We thought that was more important to get the 
money down to the kids instead of paying for a bureaucracy.
  We increased the level for special education children to the highest 
level ever, more important than paying a bureaucracy. We increased 
student loans, Mr. Speaker, by 50 percent, not 15 but 50 percent, and 
they said we killed education or cut it by $10 billion. We drove the 
money down to the zip code, eliminated a bureaucracy, and what Mr. 
Hoekstra and Mr. McKeon from California are trying to do is look at the 
programs and let us focus on the ones that work.
  The last point, if the gentleman would be kind enough to yield, 
AmeriCorps, $27,000 per volunteer. The President talks about a 
volunteer force. In Baltimore it costs $50,000 for a volunteer. And our 
tax dollars are going to pay for that.
  Mr. KINGSTON. Mr. Speaker, would you explain what AmeriCorps is, 
because I think there may be some folks who want to know what 
AmeriCorps is.
  Mr. CUNNINGHAM. AmeriCorps is one of the President's pet programs 
that allows people to go out and help in other areas; for example, 
painting a fence or cleaning a yard for a senior citizen or doing 
different kinds of work, and that is supposed to be voluntary, but they 
also receive an average of $27,000 for that activity, which we think is 
wrong. Part of that is used as direct pay, part of it is used for child 
care, part of it is used for administration costs. But we can spend our 
dollars better at that.
  The other area in which we waste money, if we are getting so little 
return out of Federal Government dollars that taxpayers pay, and a 
State bureaucracy is just as bad as a Federal bureaucracy if it takes 
the money from getting down to the teachers and the students and the 
parents where they can direct it, but if we cannot pass school bond 
issues at the local level because people are only getting 45 percent of 
their paycheck because of high taxes and big government, how are we 
going to build up the infrastructure?
  Well, one of the ways in which we are proposing is to take private 
enterprise, let the IBM's, let the Baby Bells, let the AT&T's, Alcoa 
put in the fiberoptics, let Apple put in the computer system so that 
they are not archaic within a year, and give them a tax break for 
investing in our taxes.
  We have less, Mr. Speaker, than 12 percent of our classrooms in this 
Nation that have even a single phone jack. Business tells us that a 
large portion of the children coming out of high school do not even 
qualify for an entry level position because they cannot read. The 
President was right. We need 4-year-olds to read and 8-year-olds to do 
math, but if they cannot read and write, they cannot speak the English 
language or they do not have the technical skills, that delta that my 
colleagues talk about between the rich and the poor all the time is 
going to grow exponentially. So it is one of the ways that we can 
actually enhance and save our tax dollars.
  Mr. HAYWORTH. Mr. Speaker, I just would like to thank my colleague 
from California, because not only has he outlined the parameters of the 
problem, but he has offered a solution.
  Mr. Speaker, just simply to bring this home to Arizona, the Sixth 
Congressional District and indeed throughout the State of Arizona, 
there are real problems with inequities in school funding. There are 
real challenges for rural school districts who, through the 
evisceration of resource-based industries, have seen their tax bases 
decline exponentially.
  Indeed, I think of Superior High School in the town of Superior, AZ, 
in the Sixth Congressional District, where the high school is anything 
but superior in terms of the building. Now, the students that go there 
are truly superior, fine young people working hard, but they are in a 
situation where their school has fallen into disrepair and the tax base 
has been eradicated.
  So we have to look for other ways to end these funding inequities, 
and that is why I am so pleased that my colleague from California wants 
to step forward with a plan that would call on private enterprise to 
step forward, and now with a seat on Ways and Means I look forward to 
working with the gentleman from California [Mr. Cunningham] and with 
the gentleman from Texas [Mr. Archer], the chairman of that committee, 
to find a way to deal with the Tax Code to help business help schools.
  Mr. KINGSTON. Mr. Speaker, it is interesting, I was talking to a 
private school, they had a private school in my district last week and 
he was telling me about a private school not in my district, but 
elsewhere in the country, where they were getting away from this rat 
race that a lot of our school systems are in in terms of buying new 
computers, because every year you buy new computers and because of the 
bureaucracy it takes a long time. So if you and I go out and buy a 
computer tomorrow, it is going to be obsolete. But in the school system 
it is even more because of all of the redtape that they have to go 
through.
  So what they say is the school system does not buy computers any 
more. Each child has a laptop and in their lockers are batteries where 
they charge

