[Congressional Record Volume 143, Number 107 (Friday, July 25, 1997)]
[House]
[Pages H5811-H5818]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        ON BALANCING THE BUDGET

  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 as the designee of the majority leader.
  Mr. NEUMANN. Mr. Speaker, I rise today to talk about a very important 
issue facing this Nation: It is the growing debt that faces this 
country. Today our debt stands at $5.3 trillion, $20,000 for every man, 
woman, and child in the United States of America.
  To begin this discussion, I think it is very important that we 
understand the difference between balancing the budget, that is, 
reducing the deficit to zero, and paying off the debt. The deficit is 
the part we talk about out here, and it is important to understand that 
the deficit is the overdrawn checkbook. When Washington talks about 
balancing the Federal budget, what they are actually talking about is 
not overdrawing their checkbook anymore.
  What has been going on since 1969 is, every year the Government 
collects taxes out of the American people's pockets and it puts it in 
their checkbook and then the Government writes out checks. But it 
writes out checks for more money than they have in their checkbook. We 
all know in our houses that would not work and it does not work out 
here.
  So what it is they do when the checkbook is overdrawn, is they go and 
borrow the amount of money the checkbook is overdrawn. The result of 
that borrowing is what is shown in this chart. It is the growing debt 
facing this great Nation that we live in.
  From 1960 to 1980 the debt did not grow by very much, but from 1980 
forward they started overspending by a lot, and they started borrowing 
lots of money, and that is why the debt is growing as fast as it is. 
And we can see it in this chart. As a matter of fact, right now, today, 
we are at about this point on the chart. And it brings to light how 
important it is that we deal with not only the deficit but that we

[[Page H5812]]

stop the Government from spending more money than it has in its 
checkbook.
  But after the deficit is dealt with we still have the $5.3 trillion 
debt, and we need to put a plan into place that also deals with that. I 
have recently introduced legislation called the National Debt Repayment 
Act. And what the National Debt Repayment Act is, it goes the next step 
beyond balancing the budget. After the budget is balanced, it says that 
we must start making payments on reducing the size of this debt.
  I am a former home builder, so we set it up very much like we would 
when we borrow money to buy a house. We pay the loan off over a 30-year 
period of time. Under the plan, as the surplus is developed, one-third 
of the surplus would go to additional tax relief for the American 
people and two-thirds would go to start paying down this Federal debt.
  A lot of people might ask, how did we get this debt this big and what 
is going on out here that would lead us to this size of a debt? I think 
it is important that we get a handle on what happened in this city 
before 1995.
  Before 1995, this city, the people in Washington, continually made a 
series of promises to the American people. What I have on this chart is 
the Gramm-Rudman-Hollings promises of 1985, and then again in 1987. And 
one can see how they promised, and the blue line shows how the deficit 
was going to go to zero, they were going to stop overdrawing their 
checkbook. The red line shows what they actually did with the deficit. 
They made promises to the American people and they broke those 
promises.
  Again, I would emphasize this is the past. This is pre-1995. Promises 
were made, the deficits exploded, the promises were broken.
  In Washington, they figured out the logical thing to do if they could 
not keep their word was to make a new set of promises. So they made 
another set of promises, the Gramm-Rudman-Hollings II, and the blue 
line shows what they promised in that set. And again the deficit 
exploded and they did not keep their promises. They could not hit their 
targets.
  The reason we have this debt is because, as these promises were made 
in the late 1980's and early 1990's, the people representing the United 
States of America, the people here in Washington, they were not able to 
keep their commitment to the American people.
  In 1993, recognizing that they had broken all their promises, they 
got serious about this and they said, ``We know what we can do about 
this, we will raise taxes. We will take more money out of the pockets 
of the American people. And maybe if we do that, we can stop 
overdrawing our checkbook.'' Because if they took more money out of the 
pockets of the American people and they put it in their checkbook out 
here, they would have more money to spend but they would be closer to a 
balanced checkbook.
  So they raised taxes in 1993, and I would point out the tax increase 
passed the House of Representatives by a single vote. Not one single 
Republican voted for it. And it passed the Senate by a single vote.
  So we have these broken promises before 1995, we have the tax 
increase of 1993, and we have the revolt of the American people in 
1994. In 1994 the American people said, ``Enough of this stuff, we do 
not want any more broken promises of a balanced budget, and we do not 
want these tax increases,'' and they put a new group of people, they 
put the Republicans in charge of both the House and the Senate.
  Now, I think it is reasonable that the American people should ask are 
they any different. Is there any difference between the Democrats that 
were here before and this picture of broken promises and higher taxes, 
and the group of people that is now in Washington, DC, in control in 
the House and the Senate?

