[Congressional Record Volume 143, Number 108 (Monday, July 28, 1997)]
[Senate]
[Pages S8175-S8180]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
A BALANCED BUDGET ACT AND TAX RELIEF
Mr. COVERDELL. Mr. President, I have just returned from my home State
and I can certify that the issue of a balanced budget act and tax
relief is on the minds of a lot of Americans. Everywhere I went,
whether it was stepping out for lunch or meeting with various groups,
somebody would come up and say: Get this done. Hold firm. Stay the
course.
America wants this to happen. America wants a balanced budget act to
pass and be signed by the President. It will be the first one in nearly
30 years. That is hard to believe, that we have so abused our financial
health that this will be the first balanced budget we will be passing
in 30 years. And they want the tax relief. I don't think I have met a
citizen that didn't, in some way, start calculating, like the young
county commissioner I met who is a farmer and a full-time county
commissioner, and he has two children. He said, ``If that measure
passes, that's going to save my family $1,000, $500 per child.'' Or the
elderly couple who are concerned about maybe selling their home and
relocating, who are concerned about the capital gains tax that
currently rests against that property. Or the family that talked about
the onerous nature of death taxes in America, the kinds of decisions
and pressures it puts on small businesses and family farms. They really
do want this done. I hope, as I said last week, the President will set
aside the partisan nature of this issue, and trying to one-up somebody
else, and just get it done.
I was reading in today's Washington Post, it says:
Congressional Republican leaders said last night they were
on the verge of a final budget and tax agreement with the
White House after making a major concession on the proposed
$500-per-child family tax credit and dropping their
insistence on ``indexing'' a reduction in the capital gains
tax.
Or, in the New York Times, Monday, July 28:
Budget Deal Down To ``Small Issues,'' Gingrich Declares.
Spokesman for President Says Assessment Is Premature--
Meetings Continue.
This is something that both the leaders of our House and Senate and
President should really come forward on, get it done, and make a
statement that we have, in a bipartisan way, produced major policy. I
would revisit, once again, the fact that if the leadership of both
parties in the Senate, the leadership of the Finance Committee, both
parties, the leadership of the Budget Committee, both parties, if they
all could find a balanced budget act and a tax relief act on which they
could agree, it ought to send a pretty powerful message to the
President and his administration. Remember that 73 Members of the
Senate, a majority of both parties' conferences, voted for the Balanced
Budget Act, and 80 of them voted for the Tax Relief Act.
I don't know what more proof you could have that these proposals are
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well-founded, evenly distributed, and essentially fair. Perfect? No.
That's not possible in this environment. But anything that can get that
kind of support of the leadership, as I said, of both parties, that is
a powerful statement and I hope the President would take note of it.
I would like to take just a few minutes and put these two major
pieces of legislation in context. I think it would explain why
somewhere between 60 and 75 percent of the American public wants this
to happen. Let's just go back to the beginning of this decade, 1990. In
1990, under the Bush administration, a historically high tax increase
was passed in August 1990. In round numbers, about $250 billion of new
tax burden were put on American workers and their families. A lot of
people feel that had much to do with President Bush being defeated in
the following election, in 1992. I think there were a lot of issues
involved, but many feel that was the turning point.
On top of that, his opponent, soon-to-be-President Clinton, was
campaigning across the country that he was going to lower taxes,
pointing to that tax increase of 1990. ``The middle class needs a
break,'' he said. He was elected in 1992 and came to Washington as the
new President. However, before he had moved into the White House, he
had discarded that promise, and, by August 1993, in his first year in
office, instead of lowering taxes on the middle class, he raised them.
He raised taxes to an all-time--in an all-time historical--in the size
of the tax increases, it was even larger than the previous one which
occurred in the Bush administration. It was over $250 billion. So,
between 1990 and 1993, the American workers and their families suddenly
were carrying a half a trillion in new taxes, and they were paying the
highest tax levels they had ever paid.
