[Congressional Record Volume 143, Number 92 (Thursday, June 26, 1997)]
[House]
[Pages H4825-H4830]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              THE ECONOMY

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 1997, the gentleman from Minnesota [Mr. Gutknecht] is 
recognized for 60 minutes as the designee of the majority leader.
  Mr. GUTKNECHT. Mr. Speaker, I am joined tonight by my colleague, the 
gentleman from Tennessee [Mr. Wamp] who came here with me in 1994, in 
the class of the 104th Congress. We are going to talk tonight a little 
bit about where we were, where we are, and where we are going.
  We want to talk about what has happened here in this last week 
because this is a very happy day. It is a happy day, I think, for this 
Congress. I think it is a very happy day for this country, and most 
importantly, I think it is a wonderful day for our children, because 
through this week we have passed for the first time in a generation a 
balanced budget plan that will in fact balance the people's books.
  We have also passed the first tax relief in 16 years that is targeted 
for middle-class American families. This has been a very, very good 
week for America's children and for America's families.
  I think to really understand how much has happened in the last 3 
years here in Washington, I think we have to go back and look at what 
was happening for the last 40 years. I believe that for the last 40 
years Washington had it wrong. For 40 years Washington thought that 
Washington knew best that bigger bureaucracies could solve social 
problems. So for 40 years, spending here at the Federal level increased 
at nearly double the inflation rate, taxes went up faster than family 
incomes, the debt ballooned and social problems got worse.
  Washington had it wrong.
  Washington waged a war on poverty. Washington spent over $5 trillion 
in that war, and if you take a walk through any burned-out inner city, 
you will see the victims that that war has brought us.
  Ask yourself, who won the war on poverty? I believe that Washington 
had it wrong.
  Washington overtaxed those who worked hard and played by the rules, 
and they squandered much of it on top-heavy programs that did little 
but breed more dependency.
  When I was growing up, I think when the gentleman from Tennessee [Mr. 
Wamp] was growing up, we are both baby boomers. I was born in 1951. 
Most people do not remember who spoke at their college commencement, 
but I do. When I graduated from college, the speaker was the director 
of the United States Census. And he told us that there were more kids 
born in 1951 than any other single year. We are the peak of the baby 
boomers.
  So when I came to Washington, it was with a special responsibility 
because my parents are still living. They are on Social Security. They 
are on Medicare. I obviously feel that I have a very strong 
responsibility to them.
  But I also have three children. One of them is already in college 
and, hopefully, the other two will go on to some form of postsecondary 
education. So I also understand we have a moral responsibility to our 
children as well.
  Things have changed a lot though since I was growing up. When I was a 
kid growing up, and I would assume this is true for the gentleman from 
Tennessee [Mr. Wamp] as well, the largest single payment that my 
parents made, and my folks were able to raise

[[Page H4826]]

me and two brothers on one paycheck. That was really the norm back in 
the 1950s.
  Part of the reason they could do that was that the largest single 
payment that they made every month was the house payment. Now the 
largest payment that most families, the average family makes is to the 
government.
  As a matter of fact, the Taxpayers Union says that the typical 
American family with a median income in the United States today spends 
more for taxes, when you factor in the sales tax, the income taxes at 
both the State and Federal level, property taxes and all the other 
hidden taxes that people pay, the average American family pays more for 
taxes than they do for food, clothing and shelter combined.
  So for 40 years Washington had it wrong. I want to yield to my 
colleague from Tennessee [Mr. Wamp] and perhaps talk a little bit about 
what things were like and part of the reason that he decided to 
``wamp'' Congress.
  Mr. WAMP. Mr. Speaker, I appreciate the gentleman yielding to me.
  I hope that after I speak for a moment about taxes and I yield back 
the time, that you might recognize the gentleman from Maryland [Mr. 
Hoyer] who has to recognize a patriot. He was not here earlier and, 
rather than his waiting for an entire hour, if there is any way that we 
could allow some time to be yielded to him, I would appreciate that.
  But while we are on this track about taxes, I was also born in the 
1950s. I think today is a day that we should stop, the gentleman from 
Minnesota discussed what life was like in the 1950s, and just reflect a 
little bit about the growth of the Federal Government and what has 
happened. Because I think it is worthwhile to look back.
  In 1957, when I was born, my parents paid less than 10 percent of 
every dollar they made in combined taxes, local, State and Federal put 
together. The Federal tax rate was only a third of that, but they only 
paid a dime out of every dollar.
  We now know that in today's world, that figure is approximately half. 
As a matter of fact, Tax Freedom Day is going to take place next week, 
on Thursday, July 3. That is incredible because July 4, the following 
day, is Independence Day. And this year independence from the 
government is actually the day before we celebrate as a Nation that 
great day each year, Independence Day, because it is going to be July 3 
this year before the average American has actually worked long enough 
to pay all of the taxes that they owe plus the cost of regulation. It 
is now more than half of every dollar they make.
  Let me say this, because I have got a son Westin and a daughter Coty, 
and I do not want them to work until October to pay the government and 
then keep what is left.
  We know the stress that this problem has placed on American families 
because let me tell you, the level of taxation is directly tied to how 
much quality time you have in your family. You talked about the stress 
that has caused most families to have two wage earners. Mom and dad are 
both working.
  My mother did not work. Thankfully, she did not have to. She spent 
more time with us. Now moms and dads are both having to work. We also 
know the family is splitting up and actually single moms I think have 
it worst of all. And do you know, we need to focus on this issue.
  While we are talking about taxes, and we have been debating the level 
of tax relief, but the fact is there are very few people left now in 
Washington that will actually argue on behalf of not giving some of the 
American people their money back, because we had the large tax increase 
in 1993.
  I think we ought to reflect not on just what has happened in the last 
2\1/2\ years but what has happened in the last 4\1/2\ years.

