[Congressional Record Volume 143, Number 102 (Thursday, July 17, 1997)]
[House]
[Pages H5478-H5485]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     PROGRESS REPORT ON THE DEFICIT

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 1997, the gentleman from Wisconsin [Mr. Neumann] is 
recognized for 60 minutes.
  Mr. NEUMANN. Mr. Speaker, I rise this evening to bring America some 
good news for a change and to talk to my colleagues about some of the 
progress that has been made out here in the last 3 years because it is 
significant and it really brings us to the question of what next.
  We came here, many of us came here, out of the private sector with no 
political background, myself included, and we came here in 1995 set on 
the idea that it was our responsibility to do something about the 
deficit to get us to a point where this Government spent no more money 
than it brought in, to get us to do something about the high tax rates 
in this country, and we were very concerned about Social Security and 
Medicare as it related to our senior citizens.
  It has been a great day in Washington because today we actually 
introduced a bill that deals with the next step, and in order to deal 
with the next step; that is, paying down some of that debt, you first 
have to recognize we are in the third year of a 7-year plan to balance 
the budget, we are on track and ahead of schedule, Medicare has been 
restored so our senior citizens can rest assured that Medicare is safe 
for at least another decade, and good news for virtually every American 
all over this country:
  Taxes are coming down. We have got a $500 per child tax credit coming 
through. If you own stocks or bonds or have a retirement fund of any 
sort, the capital gains tax reduction will affect you and allow you to 
keep more of your own money instead of sending it to Washington. The 
death taxes are coming down.
  And of course there is all sorts of other tax provisions in there: 
the $1,500. If you have got a student in college right now, the $1,500 
to help you get that student through college.
  But the good news, and we will see more of this as we go forward this 
evening, is there are more tax cuts coming in the plan.
  The logical next step is to talk about paying down the debt, and 
before I get into this I think it is real important we pause and just 
make sure that we talk a little bit about the difference between the 
deficit and the debt.
  Every year since 1969 the Federal Government has been spending more 
money than what it has in its checkbook. It is not a lot different than 
our home. In our home we have income, we get a paycheck every month or 
every week, depending on what kind of setup you have, but at any rate 
you get a paycheck, you put it in your checkbook, and you write out 
checks to pay your bills.

  Well, in your home you cannot write out checks for more than is in 
your checkbook, or of course the checks are going to bounce. Well, what 
the Federal Government has been doing since 1969 is collecting taxes, 
putting those tax dollars that they take out of your pocket into the 
government checkbook and then writing out all kinds of checks.
  The problem in the government is it is very different than in our 
homes. When the government writes these checks out, they write out 
checks for more than what is in their checkbook. That is called the 
deficit. Since 1969 every year the government takes money out of your 
pockets, puts it in their checkbook and then writes out checks for more 
money than they have in the checkbook. That is the deficit.
  Well, what happens with that deficit? Since their checkbook is 
overdrawn, they really only have one thing that they can do; they go 
and borrow the money to put in their checkbook.
  And here is what has happened over the course of the last few years:
  From 1960 to 1980, the growth of the debt was fairly small. But from 
1984 forward, you can see that government has been overdrawing their 
checkbook by a substantial amount.
  So what happens?
  Well, in the year 1980, for example, they wrote out more checks than 
what they had in their checkbook, and they borrowed the money, and the 
debt started growing. By 1985 you can see the debt was growing more and 
more, and every year they kept writing out more checks than what they 
had money in their checkbook, and the debt just kept growing.
  Now I point to this chart because it is about the best picture that I 
have seen to show just how serious this problem of debt is, because 
every year when they go out and borrow that money to make their 
checkbooks solvent, of course, it just gets added on to the debt.

[[Page H5479]]