[[Page H752]]

their laptops for 4 hours and then they can use them during the course 
of the day. I strongly believe that that is the technology that we are 
moving toward rather than having every gizmo that comes out of IBM, and 
so forth.
  But the beauty of it is that these laptops are sponsored by 
businesses who want to get the kids to be computer friendly, so they 
underwrite it, and it does not cost the school system, or it costs them 
a lot less. That is the technology. We are so often playing by 
yesterday's rules when it comes to government. Technology is lightyears 
in front of us.
  Mr. HAYWORTH. Mr. Speaker, if the gentleman would yield, there is one 
central point that should be our guide. Every dime appropriated at the 
Federal level should go to help teachers teach and help children learn. 
That is our challenge, that is our mission, and that is one of the 
things I will work on in this 105th Congress.
  Mr. KINGSTON. Mr. Speaker, before I yield to the gentleman from 
California, let me say that we have to have child-centered education. 
Right now the Washington, DC school district spends, I think it is 
about $10,000 per child because I know that Utah is the lowest in the 
country at about $3,400 and Washington, DC is the highest in the 
country. We spend $10,000 per child in Washington DC, and yet this 
Congress is going to have to spend an emergency appropriation to fund 
new boilers in Washington DC because they are about to blow up. That is 
how wasteful, I would say, and overburdensome bureaucracy can be. The 
money should be going to the teacher and the classroom.
  I yield to the gentleman.
  Mr. CUNNINGHAM. Mr. Speaker, if you look at the American people, 
there are bright sun spots in education. You go to a lot of the 
schools, we have fantastic teachers and we have some fantastic 
programs. But if you go, for example, outside Chicago, where I used to 
coach and teach, about 5 miles down the road there is about 7 miles of 
Federal housing projects. Those kids do not learn in school. They carry 
guns, not books. Most of the girls become pregnant one or two times. 
The grandmothers raise them, and if you are a male child the only hope 
you have is to be in a gang, or a female child, even today are becoming 
more and more involved. The chance for them of achieving the American 
dream is less; the welfare reform helped that.
  But those are some of the other ways in education that I think that 
we can enhance it, and there are so many ways, Mr. Speaker. We are only 
covering just a little bit here.
  Remember a gentleman, Mr. Speaker, named Jaime Escalante? He had a 
vision that he could teach minority children in the inner cities 
physics. How much support did he have with the kids? They thought he 
was nuts. The administrators and the teachers thought you cannot do 
that in an inner-city school. We have tried it. You are going to fail. 
What about the parents? He had zero support. Well, Jaime Escalante set 
out to teach these children physics. It was up to I think 90 percent of 
them got A's and went on to college in physics when he proved it. Then 
you got the support of the children, you got the support of the 
parents, you got the support of the administrators and the community to 
invest in education.
  People today look at all of these programs at the low return that 
they are getting on the education dollar for their children, and they 
are not as apt to cough up money.
  The second aspect of that is that people are tax tired. They are 
taking home less. My children are only going to take home 16 to 18 
percent of their paycheck. How much are they going to be willing to 
invest into education?