  The President of the United States, in his first 2 years, went out of 
bounds. He went too far to the left. Largest tax increase in history, 
turning health care over to the Federal Government. The country said, 
whoa, we did not elect you President to do that.
  This President is a savvy politician so he moved back to the middle, 
moved back towards the middle, was reelected, moving rapidly back 
towards the middle. Now he is in agreement that we need to balance the 
budget within 5 years, reform Medicare, regardless of what was said 
during the last year's campaign. Now there is bipartisan agreement that 
we have to do what is right for Medicare to keep it solvent for our 
senior citizens who so much rely on it and give some tax relief back to 
the American people, to stimulate the economy and to give that working 
mother who right now is about hopeless, if she has two children, she is 
going to get $1,000 back.
  How important is that for the lady who busts her tail to try to keep 
her head above water? It is very difficult for a working single mother 
to take care of her family, go to work, maybe work two jobs, some 
people working three jobs, just to get by, very little hope. Hope is 
where it is at. That is what is wrong with so many of our children. 
They do not have hope. And they are growing cynical.
  We cannot let our country cross the bridge from skepticism, which 
they are supposed to be somewhat skeptical of the government. Our 
Fathers thought that was healthy. But cynicism is disconnecting. No 
hope. What will I do? Why should I try?
  We want to give them some hope and reverse the tide, go back the 
other way, give them a third of that tax increase of 1993, which caused 
a political change in Washington, give them a third of that tax 
increase back. And that is what the Congress did today.
  It is not completely through, but today was a step in the right 
direction.
  I want to yield back to the gentleman, but I want to continue this 
dialogue about where we are on the size of government, the 
accountability of the government, and why this is real progress.

                              {time}  1845

  Albeit, not perfect, but it is real progress.
  Mr. GUTKNECHT. We will get back to that.
  Mr. Speaker, we were just beginning to speak about how the winds of 
change have begun to sweep through Washington. I have got a chart up 
here I am going to talk about in a minute, about how really graphically 
I think it shows how things are changing here in Washington.
  But I think the first indication that things were changing in 
Washington was the debate we had when we first came here about welfare. 
For 40 years the answer to poverty and welfare in this country was to 
build bigger bureaucracies, to take more money away from working 
families and redistribute it through a complicated welfare system that 
was created and run here in Washington. The bureaucracy got bigger, and 
we actually saw an increase in poverty. The real tragedy of the welfare 
system was not that it cost too much money. The tragedy is that it 
created too much dependency.
  Once again we could see the examples, we could see the victims all 
around us. I think the American people, as is so often the case, were 
way out in front of us and they said:

       You have got to change this system. It is just wrong. What 
     we are doing is creating dependency. We are creating more 
     illegitimacy. We are creating less hope.

  And as you said earlier, when you reach that point where you have no 
hope, I think that is saddest indictment of all. So some of us said we 
have got to reform this welfare system, and that Washington does not 
necessarily know best. There were States like Wisconsin and Michigan 
and other great States led by great governors that said:
       Let us run welfare, send more of the resources and 
     decision-making back to our States, let us supply some of our 
     thinking and creative tough love, and we can go a long ways 
     towards reforming this system and reducing the amount of 
     dependency and perhaps encourage more personal 
     responsibility.