It is little wonder there is so much anxiety in middle America and
their families. Even with the economy in reasonably good shape, the
enthusiasm is less than wondrous. I decided about 2-years ago to take a
look at that family. That family in Georgia, and I think this would be
true in most of our States, earned about $40,000 a year in gross
income. Typically, both parents work today, as you know. And when
President Clinton came to Washington, they were only keeping about 53
percent of their paychecks. After they paid for State taxes, local
taxes, and Federal taxes, cost of Government and their share of higher
interest rates because of a $5.4 trillion national debt, they were
keeping 53 cents on the dollar. Unfortunately, today they are only
keeping 47 cents on the dollar. The decline in their disposable income
marches on.
These families, in my view, have been pressed to the wall, and we
have made it exceedingly difficult for these families to do what we
have always depended on the American family to do, that is, educate,
house, provide for health, transportation, get the country up in the
morning and off to work and school, and prepare their families and
children for stewardship when it is their time to lead. In a situation
where they are paying more in taxes than housing, education, and food
combined, we have a problem in America. If the forefathers were here
and could see what we have been confiscating and taking out of the
checking accounts, and taking away from those who earned their income,
they would be stunned. They would think this was a violation of the
essential premises upon which the Nation was founded, which included
economic freedom.
Let me put this in another context. My mother and father, born in
1912 and 1916, kept 80 percent of their lifetime paychecks to do the
things I mentioned a moment ago: raise the family--me and my sister--
educate, house, provide for health and prepare for stewardship. My
sister is 10 years younger than I. She will keep about 50 percent of
her lifetime paycheck, and her daughter, my niece, who has just begun
her career under the current scheme of things, will only keep about a
third of her lifetime paychecks.
My niece is not going to be free, by the American definition I
understand, if 70-plus percent of her paycheck is going somewhere else
and she is left with a third of the money she earns to do her job in
life. Her options have been severely constrained from those of her
grandmother and grandfather. Those options that my dad and my mom had
are the very things that made America what it is.
My dad began his career as a coal truck driver. Had he been born in
the sphere of the Soviet bloc, I am convinced he would have died a coal
truck driver. But, instead, he lived a life of entrepreneurial spirit
and dreams and visions, creating businesses and jobs, the very things
that economic freedom have done for our country. The genesis of all
American glory is our freedom, and one of the cornerstones of that
freedom is economic freedom, economic choices that families and workers
in America can make that families and workers in many countries around
the world could not.
Which brings me to the point I am trying to make about the importance
of this tax relief proposal. Keep in mind what I said a moment ago. In
1990, $250 billion in new taxes were laid on the backs of American
workers and families. In 1993, though promised tax relief, they got
another $250 billion in taxes. So we now have, in 3 years, a half a
trillion in new taxes. This proposal we are talking about is really
only a first step. The net tax relief is $85 billion and you have to
stand that against the $500 billion new tax burden.
It really only represents relief of about 20, 25 percent of the taxes
that have been put on the backs of these people in the last 36 months.
In the last Congress, the new Republican majority tried to refund the
President's tax increase. We sent the President a tax relief package,
about $245 billion, but he vetoed it. So he kept that tax burden in
place and on the back of every worker and every working family.
We have been through another election. We had a President who said
the era of big Government is over. We had a Republican majority in the
Senate and the House committed to reining in the size of Government,
committed to balancing our budgets, committed to lowering taxes and,
finally, the convergence of these two agree to a minimalist--what this
is--a minimalist tax relief. But nevertheless, it is moving in the
right direction. It is moving in the right direction, and it will be
significant to millions of American families. I hope that it is but the
first step and that a healthier economy would produce yet a new
opportunity to lower the tax burden.
From my perspective, a worker in America ought to, at a minimum--at a
minimum--keep two-thirds of their paycheck. Just two-thirds. It ought
to be more. Getting to a position where they can keep two-thirds is a
herculean task. They are currently keeping 47 to 50. On an average
basis, that means this Congress, this President ought to be working to
keep $8,000 per year--$8,000 per year--in the checking account of every
average family across America.