  To show you how serious this problem is, we are currently about here 
on this debt chart. It is a very, very serious problem facing this 
country.
  Now, when Washington tells the American people that they are about to 
balance the budget, what that actually means is they are going to quit 
spending more money than they have in their checkbook.
  Now most Americans would ask the same question they do in Wisconsin. 
They would ask the question:
  Well, if you balance your checkbook; that is, you stop spending more 
money than you have in your checkbook, what about that debt that is 
still out there?
  And I should show just how big that number is, that we actually put a 
number to it as we would in our own homes with our own checkbooks.
  The debt, the amount of money that the government has overdrawn their 
checkbook by, in 1969, they borrowed it, and then in 1970 they borrowed 
some more, 1971, and all the way through to and including this year; 
that debt adds up to $5.3 trillion. The number looks like this, but let 
me translate that into English.
  It is effectively the same as $20,000 for every man, woman, and child 
in the United States of America. Again, this is the debt, this is the 
amount of money they have actually borrowed. This is the money that we 
will pass on to our children if we do not do something about it.
  Another way of looking at this is for a family of five, like mine, 
the Federal Government has actually borrowed $100,000 basically over 
the last 15 years.
  Put another way, the Federal Government spent $100,000 more than what 
it took in in taxes from an average family of five, like mine, and here 
is the real problem with that:
  A lot of people in this community would like to say, well, do not 
worry about the debt, it is no big deal, it will go away, but here is 
the real problem:
  The real problem is that an average family of five in America today 
sends a check for $580 every month to Washington, D.C., to do nothing 
but pay the interest on the federal debt.
  Now, the families out there should be thinking about, well, what 
could we do if we did not have that debt. Well, you would keep the $580 
in your own pocket, and a lot of them are going, well, I do not know 
what he is talking about because I do not really pay $580 in income 
taxes.
  But I would like to point out that when you walk in a store and you 
buy a loaf of bread and the store owner makes a small profit on the 
loaf of bread, part of that profit gets sent out here to Washington in 
the form of a tax, and that is part of the $580 a month that our 
families are paying in interest on this Federal debt.
  So again there are 2 different topics here. One is the deficit. The 
deficit is the amount that the Federal Government overdraws their 
checkbook by every year. When the people in Washington talk about 
balancing the budget, what they are talking about is their checkbook. 
They are talking about stopping the practice of spending more money 
than they have in their checkbook every year.
  Well, what that means is after we balance the budget, we have still 
got this $5.3 trillion debt hanging over our head.
  Now I started this evening by saying it is a wonderful night tonight 
because today we introduced a piece of legislation that goes to the 
what next. The what next of course is what do we do about this $5.3 
trillion debt? Do we pass it on to our children?
  And I am talking some flack over this bill, to be perfectly frank 
were you. We had a former Vice Presidential candidate that said that we 
do not have to worry about the debt. In fact, Jack Kemp said that the 
debt will take care of itself over a long period of time and we really 
do not need to worry about paying the debt back. When we start running 
surpluses; that is, when we start collecting more taxes than what we 
write out checks, why do we not just do all tax cuts and not worry 
about this debt?
  Well, I want to tell you there is two gentlemen, and we are not 
allowed to show them here because of House rules. On the floor here 
with me this evening, my son is here, and the reason we cannot look the 
other way is because it is not acceptable for us in our generation to 
pass this $5.3 trillion debt on to our children. Is it really fair that 
our generation spend this money and look the other way and say, ``Well, 
let's hope it takes care of itself,'' or do you think we more have a 
responsibility to do something about the debt much like any homeowner 
would do with any debt against their home?
  The bill we introduce today is much like repaying a home loan. It is 
much like any family in America would do where you simply start making 
payments on the debt, and over a 30-year period of time we repay the 
Federal debt. Here is what the bill does:
  After we reach a balanced budget we cap the growth of government 
spending 1 percent below the rate of revenue growth. That creates a 
surplus because, if you are in balance to start with, spending goes up 
by one amount a little bit less then revenues go up. That creates a 
surplus. That surplus, we take two-thirds and we apply it toward paying 
down the Federal debt. We take one-third and supply additional tax cuts 
to the American people.
  Well, 2 things happen under this bill, actually 3 things. One is 
there are additional tax cuts for the American people. But 2 other very 
significant things happen. The first and what I consider to be the most 
important: We pass this Nation on to our children debt free. By the 
year 2026 under our plan, the Federal debt is repaid in its entirety. 
Again by 2026 the debt could be repaid in its entirety under this plan.
  The other thing that happens is equally significant. Today we collect 
more dollars in the social security then what we pay back out to 
seniors in benefits. That money is supposed to be sitting here in a 
savings account someplace. Well, it is not here, and I do not think 
this is any big surprise to anyone. The money has been spent on other 
Washington programs, and in fact the Social Security trust fund is all 
part of this $5.3 trillion debt.

                              {time}  1900

  As we pay back the Federal debt, the second thing that happens is we 
put the money back into the Social Security trust fund that has been 
taken out, so our senior citizens can again be assured that Social 
Security is solvent at least to the year 2026.
  So this bill really has something in it for all generations. To the 
young people, they will not have to make that $580 a month payment to 
Washington to do nothing but pay the interest on this debt. Instead, 
they can keep that money in their own homes for their own families and 
decide how to best spend their own money. That is what this should be 
all about. So to the young people, they get a debt-free nation. What a 
wonderful opportunity that is in this bill.
  For the people that are working today, one-third of those surpluses 
are dedicated to additional tax cuts for working families in America 
today, so the good news is for people in the work force, taxes go down 
some more.
  For our senior citizens, the Social Security trust fund, the money 
that has been taken out by the Washington bureaucrats and spent on all 
kinds of other programs, that money gets put back into the Social 
Security trust fund and Social Security once again becomes solvent for 
our senior citizens.
  A good day in Washington, a good day in Washington is where we can 
introduce a bill that actually talks about paying off the Federal debt, 
lowering taxes and restoring the Social Security trust fund. That is 
what happened today.
  What kind of support do we have on this? Let me start with the 
Members of Congress. In the House of Representatives we have roughly 
100 sponsors from both sides of the aisle. I am happy to say there are 
Democrat cosponsors in this as well as Republican in the House. We have 
people such as Speaker Gingrich. The gentleman from Georgia, Mr. Newt 
Gingrich is a cosponsor of the bill; the chairman of the Committee on 
Appropriations, the gentleman from Louisiana, Mr. Bob Livingston, a 
cosponsor of the bill; the chairman of the Committee on the Budget, the 
gentleman from Ohio, Mr. John Kasich, a cosponsor of the bill; the 
honorable chairman of the Committee on Rules, the gentleman from New 
York, Mr. Jerry Solomon, a cosponsor of the bill; the gentleman from 
New York, Mr. Bill Paxon, a cosponsor of the bill; 100 cosponsors in 
the House of Representatives already on this idea.