  That is exactly what we did, and the results are overwhelming. I do 
not know if my colleague even knows this, but since we were elected to 
Congress, there are over one million families that are no longer 
dependent on the welfare system. As I say, that is terrific news, not 
just because it saves money but, more importantly, because it is going 
to save people and it is going to save families and it is saving 
children from one more generation of dependency.
  At first, when we first started talking about welfare reform, it was 
called radical and it would not work and it would hurt people. But 
ultimately, I

[[Page H4827]]

think as John Adams used to say, ``facts are stubborn things.'' We 
ultimately prevailed in that debate. We got the President to sign that 
welfare reform.
  I was very heartened to learn that even the New Republic, which is by 
its own admission a liberal magazine, now acknowledges that they were 
wrong and that the welfare reform that we passed really is working. 
With a little nudge, as many as 60 percent of the people who were on 
welfare before can be nudged onto payrolls and off the welfare rolls.
  I would like to yield to the gentleman from Tennessee [Mr. Wamp] to 
talk a little bit about what is happening in his State and around the 
country, and some of his observations on welfare and poverty and 
dependency and personal responsibility.
  Mr. WAMP. Mr. Speaker, I thank the gentleman for yielding.
  Mr. Speaker, if we analyze what is happening out here in our country 
today, in 1997, and we really yearn, as I do, for a renewed sense of 
ownership from the people of our government and our country, I actually 
attempt, which may be thinking out of the box, to represent people who 
are so alienated or so hopeless they may not even be registered to 
vote. They may have just completely given up on the government, 
thinking that Washington is just out of control, it is going in the 
wrong directions, politicians are all the same.
  My colleagues know what I am talking about, because we have all met 
those people. Many of them just kind of brush you off. They do not want 
to have anything to do with you. But if we can repair that bridge, to 
use the President's term, with those folks, and through real change and 
persistence convince those people that, yes, this country is worth 
fighting for and, yes, we can fix any problem that we have and for a 
sustained period of time, I would not expect them to automatically buy 
into the notion that Washington is finally changing. Because for so 
long they saw reform come, and then it really was not reform, and they 
thought that maybe some progress was being made or they wanted to think 
that, and it did not happen.
  So I am really encouraged that we might be able to re-energize these 
people with a sense of hope that will cause this next generation to 
vote again, to be active citizens, to take ownership in this great 
Nation because it is worth fighting for and we cannot afford not to.
  I do not want to oversimplify it, but there is a lot of talk now of 
what caused these million families to go back to work and there is a 
lot of credit taken. The President wants to take credit and the 
Congress wants to take credit. We all should remember, as Americans, 
that great things can happen when it does not matter who gets the 
credit.
  Some of my folks back home, they do not have much confidence in the 
President, so they basically say, ``Well, y'all can do what you want to 
up there, but you cannot work with him.'' Listen, the American people 
elected him, and our President is there for three and a half years. If 
he is willing to come over towards the middle and meet us on a balanced 
budget plan to try to leave his place in history, we should meet him 
there, we should shake his hand and say, ``We are going to try to work 
with you.''
  The only people fighting that I can see really are the people on the 
far left. They had their day. They had their day. In the 1960s they 
promoted the Great Society, the concept that the Federal Government 
could solve the woes of America, and that was an experiment that 
failed. We now, being the beautiful country that we are, get up off the 
ground and dust ourselves off. The people sent some of us here to try 
to fix this, and it is not easy.
  The Founding Fathers never wanted it to be easy. They created such a 
complex system of government, with separation of powers between the 
executive and legislative branch, they even cut the legislative branch 
in half so we have got another body over here to deal with, and it is 
very complicated to change. But I can assure people that the process 
has begun.
  This big ship of state that was going so much in the wrong direction 
slowly over time has begun to turn. If we move that big ship of state 
one degree back in the right direction, over time you totally alter the 
destination. That is what is happening in this budget agreement.
  I was cautiously optimistic all along, wondering if we could make it 
real, if it would survive, if either side would diminish or bail out of 
the agreement. I did not want to get too excited about it until I knew 
more of the details.
  This week I worked with the leadership on an issue called enforcement 
provisions. The gentleman from Texas [Mr. Barton] and the gentleman 
from Delaware [Mr. Castle] and I have been in and out the leadership 
rooms.
  This week with all of the leaders of the majority side and the 
leadership of the blue dog Democrats on the minority side to try to 
bring a freestanding bill, which they have agreed to do in the month of 
July, to this floor and, if it passes, to roll it into the 
reconciliation bill and make it a part of this agreement to make sure 
that, if the projections in this agreement do not go as well as we hope 
they will, the assumptions do not live up to their expectation, that 
there are some floats built in so that we stay on track, so that we 
actually follow through on this agreement, unlike Gramm-Rudman and 
previous budget agreements that the Congress did not stick with or 
stick to, that we will actually do that.
  Why? Because we, as a country, are on that bridge between skepticism 
and cynicism, and we cannot lose that next generation. We cannot lose 
them. We have got to have them. We have challenges. We need them 
engaged. We need them to be hopeful and optimistic.
  The whole idea is that through this process we can abandon some of 
the notions of the past that Federal Government is a cure-all for 
America and move more in the direction of responsibility, individual 
responsibility, corporate responsibility. We are first responsible for 
ourselves, then our immediate family, then our community, our citizens 
at large.
  The Federal Government should be one of the last places that we go. 
But for years and even decades in a row, the Federal Government was the 
first place people wanted to go, and the Founding Fathers never 
intended that. Actually, the $5.3 trillion debt is evidence of that 
tendency for years to go to the Federal Government first to try to 
solve the problems of America.
  I want to commend our class's colleague, the gentleman from Wisconsin 
[Mr. Neumann], who has come up with a very responsible plan to not just 
balance the budget and to potentially balance the budget ahead of our 
schedule, 2002, even earlier, right at the turn of the century, but 
also to pay off the debt.

