[Congressional Record Volume 143, Number 30 (Tuesday, March 11, 1997)]
[House]
[Pages H859-H863]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          BALANCING THE BUDGET

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 1997, the gentleman from Minnesota [Mr. Gutknecht] is 
recognized for the remainder of the 60 minutes as the designee of the 
majority leader.
  Mr. GUTKNECHT. Mr. Speaker, I yield to my colleague, the gentleman 
from the great State of New Jersey [Mike Pappas] who has joined the 
discussion tonight to talk a little bit about the budget and balancing 
the budget and from his perspective as a new Member of this body. We 
welcome him to this special order tonight and hope it will not be the 
last time he will join us.
  Mr. PAPPAS. Mr. Speaker, I thank my colleague for yielding to me.
  Mr. Speaker, I ran for Congress last year because I believe very 
strongly that if we as a nation could not get our Nation's fiscal house 
in order, the future will not be as bright as it should be. Everyone in 
this city says they are for a balanced budget, yet some of those same 
people opposed the balanced budget amendment, which would have forced 
both the administration and the Congress to do what every American in 
this country has to do each and every year: balance their own budget; 
that every small business person has to do each year, to balance their 
budget.
  I think it is unfortunate that while they say they want to balance 
the budget, they present a plan, a plan, not a budget but a plan, that 
sees the budget in imbalance to the tune of $69 billion.
  I can recall back in 1992 when Mr. Clinton was running for office, 
that he said that he had a plan to balance the budget in 5 years. Now 
we are in the fifth year of his administration, and yet we are looking 
beyond to another 4 or 5 years when he is out of office. I am here to 
act, I am here to vote. I am here to do what the people of the 12th 
District in central New Jersey sent me to do, to see a balanced budget 
within our lifetime. I am absolutely committed to do that.
  I am disappointed, yet at the same time I am hopeful, because at 
least now within the administration there is at least agreement that we 
need to balance our budget. That is tremendous progress from what we 
may have seen many, many years ago, where there was even a difference 
of agreement with regard to that.
  So I am here to literally roll up my sleeves, to make the tough 
decisions now, over the next year or two, at least within this term 
while I am serving the people of my district. Back home in New Jersey 
our State government, our county, our municipal governments, our school 
districts, each are required by our Constitution to have a balanced 
budget. I think it works very well for the people that I represent.
  There are those I have even heard that have said, at least in New 
Jersey, those that have opposed the concept and voted against balancing 
the budget, they have said that when they were a local official in 
their community that they balanced their budget. They did not add that 
the Constitution requires them to balance their budget, and if that 
requirement was not in existence, I have to wonder and we all would 
have to wonder whether that would be the reality.
  So I am here just to add my voice to the chorus here on both sides of 
this aisle that wants to see this budget balanced. I want to, as I said 
earlier, roll up my sleeves, make the very, very tough decisions that 
each of the people out there, throughout this country, have to make 
every day. People elected us to do that. They did not elect us to come 
up with a plan.
  It seems even in some of the committees that I serve on, there are 
people that talk about specific needs that need to be filled for 
various segments of our population. Some of those things I think have 
to be addressed today, or within the next year or two, versus saying we 
have a plan and we are going to project that in 10 years or in 8 years, 
that this particular need will be met and that this particular program 
will be initiated.
  It is great to have a plan, but the plan is only as good as the paper 
it is written on. If we do not follow the plan that the American people 
have expected us to do, or expect me to be part of instituting, then I 
think we will have failed. I do not think they want us to do that. I do 
not want to do that, and I believe that the majority of the people, at 
least in this Chamber, do not desire to do that.
  Mr. GUTKNECHT. I thank the gentleman for his comments. I would just 
share, just to follow up with some of those comments, that what the 
gentleman was talking about, I think if the voters had been told last 
fall that part of the plan would be to increase the deficit by $24 
billion this year, and ultimately wind up with a 5-year plan, and that 
according to our official scorekeepers, the Congressional Budget 
Office, that would actually leave us with a $69 billion deficit in the 
year 2002, my sense is that the voters would have been incensed. They 
would have said no way.
  I want to point out, this is one more chart that describes what we 
are talking about. In some respects it is like a person who says I am 
going to go on a diet. I am going to lose 50 pounds. But first I am 
going to gain 10 pounds. I will actually do most of the weight loss 
program in the last week of this plan of the diet.
  That is crazy. That is not the way the world works. That is not the 
way human beings work. Frankly, we know that is probably not going to 
happen. At least we have a start.
  I want to point out some other things. I want to get the gentleman 
from New Jersey [Mr. Saxton] back involved in the discussion as well. 
Today the Secretary of the Treasury, Mr. Rubin, came and testified 
before the Committee on the Budget. I wrote down some quotes of things 
that he said. I agreed with much of what he said today. I did not agree 
with his analysis, I did not agree with his final budget plan, but at 
least there were a number of points that he did say that I really agree 
with.
  One of them, he said, was that we have an historic opportunity. I 
think that is absolutely true. One of the unfortunate things, and the 
gentleman from New Jersey used the term ``disappointing,'' and I think 
disappointment is the right term. For the first time in a very long 
time we have an electorate who wants us to make those tough decisions, 
we have a body politic who has said we want to balance the budget, we 
have a President who says that he wants to balance the budget, and we 
have a Congress that is prepared to make the tough choices.
  Unfortunately, when we start with this kind of a plan, it makes the 
job even tougher. That is why I think it is disappointing.
  He also said, and this is a quote:
       Financial markets will punish bad behavior and they will 
     reward good fiscal behavior.
  It was interesting, because the Secretary previously had been, I 
believe, the CEO of Goldman Sachs, and they recently put out a 
newsletter, an economic analysis of what was happening in Washington. 
The headline on this newsletter was ``No Meaningful Fiscal Restraint 
Before the Millenium.''
  They go on to say, ``The prospects for a balanced budget agreement 
remain excellent. Republicans plan to use the Clinton plan as a 
starting point in the construction of their own proposal,'' which I 
think is accurate. Then they say, ``The bad news is that it appears 
increasingly likely that a deal will not result in meaningful fiscal 
restraint until the next millenium. In the Clinton budget plan the 
fiscal restraint is