Just think what those families could do with that resource in the
context of education, health insurance, housing, recreation, savings.
American families don't save anything. They can't save for the rainy
day. They can't save for education upfront. They are having a hard time
saving for retirement.
What can you save, Mr. President, after the Government has marched
through your checking account and walked off with over half of it? Talk
about freedom. I sort of look at it this way. If somebody marches
through my checking account and takes over half of what I earn, they--
it--has more to do with my life than I do. In family after family
across our land, that is what is happening today, and that is why this
tax relief proposal is on target and correct, and the President needs
to come forward, meet, as is being endeavored here of the leadership of
the Congress trying to meet him halfway--just like what happened
between the Democrat and Republican leadership here in the Senate --and
get this done. Get this done for those average checking accounts and
start finding a way to get that $8,000 back into the average checking
account of the average working family across our country.
There is one feature in the Senate proposal that we sent across to
the House. We added it in the debate here. As you know, the President
has called for $35 billion of the tax relief should be in tax
advantages that occur against tuition and higher education and tax
credits that occur for families who
[[Page S8177]]
have students in higher education. That is a huge piece of the $85
billion, I might add. He and his colleagues are arguing that this tax
relief for families that have students in higher education is the most
important component of it, in his mind.
There are some critics of that. I can support that, because it at
least is leaving those dollars in the checking accounts of those
families. I personally believe it should be broader based. I think if a
family wants that tax relief to buy a new home, if a family wants that
tax relief to deal with other problems--health--they ought to have the
option. It ought not to be just tax relief only if you are a family
that has a child confronting the cost of higher education. That is
fine, too, but it ought to have been broader. But in the series of
compromises with the President, we will probably come very close to
honoring his request.
In my view, while cost of higher education is critical, the problem
in American education is in grades 1 through 12. It is at the
elementary level. It is in high school. Look at the data. Somewhere
between 50 and 60 percent of the students coming to college this
September will not be able to read proficiently.
Look at the comparison of our reading skills, our math skills, our
science skills against the other industrialized nations. And I am
talking about the students that are coming out of our elementary and
secondary schools getting ready for college, and we don't look very
well. Everybody knows it. We are at the bottom of the list time and
time again. One through 10, we will be 10.
So I think the President's proposal was weak on the failure to
address issues at the elementary level, and I offered an amendment,
along with our colleagues, which said that the savings accounts that
were created also for higher education, in the version that came from
the Senate Finance Committee, said you could take after-tax dollars, up
to $2,000, and put them in a savings account and the buildup would be
tax-free.
So when you took it out to pay for costs of higher education, you
would not pay taxes on the interest that had accrued. That is a good
idea. But my amendment took it down to grade one and said you could use
the buildup to pay for costs associated with elementary and high
school. We said you could take it out for home schooling. We said you
could take it out for transportation. We said that you could take it
out for computers or tutoring. We said you could take it out for
tuition. If you, the family, decided that you wanted your child to go
to some other type of school, you could use these funds to help pay for
that.
If you put the maximum contribution in, by the time the child was
ready for first grade, you would have $15,000 in that account to help
deal with decisions that were important to that family regarding
education at the elementary level and high school level.
Mr. President, the administration has voiced concerns about this, and
they are beyond me. What would be the logic of denying a family the
opportunity to have this savings account and to draw on it for
computers, home schooling, tutoring, transportation, or tuition? I find
it most difficult to understand how we could object to that at the
elementary and high school level.
Do we not have confidence in these parents that they can make
decisions about how to improve the situation for their children at the
level of education that is certifiably the most troubling in America,
that is producing data that has every American across our land worried
and bothered, that we are not competing at this level with students of
the industrialized nations around the world? Why wouldn't we want to
focus, why wouldn't we allow that tax credit to go into a savings
account once it has been put in place, which you could also add to this
savings account?