                              {time}  1900

  Because balancing the budget is one thing, and we should all support 
a reasonable plan to balance the budget while protecting legitimate 
priorities, and we have come together on that in an unprecedented and, 
I think, a historic way.
  But then what about the debt? What about that? Let us go ahead and 
address that while we are getting the American people fired up about 
their country again and with a renewed optimism, and then say what do 
we do to get out of debt. We have a plan. I am sure the gentleman is a 
cosponsor, I am a cosponsor of the Neumann plan to pay this debt off by 
the year 2026. I believe we can do it. It is a patriotic challenge of 
our generation. The economy is good; basically, the world is at peace. 
We have a few conflicts. America has survived.
  Let me tell my colleague, this is where we, our generation, should 
accept this as our challenge, because thank God we are not at war and 
we do not have the challenges that our parents and our grandparents had 
to go through so that we could be here today, and we should be grateful 
for that, but we should not coast. We should not rest. We should not 
take it easy, and we should not be hopeless.
  We should stand up to the challenge and face this as a national 
imperative to get our country back out of debt and be on solid ground. 
Why? Because the debt is as much as our defense budget. The interest on 
the debt every year is as much as we pay for national defense, or as 
much as we pay for Medicare. Those dollars do not feed children, they 
do not house the homeless, they do not do one bit of good for anyone. 
They are wasted dollars. If we could reverse that tendency, every 
dollar we save could go

[[Page H4828]]