[[Page H860]]

extremely backloaded,'' which we have pointed out. Here is the point: 
``This suggests that a budget deal will not have near term implications 
for the conduct of monetary policy.''

  What does that mean to the average family who wants to buy a new home 
and a new car? What it means is that interest rates probably will not 
come down. As a matter of fact, they may go up. That goes back to the 
point that the Secretary made: Financial markets punish bad behavior. 
They reward good fiscal behavior.
  What does this mean to families? We need to talk a little bit about 
that, and I want to get the gentleman from New Jersey involved in this 
discussion, because he probably understands this better than I do, but 
it is a chart I want to show of what happens to interest rates. They 
mean a lot because it affects what people can buy. It affects how many 
new homes are built and how many new cars are purchased. That affects 
how many new jobs are available, and good-paying jobs to the people who 
need them. In the end, this is really about how is it going to affect 
the American family.
  This is an interesting chart. I think it tells some interesting 
things. This was November 1994, when I and 72 of my colleagues became 
part of the Republican majority, and we called ourselves the majority 
makers. You can see interest rates were trending up until the election 
day. Then they trended down all through 1995, until we got to where the 
budget negotiations broke down. Then, guess what? Interest rates 
started to trend back up.
  After the elections of 1996 and conservative majorities were kept in 
the House and Senate, interest rates started trending back down. The 
President introduced his budget, interest rates have trended up 
slightly since then. Maybe it is just coincidence, but I think it is 
too great a coincidence. I think money markets do watch what we do here 
in Washington. They do reward good behavior and they do punish bad 
behavior.
  Ultimately what this means--we want to talk a little bit about what a 
balanced budget ultimately means to the families. If we can balance the 
budget without raising taxes, a number of the leading economists in 
this country have said we can expect significantly lower interest 
rates.