[[Page H5480]]

  It goes beyond that. It goes beyond that. We had an interesting 
conversation. Think about this range of support, from the Speaker, the 
gentleman from Georgia, Mr. Newt Gingrich to the conversation I had 
yesterday with a well-known American citizen, Ross Perot.
  We are going to see Ross Perot tomorrow and present the rest of the 
details of the plan in person to him, but he is very optimistic and 
very supportive of the plan, because of course it does what he talked 
about doing for the last 5, 7, 8, 10 years, and that is balancing the 
budget and paying off the Federal debt. So we have a wide range of 
support for this.
  It goes beyond that. Two hundred fifty thousand members of Capitol 
Watch have signed off as endorsing the plan. United Senior Citizens 
Association, let me see what they say about it: Since its inception, 
the United Senior Citizens Association has lobbied Congress to restore 
the stability of the Social Security trust fund. The introduction of 
the National Debt Repayment Act is a step toward making Social Security 
solvent.
  The Council for Government Reform: On behalf of over 250,000 members 
of the Council for Government Reform, I urge you to cosponsor and 
support Mark Neumann's legislation entitled the ``National Debt 
Repayment Act.''
  Coalitions for America: Coalitions for America supports the National 
Debt Repayment Act of 1997. We do so for the simple reason that your 
bill sheds some sadly needed light into the tremendous load of red ink 
America is drowning under.
  Business-Industrial Council: On behalf of 1,000 member companies, the 
U.S. Business and Industrial Council, USBIC, I would like to extend our 
support for the National Debt Repayment Act of 1997.
  The gentleman from Georgia, Mr. Newt Gingrich in a press release 
strongly supporting it: The Debt Repayment Act takes us in exactly the 
right direction to lead a national dialogue on how to best deal with 
the surpluses once the budget is balanced.
  I can keep going on this, but the bottom line is the support for this 
thing and the range of support, from Republicans to Democrats, from the 
Speaker of the House to Ross Perot, the support for this particular 
idea grows because it is a commonsense, straightforward approach for 
this great Nation we live in.
  What a dream for America. What a dream for this great country: a 
balanced budget, lower taxes, Medicare restored. And now the next step: 
We pay off the debt so our children can get this Nation debt free, we 
restore the Social Security trust fund so it becomes solvent again, and 
we continue the process of reducing the tax burden on working families 
in America. What a dream for this great Nation we live in.
  I would like to next go to a little bit about what has been happening 
before 1995, what has happened from 1995 to today, and then how we can 
get to the point where this bill is actually put into place and 
actually used.
  To begin this discussion, I want to start with the past. I have to 
say that the past is before I was actively involved in politics. Before 
1990 I was never in politics. I was working very hard building a 
business out in Wisconsin. We built the business from the ground up. In 
the end we were providing about 250 job opportunities in southeastern 
Wisconsin and in northern Illinois.
  What was going on out here in Washington is that people in Washington 
were making a series of promises to the American people, and they kept 
getting broken. That is what drove many of us out of the private 
sector, and with a concern for our children and future generations of 
this great Nation, we left the private sector to serve our country for 
a period of time, undo what was done in those broken promises, 
hopefully straighten this out, and then return back to the private 
sector.
  Let us look at the promises. Let us think back to before 1995. This 
is the past. This is before the American people basically provided the 
impetus or the revolt, if you like, of what was going on. They did that 
in 1994.
  Let us go back before then and talk about what was promised in the 
late 1980's and early 1990's. I have up here the Gramm-Rudman-Hollings 
Act. This blue line shows how they promised they were going to get to a 
balanced budget. Notice, it reaches zero in 1991. That is to say, they 
promised the American people they would balance the budget by 1991.
  I watched this thing from its inception, only when they promised it 
was going to get balanced; instead what happened is this red line. That 
is the deficit line. That is how much they overdrew their checkbook by. 
I was out there working hard to run a business, make sure those 250 
people got paid every week, and I was watching Washington overdraw 
their checkbook every week. It was very frustrating to watch.
  When they made this promise and then broke it, they overdrew their 
checkbook by even more than they said they were going to, many 
Americans got very angry at this situation as they felt threatened for 
the future of our country. I do not care what anybody in this community 
says, the American people do care about this country. They care about 
what kind of a country we are going to pass on to our children.
  So they saw they could not live up to what they had promised in 1985 
and they put a new plan into place. They called it the Gramm-Rudman-
Hollings Act of 1987. This one provided another blue line, another 
series of promises. It was supposed to be balanced in the early 1990's, 
but instead of following their promise, again they broke it and 
overdrew their checkbook by massive amounts of money.
  This is what led to the 1994, if you would like, I would call it an 
uprising of the American people. It was not a revolt in Washington, it 
was the American people saying, we are sick and tired of these people 
making promises to us out there in Washington. We are sick and tired of 
those promises that were broken.
  At this point I might add that the Democrats were in control of both 
the House of Representatives and the Senate and the Presidency. They 
said, we are sick and tired of those broken promises. So we got to 
1993. This was going on.

  In 1993, they said well, we had better get serious about this. Our 
checkbook is really overdrawn. The people that were in Washington in 
1993 said well, the only thing we know to do to balance our checkbook 
is to reach into the pockets of the American people and take out more 
money. That was the tax increase of 1993: broken promises and higher 
taxes. That is before 1995. That is before the American people sent a 
new group to Washington to change these broken promises and higher 
taxes.
  I would hope all of my colleagues take a moment tonight to remember 
the tax increases of 1993, because we need to remember what that 
environment was back in 1993, the broken promises and the higher taxes, 
to understand just how far we have come in the last 3 years.
  Remember, in 1993 they raised gasoline taxes, they raised Social 
Security taxes, the biggest tax increase in history, and there was a 
huge fight out here in Washington. As a matter of fact, they passed the 
bill by one single, solitary vote in the House of Representatives, and 
not a single Republican would vote for the tax increase.
  So it went over to the Senate. In the Senate they again passed it by 
one single, solitary vote, the biggest tax increase in American 
history, and it passed both houses by one single vote and was, of 
course, then signed into law by the President.
  What was the result? The result was the American people said, I am 
sick and tired of these promises being broken. I am sick and tired of 
the people in Washington thinking that the right solution to their 
spending habits is to reach into the pockets of the American people and 
take more money out to Washington. We have had it with that.
  So in 1994, they elected a new group of people and sent them on out 
here to Washington. Again, I would emphasize that at that point the 
House of Representatives was taken control of by a new party, by the 
Republican Party. The Senate also was taken over by the Republican 
Party at that point.
  But it is not the party difference that is important here, it is the 
change in what was happening and the concept of the way to solve the 
problem of balancing the budget, reaching into the pockets of the 
people and taking more money out to Washington, or the very