for a productive cause. We have to invest the scarce dollars that the 
Federal Government collects from its people, and they are too high. The 
amount of money we are spending on the Federal level is too high. We 
have to restore more accountability.
  Steps are being made; more progress can be made.
  Mr. GUTKNECHT. Mr. Speaker, I think the gentleman has raised a number 
of good points. There is some tremendously good news. I, frankly, am 
not surprised at skepticism, because we have had Gramm-Rudman, we have 
had lots of budget deals, and lots of times what Congress would do is 
they would say, well, if you would just let us raise taxes a little bit 
more, then we would balance the budget. Well, what happened? They 
raised the taxes, they never cut the spending, and the budget deficit 
continued to grow.
  So there is a good deal of skepticism. Sometimes we need a report 
card. If we think we are going to get to Chicago, once in a while we 
have to say, are we headed in the right direction?
  Let me just share with the gentleman, and I think the gentleman 
probably knows this, but some of our Members do not. In our 1995 budget 
resolution we said that we would spend $1,624 billion in fiscal year 
1997, that is the fiscal year we are in right now. We said we would 
spend $1,624 billion. The good news is that we are only going to spend 
$1,622 billion. So we are actually going to spend less in that fiscal 
year than we said we would spend 2 years ago. That is good news.
  But I think the news gets even better. Because the economy has been a 
lot stronger than you or I or any of the economists, the President, the 
GAO, the CBO, and all the other people who keep score, the economy has 
been a lot stronger. More people have confidence now in America, they 
have confidence in the economy, they are out buying homes and cars and 
investing in new production, and so forth. So we have actually taken in 
about $100 billion more in revenue than we expected to take in. At the 
same time, we have actually spent less than we said we were going to 
spend. So I think that is great news.
  I want to show this chart for the benefit of the gentleman and others 
who may be watching in their offices. But this is another example how 
the winds of change are really beginning to blow through Washington. 
The wind is actually changing, the direction is changing, that 
battleship is turning, because since 1975 to 1995, for 20 years, every 
year, if we take an average, these red lines is how much more the 
Congress spent than it took in.
  If we average it all out, and it varied from $1.09 to $1.35, but for 
every dollar the Congress took in, it spent an average of $1.21. I am 
happy to report that since we came here, that we have a new Committee 
on Appropriations, a new Committee on the Budget, and a new Committee 
on Ways and Means chair, that since we came to Congress, I would say to 
the gentleman, that that average has dropped to $1.08. With this budget 
agreement it ultimately will reach 99 cents. If we can get to that 99 
cent level, and this is where the plan of the gentleman from Wisconsin 
[Mr. Neumann] comes in, that is when we not only balance the budget on 
a year-to-year basis, but we begin to pay down some of that debt.
  I think we ought to set, in terms of a goal of generational fairness, 
that our generation, the baby boomers, while we are protecting Social 
Security, while we are protecting Medicare we are going to pay off that 
debt so that we can leave our kids a debt-free future. I think that is 
a future that is worth fighting for. That is the way we can guarantee 
that the next generation and the generation after that will have their 
shot at the American dream.
  Mr. Speaker, as I said earlier, for 40 years I think Washington had 
it wrong. They thought that they could spend their way to prosperity, 
and that is the reason that we are spending as much for interest on the 
national debt as we do for national security and some of the other 
things that the gentleman talked about. So we have to change that.
  But it is changing. The good news is that we are spending less than 
we expected to spend, we are taking in more revenue than we expected to 
take in. Frankly, I have some of the number crunchers for the Committee 
on the Budget and I serve on the Committee on the Budget with the 
gentleman from Wisconsin [Mr. Neumann] and the gentleman from Ohio [Mr. 
Kasich] and a lot of other good folks.
  I had them run the numbers and I said, what if the economy slows down 
a little bit. One of the myths is that this budget agreement is based 
on rosy economic scenarios. Right now the economy is growing at about 
3.8 percent per year. Our budget agreement assumes that that growth 
rate is going to drop to 2.1 percent. Frankly, I think it is going to 
keep going on a much faster rate. So I asked the Committee on the 
Budget if they would just run some numbers and tell me what would 
happen if yes, the economic growth rate slowed, but it slowed to more 
of the average where it has been for the last 15 to 20 years, which is 
about a 3.2 percent growth rate.
  If we do that, the interesting thing is that: First, the budget 
balances in the year 2000, and by the year 2002 we will have a surplus 
of over $200 billion in the Treasury. No one knows what is going to 
happen next year or 5 years from now. I think the gentleman's 
recommendations for some kind of enforcement provisions is a very good 
one and we ought to give it very careful consideration.

  Mr. Speaker, I think the good news is we are keeping our promise, we 
are ahead of schedule, we are under budget, we are doing what we said 
we are going to do, and I think the American people understand that.
  I would like to yield back to the gentleman and maybe we can talk a 
little more about making government more accountable and encouraging 
more personal responsibility and what else is happening with the 
budget.
  Mr. WAMP. Well, we also talked about the economy. I think it is 
important to look at what the economy may do in the short run. I am 
convinced that it will be a real shot in the arm to an economy that is 
already performing well if we follow through on tax relief. I believe 
when people look back and say well, how did this economic trend 
continue for this long, frankly, I think one of the reasons is because 
the American people sent this new Congress here and they actually saw 
us reducing spending.
  Now, as the gentleman knows, I serve on the Committee on 
Appropriations, and just this week we marked up, we wrote the 
legislation, for the legislative appropriations bill. Now, there are 13 
appropriations bills that have to be passed out to fund the 
discretionary portion of the Federal Government. It is an interesting 
trend what has happened since 1965, but in 1965, the Congress actually 
appropriated about two-thirds of the money, and a third of the money 
was entitlements, automatic spending.
  Well, that has just about reversed from 1965 to 1996, last year, 
where it is just the opposite. Entitlements and interest have two-
thirds, and we only appropriate about one-third. Of that one-third that 
we appropriate, as you well know, about half of it is defense, and the 
other half is all the other nondefense discretionary bills put 
together.
  So here we are making these reductions in this small portion of the 
Federal budget, but we have shown Wall Street, we have shown the 
American people, that we are willing to reduce spending for the first 
time in 26 years. The legislative branch, which we voted on this week, 
actually is experiencing a freeze after in the last 2 years a slight 
reduction actually, in actual dollars, not indexed for inflation, but 
in actual dollars, and previously we had reduced that legislative 
budget so much, first saying let us clean up our own House, let us 
start here in the Congress itself, reduce the staff, reduce the 
committees, reduce the legislative budget. We did that.
  As a matter of fact, if all of the other appropriations bills were 
treated the same as the legislative appropriations bill, I was told 
this week the budget would be balanced in 2 years.
  Mr. GUTKNECHT. Mr. Speaker, it would be balanced today if we had 
started in 1995.
  Mr. WAMP. That is right. If we started prospectively, I am told the 
budget would be balanced in 2 years.
  So things are going in the right direction. I believe that the 
markets are a reflection today of the renewed confidence that things 
are changing in Washington.

