[Congressional Record Volume 143, Number 37 (Thursday, March 20, 1997)]
[Senate]
[Pages S2630-S2631]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               FORGO TAX CUTS UNTIL WE BALANCE THE BUDGET

  Mr. BUMPERS. Mr. President, I rise to pay tribute to my colleague in 
the House, Speaker Gingrich. For those of you who think that I must 
need a saliva test for saying that, here is why. It was earlier this 
week in a press conference, that Speaker Gingrich made a very 
responsible statement. He said that this Congress should forgo tax cuts 
until we balance the budget--an eminently sensible, unassailable 
proposition insofar as I am concerned.
  I expected him to get the reception he got. Some of his very best 
friends in the House jumped on him and said, ``You have betrayed us.'' 
Thirty House Members sent him a hot letter, saying, ``What on Earth are 
you thinking?''
  I don't know what he was thinking, but I assume he was thinking the 
same thing I was thinking, and that is that the snake oil of cutting 
taxes and balancing the budget makes no sense whatever. We have tried 
it. Ten years from now or 20 years from now, when memories have faded a 
little further, I would rather expect people to say, yes, we can cut 
taxes and balance the budget. But we are, really, only 4 years away 
from the end of George Bush's tenure as President; we are 16 years away 
from 1981 when the U.S. Senate took leave of its senses and passed a 
massive tax cut on the proposition that if we would do that and 
simultaneously balance the budget, which was at that moment $87 billion 
out of kilter, that we could balance the budget by 1984 if we just 
bought into this proposition that we needed to cut taxes monumentally 
to stimulate the economy.
  But I am again happy to report to my colleagues I did not buy that 
snake oil. There were 11 Senators--believe it--11 U.S. Senators who 
said, ``This is crazy. It will never work. It makes no sense whatever. 
It violates economic principle, violates normal sanity.'' But we went 
ahead and did it, and I will never forget that fall day when President 
Reagan, at Rancho Mirage, signed the bill in front of about 100 
television cameras, saying, ``You have given me the tools. Now I'll do 
the job and nobody will be left behind.''
  Here is what happened. Twelve years later, we had accumulated $2.5 
trillion in additional debt to go with the already $1 trillion debt 
that we had incurred during the first 200 years of this country's 
history--actually less than that. But from the date we adopted and 
ratified the Constitution in 1789, until the day we passed that tax cut 
in 1981, the debt had accumulated to less than $1 trillion. Twelve 
short years later, we had increased that trillion-dollar debt by $3 
trillion, and the national debt at that time then became $4 trillion, 
and we have been striving to dig ourselves out of that hole ever since.
  Mr. President, 3 or 4 weeks ago I was walking out that door to go 
back to my office and one of the most conservative Republican Senators 
in the U.S. Senate, who happens to be a good friend, came over to me 
and he said, ``I'll tell you, Dale, confidentially, I've never seen 
things better. The economy is as good as it ever gets. A lot of things 
are going right in this country.'' I almost fainted. I said, ``I could 
not agree with you more.''
  I sometimes wonder why people are not dancing in the streets. Since 
1992 we have taken the deficit from $290 billion to $107 billion in 4 
short years. The unemployment rate in this country is the lowest in 
years. Some economists say you you cannot get it much lower than 5.3 or 
5.4 percent. Interest rates are at a manageable level. And this 
morning, everybody who read the Washington Post saw a feature story 
about how the deficit is continuing to go down.
  Let me back up. The President sent his budget over here and he said: 
In 1997, the deficit will be about $127 billion. It will be about the 
same in 1998. This morning the newspaper reports that because of this 
economy, enjoying the longest sustained growth since Dwight Eisenhower 
was President, even CBO, which is very conservative in their 
projections, says the deficit this year is going to be down to $115 
billion. But other very reputable economists say, no, you are 
underestimating the taxes the people of this country are going to pay 
this year because the economy is doing just fine.They say, we believe 
the deficit will be under $100 billion.
  I am the eternal optimist. I like to believe that last statement, 
that the deficit will be below $100 billion, turns out to be true, in 
which case we will have done something that is unprecedented in this 
country. We will have had 5 sustained years of deficit reduction.
  Do you want the economy to continue as it is now and have this 
sustained growth that we have been enjoying? I will tell you a simple 
way to do it. You send a message to the American people that the U.S. 
Congress has come to its senses, and decided to forgo tax cuts of any 
kind until the United States budget is in balance.
  Then tell them, on top of that, this year's deficit is not going to 
be $99 billion; we're going to further reduce it to $90 billion or $85 
billion. I can tell you, Wall Street will jump with joy.
  Why would we be considering tax cuts of $193 billion, almost $200 
billion? Why would the U.S. Senate be considering a $200 billion tax 
cut over the next 5 years and $508 billion over the next 10 years? Why 
are we considering that when we know that a tax cut of that magnitude 
is going to stimulate