[[Page H5481]]

different view that was brought in in 1995.
  The different view went like this: Instead of reaching in the pockets 
of the American people and taking more money out here to Washington so 
we can maintain big government, instead of doing that, what we are 
going to do is curtail the growth of government spending. When we 
curtail the growth of government spending, since the government spends 
less, that means they will not need as much money out of the pockets of 
the American people. When they spend less, of course, they are going to 
borrow less.
  Here was the theory. If the government borrowed less money out of the 
private sector, that would mean there would be more money available in 
the private sector. More money available in the private sector would 
keep the interest rates down, and when the interest rates stayed down, 
people would probably buy more houses and cars, because they could 
afford them. When they bought more houses and cars, people would have 
to go to work building those houses and cars. Of course, when they went 
to work they were leaving the welfare rolls and went into the work 
force.
  I have good news. We have now moved out of the past and into the 
present. Our motto was put into place in 1995. The American people 
deserve the credit for this. The American people sent a new group to 
Washington. That new group sent to Washington with their ideas of 
curtailing the growth of government spending have laid this down, and 
now we are in the third year of this.
  The American people have every right in the world, they should be 
checking us. They should now be asking the question: Is this group that 
we put in charge in 1995 doing anything different than what the people 
did before them, the broken promises of Gramm-Rudman-Hollings? Is there 
anything different going on?
  I brought a chart along to help see just how different it really is 
out here. In 1995 we promised the American people a balanced budget by 
the year 2002. We laid out the deficit stream just like they did with 
Gramm-Rudman-Hollings. In the first year we promised the deficit would 
be below this red column, below $154 billion. The deficit in the first 
year was actually $107 billion. Here is what was promised. That is the 
red column. Here is what the deficit actually was. Please note, the 
deficit that actually occurred was smaller than what was promised to 
the American people. We not only hit the target, but we were ahead of 
schedule.
  The second year, we said it would be under $174 billion. It is 
actually now well under 67. In the second year of this plan, again, the 
promises, the red column, and the blue column is what actually 
happened. Conceptually, the idea of controlling the growth of 
government spending worked. The idea of the government borrowing less 
money and leaving more available in the private sector, keeping the 
interest rates down so people would buy more houses and cars, providing 
more job opportunities, it worked.
  We are now in the third year of that plan, and again, in the third 
year we are not only on track but ahead of schedule. That is the debate 
going on in Washington today. We are well ahead of schedule to be to a 
balanced budget by the year 2002.
  Has anything changed? Mr. Speaker, I would like to point out that 
under the Gramm-Rudman-Hollings, they never hit the targets. Under the 
new group that is here since 1995, we have not only hit the targets, 
but we are ahead of schedule in the first year. We not only hit the 
target, but we are ahead of schedule in the second year. We not only 
hit the target, we are ahead of schedule in the third year.
  The good news for the American people is that we may very well have a 
balanced budget by next year, we are so far ahead of schedule on our 
plan. Because the idea of the government borrowing less, keeping the 
interest rates down so people can afford to buy houses and cars and 
provide job opportunities, that working model of 1995 worked so well 
that we are probably going to have a balanced budget by the year 1998. 
That is great news for the American people.
  A lot of people cannot figure out exactly how this happened. I 
brought another chart along to help show what this curtailing the 
growth of government spending really means. Before 1995, the average 
growth of spending under the old regime was 5.2 percent annually. I 
went back 7 years and took the average growth in spending of the 7 
years before the 1995 group took over, before the American people put 
the Republicans in charge of the House and Senate.
  Since then, spending is still going up by 3.2 percent but the growth 
of government spending in Washington has been slowed by 40 percent in 2 
short years. This is how fast it was going up before 1995, this is how 
fast it is now going up after 1995.

  Is spending still going up, or are we making draconian cuts that 
virtually every American has been told about? I have news, there are no 
draconian cuts. Spending in government is still going up by 3.2 percent 
a year. Government is still getting bigger, and a lot of us do not like 
that. A lot of us would prefer to see this number at zero. Government 
does not need to be bigger. Cut out the waste and get down to the 
programs that people actually need.
  But the facts are, government spending is still going up by 3.2 
percent a year. If we look at inflation in adjusted dollars, it is 
going up by about .6 percent per year. If we take a look at what is 
really happening to government spending, it was going up in real 
dollars by 1.8 percent a year. It is now still going up by about .6 
percent. That is after inflation.
  Government, unfortunately, is still getting bigger, so we have plenty 
of room to move this plan forward to the next step and stop government 
from growing at all. But at this point, what has been done is the 
growth of government spending has been slowed. It is the slowing of 
that growth of government spending that has led us to a point where we 
can actually both balance the budget, probably by 1998 or 1999, well 
ahead of schedule, and reduce taxes on the American people at the same 
time.
  What a wonderful situation this is and what great news this is for 
America. Instead of in 1993 talking about higher taxes, we have in fact 
curtailed the growth of government spending to a point where we can 
both balance the Federal budget and at the same time provide tax relief 
for the American people.
  It is good news for America. That is what I said when I started this 
evening, it is a great day in Washington. And there are not a lot of 
great days in Washington, believe me; but it is a great day, because we 
know that what has been tried in 1995, that model that was put into 
place, we know that model actually works, and it is very, very 
important.
  I have one more thing here that shows just how important the work 
that has been done is, and credit for this should go to a lot of the 
different leadership in both Houses for this, but most important, to 
the American people, because after all it is the American people that 
had the common sense in 1994 to change what was happening in this 
community. It would not have changed without the American people.