[[Page H4829]]

  Mr. GUTKNECHT. Mr. Speaker, it is not just the markets, it is 
consumer confidence. I think there was a report out yesterday that 
consumer confidence is about at a record all-time high.
  The American people in Washington for the first time say what they 
mean, mean what they say and do everything within their power to 
actually get it done.
  I want to talk a little bit about this chart, because I mentioned it 
earlier. If the gentleman can see the red bars, going back to our 7-
year balanced budget plan, which unfortunately the President vetoed and 
only parts of it actually became law, but thanks to the hard work of 
the folks on the Committee on Appropriations where they cut about $50 
billion in wasteful spending and we also began the process of reforming 
and controlling the growth of entitlements, but this was our plan over 
7 years.
  Those are the red bars of what the deficits would be. The blue bars 
are where we actually are. And again, it points out, we said we would 
have a budget deficit in fiscal year 1997 of $174 billion. It is really 
going to be something more like $70 billion. Because of slower economic 
growth projected for next year, it does take a slight move up, but 
frankly, I think if we are anywhere close, and this goes back to 
another point that we both made, that if we talk to economists, if we 
talk to regular folks and we asked them what do they think will happen 
to the economy if everybody believes that Congress is going to balance 
the books, No.1; and No.2, if we allow them to keep and spend and save 
more of their money, do they think the economy will slow down, or do 
they think it will remain strong?
  Virtually everyone that I have talked to from some of the top 
economists to some of the top business people to just regular folks at 
the barber shop, they believe that if we allow people to keep more of 
their own money and if we are serious about balancing the budget, real 
interest rates are going to come down and real economic growth is going 
to remain strong.
  So that is why I believe, and I am not an incurable optimist, but I 
think I can back this up and time will prove me right, that if we 
actually can get this budget plan signed into law and begin the process 
of allowing families to keep and spend and invest more of their own 
money, I think we are going to have a strong economy, not just for the 
next year, but probably well into the next century.
  Mr. WAMP. Mr. Speaker, I would like to say this again. Sometimes back 
home I get in trouble for being too honest, brutally honest at times 
about what really the situation is here in Washington as I explain it 
to people and do radio talk shows or town meetings or whatever. If we 
are talking about the deficit for this coming fiscal year, which is 
fiscal year 1998, and as the gentleman has pointed out, it is $49 
billion less than our plan when the Congress came in and passed the 7-
year balanced budget plan, the deficit for fiscal year 1998, according 
to our glidepath that we originally passed, was going to be $139 
billion, and now this new plan, as agreed upon by the President, has a 
$90 billion budget deficit and we discussed the fact that it is up from 
last year, part of that, though, and in all fairness and in brutal 
candor to the American people, which I believe that they now expect and 
deserve, is that the President in this agreement wanted to increase 
some discretionary spending in the short run over what he calls his 
priorities.
  Again, this is a system that has worked very well for over 200 years 
in this country. It includes an executive branch with veto power. We 
have to have a supermajority, a two-thirds vote of both bodies to 
override his veto.