                              {time}  1430

  I brought some charts along for that, because I think the answer to 
that question is very important. It is more than fair that the American 
people ask are they any different than what has happened since 1995, 
when we sent a new group there to control. I brought this chart along 
because this chart shows just how different things really are.
  The red columns that one sees on this chart are our plan to balance 
the budget, too. When we got here in 1995, we made a promise to the 
American people that we were going to balance the budget too and 
preserve this Nation for our children. The red column shows the deficit 
numbers that we promised the American people.
  This is very different than those last charts, though, however. 
Instead of missing the targets, in the first year of our plan, we not 
only hit the target but were ahead of schedule. The blue column shows 
what actually happened. So in year one, we were not only successful, 
but we were ahead of schedule. Along came year two. We were not only 
successful but we were ahead of schedule. We are now in year three of 
this plan; and, again, we are not only on schedule, we are ahead of 
schedule.
  It now appears that, because of the success of this group since 1995, 
along with a strong economy, that we are in a position to balance the 
budget by next year. So we have not only hit our target of balancing by 
the year 2002 and keeping our promise, but it now appears that we will 
have a balanced budget as soon as 1998, 1999 at the latest, and that is 
great news for the American people.
  Why is this happening? What is the message here? What is different? 
Well, this group curtailed the growth of Government spending to a point 
where we were able to hit our targets. No raise of taxes. No taking 
money out the pockets of the American people. Our vision was we should 
curtail the growth of Washington spending.
  When Washington spends less money out of their checkbook, it is no 
different than in our household, their checkbook was overdrawn by a 
smaller amount. As a matter of fact, if we look at the year 1997, for 
example, they overdrew their checkbook by $100 billion less than what 
was expected. Well, what happened?
  When Washington did not go into the private sector and borrow that 
$100 billion, that left the money available in the private sector. With 
$100 billion available out there in the private sector, of course that 
is more availability of money. More availability of money meant the 
interest rates stayed down. And this is where it now translates out of 
Washington and into the real world. In the real world, when the 
interest rates stayed down, it was very predictable what happened next. 
People started buying more houses and buying more cars.
  This was our vision in 1995. If Washington could just stay within 
their means, could meet their targets and stay ahead of schedule, they 
would borrow less money out of the private sector. More money available 
would keep the interest rates down. And with the interest rates down, 
people would buy more houses and cars and they would do all the things 
to make this economy work. Because when they bought houses and cars, 
other people had to go to work. That meant they left the welfare rolls, 
took less money away from the Government, and started paying taxes in.
  That is the working model that has led to this picture. Again, I 
cannot emphasize enough how different the picture is now than it was 
before. We are not only on track to balancing the budget, we are ahead 
of schedule.
  I would like to also point out the success that we have had in terms 
of curtailing the growth of Government spending. This chart shows it 
the best I can. Before the Republicans got here in 1995, Government 
spending was going up at an annual rate of 5.2 percent.
  We have heard a lot about draconian cuts. I would like to point out 
that, since the Republicans have been here, spending is still going up, 
much to the chagrin of some us out here, but it is going up at a much 
slower rate. What has actually happened is the growth of Government 
spending, growth of Washington programs has been slowed by about 40 
percent.
  Since Washington spending is not growing as fast, we are able to both 
reach a balanced budget and offer tax relief to the American people. 
What a wonderful situation this is that we have out here right now. We 
are now in a position because of this success that we can offer the 
American people both a balanced budget and tax relief, $500 per child; 
college tuition $1,500 for your kids going to college; capital gains

[[Page H5813]]

being reduced from 28 percent to 20 percent; the death taxes, reform; 
the dream IRA has pulled into place. All of these good things are 
happening out here because Washington is no longer expanding like it 
was before. That is good news for the American people.
  I had a conversation this morning and the person was talking and he 
said, ``I have got two kids at home.'' And I said, ``Good. January 1 of 
next year what you should do is you should walk in the door of your 
employer and you should tell your employer you wanted to keep $66 more 
in your paycheck in January that you were sending to Washington before. 
You just get to keep that money. It is his money anyhow.''
  And this person just simply has to walk in the door of his employer 
on January 1 next year and say, ``I want to keep an extra 66 bucks a 
month of my own money,'' and he gets a $66 raise in one month simply by 
walking in and doing it because these tax cuts are put into place. Good 
news for America.
  The logical question is, ``What is next?'' I think the logical 
question, we look at this picture, we look at the broken promises of 
the past and the tax increases of 1993 and the American people stepping 
forward and rejecting those broken promises and the tax increases, and 
they have now moved to a point where they put a group of people here 
that are going to both stay on track to balancing the budget and reduce 
the taxes at the same time, the logical question is, ``Where do we go 
from here?''
  I think the answer to that question goes back to kind of where we 
started tonight. Even after the budget is balanced, we still have this 
$5.3 trillion debt hanging over our head. For any of the viewers that 
have not seen this number, this is what the number looks like. It is 
staggering. It is $20,000 for every man, woman, and child in the United 
States of America. It is $100,000 for a family of five like mine. And 
the kicker is, a family of five pays $580 a month in interest only on 
the Federal debt.
  Now a lot of people say, ``I do not pay that much in taxes.'' Well, 
the reality is, you pay taxes all over the place. When you walk in the 
store and buy a loaf of bread and the store owner makes a profit on 
that loaf of bread, the store owner sends part of that profit to 
Washington, DC, to help pay the interest on that Federal debt. So they 
are paying it.
  So the logical question is, ``What next?'' The logical answer to that 
question is after we balance the budget, we should start addressing 
this national debt. Recently I introduced a bill called the National 
Debt Repayment Act. And it does this. After the budget is balanced, we 
cap the growth of Washington spending at a rate 1-percent lower than 
the rate of revenue growth. That creates a surplus. Two-thirds of the 
surplus goes to paying down this debt. One-third of the surplus goes to 
additional tax cuts for the American people. I think it is real 
important that we point out, as this debt is repaid, the money that has 
been taken out of the Social Security trust fund by the people in 
Washington over the last 15 years gets put back into the Social 
Security trust fund so Social Security once again becomes solvent for 
our senior citizens. The people that are working today would get 
additional tax cuts; so for our seniors, solvency in the Social 
Security trust fund, security in the Social Security system for our 
seniors. For our working families, for people in the work force today, 
taxes is part of this bill.

  I think most important of all, for future generations, for our 
children and for our grandchildren, we get to pass this great Nation on 
to our children debt-free. We pay off the Federal debt by the year 2026 
under this bill, and we get to pass this great Nation on to our 
children debt-free. I think that is the message of the future, and I 
think that is the message of the Republican Party.
  The past, the party that was here before us in control, the broken 
promises of the late 1980's and the early 1990's and the tax increases 
of 1993, that is gone. The American people sent a different party here 
to run Washington, DC. This party is in the third year of a plan to 
balance the Federal budget. We are on track. We are ahead of schedule. 
The budget should be balanced in 2002 but probably as early as next 
year or the year after, on track, ahead of schedule, by curtailing the 
growth of Washington spending so that we can provide both a balanced 
budget and lower taxes for the American people.
  This vision for the future includes paying off the Federal debt, 
restoring the Social Security trust fund, and giving this great Nation 
that we live in to our children absolutely debt-free. I can think of no 
better vision for the future of our Nation.
  Mr. Chairman, I yield back the balance of my time.
  The SPEAKER pro tempore. The gentleman from Wisconsin [Mr. Neumann] 
yields back his time.
  Under the Speaker's announced policy of January 7, 1997, the 
gentleman from Minnesota [Mr. Gutknecht] is recognized for the 
remainder of the majority leader's hour. That time would be 47 minutes.
  Mr. GUTKNECHT. Mr. Speaker, I yield 5 minutes to the gentleman from 
North Carolina [Mr. Etheridge].