                              {time}  1930

  As a matter of fact, we can expect somewhere between 1.5 to 2 percent 
lower interest rates. That means a savings of $1,230 per year on the 
average home mortgage for a small home. For a larger home it can mean 
as much as $2,100, $2,160. On an average car loan, we are talking about 
a difference of $180 a year; on a student loan, $216 a year. That is 
real money.
  What that means is if American families have to spend less for 
interest, if the Federal Government has to spend less for interest, it 
means that we have more money to spend on other things. It means we can 
afford more homes and cars. It means that families can afford to send 
their kids to college.
  In the end, that is what this debate is all about. It really is about 
improving the quality of life for American families.
  I wonder if Congressman Saxton would want to jump back in here and 
talk a little bit about the impact. You have probably studied the 
correlation between taxes and between spending and budget balancing and 
interest rates and how it is going to affect families more than anybody 
else in the Congress.
  Mr. SAXTON. Mr. Speaker, I thank the gentleman for yielding on this 
point. I think it is a very important one.
  Obviously, a good part of what has caused the economic growth to take 
place, this growth period started in 1991 incidentally, the last 
quarter of 1991, the growth that has taken place has been encouraged to 
a large degree by the Fed holding down short-term interest rates. And I 
think it is very important to recognize that that is one of the factors 
that has caused the economic growth that we have sustained through that 
period of time to take place.
  It has been dampened somewhat, however, and I think most economists 
will agree that the tax increases that occurred in 1990 and 1993 had 
just the opposite effect. While the Fed was trying to hold down short-
term rates to cause growth in the economy, at the same time Congress 
put a damper or a wet blanket on economic growth and caused what I see 
as moderate, at best, economic growth taking place.
  If we had not had the tax increases on the other hand and if the 
economy had performed in a more robust way, while interest rates were 
low, we certainly would have had more job opportunities. We would have 
had higher wages, in my opinion, and certainly a higher rate of growth 
in the economy generally. So interest rates have played a very, very 
key role in this entire scenario.
  Aside from the Fed controlling to some degree short-term rates, long-
term rates are controlled to a large extent by investor expectation. If 
investors expect that inflation will be low and if investors expect 
that we are going to do our job and stop borrowing on the Federal level 
to the extent that we have and then they will expect that credit will 
loosen, then that expectation causes long-term rates to come down as 
well, which is all certainly very, very positive for job growth, growth 
in wages and growth in the economy generally.
  Our job here is to be partners with the Fed and the Fed has done its 
job extremely well in controlling short-term rates. Our job is to help 
control long-term rates by doing the responsible thing and moving in a 
steady decline in terms of deficit spending to the point where we 
actually have a balanced budget and every American family will benefit 
through a program like that, particularly when it comes, as you 
correctly point out, Mr. Gutknecht, to interest rates coming down.
  Mr. GUTKNECHT. And that affects families. That affects their ability 
to buy, their ability to buy new homes, remodel homes.
  I want to point out one other thing, I want to get Mr. Pappas back 
involved in this discussion a bit, too, but this chart sort of shows 
some of the bad news that we are, according to the Congressional Budget 
Office, we are still about $69 billion short under the President's plan 
in the year 2002. That is sort of the bad news. But it gets worse. 
Because if this chart were extended, and we are going to have to get 
this chart extended, if you just leave everything else the same, when 
people my age begin to retire in about the year 2011, 2012, when we 
begin to really make demands upon the Social Security system, the 
Medicare system, and other things, and as our income levels begin to go 
into retirement mode, this chart begins to go right straight up. It is 
almost like an F-16 taking off in a completely vertical takeoff.
  While I think this chart is kind of bad news, it gets a lot worse if 
we do not get serious about solving Medicare, solving Social Security, 
a lot of those underlying problems and begin to make some modest 
changes today so we can save the fund for the future.
  I yield to the gentleman from New Jersey [Mr. Pappas].
  Mr. PAPPAS. Mr. Speaker, I thank the gentleman. I notice on the chart 
that it shows on the President's plan that the deficit begins to 
decrease rather rapidly after or the last year of his administration or 
after that. The problem with that expectation is that is making certain 
assumptions about what the next administration would propose and what 
that Congress would dispose.
  And those are assumptions that I think could be rather dangerous if, 
again, we are just working off of a plan. Again, I think we have to do 
what we can do when we can do it. And today is the time that I believe 
that the people that we represent, each of us represent, expect us to 
act.
  I think the chart that you are demonstrating or displaying once again 
shows that the difficult decisions are being passed on to the next 
President and to a subsequent Congress. We are here to act now. And I 
think that if I wrote back or if I was at a town hall meeting in my 
district and I told people that I am representing that you are going to 
have to reelect me three or four more times before we are going to 
start making some meaningful decisions to bring that budget into 
balance, I do not think they would be very happy with me.
  Mr. GUTKNECHT. I might just point out, too, that I was with some 
school