                              {time}  1915

  This Congress does not have that. If we want to see progress made at 
the end of the day, there has to be some compromise on both sides. I 
want the folks back home, some of my wonderful, hardcore conservative 
friends who say we should not have been increasing domestic spending in 
the short run in order to get this agreement, in an ideal world I 
agree, but for 3\1/2\ years politically we do not have an ideal world. 
We have a split government with an executive branch from one party and 
a legislative branch solidly from the other party. Where we can, we are 
going to need to work together.
  I think the American people last year said, you all let the 
temperature down just a bit. The 104th Congress was a little too 
partisan. Try to work together. Do not engage in shallow, divisive 
rhetoric, because at the end of the day, in my opinion, there are only 
two kinds of politicians, only two kinds of leaders, those that unite 
and those that divide.
  The politics of division is not good for America. It has been very 
popular in recent years. They even have phrases called wedge issues. By 
definition that is an issue that will split people into two parts, and 
then you can pander to one part because the wedge issue divided that 
group of people.
  The politics of division has now risen to prominence in America. I 
think that is part of the cynicism, is they do not like attack 
politics. They do not like the politics of division. There are leaders 
who have succeeded by bringing people together. The politics of unity. 
Alex Haley, a wonderful Tennesseean, used to say, find the good and 
praise it.
  We need to find what it is we can agree on and come together on that, 
and set aside for the purpose of that discussion and for the moment our 
differences, and certainly not allow the politics of division to win 
the day.
  That is not an exclusive propensity for either side of the aisle. I 
believe neither party has an exclusive on integrity and ideas, and 
frankly, I believe there are Members of both parties in Washington and 
across the country that engage too much in the politics of division and 
not near enough in the politics of unity. We need more leaders in this 
country that will say, OK, what can we agree on? Where can we meet in 
the middle?
  Instead of saying, well, you just cannot trust the President, I think 
we should say, if the President is willing to meet us close to the 
middle, what can we agree with?
  So the deficit does right there tick up in the short run, but we get 
real entitlement reform to save Medicare, keep it solvent, because it 
is hemorrhaging.
  Mr. GUTKNECHT. Absolutely.
  Mr. WAMP. Medicare, even though it was demagogued, they called it 
medagoguery in the last election cycle; it is hemorrhaging, losing 
millions of dollars every day until we fix it. In order to fix it, we 
have to rein it in. In order to get that accomplished, we have to say, 
Mr. President, what does it take to get your agreement? We would not 
have had the agreement.
  Frankly, it is not an ideal situation. The ideology cannot win the 
day. There is a pragmatism that has to set in. In this country today we 
have this mixed government. We are not going to have another election 
to change that, so what can we do in the meantime to try to reach some 
common ground? Move the country forward, engage in the politics of 
unification again, because our country has so many problems, I am 
afraid if we do not work together in this city and across this land.
  Mr. GUTKNECHT. Mr. Speaker, I would say to the gentleman I generally 
agree with what he has said, although I would phrase it somewhat 
differently. I think in the book of Ecclesiastes it talks about there 
is a time for everything, a time for war and a time for peace. In 
politics there is a time for confrontation. There are clearly some 
times when you have to draw a line in the sand and say, beyond this 
point there is simply is no retreat.
  Perhaps we engaged in too much confrontation during the last 
Congress. But on the other hand, there is also a time for cooperation. 
I know some of my supporters, as the gentleman has back in Tennessee, 
really, they kind of like the politics of confrontation. Clearly they 
see it sometimes as a spectator sport. But in the end we have to do 
what is best for America. We have to do what is best for American kids 
and what is best for American seniors.
  So in some respects, if the gentleman and I were to sit down and 
write a budget agreement, probably it would not look exactly like the 
one we voted on this week. The same is true with the tax bill. If I 
could have written the tax bill, it probably would have been 
significantly different than the one I was proud to vote for today.
  In the end, this is about getting 218 votes here in the House, 51 
votes in the

[[Page H4830]]

Senate, and getting the President to sign it. I think the great news is 
that after going through some of the politics of confrontation, which 
in my opinion were important because they began to lay the foundations 
for where we are today, I honestly do not believe that we would have a 
budget agreement as good as the one we have, had we not been willing to 
demonstrate in the last Congress that we were willing to stand and 
fight. I think we would not have had as good a Medicare reform plan as 
we have today if we had not been willing to demonstrate that we were 
willing to fight for the principles we believed in.
  On the other hand, we had to make some compromises. We could not 
completely ignore some of the President's priorities. There will be 
more money in education which I think generally, though, when people 
begin to analyze it, I think they are going to like some of the stuff 
that is going to be done for education. I know education, whether we 
are in Tennessee or Minnesota or wherever, is a very high priority with 
the American people.
  So yes, it is a compromise. It is cooperation. We are trying to work 
together, because we understand that the greater good is what is really 
good for the American people.
  Mr. WAMP. Mr. Speaker, I appreciate the gentleman yielding to me, and 
I have enjoyed this discussion immensely. I think it is a worthy effort 
that we have engaged here in Washington.
  Mr. GUTKNECHT. Reclaiming my time, Mr. Speaker, I did want to talk 
just briefly, and we ought to spend a couple of minutes talking about 
the tax bill we passed today. I think there has been, just as we had a 
little bit of disinformation about Medicare, we have heard a little bit 
of disinformation about the tax plan.
  I just want to say, and these are from the Committee on the Budget, 
the Committee on Ways and Means, I am sorry, but they have all been 
confirmed by the Joint Committee on Taxation. I would hope that whether 
people live in Minnesota or in Tennessee, wherever they are, that they 
would get the facts.
  I think the facts speak for themselves. The bulk of the tax relief 
that is in this package, in fact, I think it is very accurate to say 
that 75 percent of the tax relief that we passed today is targeted at 
families that earn less than $75,000. Despite all the disinformation 
that has been spread, I think families can figure that out for 
themselves.