               Regarding Tax Relief for Working Farmers.

  Mr. ETHERIDGE. Mr. Speaker, I thank the gentleman from Minnesota [Mr. 
Gutknecht] for yielding me the time.
  Mr. Speaker, I rise today on behalf of the hard-working farmers of 
North Carolina. I want to thank my colleagues that voted yesterday to 
preserve crop insurance for tobacco farmers.
  Defeating the amendment this week could not have come more timely. 
Just this week, rain and wind from Hurricane Danny damaged thousands of 
tobacco farms in North Carolina as farmers prepared to go to market. As 
insurance adjusters began to survey the damage, farmers will count on 
crop insurance to pay the bill as they try to salvage what they can.
  If crop insurance were not available to these small farmers, not only 
would this year's crop be a near total loss for them, but others would 
be forced off the farm entirely. Many of these very farmers are still 
repairing the damage to curing barns, irrigation equipment, and other 
farm equipment received during Hurricane Bertha and Hurricane Fran just 
last year. Others are just now recovering to pay off farm loans and 
bank debts that they sustained during that period. And their families 
also faced damage from blue mold just last year on their tobacco.
  Yesterday's vote was a huge victory for small farmers, especially 
poor, minority, and disadvantaged growers. Tobacco has been in the news 
a great deal lately. It has been the source of quite a bit of 
controversy. However, there is one fact about tobacco that is 
indisputable. The golden leaf has helped build the State of North 
Carolina, and it has helped transform the Tar Heel State into an 
international force in business, technology, education, research, 
medicine, and the arts.
  Before the turn of the century, North Carolina was known as the Rip 
Van Winkle State, devoid of good education, economic wealth, and many 
other things that others enjoyed. Jobs were hard to come by, and a 
week's pay at a textile mill never seemed to be quite enough to pay the 
bills at the town general store.
  Education was a privilege only for a very special few people. At the 
turn of the century, most children left school early to work on the 
farm or in a textile mill, and only a lucky few graduated from high 
school, and even less went on to college. Health care was atrocious. 
But because of the geography and climate, North Carolina farmers found 
that they could grow a variety of crops and especially one that turned 
a good crop, flue-cured tobacco.
  Tobacco has helped educate our children, help establish our community 
college system, build our roads, and send thousands of young people to 
a public university system that is the rival of any in this Nation and 
around the world. Tobacco and the tax revenues and economic development 
it has generated has provided the State and local government the 
resources necessary to foster an environment of technological 
achievement in our State that would not have been deemed thinkable just 
a few decades ago.
  North Carolina boasts the best research universities that exist 
anywhere. Our community college system is the model used by States all 
over the country. North Carolina boasts more

[[Page H5814]]

miles of State maintained highways than any State in this Nation. And 
the Research Triangle Park has become a research technological 
manufacturing center that has put North Carolina ahead of the pack in 
the creation of new jobs and economic development opportunities as we 
look forward to the new millennium.
  Just over 50 years ago, tobacco was the economy of North Carolina. 
And it remains an important part of our State today, but it is a less 
important part. North Carolina has a well-diversified, multifaceted 
economy, thanks to the sweat and toil of the farmers all over our 
State.
  But tobacco is extremely vulnerable to the fury of nature. 
Hurricanes, tornadoes, floods, and other acts of nature that have 
visited North Carolina in recent years have devastated our family 
farmers. Crop insurance would have made it more difficult had farmers 
not had to insure themselves against nature's fury.
  So let me thank my colleagues again for casting a vote on behalf of 
family farmers. I also want to thank my colleagues that voted to 
preserve the peanut program and the reforms that were made to it in the 
1996 farm bill. Because had they not voted against the Neumann-
Kanjorski amendment, peanuts would have been in trouble.
  Peanuts have also played a big role in the agriculture economy of 
North Carolina. Before tobacco became the king crop, peanuts sustained 
the fragile economies in many of our poorest counties in North 
Carolina, as it still does today. Peanut farmers face many obstacles, 
as do others. Too much water turns them to mush. Too much drought turns 
them to dust.
  Mr. Speaker, I again want to thank my colleagues for casting their 
vote to help our farmers yesterday.
  The SPEAKER pro tempore [Mr. Burr]. The gentleman from Minnesota [Mr. 
Gutknecht] is recognized and has 42 minutes remaining.
  Mr. GUTKNECHT. Mr. Speaker, I would like to talk a little bit about 
what has been happening over the last 40 years, what is happening in 
the Congress today, and sort of pursue some of the ideas that our 
colleague, the gentleman Wisconsin [Mr. Neumann], was talking about.
  I am pleased to have joining me the gentleman from Florida [Mr. 
Weldon], who came in with me and the gentleman from Wisconsin [Mr. 
Neumann] in the class of 1994, to talk a little bit about what is 
happening with this budget, what is happening with taxes.
  I want to mention something that our colleague, the gentleman from 
Wisconsin [Mr. Neumann], neglected to mention. I think it is a very 
important point.