Mr. President, as I said, there have been objections raised regarding
this very simple and, I think, straightforward and clean proposal. I am
pleased to say that as of the hour of 4:30 on Monday, July 28, after a
series of conferences, first between the Senate and the House to come
to a congressional agreement, which has been done and that is
important--the House and Senate have met and concurred and they have
agreed that this position shaped by the Senate should be in the
congressional proposal, and it is. I thank the conferees, and I thank
the Speaker, in particular, for fighting to keep this proposal in the
mix.
So we are now down to a point that the only opposition to this
concept would be the President, who would be, I guess, saying it's not
a good idea for families to be able to have savings accounts that
accrue resources that would allow families to make prudent decisions
about how to help students, their children, confront the one arena in
American education that is so troubling, that is having so much
difficulty, that is sending youngsters to college who are having
trouble with the basic skills of reading and writing and arithmetic.
The ABC's, the things that every student who is going to be successful
in college, who is going to be successful in their career must know. We
are not getting that job done. This is but a small step in allowing
this kind of opportunity or this one more option, one more ability to
deal with this troubling arena in American education.
So I am very hopeful, and I call on the President and his
administration to agree to the education IRA to be used for a child's
education, grades 1 through 12, and leave this in the tax relief
package that we hope will ultimately be done and hopefully done this
week.
What a great message to send America as it enters into the final
month of the vacation summer to begin the aggressive era of the fall to
say, ``We, the Congress and the President, came together and have
secured a balanced budget the first time in 3 decades, and we, Congress
and the President, have obtained a tax relief act first in a decade and
a half.'' It would be a powerful message to send to our country and the
world at this time.
I have a little bit more to say about that, but I see that we have
been joined by the distinguished Senator from Washington. And I yield
as much time as the Senator requires to comment on these subjects of
balanced budgets and taxes.
Mr. GORTON addressed the Chair.
The PRESIDING OFFICER. The Senator from Washington.
Mr. GORTON. Mr. President, we here in the Congress and the White
House seem at this point to be on the verge of an agreement which will
pay two magnificent dividends to the American people.
The first is the promise of a balanced budget, not just one time, not
just on a touch-and-go basis, but perhaps with a sufficient number of
reforms on spending policies so that we can reasonably expect a
balanced budget for a considerable period of time in the future.
Even the promise of that balanced budget, Mr. President, a promise
made 2 years ago by the first Republican Congress, has been largely
responsible for interest rates, on average, to be 1\1/2\ percentage
points lower than they were when that Congress came into being. For a
middle-class family with an $80,000 mortgage and $15,000 automobile
loan, that means $100 more a month for the family to use or to save or
to spend on its own rather than on interest payments.
Beyond that, Mr. President, it means that the United States will have
substantially ended the practice of spending money that it did not have
year after year after year, borrowing that money and sending the bill
to our children and to our grandchildren.
The second wonderful dividend which we seem about to present to the
American people is tax relief. Just 4 years ago, perhaps to the month,
we were here debating--and on this side of the aisle opposing
unsuccessfully--what turned out to be the largest tax increase,
measured in dollars, in the history of the United States.
Today, that debate, that idea is buried, if not forgotten. And we
have changed the entire direction of the debate here from how much more
can we spend and how much more can we tax to how can we limit the
spending habits of the Government of the United States and what kind of
dividend in the form of tax relief can we return to the American
people.
We now talk about tax relief rather than about tax increases. The
debate over what kind of tax relief, Mr. President, has obscured the
profound nature
[[Page S8178]]
of the change in this debate. It is all too easy to forget that it has
only been for the last 2 years that we have seriously been debating tax
relief. My friend and colleague from Georgia just pointed out, quite
accurately, that this will be the first tax relief for the American
people in more than a decade and a half.