[[Page S2631]]

the economy? And why do we want to stimulate an economy that is perking 
along so well that Alan Greenspan keeps Wall Street on edge every day 
saying, ``If this economy gets any hotter, I'm going to raise interest 
rates''? That is the constant threat every time the Federal Reserve 
Board meets, the threat of higher interest rates.
  You cut capital gains taxes, and I promise you it will not be long 
until you will have an interest rate increase from the Fed. You cut 
these other taxes to the tune of $200 billion over the next 5 years, 
and I promise you interest rates will go up. Alan Greenspan will see to 
it. And if interest rates go up, the market will drop and economic 
activity will drop. So why would we insist on making a crazy economic 
decision to stimulate an economy which is moving along sharply?
  I see statements in the press every morning of some politician 
saying, ``Well, people know how to handle their money a lot better than 
Washington. It's a lot better to leave it in their pocket than send it 
to Washington.'' I understand that, and I understand that if you are 
looking for applause, that statement is a good way to get it. But I 
also understand that we have a golden opportunity that does not present 
itself often, and that is to honestly balance the budget and give the 
people of this Nation a night's sleep like they have never had before.
  The Senator from New Mexico offered two budgets this afternoon. One 
was the President's. I said many times on this floor, I am not enamored 
with the President's budget. I am not enamored with any budget which 
does not reduce the deficit this year and next. The Senator from New 
Mexico is getting very close to singing my song. You like 
bipartisanship? You like for Republicans and Democrats to agree? The 
Senator from New Mexico probably is not trying to curry my favor, but 
he is getting awfully close to doing it with his resolution which says 
no tax cuts until we get to a balanced budget using CBO's figures.
  Mr. President, the Budget Committee has been deliberating, and I 
think they have been making some progress, incidentally. They even 
think they have the deficit down to $111 billion now, and if they are 
that close, I think it is absolutely imperative that we improve over 
the 1996 deficit by cutting it below $107 billion this year and below 
that next year.
  One of the things about the proposal of the Senator from New Mexico 
is that when we reach that happy day--when we are in balance--then half 
of any surplus will go to reduce the cuts made in nondefense 
discretionary spending. That is education, law enforcement, 
environment, health care, medical research. It is all the things that 
make us a great nation. But the Senator from New Mexico very carefully 
has focused on making cuts in nondefense discretionary spending. Well, 
what is wrong with asking the Defense Department to help out? Why in 
the name of all that is good and holy would we, in 1996, insist that 
the Defense Department take $9 billion more than they even asked for?
  I sit on the Defense Appropriations Committee, and I am telling you, 
I get absolutely nauseated at times. You take the F-22 fighter plane, 
which we do not need, I promise you--and I am going to stand at this 
desk and maybe lose another battle on the F-22--but when you start 
talking to me about building 438 airplanes at $180 million each to 
compete with a Russian airplane that is not even on the drawing board, 
let alone being off the drawing board, and at a time when we are 
building 1,000 advance F-18's which will be as good, or better, than 
any plane that could possibly challenge us for the next 20 years, and 
then follow that in 2015 with a joint strike fighter--no, they want to 
fill in what they say is a gap with a plane, Mr. President, that costs 
$180 million a copy, 438 of them.
  Would you like to know how much the estimated cost of the F-22 has 
gone up in the past year compared to what we were told in 1996? $15 
billion. $15 billion in 1 year. God knows what it will be by the year 
2006 or 2007 when we start building these airplanes. We will not be 
able to afford them, I can tell you that.
  I am simply saying that we should look at what we are going to cut. 
The Senator from New Mexico has a $100 billion cut in Medicare. And 
what about Medicaid? I do not know whether we are cutting Medicaid $9 
billion or $22 billion. You hear conflicting numbers on that, but bear 
in mind what these programs are. Medicare is health care for our 
elderly; Medicaid is health care for the poor, the most vulnerable of 
all our children.
  Last year, we cut welfare recipients' food stamps, everything, for 
the poorest people in the country, $55 billion. Mr. President, I am not 
going to go home and tell my constituents that I voted to savage the 
most vulnerable people in our population, the children and the elderly 
and the poor, and that I voted to give the money to the wealthiest 5 
percent of the people in America. And I promise you, if I were running 
against somebody that had done that, I could make that case in spades 
and be absolutely certain of my ground.

  I did not vote for the welfare bill last year. I was one of the 21 
people that did not. You can call me a bleeding heart liberal. You can 
call my anything you want to. But when this body starts saying the only 
way we can balance the budget is by giving the Pentagon billions they 
did not even ask for and cutting Medicare by $100 billion, and 
depriving the poorest children in the country of Medicaid to the tune 
of $22 billion, and making $55 billion in welfare cuts--you see, I 
would have to say I never went to Methodist Sunday school as a boy, but 
I did. I believed those Methodist Sunday school stories about my 
obligation to my fellow man. You hurt your fellow man, you insult God.
  So I am not going to do it, whether you want to talk about religion 
or whether you want to talk about common sense, whether you want to 
talk about what has made this country great. One thing that has made 
this country great is our commitment to the elderly. We reduced the 
poverty rate among them from 25 percent to 12 percent since 1950. We 
ought to keep doing it. We ought to come to our senses.
  I intend to sit down and visit with the Senator from New Mexico and 
talk seriously with him about this. I am not negotiating on behalf of 
the President or anybody else. But I want to applaud the Senator from 
New Mexico this afternoon because he has made a very important 
statement that a lot of people on that side will disagree with. But I 
think he is on the right track. I think Newt Gingrich made a very 
important statement earlier this week, and I applaud him for it.
  Mr. President, I appreciate having the opportunity to make these 
statements. I have been intending to do this all week and had such a 
schedule I could not do it. But I am feeling better tonight about the 
direction we are headed than I have in some time.
  I yield the floor.
  Mr. LOTT addressed the Chair.
  The PRESIDING OFFICER. The majority leader.

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