                              {time}  1445

  He said that we are ahead of goal, we are under budget, we are closer 
to a balanced budget today than we have been since I was in high 
school. I would like to talk a little bit about some of the things that 
are happening. We have eliminated something like 289 Federal programs. 
We have cut over $50 billion in discretionary spending. We have the 
first real welfare reform plan passed literally since 1965.
  There is a lot of good news that goes along with this. As a matter of 
fact, 3 weeks ago when the President did his Saturday radio address, he 
said that there are 1,023,000 fewer families on welfare today than were 
on welfare when he signed the Republican welfare reform bill just a 
little over a year and a half ago. That is good news. It is saving 
money. But the goal of the welfare reform plan was not to save money. 
The goal of the welfare reform plan was to save people, and to save 
families and to save children from one more generation of poverty, 
dependency, and despair. We are making real progress in the areas of 
welfare reform, in the areas of Medicare reform, entitlement reform, 
downsizing the Federal bureaucracy, holding the Federal Government more 
accountable, squeezing more out of the taxpayers' dollars. We are 
limiting the growth in spending.
  In fact, in 1995, when we passed our first 7-year budget plan in 
which we said we will balance the budget by 2002 and we will provide 
tax relief to working families in the United States, when we passed 
that original blueprint for balancing the budget, when we said in 1995 
that in fiscal year 1997 we would spend $1,624 billion, that is how 
much we would spend in this fiscal year that we are in right now.
  The truth of the matter is we are actually going to spend only $1,622 
billion. This Congress is actually going to spend less money this year 
than we said we were going to spend just 2 years ago. That is good 
news. But I think the news is even better if we stop and analyze it, 
because in the intervening time because we have had stronger consumer 
confidence, we have stronger confidence in the business community, we 
have lower interest rates than even the Treasury estimated just 2 years 
ago, as a result of all of that, more people are buying homes, more 
people are buying cars, the economy is stronger, and the revenues 
coming into the Federal Government have actually increased by more than 
$100 billion. At the same time revenue has increased by over $100 
billion, real spending by this Congress is less than we said it would 
be just 2 years ago.
  I think that is great news for the American people, and it is 
particularly good news I think for our kids, because we are on the path 
now toward a balanced budget. There was a published report just a few 
weeks ago that said if the economy remains even relatively as strong as 
it is today, even close to where we are today, we could actually 
balance the budget as early as next year. I think that is great news.
  Joining me is the gentleman from Florida [Mr. Weldon]. I welcome any 
comments he may have.
  Mr. WELDON of Florida. I thank the gentleman for yielding. I wanted 
to rise and talk a little bit with the gentleman today and with the 
people viewing in the C-SPAN audience a little bit about who this tax 
cut package is really going to help. It is important for all our 
colleagues in the House of Representatives and everyone watching to 
understand exactly what this means for the families and their 
neighbors' families. Tax relief is about real people, real Americans. 
If the gentleman would allow me to come down there, I want to put up on 
that easel next to him a picture of one of those families.
  Mr. GUTKNECHT. In fact, while the gentleman is bringing a chart down, 
I think he has made an excellent point and sometimes we forget because 
we get so bogged down in $1,624 billion and 2.3 percent and $100 
billion and $200 million and all of these numbers. We sometimes talk 
about these kinds of things as if it were some kind of an accounting 
exercise when really this in the end is about real people and how it is 
going to affect their lives.
  Mr. WELDON of Florida. Mr. Speaker, this is a picture of a family 
from my congressional district, specifically the town of Palm Bay, the 
town that I live in on Florida's east central coast, an area we call 
the Space Coast because of Kennedy Space Center and Cape Canaveral 
being there.
  This is the Auger family, a middle-class family. Here we have Jim 
Auger. He is a plumber. We see him there with his wife and his three 
kids. They have a family income of less than $40,000. Jim juggles his 
roles as husband and plumber, and his wife, of course, is very busy 
with the household chores. I believe she also earns some extra income 
cutting hair. They have 3 kids. I want to talk a little bit about the 
kids.
  The oldest boy is Christopher. There is Christopher there. Then they 
have Anthony and their daughter Denae. She is 10 years old. Of course 
also they have the two dogs Bridget and Oreo.
  Mr. GUTKNECHT. Which dog is which?
  Mr. WELDON of Florida. I think this one is Oreo actually. I think I 
may have gotten that one wrong.
  I want to talk a little bit about what the Republican tax cut package 
actually means for them and how it will specifically affect this 
family, because it means a lot to this family. In fact, it means a lot 
for all families like the Augers, and the importance of this vote 
cannot be overemphasized. Indeed, I think it may be one of the most 
important votes that we will cast in this Congress.
  It is not always easy for Jim to look out for his family and to make 
ends meet, especially when so much of his hard earned money goes to the 
Federal Government. Indeed, like most middle class working American 
families, Jim sends more to the Federal Government than what he spends 
on food, clothing, and shelter combined, which is a very significant, 
important fact for many American families.

[[Page H5815]]

  What they will receive with this middle-class tax cut package is very 
important. They will receive $500 for each child.
  The gentleman from Minnesota has another picture of the family. I 
think what they are doing there is playing Pictionary at that 
particular moment. They are not trying to fill out their IRS forms and 
figure out how they are going to make ends meet. They are actually 
enjoying themselves there.
  Mr. GUTKNECHT. I want to get back to an important point because I 
think this sometimes is lost. This typical American family, and this is 
not all that different from the family I grew up in during the 1950's. 
In fact, when I was growing up in the 1950's, the average family, the 
largest single payment that they made was for their house payment. 
Today the typical family, according to the National Taxpayers Union, 
pays more in taxes, we are talking about total taxes, they pay more in 
taxes than they do for food, clothing, and shelter combined. That is 
why the typical American family is being squeezed so much and why this 
tax relief package we are talking about is so important.
  Mr. WELDON of Florida. The gentleman raises a very good point. The 
typical American family does not pay more in Federal income tax than 
they spend on food, shelter, and clothing. But when we add up the FICA, 
the Medicare tax, when we add up the property taxes, if they own their 
own home, their sales taxes and all the other taxes the families pay 
out, the typical American family is spending more money on taxes than 
anything else, and it is greater than food, clothing, and shelter 
combined.