[[Page H861]]

kids yesterday. One of the things, when I am with school kids, I show 
them my congressional pin and this nice little card case and this 
voting card, which one of our colleagues, I think 2 years ago, reminded 
me is the most expensive credit card ever invented in the history of 
human beings. And it is on this credit card that previous Congresses 
have run up about $5.3 trillion worth of debt on those schoolchildren.
  I think it is very graphic when you explain this to schoolchildren. I 
think most Americans can relate to credit card debt. Every so often we 
read about someone or we hear about a friend or a neighbor or maybe it 
is us where we get into trouble with our credit cards, where we are 
charging more and we have reached a point where we are having more and 
more difficulty just making the monthly minimum and paying the 
interest. The Federal Government in some respects is like that person 
who is having some problems with their credit card debt. They are 
having more and more difficulty just making the interest payments.

  If you had a person like that, the last thing you would do for that 
person, the last thing you would do is say, why do you not start out by 
going up and running up another $24 billion worth of debt on that 
credit card.
  No, I think the American people say, the first thing you ought to do 
is cut out the credit card. Stop spending more than you take in and do 
it quickly. Do not do it 5 years from now; do not do it 3 years from 
now. Do it this year and next year, because every dollar that we can 
save this year begins to multiply in the outyears.
  One of reasons we are doing as well as we are, and they were modest 
changes but I think they will have a profound impact long-term, are the 
cuts that were made in the last Congress where we eliminated some 289 
different programs. Some of them were not great big programs but when 
you pull a program out by the roots, you do not have to feed it year 
after year. So the savings actually multiply as you go forward.
  This is the number that concerns me, and I think it concerns the 
gentleman from Ohio [Mr. Kasich] and the Committee on the Budget and, 
frankly, should be of concern to all the Members of Congress and the 
American people, because you do not start out going on a diet by 
gaining 10 pounds. That is just not good. And you do not try to solve 
your credit card debt problems by running up even more debt on your 
credit card in the very first year of the budget.
  Mr. SAXTON. Mr. Speaker, I just want to make a point here. I think 
this is very important, because I would not want any of our colleagues 
or anybody who might be listening to this discussion to get the notion 
that we stand here talking about this ready to dismantle on a large 
scale Federal programs that are important to people.
  Two years ago, we began to slow the growth of some programs, which is 
what we still think we need to do in order to accomplish the objectives 
that we are talking about here tonight. We suggested, for example, that 
the School Lunch Program that was growing at a rate in excess of 10 
percent, seems to me it was growing at something like 11.5 percent, 
every year we were spending 11.5 percent more than we had spent the 
year before, and we suggested that one way to begin to get a handle on 
the huge increases that we had seen in Federal spending that was 
driving this deficit and national debt problem would be to slow that 
growth rate down from about 11.5 percent, I think it was to about 7 
percent. And we suggested similar kinds of things in many programs that 
had been growing at very high rates across the board.
  At the same time, during all those years, in real terms, we were 
reducing defense spending. So we had a disproportionate increase in 
some programs and no growth at all in other programs. And what we said 
was, what we say today is that if we can continue to hold down those 
programs that are currently held down and begin to get a handle on the 
large increases in the programs that are growing too fast, that we can 
maintain the services to the American people in a very similar mode 
that we are today and that we have over the past several years, but 
they just will not grow as fast. And so I think that is an important 
