[Congressional Record Volume 143, Number 44 (Tuesday, April 15, 1997)]
[Senate]
[Page S3212]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SMITH of New Hampshire (for himself, Mr. Faircloth, Mr. 
        Gramm, Mr. Hatch and Mr. Kyl):
  S. 580. A bill to amend the Internal Revenue Code of 1986 to allow 
individuals to designate that up to 10 percent of their income tax 
liability be used to reduce the national debt, and to require spending 
reductions equal to the amounts so designated; to the Committee on 
Finance.

                 The Taxpayer Debt Buy-Down Act of 1997

  Mr. SMITH, Mr. President, today I am introducing legislation to 
create an active role for ``We the People'' in the fiscal matters of 
the Federal Government.
  I am joined by my colleagues, Senators Faircloth, Gramm, Hatch, and 
Kyl, who are original cosponsors of this measure.


why we need the taxpayer debt buy-down: the president and congress have 
                      not stepped up to the plate

  On February 6, President Clinton submitted his fifth unbalanced 
budget.
  Then, on March 4, the Senate failed by one vote to approve the 
balanced budget constitutional amendment (BBCA).
  During the debate on the balanced budget constitutional amendment, 
the president and his congressional allies decried the constitutional 
change as too permanent, and argued that Congress could impose fiscal 
self-discipline.
  In response to these claims, today I am reintroducing the Taxpayer 
Debt Buy-Down Act. This legislation not only answers appeals for 
statutory restrictions, but also takes the balanced budget debate to 
the people.
  If the President and Congress cannot agree, the American people 
should decide.
  I first introduced the bill in 1992, and it was endorsed by President 
George Bush.
  More than one-third of the Senate voted for my plan which I offered 
as an amendment to the tax bill of 1992.
  I feel the time has come again to empower the taxpayers to tell 
Congress how much spending they want cut in order to balance the budget 
and buy down the debt.
  For example; in 1996, individual income tax revenue totaled over $650 
billion.
  So if every taxpayer checked off the maximum designation of 10-
percent, Congress would have to come up with roughly $65 billion in 
spending cuts.
  Admittedly, this level of participation is highly unlikely initially.
  A more reasonable estimate would be that the total taxpayer check-off 
would amount to about 3-percent of all individual tax revenue in the 
first few years.
  Under this scenario, Congress would only have to find less than $20 
billion in spending reductions.
  Considering the danger posed by our growing national debt, who could 
oppose $20 billion in spending cuts.
  The American people will be able to tell us if we are on the right 
track, or if they want more deficit and debt reduction.
  I challenge my colleagues to support their claims that they support a 
balanced budget. Ask the taxpayers.


                      the process would be simple

  First, by checking off a box on their April 1040 tax forms, taxpayers 
would designate up to 10 percent of their income tax liability, what 
they owe, for the purpose of deficit and debt reduction. Once the 
deficit is eliminated, designated cuts would buy down the debt.
  Second, the following October, the Treasury Department would 
calculate the amount demanded by the taxpayers. Congress would then 
have until the end of the next fiscal year to cut Federal spending in 
any area to meet this target.
  Third, if Congress failed to make the necessary cuts, an automatic 
across-the-board sequester of all Government accounts, with some 
necessary exemptions, would be triggered at the end of the session. 
This sequester would ensure compliance with the taxpayer-mandated 
spending reductions. However, I would hope this would not occur if 
Congress listens to the mandate of the taxpayers.
  Fourth, furthermore, to harmonize this grassroots effort with 
congressional efforts to balance the budget, the check-off will 
initially mandate spending cuts and debt retirement only over and above 
the savings that Congress otherwise enacts. For example, if Congress 
passes legislation that implements savings of $50 billion in fiscal 
year 1999, and the check-off for that year totals $60 billion, only an 
additional $10 billion would be cut under this bill.
                                 ______