                              {time}  1545

  All the rest of the money is going to be paying for interest on the 
debt. So the ballpark line is let us have a system that people can 
believe in and want to get out and support. Let us give them the 
resources at home, not the Government, that can support that vision. We 
can enhance education instead of letting the Federal Government, like 
the liberals and many of the socialists want to do, to have the 
Government control everything at great waste.
  The direct lending program I mentioned a minute ago, of the 
President, $50 million in 1 year wasted in a study, in a program on how 
they could get out the money better--$50 million in 1 year. Yet they 
want all of that to go out of the Department of Education. What a waste 
that would be.
  Mr. KINGSTON. Mr. Speaker, sometimes I do not know why we as 
government bureaucracies just do not think. There was a case of a 
school district that spent, listen to this, over $1,000 to obtain a 
government grant that had a $13 value. They used it to park their bus 
one day. They spent $1,000 to get a $13 grant. Does that make sense?
  There was another case, and the gentleman knows this, his committee 
ferreted it out, of about $81,000 in safe and drug-free school money 
that was spent buying dentures for toothbrushing lessons, which is 
important. Of course, I think it is a parent job, not an educator job. 
But that money should have gone into drug education.
  There was another one, and the gentleman from California [Mr. 
Cunningham] remembers his committee found out, out of a school system, 
and I think I am 90 percent sure of the State, but because of the 10 
percent uncertainty I will not say it, but they spent the safe-and-
drug-free school money, $171,000 on a 3-day retreat. That is absurd. 
That is a waste of money. None of that money got to the teacher and to 
the child in the classroom.
  Mr. HAYWORTH. I think the point is well made. Again the message we 
want to share, Mr. Speaker, with those who join us via television is 
the notion that we can do a better job, use our resources in a more 
intelligent fashion when we focus on having children learn in a safe 
environment, when we assure equality of opportunity for every 
schoolchild from the inner city to the most rural regions of this 
country, to places in between, where they have an opportunity to have a 
quality educational experience, and where we focus resources on helping 
teachers teach, helping children learn, and empowering parents to make 
sure their children have an education worthy of their goals and worthy 
of this Nation's future.
  That is the challenge before us. That is why I look forward to 
working with the gentleman from California. That is why I look forward 
to working with the gentleman from South Carolina [Mr. Graham] who is 
preparing legislation that would say that we should direct 90 percent 
of the money raised at the Federal level for education, we should work 
to ensure that 90 percent of that money gets back into the classrooms 
locally to help teachers teach and help students learn, and quit 
empire-building with the Washington bureaucracies; because this 
redistribution of wealth, as my colleague the gentleman from California 
has pointed out, and I have seen statistics that are even more dire, 
where according to some studies only 8 cents of every dollar ends up in 
some classroom settings.
  The answer is more than dollars and cents, C-E-N-T-S; it is common 
sense, S-E-N-S-E, that we must work to preserve, to empower students, 
teachers, and parents in this educational endeavor.
  Mr. KINGSTON. Mr. Speaker, I yield to the gentleman from California, 
who wants to make a few more remarks, and then I want to pick the brain 
of the gentleman from the Committee on Ways and Means and talk about 
the IRS. If the gentleman from California, the other gentleman, wants 
to join us, he is welcome to.
  Mr. CUNNINGHAM. Mr. Speaker, I thank the gentleman for yielding to 
me.
  Mr. Speaker, what would we ask our colleagues on the other side of 
the aisle to agree with us on when we look at the President's budget 
and the Republican budget to come together?
  I think there are some key issues. First of all, we would want the 
numbers to balance at the agreed amount of time, which is 7 years.
  Second, we do not want to increase taxes to do that. The American 
public and the economy is stagnant at about 3 and 4 percent. Remember 
that the President in his 1993 budget increased taxes $270 billion. He 
promised a middle-class tax cut and increased middle-class taxes. He 
increased the gas tax. He increased the tax on Social Security earners, 
and increased or at least had even a retroactive tax. The President in 
this budget increases taxes, Mr. Speaker. We disagree with that.