part of the discussion as well.
  There is one other point that I would like to make. I do not want to 
confuse the discussion about how important it is, for all the economic 
reasons and all the reasons that had to do with families, that we 
balance the budget. But there is one idea that is floating around here 
that I think we ought to be very cautious with, and that is that 
recently a commission gave a report on the Consumer Price Index. And 
the report suggested that the Consumer Price Index is not accurate, 
that it overstates the rate of inflation.
  And I think it is very important to understand that, yes, while we 
want accurate data in terms of the Consumer Price Index, that the CPI 
is used in our tax code to determine how much taxes people pay from 
year to year. The brackets in the marginal rate structure of our 
Internal Revenue Code actually are indexed to go up with inflation. And 
if we rush out without having all the information that we can possibly 
get and arbitrarily legislate a change in the Consumer Price Index, it 
will mean a tax increase that a JEC study recently pointed out that at 
the end of a 12-year period will be an additional $405 a year that the 
average taxpayer will pay in taxes, a very significant tax increase.
  So while we want to balance the budget, we do not want to look for 
the oversimplified ways to do it which means slashing programs that are 
going to hurt people or finding a gimmicky thing like adjusting the 
Consumer Price Index. Because an adjustment downward in the Consumer 
Price Index of 1.1 percent, as the Boskin Commission suggested, means 
at the end of 12 years every American taxpayer will be paying an 
additional $405 every year in taxes.
  Mr. GUTKNECHT. I am glad that you made that point. I certainly did 
not want to suggest that we are going to eliminate important programs 
that Americans count on. But I do want to make the point that there is 
an enormous amount of duplication, and there are a lot of programs that 
the Federal Government funds even today that are not necessarily 
effective.
  We have so much duplication, overlap between the States, the Feds, 
and so forth. I think you also make a very good point about whether or 
not we should tamper with the CPI for political or budget reasons. If 
we are going to change the CPI, it ought to be done by professionals, 
and it ought to be done for the right reasons, not simply just to 
balance our budget.
  Mr. SAXTON. As a matter of fact, if the gentleman will continue to 
yield on that point, the Bureau of Labor Statistics, which has the 
responsibility, along with calculating employment and unemployment 
figures, also is responsible for managing the Consumer Price Index 
process and the formula through which they measure the rate of increase 
in prices or price stability.
  The Bureau of Labor Statistics I have asked to report back to us by 
this summer on the structural makeup of the Consumer Price Index 
process and to make recommendations as to how the situation might be 
managed without legislating an arbitrary reduction which I think would 
be a mistake.
  I think your point is absolutely correct. There are people who eat 
and live and breathe issues that have to do with statistical analysis 
and how to measure the basket of goods that the Consumer Price Index 
measures. Our leadership is incidentally making a lot of these same 
points. So I am very pleased about that and hope that we will show some 
restraint and not look at this as an easy fix to move toward a balanced 
budget because I am not so sure it gets us there.
  Mr. GUTKNECHT. The other gentleman from New Jersey [Mr. Pappas], any 
other closing thoughts?
  Mr. PAPPAS. I was just going to ask my colleague from New Jersey, 
since he has been a long-standing member of the Joint Economic 
Committee and he has been here in the House for a few terms, if he 
would tell us through his tenure here, when just the early part of this 
decade, when there was a tax increase that was instituted, what was 
the, I think we all know but just from your perspective here as a 
member of that committee, what was the response by the Congress and 
just the response of the economy to that way to address what was 
perceived the way to go about making progress on the deficit?