                              {time}  1915

  It cannot change without the support of the American people. What 
this chart shows is where the deficit was headed.
  If the group that came here in 1995 played golf and basketball 
instead of doing their job, this line shows where the deficit was 
headed when we got here in 1995. The yellow line shows how much 
progress was made in the first 12 months under a new party in control.
  My colleagues will notice that the deficit projections came down, but 
they still were not going to zero at that point. The green line is the 
1995 plan that we put into place, and the blue line, this is the good 
news, the blue line shows us what is actually happening.
  Again, here is what would have happened; here is how much progress 
was made in 12 months. Here is our plan. This is what we hope for. This 
is like the Gramm-Rudman-Hollings promise to the American people, and 
here is what is actually going on.
  We are not only on track in our plan, we are ahead of schedule to the 
point where the budget will probably be balanced next year or the year 
after and we can provide a tax reduction to the American people.

[[Page H5482]]

  I have got to pause for a moment in this presentation and say, I have 
been upbeat, very positive about where we are going with this country 
and very positive about the possibilities for what can happen. I want 
to pause for just 1 minute and make sure we have a dose of reality in 
here.
  This is a topic that I think is very important for all Americans to 
understand, whether they are in their thirties or forties or fifties 
and thinking about at some point receiving Social Security, or whether 
they are in their fifties and sixties and are nearly ready to start 
receiving Social Security, or whether they are 65 or 62 and over and 
are receiving Social Security. This is a very important thing to 
understand.
  When Washington says they are going to balance the budget, what they 
do not tell the American people is they are still taking money out of 
the Social Security trust fund to do it. Let me explain that. Every 
year the Social Security trust fund takes money in out of the paychecks 
of the American people. It takes in more money than what it gives back 
to the seniors in checks. That is to say, there is a surplus. They are 
collecting more money.
  The reason for that is very simple. The baby boom generation is 
moving toward retirement, and when the baby boom generation gets there, 
there will not be enough money to pay Social Security. That happens in 
2001. So they are collecting more money than what they are paying out 
right now. The idea is that money gets set aside in a savings account, 
and the savings account then provides the money in 2012 when the baby 
boom generation starts retiring and there is not enough money there to 
write out the Social Security checks.
  The only problem in Washington, this should come as no big surprise 
to anyone, when Washington saw that extra money being collected out of 
the paychecks, instead of putting it aside in a savings account they 
spent the money. They put it in their big government checkbook and 
spent the money.
  So at this point the only thing we have in that savings account is a 
bunch of IOU's. It is all part of the $5 trillion debt. So when 
Washington says they are going to balance the budget, it is important 
to understand that what they actually mean is they are going to use 
that Social Security trust fund money to actually count toward their 
checkbook and call that balanced.
  Again I have a picture here to help make that clearer. The surplus in 
the Social Security trust fund for 1996 was about $107 billion. So they 
have got this extra money coming in, about $100 billion extra coming 
in. When they say balance the budget, what they mean is, I am sorry, 
the deficit was $107 billion in 1996. On top of that there was $65 
billion in the surplus Social Security money. So there was $65 billion 
extra came in to Social Security more than what they paid out. The 
deficit had originally been reported as $107 billion; the true deficit 
then $172 billion.
  When Washington says they are going to balance the budget, what they 
really mean is they are going to zero out this blue area. So even after 
they zero out this blue area, that is the deficit, what they call the 
deficit out here, they are still using the Social Security trust fund 
money to make their checkbook look balanced.
  So in 2002, or whenever we hit a balanced budget and Washington 
proclaims victory, we need to understand that that victory still means 
they are using the money out of the Social Security trust fund. That 
leads us again to the National Debt Repayment Act and why it is so 
important.
  Under the National Debt Repayment Act, of course, what we would do 
is, after we balanced the budget we would cap the growth of government 
spending at a rate 1 percent lower than the rate of revenue growth so 
as to create a surplus. That surplus is what we use to put the money 
back in the Social Security trust fund that has been taken out.
  So over a period of time, then, when we get to a true balanced 
budget, that is, we get to a point where we are not using that Social 
Security money to mask the true size of the deficit or to make the 
budget look like it is balanced when it is really not. We get past that 
in our National Debt Repayment Act and we actually get to a point where 
all of this money that has been taken out of the Social Security Trust 
Fund gets put back in. If that happens, Social Security again becomes 
solvent through the year 2029.
  I want to talk again, we talked about the past and the present, I 
want to go again into the future, because understanding the problems in 
the Social Security Trust Fund and understanding how significant this 
debt is on our children and what it means to them and how much interest 
they would have to pay or how much they do not have to pay so they can 
keep the money in their own home. A lot of folks are talking about our 
budget plan as being pie-in-the-sky; we cannot really balance the 
budget.
  I put together a little chart that looked at the average Federal 
revenue growth over the last 3 years, revenue to the Federal 
Government; that is, if we just look at how much money is coming in to 
Washington, it has been growing by 7.3 percent average over the last 3 
years. Over the last 5 years it went up by 7.3 percent. A 10-year 
average is 6.2 percent. A 17-year average is 6.8 percent.
  In our budget resolution, in the budget plan that balances the budget 
by 2002, we only projected revenue growth of 4 percent. That is to say 
the plan we laid on the table was extremely conservative. The reason 
there are projections out there that the budget will be balanced in 
1998 or 1999 is because revenue is in fact growing even faster than the 
4-percent number. When it grows faster, of course, that gets us closer 
to a balanced budget.
  I put together a little table. I asked the question: What if revenue 
grows at a more historical level, say 6 percent? That is what this 
chart shows. If we can hold the spending in line, as we have been 
doing, and meet the spending targets that are in the budget resolution 
that has just passed, and revenue grows by 6 percent instead of the 4 
percent, still lower than it has been growing but faster than what was 
projected in the budget resolution, what happens is we do in fact 
balance the budget by the year 2000 and start running a surplus.