[[Page H753]]

  We would also like Members on the other side of the aisle to agree 
with us that it is a realistic budget. When the President in the 104th 
Congress gave us three separate balanced budgets that did not increase 
the balanced budget in time, but yet when his fourth one scored by CBO 
came up, 70 percent of the cuts took place in year 7. It is not 
realistic.
  This budget that the President has given us, 98 percent of the cuts 
take place in years 6 and 7, when he would not even be here. That is 
not realistic. We are asking for a realistic budget without tax 
increases on the American public, legitimate savings to save the 
programs. I think if we take a look also, that there should not be any 
gimmicks, that the numbers are real.
  For example, on Medicare part A to part B, people usually do not 
understand when we go through it, but let me give an example. If you 
take Medicare Part A, mostly the in-home care, and transfer those 
dollars to the general fund, that is like taking your MasterCard or 
Visa card and paying--saying, hey, I want to borrow the money to pay 
for it later. That is just increasing the deficit for our children 
later down the road. What we want to do is fund it so when you write a 
check, the money is already there. There is no gimmick to that.
  But by using part A to the general fund, it is smoke and mirrors to 
say we are going to use those savings to balance the budget when you 
are actually increasing spending.
  So I think there are several of those kinds of areas that when we 
balance the budget we will be asking the President and our colleagues 
on the other side of the aisle to at least have the common sense to 
agree on a real balanced budget, using real numbers with real savings 
and no gimmicks and no tax increases.
  Mr. KINGSTON. Mr. Speaker, I thank the gentleman. He is welcome to 
stay and talk about this next issue. I will introduce it this way.
  First of all, let me say, we want to talk about the IRS. The 
criticism is not to the employees, the criticism is to the system. 
Right now, that system has a Tax Code that is two volumes total and 
1,378 pages. It is an IRS that has 480 tax forms, and 280 forms that 
tell you how to fill out the 480.
  In 1994, the Tax Foundation estimates that businesses spent, listen 
to these numbers, 3.6 billion hours and individuals spent $1.8 billion 
preparing their tax returns. It is too complicated. One final statistic 
and then I will yield to the gentleman, because it is all up to the 
members of the Committee on Ways and Means to get this straight.