Mr. President, many may say that this tax relief proposal is modest.
And modest it is. It is perhaps one-third as large as the 1993 tax
increase. And so it is only a first step, at least as far as we here on
this side of the aisle are concerned. But there will be very real tax
relief for hard-working, middle-class citizens of the United States,
families with children, very real tax relief from the burden of capital
gains taxation, a form of tax relief which will certainly increase
savings and investment and career opportunities for Americans today and
for future generations of America as well, with tax relief in the field
of estate taxation, a particularly vicious form of taxation that
penalizes success, breaks up small businesses, requires farms to be
sold and undercuts some of the most important bases upon which a
successful American economy has been built.
No, Mr. President, since we began this campaign, this crusade with
the new Republican Congress just a little bit more than 2 years ago,
interest rates have declined, real hourly wages are moving up after 2
years of decline at the beginning of the first Clinton administration,
millions of new jobs are in existence, unemployment is as low as it has
been in decades.
Mr. President, it is appropriate to say that we are on the verge of
success because we have been able to work together. We have listened to
the demand that the American people made by their votes less than a
year ago that a Republican Congress work with a Democratic President in
order to see to it the budget was balanced and tax relief was made
available to the American people.
We, on this side of the aisle, are delighted at our success in
changing the nature of the debate from how much more Government shall
we have and how much more shall we pay for it, to how can we discipline
the Government's demand for money and how can we provide tax relief for
the American people.
One success, however, Mr. President, I submit, has a real opportunity
to lead to another. And so I trust that this quiet Monday will lead to
a challenging week, and that by the end of the week a promise made more
than 2 years ago on a balanced budget and tax relief for the American
people will have been fulfilled.
Mr. President, I yield the floor.
Mr. COVERDELL addressed the Chair.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. COVERDELL. Mr. President, I thank the Senator from Washington for
his comments regarding these important topics.
At this time I yield up to 5 minutes to the distinguished Senator
from Idaho.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Mr. President, thank you very much.
And let me thank the Senator from Georgia for bringing us to the
floor this afternoon to discuss what hopefully by the end of this week
will be a bit of history. And I believe it will be the right kind of
history, written by the House and the Senate and the White House, that
deals with significant tax relief for the American taxpayer and some
very major budget reform.
I have had the privilege of now serving in the Senate a good number
of years and also in the U.S. House. And since the early 1980s, I
became an outspoken advocate for a balanced budget. I watched as our
debt and deficit grew, becoming increasingly alarmed that somehow we
would pass on to our children and their children a legacy of debt that
would be almost insurmountable, that could cripple the economy of this
country and lead us down a road to economic deterioration and a second-
or third-rate Nation.
Because of concern, shared by many here in the Congress, and by a
growing number of American taxpayers, throughout the decade of the
1980s and into the early 1990s, we continued that drumbeat to where it
is without question a majority sentiment among the American people
today, such an overwhelming majority sentiment that in 1994 they
changed the character of the U.S. Congress, and they significantly
altered the attitude of a President who came to town not to balance the
budget and not to give tax relief but to be able to do quite the
opposite, to increase the Federal dominance over the American
character, to raise taxes, and to continue a liberal Democratic legacy
of an ever-increasingly larger Government taking an ever-increasingly
larger chunk of the American worker's paycheck. Thanks to Americans,
thanks to Republicans, thanks to conservatives, that message got
altered.
Throughout the last several weeks, because of a budget proposal and a
tax proposal put together by the Republican leadership and this
President, voted on with the substantial bipartisan support of the U.S.
Senate, the White House, the Finance Committees, the Budget Committees,
along with the leadership, have been in internal negotiations to bring
that about, again, reducing the overall size of Government, moving us
toward a balanced budget, and for the first time in 16 years giving tax
relief to the American people.