[[Page H862]]

                              {time}  1945

  Mr. SAXTON. Well, today, the economy is growing at a little over 2 
percent. Some quarters had been better. I think we had 3.9 percent 
growth in the last quarter of, I guess it was the last quarter of last 
year. But overall, the economy has grown since 1990, the last quarter 
of 1991 by a little over 2 percent.
  Now, the average growth since World War II has been over 3 percent. 
That is 1 percentage point, but it makes a big difference, because 
while 1 percentage point, when we are talking 2 or 3 percent, is like 
50 percent faster at 3 percent than at 2 percent.
  So it is very important to realize that for some reason all of us 
agree that the economy is not performing as well as we would like it 
to. We would like it to be growing at least at the historic average 
since World War II, which is over 3 percent and it is growing at 2.
  So when we begin to look at why that could be, one of the 
unmistakable conclusions we have to come to is we had the biggest tax 
increase in 1990, followed by an even bigger one in 1993. That, to me, 
seems to be what we did differently. And therefore this recovery, which 
I believe is part of the normal economic cycle, we are now in a growth 
period, this growth period is slower than I believe any other growth 
period since World War II.
  I personally believe that it is because of the two tax increases, the 
gentleman correctly points out, and certainly has had an effect on our 
economy.
  Mr. PAPPAS. Mr. Speaker, I thank the gentleman. And I asked him that 
question because I believe that balancing the budget is tied into, and 
achieving the kinds of economic growth we all want to see is tied into 
significant across-the-board tax relief.
  Many people argue that no, we need to cut spending first before we 
can then do something about taxes. Again, I will go back to a point I 
made earlier. If that had been the case, then we would not be talking 
about graphs, showing graphs where we are seeing the deficit remain in 
existence or going up before it is going down. We would not be talking 
about that. We would be talking about all the other new things that we 
are able to do for the American people because we have the kind of 
economic growth that we all desire to have.
  If we do not cut taxes and see the kind of economic growth that we 
have seen, that we saw in the early 1960's under President Kennedy, 
under President Reagan in the early 1980's, we will not see the kind of 
growth that will in fact raise revenues and assist us in cutting that 
deficit.
  Mr. GUTKNECHT. More important even than that, Congressman Pappas, is 
it will help those people.
  We passed very important welfare reform last year and it is already 
beginning to show some benefits. We are seeing welfare rolls going 
down. I have been doing some research in my home State, and we have 
seen a dramatic drop in welfare rolls just since we passed that 
legislation last year. The real answer is we need more jobs in the 
private sector. We need more people on payrolls.
  When we talk about economic growth, that can become almost a nebulous 
term that people do not understand, but they do understand good-paying 
jobs and more of them. That is really what we are talking about, is 
making it possible so that more folks who need good-paying jobs can 
find those good-paying jobs in the communities and in the neighborhoods 
where they live.
  Mr. PAPPAS. If the gentleman would continue to yield, I have to make 
one other point. I think one of the things that is only fair to expect 
from the administration under the President and the Vice President, who 
we all assume is going to aspire to succeed Mr. Clinton, our President, 
is what will the plan be? Quite frankly, whoever might be President 
after President Clinton leaves office, what is their plan?
  If in fact this is the only thing that we are able to see enacted or 
proposed by the administration, what is the plan to move forward beyond 
that time? Again, I do not want to wait. I want to act now.
  Mr. GUTKNECHT. We only have about 10 minutes left, but we have been 
joined by our distinguished colleague from Georgia [Mr. Kingston], if 
he wishes to grace us with some of his thoughts relative to the budget.
  Mr. KINGSTON. Mr. Speaker, I thank the gentleman for yielding me this 
time, and I wanted to respond to the gentleman from New Jersey [Mr. 
Saxton] the distinguished chairman of the Joint Economic Committee, 
regarding his comments to Mr. Pappas' comments about the tax proposal 
and the reduction in taxes.
  I am not on the Joint Economic Committee, and quite often I see their 
30- and 40-page documents, and I have difficulty reading them; but I 
was an economics major at the University of Georgia and one of the 
things that we often did with economics is we delved into the theory. 
But it is good to just shut the book every now and then and to think 
about the man on the street; what it would mean to him.
  Throw out the theory for a second and think about what would happen 
if we had more money in our pockets. If we had a guy just running 
around, and I will call him a friend of mine, Bill Granger. Bill is a 
working guy. He is a friend of mine and lives in Alma, GA. I am going 
to change some of the names of the cities to be a little careful here. 
I do not have his permission.
  Say Bill gets a $500 per child tax credit. He has three kids, so he 
will have $1,500 more in his pocket. Let us say his dad does not get 
that, his dad gets something from Social Security earnings limitations. 
Whatever the case, we confiscate less money out of their wallets in 
Alma, GA. What that means is they would have anywhere from, I will go 
ridiculously low, from $50 a person to maybe as much as $1,000 a 
person.
  That means they will be able to buy more shoes, more shirts, go out 
to eat more often, maybe go for a longer vacation, go to Atlanta and 
have a big time for the weekend or something like that. When they do 
that, they stimulate the economy.
  Let us think about approximately 150 million people with $50 more in 
their wallet because we are confiscating less through a tax. So what 
happens is we have all that money out on the street; people going out 
to eat more, buying more toys, more clothes, shoes, and so forth. When 
they do that, small businesses expand because they are stimulated by 
the new growth, the new prosperity out there. When they do that, they 
create more jobs. And the more jobs that are created, the more people 
that can find work.
  All the folks on welfare now, there would be a lot more job 
opportunities for them. They go to work. Less people are on public 
assistance and more revenues coming in.
  Both President Kennedy and Reagan cut taxes, and when they did, 
actual money paid in to taxes in Washington increased. It did not 
decrease it.
  We always hear from some people how are we going to pay for the tax 
cut? It is not a matter of paying for the tax cut. The revenues, 
because of the taxes being out on the street, the revenues actually 
increase. So we do have this phenomenon that if we cut taxes, revenues 
will increase and America has more prosperity.