  According to a study of Daniel Pilla of the Cato Institute, the IRS 
gives out wrong answers to more than 8 million taxpayers a year. It is 
too complicated. What can we do to simplify the tax system?
  I yield to the gentleman from Arizona [Mr. Hayworth].
  Mr. HAYWORTH. Mr. Speaker, I thank my colleague, the gentleman from 
Georgia, because he asks a question that far exceeds the $64,000 
question. Indeed, it is a question that deals with trillions of dollars 
and is fraught with many challenges to our Nation.
  I think it is important, in the spirit of simplifying, to first 
define our goal. I believe, quite candidly, Mr. Speaker, that the 
American people will accept nothing less than our pledge to end the IRS 
as we know it.
  One way that I think my colleague, the gentleman from Georgia, would 
certainly champion is to put the service back into the final word in 
the name Internal Revenue Service; to the extent possible, to end the 
adversarial relationships that have grown up between the IRS and the 
citizenry.
  Let us not forget, Mr. Speaker, that we have the highest voluntary 
compliance rate of any Nation in the world when it comes to accruing 
revenue. But let us also understand this: that since this Nation 
ratified the 16th amendment, and the first direct tax on income came 
about in 1913, the cost of government, the cost of the Federal 
Government, even taking into account inflation, has increased in excess 
of 113,000 percent. So there are many questions we have to deal with.
  I thank my colleague on the Committee on Ways and Means, the 
gentleman from Ohio [Mr. Portman] for holding hearings about tax 
simplification, for working to get to the bottom of many of these 
issues that confront us: for example, the notion that the new computer 
system at the Internal Revenue Service, with an expenditure in excess 
of $4 billion, is not working; and still, Mr. Speaker, the confounding 
notion that within our Tax Code we penalize people for succeeding, we 
penalize people for getting married, and finally, we penalize people 
for dying.
  For although some refer to it as an estate tax, the fact is that we 
have, in essence, a death tax, where people who work hard, like the 
seniors who live in the Sixth District of Arizona in and around the Sun 
Lakes Retirement Community in my district, have worked hard, have 
achieved, would like to pass on, quite frankly, their prosperity to 
their children, pass on their businesses, and such is the excessive tax 
rate that these people are hurt.
  Mr. KINGSTON. Mr. Speaker, these are senior citizens who lived 
through the Depression. They are frugal. The gentleman is talking about 
my dad. He was raised in Brooklyn, NY. He fought and he saved, and 
because of the results of foregoing some pleasures and sacrificing a 
lot, he has savings now. Because of our tax system, he cannot pass that 
on. He is not a wealthy man, but he is a middle-class guy who saved. 
Because of that, he is now being penalized.
  That is the same person the gentleman is talking about: the seniors 
in Arizona, they are in Georgia, they are all over the United States of 
America.
  Mr. HAYWORTH. That is what we want to work to change. We need to 
change drastically and, yes, even work to repeal this death tax. We 
need to work to change the system of taxation where people are 
penalized for succeeding in our economy. We need to hold hearings, as 
we will, to take a look at alternative notions to the income tax.
  Our majority leader, the gentleman from Texas [Mr. Armey] champions 
the flat tax. Our chairman of the Committee on Ways and Means, the 
gentleman from Texas [Mr. Archer] champions the notion of a consumption 
tax, most often reflected in a national retail sales tax.
  What is very important for us, both in the Committee on Ways and 
Means and as a Congress, and indeed as a country, is to examine very 
carefully all the implications, the benefits, the challenges of these 
different alternatives and then move forward, once we achieve a 
consensus, to have that type of tax reform that will indeed end the IRS 
as we know it.
  Mr. KINGSTON. Mr. Speaker, let me give the gentleman a statistic that 
was sent to me by my friend, a Dr. Whitaker of Warner Robins, GA. In 
1913 when the original income tax went into effect, if you had an 
income of $20,000, your tax rate was 1 percent. If you average out a 
$20,000 income in 1913 to today's dollars, that would be the equivalent 
of making $298,000 a year.
  So for us today to have the same rates as we originally had on the 
income tax in 1913, someone making $298,000 a year would have a tax 
rate today of 1 percent. So the tax rate has just gone up and up and up 
and up, since we know that not to be the case. Even somebody making 
$20,000 a year would jump on paying the 1-percent tax.
  Incidentally, the highest tax in 1913, the highest percentage was 7 
percent. And now the average for middle-class Americans is about 24 
percent, easily 30 percent for many people, and 33 percent and on up.
  Mr. HAYWORTH. If the gentleman will yield, Mr. Speaker, the other 
thing we need to do, as I talked about, in terms of penalizing people 
for succeeding, is the excessive taxation, and I really call it the 
success and prosperity tax. We have come to call it the capital gains 
tax, and we welcome the initiative the President has put forth in terms 
of wanting very tightly targeted tax relief in terms of capital gains 
taxes.

                              {time}  1600

  His plan limits it only to homeowners. There are many small business 
owners across the country who have worked hard, who have succeeded, who 
will have more money to save, spend, and invest in job creation and in 
the economy if they have more of their money to hang onto.
  Mr. KINGSTON. Mr. Speaker, if the American people, let us just say, 
had $50 more in their pocket because the

[[Page H754]]