That agreement is not at hand yet, but we are told that that could
well become the case this week. And I hope it is. I hope it gives to
the American working family the kind of relief they deserve during a
period when they are being taxed at the highest rate ever, that it
gives to the American investor an opportunity to change the character
of his or her investment to create even more jobs, to keep the economy
even stronger than it is today for a longer and a more sustained period
of time and that says to the less fortunate in our country, you too
will benefit, you too will benefit by being able to keep more of your
hard-earned dollars. And it says to those who are concerned about
education, you can put a little more away to provide for that day when
you will want to help your children gain a higher level of education so
they can advance themselves in our society.
All of that is historic. We may, while serving here on a day-to-day,
year-to-year basis, lose that perspective, but I do not think the
American people will, because we are saying to them, we heard you, we
heard you loudly and clearly. And while a marathon race is not won by a
single lap around the track, or the Super Bowl is not won by a single
victory at the beginning of the season, this is in itself a victory, a
significant victory in that long march away from an ever-larger
Government that takes more and more away from the average taxpayer,
both in his or her earnings and in his or her freedoms.
So I hope that the work that has gone on the last 2 weeks, in fact,
bears fruit. I am excited about the opportunity to debate these issues
on the floor of the Senate this week and to vote by week's end on a
historic budget package that continues to bring us toward a balanced
budget and a historic tax package that offers tax relief to the average
taxpayer again for the second time in 16 years.
So let me again thank the Senator from Georgia for his continued
leadership on this issue, coming to the floor day after day to inform
the American people about what we are about and what we are striving to
achieve, oftentimes behind closed doors because of the nature of the
kind of negotiations that have gone on, but must require ultimately in
the end to be made public. So let me thank my colleague from Georgia.
I yield the floor.
Mr. COVERDELL addressed the Chair.
The PRESIDING OFFICER. The Senator from Georgia.
Mr. COVERDELL. I thank the Senator from Idaho for the contributions
he has made, not only here today but throughout this Congress, with
regard to balancing budgets and tax relief.
At this time I yield to the distinguished Senator from Texas for up
to 10 minutes on the subject of the balanced budget and tax relief.
The PRESIDING OFFICER. The Senator from Texas is recognized.
Mrs. HUTCHISON. Mr. President, I thank the Senator from Georgia for
wanting to talk about this very important issue, because, as we speak
on the
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floor here today, I hope that the negotiations are about to come to an
end and we will give the American family the first tax break they have
had in 16 years.
I think it is an incredible thing to say that we haven't had a real
tax cut in this country for 16 years. As hard-working Americans have
tried to improve their quality of life, it just seems like their
expenses have gone up so much that we now find that the spouses are
working more, sometimes just to pay taxes. That is not what we want in
this country. We want spouses to have the option of staying home, if
they want to, and not make them work because they can't make ends meet.
If we are going to continue the American dream of increasing our
quality of life with each generation, we are going to have to pare
Government down, balance the budget, make sure that people are not
paying any more taxes than we have to have to run a Government.
I think the time has come for us to take a leadership role. In fact,
that is what Congress is trying to do. We came into power in this
Congress, starting after the elections of 1994, with very clear goals:
to make Government smaller; to let people keep more of the money they
earn; to stop talking about money in Washington as if it belongs to us,
but to understand that, no, it belongs to the people who work so hard
to earn it, and let's let people have that money back to spend the way
they would like to, rather than the way people in Washington dictate.
These are the things that we came in to do.
We are very close. I hope we will be able to close this loop by the
end of this week so that the people of America will be able to feel
that they have more of the money they earn in their pocketbooks, rather
than writing a check to the IRS in Washington.
Fifty years ago--just 50 years ago--Americans sent 2 cents of every
dollar to Washington. Today, they send 25 cents of every dollar they
earn to Washington, and that is just the Washington part. If you add
their State and local taxes on top of that, most Americans pay 40
percent of what they earn; 40 cents of every dollar goes to the
Government.