  That is the real importance of passing the National Debt Repayment 
Act. These surpluses could start as soon as 1999 or 2000. And when 
those surpluses start, there is going to be a frenzy in Washington, DC, 
with a strong desire to spend more of the American people's money. By 
passing the National Debt Repayment Act, we would assure that two-
thirds of this surplus goes to repaying the debt, including paying off 
the Social Security trust fund, and that one-third of this surplus is 
provided for additional tax cuts to the American people.
  That is what the National Debt Repayment Act is about. It was 
introduced today, and I would strongly encourage my colleagues to be 
actively involved in supporting it. And equally important, I think, the 
American people need to get actively involved in this, because inside 
the beltway there is this strong sense that somehow the debt is 
irrelevant. It is almost like we do not care if we pass it on to the 
children. We want to give more tax cuts because that will be 
politically popular.
  I deep down inside believe that the American people understand that 
the right and proper thing to do, the morally and ethically right thing 
to do, is to pay the bills that we ran up over the last 15 years. The 
National Debt Repayment Act will allow us to do just that. Before 
people in my age group leave the work force, we would have the debt 
repaid in its entirety.
  For the people who want more tax cuts, I would just point out that as 
we pay off the Federal debt, as we implement this sort of a plan, the 
interest payments to the Federal Government will be reduced. And when 
we reduce those interest payments, of course, taxes can be 
correspondingly held down.
  There are two important things in order to bring all of this about. 
There are two very important things. One of them is that we curtail the 
growth, we continue curtailing the growth of government spending. We do 
not have to have draconian cuts. We do not have to wipe out all kinds 
of programs that are important to people.
  What we do have to do is, we have to curtail the growth of government 
spending. That may mean that a program gets killed on one side that was 
wasteful or not as productive or not as important as another program 
someplace else. If we were to say limit the

[[Page H5483]]

growth of government to the rate of inflation, some program might grow 
faster than inflation, such as Medicare. Some other program might have 
to grow slower than the rate of inflation.
  I would point to one of these. Last year we sent $35 million to 
Russia so Russia could launch monkeys into space. I do not think we 
needed to send that $35 million. We took $35 million of the taxpayers' 
money. We sent the money to Russia for the Russians to launch monkeys 
into space for research.
  Those things should be eliminated. The dollars spent on those sorts 
of programs should be redirected to programs that are more important, 
say Medicare, for example, and that should allow us to keep the growth 
of government spending at the inflation rate or even lower.
  The beauty of this whole idea, the National Debt Repayment Act, is 
that we have one-third of the surplus going to additional tax cuts, 
two-thirds going to repay the debt. We get to pay off the entire debt 
by the year 2026 and give this Nation to our children debt free. The 
Social Security trust fund is restored, and we get to provide 
additional tax cuts to the American people.
  I cannot think of much better that we could spend our time and effort 
on. I cannot think of a better vision for the future of this great 
country.
  I have got a few minutes left tonight. I would like to jump over into 
another topic that I think is very important out here. I would like to 
go into a little more detail on the tax cuts that are coming for the 
American people.
  There is a lot of debate in this community right now about whether 
people who are not paying any income taxes should get a tax cut or not. 
Many of us feel that if a person is not paying taxes, it is probably 
pretty hard to get a tax cut. There is a debate about whether the 
Social Security taxes that are withheld out of a paycheck should be 
applied or not. I guess that debate will go on.
  But the bottom line is, when it is all over and done with, people 
with children, families with children with incomes below $110,000 a 
year, or $75,000, if they are single, they get $500 per child back in 
their home. If they are in a house where they have got one child headed 
off to college and two kids in school yet, they will get $500 for each 
one of those kids. On top of that, for the one that went off to college 
they will get an additional $1,500.
  This is not like they get from Washington. This is their hard-earned 
money that, instead of sending it out here to Washington to let 
Washington decide how to spend it, they get to keep this money in their 
own home and spend it in the way that they think is most desirable for 
their own family.
  I was talking to a family with three children in church the other 
day. They said to me, the first thing I am going to do with this money, 
$500-per-child, I am not going to go and spend that money. That is 
going into a college fund for my kids so I know when they get there, 
and I will have three in college at that point, I know when they get 
there we can pay the college bills.
  What a great statement that is for America. American families care. 
This country is not dead and gone. The people of this country care, not 
only about the country, they care about their family. When the $500-
per-child tax cut comes through, families are not going to go out and 
blow that money. They are going to use that money to provide a better 
life for their children. In this case they are going to put it away for 
a college fund. That is great news for the future of this country. That 
is the way it should be.
  I would like to address another group of people, and this is not 
often discussed in the tax cut plan that is currently on the table out 
here. I talk with a lot of folks where their kids are grown and gone. I 
have a 20-year-old, an 18-year-old; the 18-year-old heads off to 
Carthage College next year. The 20-year-old is going to New Ulm, MN, to 
college. I have a 14-year-old at home that I am sure will head off to 
college in three or four years.
  At that point my wife and I become empty nesters. An empty nester is 
a family where the kids have grown and they have left the house and are 
no longer living there. There are a lot of American people out there in 
their middle forties that are empty nesters. They are in this big house 
that they built to raise their children. They do not need that big 
house anymore.
  The dilemma, under the Tax Code right now, is this: If they sell 
their house today and they are 48 years old, their kids are gone, they 
decide they want to go into a smaller home, lower payments, and start 
saving for their own retirement, if that is what they would like to do, 
under today's rules they sell that bigger house and move into a smaller 
house and the tax burden comes out and grabs lots of money from them.

