[Congressional Record Volume 143, Number 63 (Wednesday, May 14, 1997)]
[House]
[Page H2618]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          THE BUDGET AGREEMENT

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Wisconsin [Mr. Neumann] is recognized for 5 minutes.
  Mr. NEUMANN. Mr. Speaker, I rise to address the budget that is 
currently being discussed in Washington, DC, and maybe to clean up some 
misinformation that is floating around out here and provide some very 
basic elementary facts on what is included in the budget agreement that 
is currently being worked on and basically been agreed to, short a few 
final details.
  Here is all this budget plan does that is currently being proposed. 
It balances by the year 2002, has declining deficits for each year 
starting 1998 and going forward, restores Medicare for a decade so our 
seniors do not have to go to sleep tonight wondering whether Medicare 
is going to be there tomorrow. It allows families, all Americans to 
keep more of their own money instead of sending it to Washington, DC.
  This is done in four ways at least. The $500 per child tax credit is 
in here. Capital gains will be reduced, we are hoping, to a number 
below 20 percent. The death tax reform to allow people to not have to 
pass away and also see the taxman on the same day is in here. Also, we 
are hoping to provide a college tuition tax credit to help the many 
people across this Nation who are paying large college tuition bills 
this year.
  Further, the budget plan does not adjust the CPI. This was a major 
concern to our senior citizens because, of course, lowering the CPI 
would reduce cost-of-living adjustments in the future. So there is no 
CPI adjustment in here. It was a major concern, and it has been 
addressed and is no longer part of it.
  Also in the plan there is discussion and it is laid out exactly how 
to go about past 2002, paying off the Federal debt. And when we pay off 
the Federal debt, of course, that means that we also put the money back 
in the Social Security trust fund that has been taken out. I might add 
that it was brought to my attention this morning that as we pay off the 
Federal debt we would also be returning the money to the highway trust 
fund that has been spent over the last 10 or 15 years as opposed to 
dedicated to road construction.
  As I am out here, there are a lot of things that have developed in 
this plan. There is an awful lot of misinformation floating around 
about it. But I think it is time that we look at some of the great 
things that have happened both under this plan in the last 2 years and 
how they compare to what happened prior to that.
  In the 7 years before 1995, before the Republicans took over 
Congress, annual spending increases in overall Government was 5.2 
percent. Government spending went up 5.2 percent every year. Since the 
Republicans have taken over in 1995 and as we look at this budget plan, 
3.2. So it is a decrease in the amount of growth in Federal Government 
spending. In inflation adjusted dollars, it was 1.8, and it is all the 
way down to 0.6. It is a two-thirds reduction in the increases in real-
dollar spending of this Government.
  I heard some complaints that nondiscretionary defense spending is 
going up too much in this plan. That is not really true either when we 
look at the facts. We look at the facts before 1995, nondiscretionary 
defense spending was going up by an average rate of 6.7 percent per 
year. And under this plan it goes up by 0.9 percent per year, less than 
1 percent increase per year. In real dollars, it was 3.2 before 1995, 
and under this plan it is actually being decreased by 1.5.

  A lot of folks talk about us using a rosy scenario to make it look 
like the budget is balanced. I have good news for everyone in this 
great country that we live in. The good news is they were not rosy 
scenario projections that led to the budget getting balanced. The 
growth in GDP is now being projected 0.2 percent lower than projections 
we used in 1995. As a matter of fact, they are very conservative 
projections. And should the economy continue strong as it is today, the 
good news is we might very well, under this agreement, reach a balanced 
budget by 2000 or perhaps even 1999. That is how conservative the 
projections in this plan are.
  One more point I would like to bring to the attention of my 
colleagues today. Back in 1995, we passed a budget resolution and we 
declared victory. We said that this is the best thing that could happen 
to this country because it is going to lead to a balanced budget. We 
had this idea that, if Government just controlled their growth, they 
reduced the amount of money they were borrowing out of the private 
sector, that that would lead to a strong economy in our country.
  The theory was, if Government borrowed less, there would be more 
money available in the private sector. With more money available in the 
private sector, interest rates would stay low because of increased 
availability, and with interest rates low, people would start buying 
more houses and cars and the economy would boom. People would leave the 
welfare rolls and they would go back to work.
  In fact, we find this is no longer a theory, but the model worked 
better than anyone anticipated. In the budget plan of 1995, we 
projected a deficit in 1997 of $174 billion. It turns out this model 
worked so well that the deficit is all the way down to $70 billion this 
year.
  I would like to conclude with what I would call the miracle of 1997. 
I really do think this is a miracle. Before I came to Washington, I 
would have described this as a miracle. Here is the miracle of 1997.
  Between our 1995 projections and today, $100 billion of unanticipated 
revenue came in. That is, they collected more revenue because the 
economy is so strong, $100 billion more than what was expected. The 
miracle is this, instead of spending that $100 billion, every nickel of 
it went to deficit reduction; and, in fact, that is why the deficit is 
$100 billion below what we anticipated back in 1995, when we passed the 
House budget resolution.
  The end result, what this means for our families in America, it means 
that our kids can look forward to a bright future once again in this 
great Nation that we live in.

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