  I think it is a very basic thing that the person on the street can 
understand and appreciate. They do not need to have the charts and 
diagrams about it because they know. Give them their money and they can 
spend it better than we can.
  Mr. SAXTON. If I may, I want to commend the gentleman from Georgia 
for the very articulate analysis or statement on behalf of what this 
will do for the American family.
  One thing I am sure he did not mean to do, but he left out something, 
which is also important that causes economic growth to take place, is 
some of that money on the street will get saved, put into a savings 
account or go into a mutual fund, which creates a supply of savings 
which others can borrow to increase the size of their business and hire 
more people.
  That is what creates the business cycle, when economic activities 
take place. Whether we believe it is the supply that creates the better 
economy or the demand, either way, by the inefficient Federal 
Government consuming less of GDP and people who are out working in the 
private sector consuming more of GDP, it makes the economy better when 
the efficient part of our economy handles the money rather than the 
inefficient part.
  So I wanted to say that I think that the gentleman's statement on 
behalf of

[[Page H863]]

the average American worker is very well placed.
  Mr. GUTKNECHT. If I could, gentlemen, our time is just about expired. 
We will have to wrap it up here, but I do want to thank my colleagues 
for participating tonight.
  I want to say, in part, with the spirit of what transpired in 
Hershey, PA, that we do look forward to an honest and civil debate 
about the great issues facing this country, and nothing can be more 
important than stopping the business of mortgaging our children's 
future and, in the end, it provides real benefits.
  Not only is it the morally right thing to do to balance the budget, 
but it is the economically smart thing to do. I think if we work 
together and have a civil debate, then I think we ultimately can 
succeed in that.
  Important now is that we all begin to speak the same language. If the 
President is speaking OMB and we are speaking CBO, it is going to make 
that job even more difficult. So in the next several weeks, what we 
hope to do is try to get the White House and the Congress to at least 
be speaking the same language.
  Then we can have that civil debate and, ultimately, I think we can 
reach an agreement during this Congress which will be historic, which 
will leave a legacy that we can all be proud of and ultimately lead to 
a stronger economic growth, more jobs, better jobs, and the ability of 
more American families to have the American dream.
  So again I want to thank my colleagues for joining me.

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