  This family is going to get the $500 per child tax credit. But 
because their oldest son is getting close to college age, they can also 
get a $1,500 a year eligibility for an IRA scholarship deduction which, 
if we do the math and translate it all out, this family will be saving 
in excess of $1,500 a year on their income taxes.
  Mr. GUTKNECHT. That is money that they get to keep, and sometimes 
people misunderstand. They confuse credits with deductions. We are 
talking about $1,500 more that this family will have in their 
checkbooks to spend as they see fit rather than having that money being 
sent to Washington to be spent by Members of Congress and bureaucrats 
as they see fit.
  Mr. WELDON of Florida. The gentleman is absolutely correct. An 
important point here that I would like to make is the Augers are not 
the only family in my congressional district who are going to benefit 
from this tax relief package. Indeed, the Heritage Foundation, a think 
tank here in Washington, DC, did a calculation for me indicating that 
84,000 families in my congressional district will see their income 
taxes go down based on this Republican middle-class tax cut package. 
That will mean $39 million in the pockets of working families in my 
congressional district, which includes Brevard County, Indian River 
County, Osceola County, and portions of Polk County in Florida. I am 
sure in the gentleman from Minnesota's district, it is ditto. He has 
got thousands and thousands of families that will benefit from it.
  This is a very important point: When we put more money in their 
pockets, in working families' pockets, it not only makes it easier for 
them to make ends meet, it not only makes it easier for them to be able 
to send their kids to college with the tuition tax credits that we are 
providing, but it is also going to be good for the local economy, it is 
going to be good for the local businessman. If you are a businessman 
and you own a hardware store or if you work in a barber shop or a 
restaurant, you are going to have more families with more spending 
money in their pocket, and that is going to in turn, well, Jim Auger 
here in this picture is a perfect example. He is a plumber. There are 
lots of families that are going to benefit that he does plumbing work 
for. How many families in my congressional district or in the 
congressional district of the gentleman from Minnesota [Mr. Gutknecht] 
have a leaking faucet that they would like to get fixed but they do not 
have the money, the end of the checkbook comes before the end of the 
month? What is going to happen, people will have more spending money 
and the spinoff benefit will not only be that it is going to be easier 
for him to send his kids to college; they are going to have more 
spending money. But as well, it may actually help his business because 
it is going to help the families that he does plumbing work for.
  This is something that has the potential to help everybody in 
America. It will create jobs, it will make working families and 
families with kids better able to make ends meet, and probably most 
importantly, it is going to make it a lot easier for this mom and dad 
in this picture to send these three kids to college.
  These kids are bright kids and their parents believe they are college 
material and that they should be able to succeed in college. But as 
everybody knows, it is not just the tuition. It is the room and the 
board and the books and paying the medical insurance while the kids are 
in college. So providing for a kid for another 4 years and seeing him 
through the process of college is very, very difficult on families. 
This family is going to be better able to send their kids to college. 
That is a big part of what this tax package is all about.
  I am very, very pleased to rise today and join the gentleman in this 
special order and talk about not just the statistics and not just the 
numbers, but real flesh and blood people like the Augers and their 
three kids, because this is going to mean a real difference for their 
quality of life. For too long, American families like them have been 
bearing too much of the burden of government here in Washington. If we 
look at the facts and look back 40 years when my mom and dad and the 
gentleman from Minnesota's mom and dad were raising our families, I 
know I have my sister Carol visiting from Tennessee in the gallery up 
there listening to this speech. I have three sisters, Carol is the 
youngest, my sister Maryann, who is younger than me, and then my older 
sister Christine. When my parents were raising the four of us kids, my 
father was a postal clerk, working in the post office, they were 
sending about 2, 3, 4 percent of their income to Washington, DC. Now 
these families are sending 25 percent of their income to Washington, 
DC.
  As I understand it, she likes to cut hair and she enjoys cutting 
hair. But there are a lot of working moms who would rather not be out 
in the workplace. They would rather be home with the kids. Particularly 
when the kids are really little, they would rather be home with them. 
This tax package is going to go a long way to helping a lot of those 
families.
  One of the things that I think is most ironic is that not only has 
this been a very difficult process over the 3 years to get the 
administration to come along with us on a tax cut package, but as well 
it really is taking our initiative, the initiative of the Speaker, the 
majority leader, the leader in the other body as well as all the other 
Members, to really get the President of the United States to fulfill a 
pledge that he made in a campaign in 1992 to provide a middle-class tax 
break. So it is really a pleasure for me to join the gentleman.
  Mr. GUTKNECHT. I will hold this picture up of this family, but I 
think if he flips to the next chart, let us talk a little bit about 
that. He is absolutely right that the President promised when he ran 
for office the first time a middle-class tax cut. He did not promise a 
lower income tax cut, he did not promise to cut taxes for people who 
pay no income taxes. He promised a middle-class tax cut.
  In many respects, what we are doing is we are helping the President 
keep that promise. According to the Joint Committee on Taxation, which 
is a bipartisan committee and is the official scorekeeper of all tax 
bills, 76 percent of the tax relief in the package that passed this 
House, and we have not yet got the calculations on the bill that is 
being finalized in the conference committee, but my suspicion is it 
will be very close to the same number, at least three-quarters of the 
benefit of this tax package will go to families who earn less than 
$75,000 a year.

                              {time}  1500

  And there are lots and lots of families in that category, and I yield 
to the gentleman.
  Mr. WELDON of Florida. Yes, if the gentleman would yield, I 
appreciate it, thank you.

[[Page H5816]]