  Under the tax cut package that is here today, this is very 
significant for empty nesters, if they wish to downsize their house, 
the government is not going to come and take a portion of the inflated 
price of their old home, their bigger home.
  Let me walk through this. Suppose a family has three kids and they 
are young kids, and when they were 35 years old they bought a house for 
$35,000, $40,000. They kept that home, and now they are 48 years old 
and their kids are all gone and they need a smaller house. The home 
that they bought for $35,000 is now worth $85,000, so there has been a 
$50,000 inflation in there.
  Under the old rules, if they sold the house before age 55, they pay 
taxes on that $50,000. They pay a capital gains tax on it. Under the 
new rules, if they sell their house even before the age of 55, they do 
not have to pay the taxes on it. So if they want to sell their big 
house, move to a smaller house, lower payments and save for themselves 
for retirement, go ahead and do it. That is what the new tax rules are 
saying. It is a significant change for a lot of Americans that has not 
really been talked about out here.
  There is another area of tax cuts that I think is very significant. 
Lots of people, especially my age group, 20's, 30's, on up into the 
40's, we started saving in a pension plan of some sort for our own 
retirement, many times even outside our employer's plan. We started 
some other sort of a savings plan to get ready for our retirement, or 
if it is our place of work and they provide us with a pension plan of 
some sort.
  In that pension plan they have been buying maybe stocks and bonds or 
whatever they buy in that pension fund. By the time they reach 
retirement, the value of those stocks is going to have increased, we 
hope. That is why they are buying them, so they will increase in value 
under the old rules.

                              {time}  1930

  When we pull those stocks out of the pension fund, we pay a 28 
percent tax on them. It is called a capital gains tax. Under the new 
rules, instead of paying 28 percent, we will only pay 20 percent. That 
is a very significant reduction. That is an 8 percent reduction.
  If we pull money out of our pension funds, and let us say we are 
taking out $1,000 of this profit a month, instead of paying 28 percent, 
$280 in taxes out of that thousand dollars we are taking out, we are 
now only going to pay $200; and we get to keep an extra 80 bucks in our 
own home to spend as we see fit instead of sending it to Washington to 
spend on our behalf. Another very significant change in the tax code.
  There is lots of good news out there in the tax code. A lot of times 
the American people get bogged down in all the bickering and fighting 
going on down here in Washington, but I think it is important as we are 
listening to that that we remember the huge difference in transition 
that has taken place from before 1995 to today.
  Before 1995 there was no fighting about tax cuts. For goodness sakes, 
there was no tax cuts even being discussed. The only thing being 
discussed were which taxes should be increased and how far. Today, yes, 
there are some disagreements over which taxes should be cut and how 
far, but is it not a wonderful situation for the country to be in, 
where we are talking about which taxes to reduce on the American people 
and how far they should be reduced?
  Let us have that debate. And the good news is that under the National 
Debt Repayment Act there is more tax reductions coming for the American 
people.
  I would encourage every American to get actively involved in this 
debate. If for some reason somebody can find a way that they are not 
affected by the

[[Page H5484]]