Federal Government did not take that money, we confiscate it now, but 
if we left $50 more in the pockets of, say, 200 million Americans, that 
would be another $10 billion in the economy. Will that $50 dollars in 
your pocket send to college? No. But you will go out to eat more often; 
you might buy another pair of shoes, another pair of socks, a belt. And 
when you do that, small businesses will expand to react to that $10 
billion infusion of money into the economy. When those small businesses 
expand, jobs are created. When more jobs are created, more people go to 
work. When more people go to work, less people are on welfare and other 
public assistance programs and more tax revenues come in.
  President Reagan and President Kennedy both proved this through tax 
cuts in the 1960's and the 1980's. If we today just give our average 
amount of tax relief, we would be creating more jobs and increasing 
revenues. I strongly feel that is very consistent with deficit 
reduction.
  Mr. HAYWORTH. Mr. Speaker, it is a very important first step that we 
take these important steps, even as we look at broad based tax reform, 
that we offer tax relief and tax cuts. This is another area where there 
are some honest disagreements.
  Treasury Secretary Robert Rubin came to testify in front of the 
Committee on Ways and Means a couple of weeks ago. The administration 
has a limited plan for a $500 per child tax credit. I asked Secretary 
Rubin about that single mom in the sixth district of Arizona, and there 
are many of them, who may not be receiving child support payments from 
their former spouse, who may be working very hard to stay above the 
poverty level and therefore not qualifying for the earned income tax 
credit and let us say the single mom has two children, ages 13 and 15.
  Under the administration's plan, that family would receive no tax 
credit for those children because, you see, the President's plan only 
goes to age 12. Those of us who are parents, and the gentleman from 
Georgia and I, the gentleman from Georgia's daughter is just entering 
her teenage years, our eldest daughter is just leaving her teenage 
years. There is one basic principle: Children grow more expensive as 
they grow up.
  Mr. KINGSTON. Please do not tell me.
  Mr. HAYWORTH. I think it is important that that single mom and single 
moms like her across the country have the chance to experience that 
same type of tax relief.
  The secretary in response, it is not my intent to put words in his 
mouth, to paraphrase his comment in response was, well, we had to make 
tough choices and tightly target these tax cuts. And therein lies a 
philosophical difference. Good people can disagree.
  We believe you can expand that opportunity. You can help those single 
moms. You can help those families who are having a difficult time and 
at the same time, with the infusion of capital into our economy, you 
can actually increase jobs, increase prosperity and move toward fiscal 
responsibility.
  The two goals are not mutually exclusive. It is possible to move to 
be more fiscally responsible and to allow working Americans to hold on 
to more of their hard-earned money and send less of it here to 
Washington. That is the challenge that still confronts us.
  Mr. KINGSTON. Mr. Speaker, I thank the gentleman for joining with me. 
We have just a few minutes to close.
  I want to say this: In Washington we have an administration that 
loves big government and talks about the big government being over 
with. Yet in the State of the Union Address, I think there were 
introduced 123 new spending programs.
  The American people are real good. They are far better than any law 
that the U.S. Congress can pass. People are better than laws. What we 
need to do in America is empower people, not lawyers and not police 
states and so forth, but people.
  Give you an example, last year 90 million Americans volunteered over 
4 hours a week for charity. That is about 19 billion man-hours a year 
voluntary. If you round that out at $10 an hour, that is $190 billion 
volunteered last year by Americans. Add that to the monetary 
contributions, which is about $150 billion a year, you have an American 
public that can give and give and give. It is far superior to the form 
of government that we have in so many cases to deliver goods and 
services to people back home. Our colleagues in Washington need to 
recognize that. Get off the people's back. Let them do their own thing.
  Mr. HAYWORTH. I thank my colleague from Georgia. Again, he points out 
so many facts that are pertinent in this debate and in this endeavor. A 
couple of thoughts come to mind in the wake of the President's State of 
the Union Message.
  I talked to one of my most important constituents, indeed, my most 
important constituent, my wife Mary. Ms. Mary's first question was 
this: ``How do we pay for all these programs?'' Will this lead to a 
greater deficit?
  And that is a question that is one that is filled with compassion and 
with common sense. Let us work to rein in spending, to allow working 
families to hold on to more of their hard-earned money, to look for 
what is reasonable and rational. That is the key in this Congress and 
in the years ahead.
  Mr. KINGSTON. I thank the gentleman from Arizona for joining me.

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