  I just wanted to explain what this chart represents. And our tax cut 
package is about an $85 billion net tax cut, but actually its total 
amount is about $115 billion. This pie chart represents all of that 
money, the whole tax cut package, and we are looking at who does it go 
to. And this section in the yellow here represents 76 percent of that 
tax cut package, and it goes to families earning between $20,000 and 
$75,000.
  That to me says a great deal. It says this truly is a middle-class 
tax cut. That is the working middle class.
  Now some people may say well, gee, $50,000, $60,000, $70,000, where I 
live is not middle class, and that is true. Where I am in Florida, 
making $65,000, $70,000 a year, some people would legitimately argue is 
not middle class anymore. But I can tell you in some of our more urban 
areas, places like New York City, Long Island, Los Angeles, there are a 
lot of families struggling to make ends meet on $65,000 a year because 
of the very, very high cost of housing where a house can cost $300,000 
a year. And if you really look, that is the middle class in the United 
States of America, with incomes between $20,000 and $75,000 a year.
  This pie chart shows you very, very clearly, 76 percent goes to those 
working middle-class families.
  Mr. GUTKNECHT. That is what the President promised, and that is what 
we have delivered.
  Perhaps we can flip to the next chart because this is another chart 
that was put together by the Joint Economic Committee on Taxation, 
again the people who actually are the official scorekeepers, and what 
you see in yellow is current law or pre- the tax cut package that has 
been agreed to by the House and Senate. And what you see are the five 
different, if you broke the economic groups into equal parts of one-
fifth, the lowest one-fifth of taxpayers currently pay in the yellow 
there on the left, they currently pay 1 percent of all the taxes paid 
in the United States. The top or the lowest 20 percent of income 
earners in the United States currently pay 1 percent. Under this tax 
plan they would still pay 1 percent.
  If you drop all the way over to the highest 20 percent, they 
currently pay 63 percent of all of the taxes paid in the United States. 
Under this tax plan they will still pay 63 percent. In fact, if you 
really are honest about the way the distribution of this tax cut goes, 
it really does little to change the differences between the wealthy and 
the poor.
  The important point is, and one of the things that our friends on the 
left, they do two things with our tax bill that I think in some 
respects are incredibly disingenuous. One is they use what is called 
family economic income or otherwise imputed income. And by doing that 
you can literally take a family that is earning $47,000 a year, which 
currently is the median family income, that lives in their own home, 
that perhaps has accrued values of pensions, perhaps has an IRA that 
they could cash in, have some undeclared capital gains; in other words, 
they have got some stock perhaps that they inherited from Aunt Matilda. 
And if you put all those together using a very convoluted and tortured 
arithmetic developed by the Treasury Department, you can literally take 
that typical family, that median family with $47,000 of income, and you 
can say they have an imputed income of $80,000 a year. And that is what 
sometimes our friends on the left are referring to when they talk about 
tax cuts for the rich.
  The other thing they do, which I do not think is completely fair or 
honest, is they talk about capital gains and they say capital gains are 
tax cuts for the rich. Well, in some respects there is some truth, and 
as a matter of fact if Bill Gates were to sell all of his Microsoft 
stock under this tax plan with the tax relief that we have included in 
that for capital gains sales, he would get a very large tax cut. That 
is a fact, OK? The likelihood is he is not going to do that. As a 
matter of fact, many wealthy people never sell their stock. They leave 
it to a trust; in fact, in my guess what probably will happen to Mr. 
Gates' stock in Microsoft is one day he will leave it to some 
foundation to build electronic libraries throughout the galaxy. That is 
what historically has happened with many very wealthy people. They 
create foundations, they create trusts, and so in some respects they 
really do not take advantage of these tax breaks anyway. But even if 
they did, that is their business, it is not the government's business, 
and he would still be paying billions of dollars worth of taxes.
  But let us talk about normal people. Let us talk about farmers. Let 
us talk about small business people. Let us talk about families who 
save and invest for their future which, of course, is what ultimately I 
think we want people to do more of. One of the problems we have had 
with this Tax Code over the last 40 years is that it has discouraged 
personal responsibility by saying, you know if you save, if you invest, 
if you take care of your family, you will be punished. If you do not do 
those things, you will be rewarded. And what we are saying is we have 
got to reverse some of those perverse incentives.
  But let us talk about tax cuts for the rich, because the truth of the 
matter is most people who pay a capital gains tax are rich for 1 day, 
the day they sell their farm, the day they sell their business or the 
day they sell some other asset or investment which in many cases they 
have been paying taxes on for many, many years.
  So I happen to believe that we ought to encourage people to invest 
and save and that the real purpose of capital gains tax relief is not 
to help the wealthy. It is to help more people of modest means become 
wealthy and to help those people take better care of themselves and 
better care of their families, particularly in their retiring years.
  So I strongly support capital gains tax reductions, and frankly I do 
not have any problem defending or discussing those back in my home 
district, particularly among small business people and farmers, because 
they understand that they live poor and they die rich because they have 
invested, saved and been prudent.
  Mr. WELDON of Florida. I thank the gentleman, and I want to talk 
about one particular aspect of the capital gains reduction which is 
part of the tax package that is being discussed here in Washington 
right now.
  The capital gains tax reduction, the reason why I support it and the 
reason why many of my colleagues on both sides of the aisle support it 
is because it stimulates jobs, it helps create jobs, and the way it 
does that is if you have made an investment and you realize some profit 
off that investment, if when you go to sell and the government takes 
slightly less, you are left with a little bit more. And most people who 
make an investment reinvest their money.
  Now some people will use it for a vacation or a college education, 
but the majority of people reinvest their money right back into the 
economy in the form of stocks or bonds or business.

  And so when you lower the rate of tax on capital gains, and you leave 
more money in people's pockets who are most likely to invest it, they 
are putting more money back into the economy, and then, as a 
consequence, they are creating jobs.
  And what is probably most important about this is they are more often 
than not creating good, high-paying, quality jobs. Often it is in high-
tech industries, the kind of industries that are clean, that are less 
polluting and that frequently are paying better salaries.
  I want to make one other extremely important point. In our Republican 
tax cut package we do something called indexing capital gains, and I 
want to explain what that is. If you make an investment today, a 
thousand dollars, and 10 years from now your investment has doubled in 
value to $2,000, according to the current Tax Code you have got a 
capital gain on a thousand dollars.
  But guess what? Inflation is such that 50 percent of your profit has 
been eaten up by inflation, so instead of really having an extra 
thousand dollars, because of inflation, the decline in value of the 
dollar, you maybe only have realized $500 in real profit.
  Indeed, when inflation is going along very rapidly, if inflation was 
at, say, 7 percent, and your investment went from 1,000 to $2,000, you 
have made absolutely no profit because your $2,000 now only buys what a 
thousand dollars did years ago.