tax cuts that are currently on the table, I think it is important that 
their representatives know about that so that in the next round of tax 
cuts, as the National Debt Repayment Act is put into place, and one-
third of the surplus is allocated to additional tax cuts, Congressional 
Representatives should know exactly what it is that their constituents 
would like to do with those tax cuts to make sure it affects them too.
  Let us make sure everybody in America that is working and paying 
taxes gets a reduction of some sort, because that is what this is all 
about. Washington does not need to take as much money from the American 
people as it is taking. I believe very deeply that the American people, 
our families out there, our singles out there, that the American people 
can do a much better job of spending their own money than the people 
out here in Washington can.
  So as we go through tax cut round after tax cut round after tax cut 
round, think back to 1993 and just think, as we are going through some 
of these debates, what a wonderful thing it is that we are actually 
having these debates out here in Washington as opposed to the 
alternative which was here in 1993.
  What I want to do now is just wrap up this discussion. I would like 
to go back to the past, the present and the future, just quickly 
through it.
  I will start with the past and again just remind folks exactly how 
far we have come. I always use this chart of the Gramm-Rudman-Hollings 
promises because of the past.
  Before 1995. A different party in control of the House of 
Representatives. The Democrats in control of the Senate and the 
presidency. What was the world like before 1995, before the American 
people made a change? It is not Washington that made the change. In 
1994 the American people decided to make a change. Before they made 
that change, what was going on and what brought the American people to 
make that change?
  Well, in the 1980's, they promised under the Gramm-Rudman-Hollings 
Act to get us to a balanced budget, following this blue line for 
deficits. But they did not meet their targets. They broke their 
promises to the American people. And it was more than money, it was the 
fact that the people in Washington had made promises to the American 
people. When they could not keep their promises, they said, we know 
what to do, let us make a whole new set of promises, and they passed 
Gramm-Rudman-Hollings II and made a whole new set of promises to the 
American people and again broke those promises to the American people.
  The past, folks. Broken promises, pre-1995. Someone else in control 
of Congress. The past. These broken promises of a balanced budget. The 
past, 1993. Which taxes should we raise to get us to a balanced budget 
and how far should we raise those taxes? The gasoline tax, Social 
Security tax. Everybody's taxes went up. If one owned an automobile, 
they paid more taxes. The past. Broken promises, higher taxes.
  The present. The American people revolted in 1994 and they put the 
Republicans in control of both the House and the Senate. To see how 
different things are, those broken promises of the past, that is not 
the group that is here now. The American people should evaluate this 
change. They should look out here now and say did the Republicans 
fulfill their commitments or are they like all the rest and broke their 
promises, too.
  Well, here are the promises the Republicans made. In 1995 we laid out 
a plan to balance the Federal budget. We said in the first year of that 
plan the deficit could not be more than this red column. Well, it was 
the blue column. We not only hit our target but we were ahead of 
schedule.
  Year 2. We promised not more than the red column. Blue column is what 
actually happened. Year 2, on track, ahead of schedule. Very different. 
We not only hit our targets, we were ahead of schedule in the first 2 
years.
  We are now in year 3. In year 3, even if we go into a rescission, 
which is what is currently projected, this is what was promised back in 
1995, and this is where we actually are. A very different group of 
people with very different results.
  How did we make this happen? What brought this picture about? What 
brought this picture about is not raising taxes, not reaching into the 
pockets of the American people and giving more money to Washington. 
What brought this chart about is curtailing the growth of Government 
spending. Looking at our Government, asking ourselves which programs do 
we not need. What can we do to do a better job? How can we curtail the 
growth of Government spending.
  Government spending is still growing. It is still going up by 3\1/2\ 
percent, a little faster than the rate of inflation, but not as fast as 
it was before. And since it is not going up as fast as it was before, 
Government spending goes up slower; since we are not spending as much 
money, that means the Government did not borrow as much out of the 
private sector. When they did not borrow as much, our theory was that 
with more money available in the private sector, because the Government 
borrowed less, more money would be available in the private sector and 
interest rates would stay down, law of supply and demand.
  With interest rates down, people could afford to buy houses and cars, 
which they did. And when people bought houses and cars, other people 
had to build them, which meant they left the welfare rolls and got a 
job.

  That is exactly what has led to this picture up here of being not 
only on track but ahead of schedule. So what happened? That group that 
got sent here in 1995, they fulfilled their commitment and curtailed 
the growth of government spending. Not draconian cuts. Spending still 
went up, but at a much slower rate. We curtailed the growth of spending 
to a point where we cannot only balance the budget, but also reduce 
taxes on the people at the same time.
  That is where we are at now today. We are actually at a balanced 
budget. In 1998 we will stop spending more money than we have in our 
checkbook. As soon as 1998. And at the same time we are providing tax 
relief to the American people. That is what has happened and that is a 
very different picture than 1993.
  The past, the present, the future.
  The future of this party. The future of this great Nation. Much more 
important than the party itself. The future of our country needs to 
recognize that even after we get to a balanced budget, we still have a 
huge debt hanging over our heads. Five trillion dollars. We need to 
live up to and accept the responsibilities of our generation, a 
generation who has spent this money.
  Our generation has overdrawn its checkbook each year since 1969. The 
future, folks. We must do what is right for the future of this country 
and live up to our moral and ethical responsibilities to do something 
about the $5.3 trillion debt. We do not want to pass that on to our 
children. I think it is totally inappropriate for our generation to 
look the other way and pass that debt on to our children.
  Our job is to do something about it, and that is the National Debt 
Repayment Act. We introduced it today in Congress. The National Debt 
Repayment Act goes like this. It says after we reach a balanced budget, 
that is, the same number of dollars coming in as what the government is 
writing out checks for, after our budget is in balance, we cap the 
growth of spending at a rate 1 percent lower than the rate of revenue 
growth.
  If revenues go up faster than spending, that creates a very small 
surplus to begin with. The surplus grows each year. One-third of that 
surplus goes to providing additional tax cuts to working families; two-
thirds to repay the Federal debt.
  The future? The future is paying off the entire Federal debt under 
this plan by the year 2026, giving our Nation to our children debt-
free. And, of course, as we are paying off the debt, we restore the 
Social Security trust fund.
  The future? The future is the National Debt Repayment Act providing 
additional tax cuts to working families. A secure future and debt-free 
Nation for our children and restore the Social Security trust fund so 
our seniors, once again, are secure in this great Nation that we live 
in.
  That is a very different vision than the past that we have had here. 
This is such good news for America. It is such good news it should be 
put out on every station to let all the people know just how changed 
this place is.

[[Page H5485]]

  The past. Broken promises, higher taxes. The present. Third year of a 
7-year plan to balance the budget. On track and ahead of schedule. Very 
changed place. Curtailing the growth of government spending to the 
point where we can both balance the budget and, at the same time, 
reduce taxes on our families out there. And, after all, that is what 
this is all about, the future.
  The future is about our children and future generations of Americans. 
The future. The National Debt Repayment Act, where we repay the entire 
Federal debt by the year 2026 and give this Nation to our children 
debt-free. The National Debt Repayment Act, where we are paying off the 
debt and restoring the Social Security trust fund. The National Debt 
Repayment Act, where we allow additional tax cuts for working families. 
Additional tax cuts for working families, a restored Social Security 
trust fund for our seniors and a debt-free Nation for our children.
  That is a vision for the future of this great Nation that we live in. 
That is what I sincerely hope happens out of what has started here 
today as we have introduced the National Debt Repayment Act, and that 
is my vision for the future of America.

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