  I would like to tell the story, I was going home last week. I was 
driving into our neighborhood and there was a garage sale. There was a 
family getting out of a rather beat-up car. They were going up to this 
garage sale. They had three kids that were able to walk and then there 
was one chubber that was about maybe 8 or 9 months old that was 
permanently attached to mom's hip, you know that type.
  I thought about our tax relief package in this budget. I really 
thought, you know, this is what this is all about, because by balancing 
the budget we are preserving the American dream for those kids, and by 
passing this tax relief package we are going to provide real tax relief 
to families like that, millions of families like that.
  This tax relief package will benefit 41 million children in this 
country, and $500 times those four kids is $2,000. That may not seem 
like a lot of money to some of the folks in Washington, some of the 
well-paid lobbyists who hang around these halls, but $2,000 to the 
typical family with four kids, that is a lot of money.
  Take that family at $40,000 with three kids, and that is $1,500 plus 
the educational benefits, so this is a great package for American 
families. I am proud of it. It is not exactly the plan I would have 
written, maybe not the plan the gentleman would have written, but it is 
a great plan for America's families.
  Mr. WAMP. If the gentleman will continue to yield, Mr. Speaker, under 
this agreement, which I now believe at some point will be signed into 
law and enacted and the people will actually receive this tax relief, 
767,000 children in the State of Tennessee alone will qualify so that 
their parents receive a $500 tax credit in the coming year. That is 
incredible, just to think about 767,000 just in the State of Tennessee.
  There was a lot of debate on the floor today about who is wealthy and 
who is not wealthy. Working families in this country, just because you 
have a job and own a home, a lot of the definition we heard today, if 
you own your own home you were classified by their definition today as 
wealthy. I hope you do own your own home, regardless of what it is 
worth. Home ownership is a great thing in this country, something that 
should be held up for hope and for opportunity as a goal that people 
should have.
  I do not care if that single mom I was talking about earlier is 
making $18,000 a year or $30,000 a year, but if she has children 16 
years old or under she needs that relief right now. That is going to 
help her, and I think it is going to stimulate our economy.
  Then the other two areas of tax relief that I really believe in that 
are part of this agreement is increasing the level of death tax on 
families for assets. In my part of the world in Tennessee, many parts 
of my district are rural, where families own a farm. That farm has 
risen in value. It is called inflation that brought it up. They did not 
pay that much for it, but they have had it for a long time. They did 
not pay that much for it. They did not have that much to pay, but maybe 
they got it from their parents, and now the farm is worth more than 
$600,000, so if their parents die they would have to sell the farm, 
many of them, in order to pay the taxes, sell the family farm. That is 
unfair. This is an unfair tax. We should continue to lift that 
exemption as high as we can take it.
  Then the capital gains tax is being reduced, the rate, and it is an 
unfair tax, too, because it is another tax on inflation. Other 
industrialized countries that we compete with in a global economy do 
not even have a capital gains tax rate, like Japan and Germany. We need 
to not tax inflation. We need to have incentives for people to save and 
invest that stimulates the economy.
  We have an argument in this country over supply-side economics or 
not, but the fact is tax relief in the right way stimulates the economy 
and generates more revenue than it ever costs on the budget side. I 
really believe this is a step in the right direction.
  I appreciate the gentleman's time tonight. I have enjoyed our 
colloquy. I hope the American people maybe better understand what we 
are trying to accomplish in good faith in this city at this critical 
moment in our great country's history. I hope the gentleman has a grand 
Fourth of July back in Minnesota.
  Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman from Tennessee. It 
has been a great a hour. It has gone very fast.
  I would just like to close by saying this, this is an important first 
step. This was a very important week for American families, because we 
are beginning to restore accountability to government. We are starting 
to encourage more personal responsibility. We are sending more of the 
authority, the responsibility, and the resources back to neighborhoods 
and communities, and most importantly, to families.
  As I said earlier, for 40 years Washington had it wrong. Washington 
thought that Washington knew best. For 40 years both the bureaucracy 
and the debt ballooned, and what happened? Our social problems got 
worse. The real answers to most of our social problems cannot be found 
here in Washington. They are with our families. That is what this week 
was about. That is what our budget is about. That is what our tax plan 
is about. Our families in America are winning now, and with their help, 
we are going to keep them winning.

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