[[Page H5817]]

  Well, in the current Tax Code, you pay taxes on that inflated money. 
You actually have to pay the Federal Government for the inflation, and 
I just think that is absolutely wrong, and one of the things I am most 
proud of in our tax cut package is we allow you to index it for 
inflation.
  So if you made that thousand dollar investment and it is now worth 
$2,000, but the dollar has gone down in value slightly so your real 
capital gains is only $500, you pay capital gains tax on only $500.
  What I have been most disappointed in is the President does not want 
this provision. He wants it eliminated, and he is going around this 
city, and he has his Treasury Secretary, Robert Rubin, going around 
saying that this will, quote, explode the deficit, trying to put fear 
in the hearts of the American people that this tax cut package is going 
to explode the deficit. In truth, it is going to do nothing at all like 
that. And in truth, what we are trying to do is just basic fairness. We 
are trying to take the family values that you are trying to raise your 
kids with every day, a fairness and honesty, and we are trying to apply 
it to the U.S. Tax Code. And believe me in this city it is very hard. 
But to have the President running around and saying it is going to 
explode the deficit, in my opinion, is to say the current system is the 
way we want to keep it, we want to tax you on your inflated dollars. 
Even if your $1,000 investment is worth $2,000 and inflation has eaten 
up half of that, we are going to tax you on all of that.
  And I just think that is dead wrong, and it is just not fair. One of 
the things that I know that I have been striving for since I have been 
here in Washington, all the Members of our freshman class, particularly 
the freshman class of the last Congress and the people like Mr. 
Gutknecht, is to try to put fairness into the system, fairness in 
giving working families like the Augers, the people I showed earlier, 
more money to spend at the end of the month, more money for college 
education, better able to make ends meet, but also to put fairness into 
the law itself and have it make common sense.
  Mr. Speaker, it does not make common sense if the dollar has gone 
down in value such that your investment is really not worth anything 
more, but then for the Federal Government to come along and tax you on 
that; well, my colleagues, let me tell you, you can end up losing money 
on your investments if the government is going to eat away all of it, 
even the gains that have been made purely on inflation. Your purchasing 
power can go down, and what happens when you live in a country like 
that where they are taxing you on everything and taxing you on your 
taxes, well, people will not make investments, and then you will not 
create good, high-paying, quality jobs, and then we all suffer.
  So we want a Tax Code that makes sense, we want a Tax Code that is 
fair, we want a Tax Code that helps working families, we want a tax 
system that encourages families to be able to send their kids to 
college, and I am very, very pleased to be able to join the gentleman 
in this special order here.
  Mr. GUTKNECHT. Mr. Speaker, I want to get back to a point the 
gentleman from Florida made, and this is one of the things that has 
been incredibly discouraging and frustrating in that we have the 
President and the Secretary of the Treasury, Mr. Rubin, and I want to 
talk specifically about the Treasury Department and their imputed 
income scheme and, even more importantly, to talk briefly about their 
notion of exploding, reducing capital gains, exploding the deficit. The 
real tragedy of that tale is they know that that is not true.
  As a matter of fact, the Treasury now has updated numbers that shows 
by reducing capital gains at the levels that we are talking about in 
this tax bill, you actually increase revenue to the Federal Government 
over the next 10 years by an additional $25 billion. Yesterday there 
was an article written by one of the former Federal Governors who said 
reducing capital gains will actually increase revenues to the Federal 
Government by hundreds of billions of dollars more because it will 
encourage people to sell assets that they have been sitting on for a 
long time and convert those and allow other people to buy them. And as 
this happens, as we get more and more transactions, as we get more and 
more people investing in savings, as we encourage investments in 
savings, you increase the size of the pie.
  You do not have to raise taxes to increase revenue. If you lower 
capital gains, even the Treasury Department now acknowledges, you 
actually increase revenue. You do not explode the deficit, you explode 
revenues, because the economic activity is growing and the biggest 
benefactors, and I think you said this, again are not the wealthy.
  And I will just also quote, there was a gentleman in my office 
yesterday, and some people know him, he is the president of Godfathers 
Pizza, a remarkable human being, and I asked him that question about 
capital gains, and I asked him what kind of tax package would benefit 
low- and middle-income people the most. And you know what he said? 
Whatever tax package lowers total taxes the most.

                              {time}  1515

  He said, do you know why? He said, because wealthy people already 
have all the toys they want. They already have the boats. They have the 
Gulfstream IV's, they have lots of toys. So if they have more of their 
money to spend, particularly as they sell investments, guess what they 
are going to do? They are going to reinvest it. They are going to 
invest it in new businesses and new opportunities and new job 
opportunities for people who need them the most.
  So the real benefit of this package I think goes to people of modest 
means and to middle-income families, and that is the way it should be. 
Just because there may be some wealthy people who will benefit, that is 
no reason to play this class warfare.
  I want to remind people and our Members who may be watching, it has 
not been that long ago that this Congress started to play this class 
warfare game. What happened? They passed something called the luxury 
boat tax. They were going to get those wealthy people who bought those 
cigarette boats and those wealthy people who bought yachts. They were 
somehow going to get them to pay more taxes. Do Members remember what 
happened?
  Mr. WELDON of Florida. Mr. Speaker, I had or still have one of those 
boat companies in my district, Sea Ray, and it just about put them out 
of business. As I understand it, 20,000 working Americans who worked in 
the boating industry lost their jobs, and I know they laid off lots of 
people in my district, and it was a disaster because people stopped 
buying the boats, so they got absolutely no income into the Federal 
Treasury off of that tax.
  And because they stopped buying boats, it put the boating industry in 
a tailspin. I know in my congressional district it hurt the company 
very, very badly, and people ended up losing their jobs. When people 
lose their jobs they go on unemployment, they may end up on welfare, 
they are not paying income tax anymore. So that luxury tax I think is 
an excellent case study. I am glad the gentleman brought it up.
  Mr. GUTKNECHT. It underscores the real danger of playing this class 
warfare game. Abraham Lincoln warned many, many years ago that you 
cannot help the poor by hurting the rich. In other words, we are all in 
the same boat. You cannot sink half of them. When they tried to do it, 
when they tried the luxury boat tax, it had a net negative revenue 
consequence. That was bad. But what was worse, over 10,000 honest, 
hard-working Americans lost their jobs. That is the danger of playing 
this class warfare game.
  I think we have to talk in the terms that President Kennedy talked 
about over 30 years ago. He said a rising tide lifts all boats. When he 
cut marginal tax rates across-the-board, guess who benefited the most? 
People with the highest incomes. But in the end who really benefitted 
in terms of more jobs, more economic activity, and a faster growing 
economy? It was people who needed the jobs worse.
  President Kennedy understood the principle of a rising tide lifting 
all boats. Unfortunately, there are Members of this body today who seem 
to think that if you cannot pick winners and losers you should not do 
anything to try to improve the state of everybody. I think that is 
wrong. I think there are people here who unfortunately have gotten into 
this game that there always have been to be losers and