Now, Mr. President, I think that is wrong. I think that means
Government is too big, and I think the time has come to do something
about it. I hope the President will agree with us, agree with the
leadership that Congress is providing on this issue and has been
providing for the last 3 years, to try to correct the inequity in our
tax laws.
The bill that we have passed in Congress, which we hope the President
will sign, will give tax relief to Americans who are paying income
taxes; if they have children, a $500 per child tax credit--not
deduction, but credit. That is something that they will get right off
the top--$500 per child. If you have two children, you would get $1,000
right off the top. That is going to cut most people's taxes in this
country by a lot.
When I have asked my constituents in newspaper articles what they
would like to see changed, No. 1 is death tax reform. Most people don't
think that death taxes are American, because the American dream is
that, if you work hard, you should be able to pass what you have
accumulated on to your children to give them a little bit better start.
That is the American dream. Why should people be taxed on money they
have accumulated and already paid taxes on? Why should they be taxed
again when they pass what they have worked so hard for to their
children?
The worst thing is when their children have to sell part of the
family farm, or all of it, just to pay inheritance taxes. That is not
right, Mr. President, and we are trying to change that. In the
agreement we are trying to get with the President, we would raise that
inheritance tax credit to $1 million. We are going to try to keep
people from having to sell assets that are not readily salable, because
when you tell people that family farm is worth $500,000 or $1 million,
but they can't earn enough to feed their family or to make life better
for their family, it is very hard to tell them that they have inherited
$1 million when it is land that is really unproductive. So we are
trying to raise that, so that you will not have to sell equipment in a
small business or a family farm that you could not possibly sell on the
open market for $1 million.
So we are going to try to make a dent in that death tax. We are going
to try to make it easier for people to sell their homes, which is most
people's biggest asset, without having to pay the huge taxes that they
now do. We are going to try to cut the capital gains tax to 20 percent.
Today, 41 percent of American families own stock. They own stock in a
pension plan or a mutual fund. That is how they are investing for their
retirement security. We want people to be able to have a capital gains
tax cut so that if they need to sell a stock, they will not have to pay
a 28-percent tax rate on the capital gain. In fact, more than 83
percent of capital gains are reported by households with less than
$100,000 in income; 56 percent of capital gains are reported by
families with less than $50,000 in income; nearly one-third of capital
gains are reported by senior citizens. This will help the senior
citizens, particularly those that are having a hard time getting by. If
that senior citizen could sell their home or sell their stock without
being penalized so heavily, it would give them a little bit better
quality of life.
We are trying to give more help to people who want to save for their
retirement futures with individual retirement accounts. A lot of people
say an individual retirement account is not really a retirement plan.
But I want to just give you one example, because I worked very hard for
homemakers to be able to set aside $2,000 a year for their retirement
security, and they can do that now. They are able to set aside $2,000 a
year, just as those who work outside the home. I want people to know
that if a couple starts, at the age of 25, setting aside $2,000 a year
per person, by the time they are 65, they will have over $1 million in
their retirement nest egg. That is a retirement plan. If a couple can
just save $2,000 a year per person, starting at the age of 25, they can
have $1 million for their retirement security. That is another reason
that we want to do away with that death tax, because we want middle-
income people to be able to save enough for real retirement security
and not have it taxed away when they die, so that their children will
not be able to have that little bit extra.
Our bill will even make IRA's better because it will make them
deductible in most instances, and it will make it easier for people to
set aside this $2,000 a year. So if we can do that, if we can have a
better savings rate in this country, if we can make people more secure
in their retirement, if we can give a capital gains tax cut and a death
tax cut and $500 per child tax credit, not only will we have kept our
promise to the American people, but we will have provided, for middle-
income Americans who are working so hard to do better for their
children, an opportunity in which they can say, yes, I can see the
difference, I can see this tax relief. That is what we are working for
in this Congress.
I hope the President will not stop us from giving tax relief to hard-
working, middle-income Americans, because if he does, he will be making
a great mistake for the prosperity of our country.
