[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?
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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.
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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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