[[Page H5818]]

we must always defend the losers. That is simply not true. We have to 
talk about expanding the pie for everybody. If we do, the American 
people understand this.
  If the gentleman could put up this last chart, I know the gentleman 
wants to talk a little bit about the space race. There is an awful lot 
of cynicism, Mr. Speaker, and I absolutely understand it. A lot of 
times I tell people on my money it does not say, ``in Republicans we 
trust,'' it does not say, in ``Democrats we trust,'' it does not say 
``in Congress we trust.'' It says ``in God we trust.'' I do not ask 
people to trust me, but I do ask them to trust themselves.
  What we have put on here, and I hope people can see this chart, if 
they want to know how much this tax package will benefit them, we have 
a couple of web sites where people can actually call it up on their 
computer. There is a GOP tax calculator, and hopefully they can see 
that on their television. People can actually calculate the tax relief 
for themselves: What does this package mean to me?
  Do not worry about what it might mean to some wealthy investor who 
may sell a large investment. Obviously they may get a tax break. But 
what people really want to know is, what will it do for me? What will 
it do for my family? If people look at this in those terms, they will 
decide it is a fair tax package, it is good for them, it is good for 
their family, and it helps them to save and invest for their future as 
well as take care of their kids. I am very proud of this tax package.
  Let me say one other thing. I have just written a letter to the 
gentleman from Texas Mr. Bill Archer. The President and some of his 
friends are saying this gives too much tax benefits to the rich, and 
there are families at the lower-income levels who are working but yet 
would not receive tax relief under this package. What we have done is 
send a letter to the gentleman from Texas Mr. Bill Archer, and this is 
from a recommendation from a gentleman who called in on C-SPAN.
  He said, ``I understand what the Republicans are saying, only people 
who pay taxes are going to get tax relief. But I kind of understand 
what the President and some of the Democrats are saying, too, and that 
is there are teachers just starting out, fire fighters just starting 
out. Under the Republican plan they would not get much tax relief.''
  He offered what I think is a simple and sensible compromise solution. 
He said, ``Why do we not just say, let each family decide which package 
gives them the best bang for the buck?'' In other words, if right now 
they get a better deal under the earned income tax credit, they could 
take that. On the other side, if they thought they got a better bargain 
under the per child tax credit that the Republican conference committee 
has worked out, they should take that. They could either have the 
system under the earned income tax credit or the per child family tax 
credit. Give them the best of both worlds. They could choose one or the 
other.
  I think that is a reasonable compromise. I would hope that the 
conferees would at least look at something like that to try and break 
this impasse, so that for the first time in 16 years we can actually 
provide working families with real tax relief.
  I know the gentleman wants to talk a little bit about, and I want to 
give the gentleman a compliment, because he represents Cape Canaveral 
and the space industry down there, and the gentleman does it very 
admirably. Here recently we have heard a lot of interesting news about 
the space program, both with the Mir Space Station that is up there 
circling now, and we all hope and pray that that turns out for the 
better, but more interestingly, what has been happening on the planet 
Mars.
  I know the gentleman has some great pictures that have come back from 
NASA, and I yield to the gentleman to discuss some of those projects 
that are currently going on at Cape Canaveral and with NASA in general. 
I yield to the gentleman from Florida.

  Mr. WELDON of Florida. I thank the gentleman for yielding, and I 
thank him for being a space supporter. I know he has been fascinated by 
some of these issues.
  I want to talk a little bit about our Nation's space program and the 
tremendous asset it is to America. We are a great Nation, 275 million 
people, 50 States, from sea to shining sea. It is a very variegated 
fabric of what makes up America. There are many great things that make 
our Nation great. Our number one asset is obviously our people and the 
people who make up so many of the great industries and institutions.
  Of course, the space program has been getting a lot of attention 
lately, particularly as it relates to exploration of Mars. I wanted to 
talk a little bit about that.
  Our space program is something that truly fascinates our children. 
Teachers in my district tell me, if you want to get kids excited about 
math and science and just why it is important and how it applies, just 
start talking about the space program and you will get their attention.
  Why is that? I think there is something that burns in the heart of 
every human being, not just every American but every human being: a 
sense of curiosity, what is our destiny. We all know we have explored 
the world. There is much more to explore in this world, but we also 
know that much of it has been explored.
  What is man's destiny? Is it just to reside here on planet earth, or 
is it to reach out and truly grasp the stars, to go to other planets, 
to visit other stars, to explore new worlds, to some day colonize other 
places in the universe?
  If I could quote Neil Armstrong, his ``one small step for man,'' we 
had a small step a few weeks ago with the Mars Pathfinder, an 
incredibly successful mission, a mission that was launched from Cape 
Canaveral in December of last year, and it arrived at the red planet, a 
successful landing of the Mars Pathfinder vehicle shown here in this 
diagram, or this is actually a photograph of Mars. This is a photograph 
taken of the Sojourner, the vehicle that is able to go out and explore 
around on the planet.
  Mr. Speaker, I want to also show this very, very interesting 
photograph. The Sojourner rolled off of the Mars Pathfinder and then 
turned around and took a picture of the Mars Pathfinder, and here we 
can see the Mars Pathfinder, and these bags that are around it are 
actually deflated balloons.
  The way that Pathfinder landed, once it came into the atmosphere 
balloons all around the Mars Pathfinder blew up, and the thing actually 
bounced on the surface something like 20 times and then came to rest. 
Slowly the air was let out of the balloons, and the thing opened up and 
out goes this rover.
  Here we can actually see in this photograph the tracks that the rover 
made in the surface of the planet. So it is a fascinating vehicle. It 
is a tremendous success, something I think that everybody at NASA can 
be proud of, particularly the people at JPL.

                          ____________________