Thank you, Mr. President. I yield the floor.
Mr. COVERDELL. Mr. President, I thank the Senator from Texas for
outlining the various important aspects of this proposed tax relief. At
this point, I turn to my colleague from Michigan and yield him--how
much time do I have remaining?
The PRESIDING OFFICER. The Senator has just over 4 minutes remaining.
Mr. COVERDELL. I yield the remainder of that time to the
distinguished Senator from Michigan.
The PRESIDING OFFICER. The Senator from Michigan.
Mr. ABRAHAM. Mr. President, I may not use all of that time. I thank
the Senator from Georgia. This is not the first time in which he has
come to the floor and led a special order to discuss these issues that
are now before us, which we hope will be resolved this week. I think it
should be noted that, for the better part of the last 3 years, it has
been with the leadership of the Senator from Georgia and the Senator
from Texas who just spoke. Others have spoken today from the leadership
on the Republican side, which has been advancing the cause of tax
relief for the working families of our country.
As we come into the final stages of these negotiations, we are very
optimistic that we will be able to realize
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the objective that many of us came here to achieve: to finally bring an
end to higher taxes in Washington and begin, finally, to roll back some
of those taxes on the American people.
In recent years, the percentage of the Nation's income, our gross
domestic product, consumed by Washington in the form of taxes has gone
up and up and up. Indeed, today the percentage is virtually as high as
it has ever been in the history of this country--as high as it was
during World War II, as high as during Vietnam, as high as during the
Depression, and as high as it has been during any of the sort of crises
that you might expect to produce record levels of taxation. Today, in
the absence of such crises, we nonetheless have had a tax rate reach 21
percent above the Nation's income.
So, Mr. President, the Republican efforts to reduce the tax burden
are timely, they are needed, and they are on target. As the Senator
from Texas just indicated, whether it is the spousal IRA or the family
tax credit of $500 per child or the growth incentives to create jobs
and opportunities, such as reducing the capital gains tax rate, the
Republican tax plan that was passed in this Chamber by a 80-18 vote
addresses the concerns of America's taxpayers in a targeted way that
will produce both a chance for working families to keep more of what
they earn and be able to do more for themselves, on the one hand, and
an opportunity for those who create jobs and opportunities to create
more such jobs, higher paying jobs, and more opportunities as we move
into the next century.
So for all of those reasons, we are optimistic that our 3-year-long
effort is about to pay dividends and that, by the end of this week,
with a little bit more effort, we can bring this tax cut to the
American people.
To all of those who have been in the leadership of this effort, I
offer my thanks because, a few years ago, I don't think anybody in my
constituency in Michigan would have expected they would see their taxes
go down. This week, we have the best chance in decades--literally, 15
years--to see that occur. So I want to thank and congratulate the
leaders on our side who have kept the pressure on. I hope that, by the
end of the week, we will achieve our goals, and I hope we will go one
step further and prevent any extraneous revenues generated by these tax
cuts from being used for anything but more tax cuts or to reduce the
national deficit.
We just saw, as the budget negotiations began, that the revenues to
the Federal Government were exceeding that which had been projected by
the budgeteers in recent years. We were bringing in over $225 billion
beyond what had been projected just a few months ago. Well, I think the
same is going to happen as a result of the tax cuts included in this
budget resolution and in the tax bill we pass.
Mr. President, I think it is imperative that any additional revenues
raised beyond that which we expect here in Washington ought to go back
to the American people, either in the form of reducing the deficit or
more tax cuts for the working families. If we do that, then we can make
this tax bill extra special, Mr. President, by truly making it a long-
term tax reduction plan for the American people.
Mr. President, I thank the Chair and yield the floor.
Mr. COVERDELL. Mr. President, is there any time remaining on our hour
of control?
The PRESIDING OFFICER. All of the Senator's time has expired.
Mr. COVERDELL. In that case, Mr. President, I yield the floor and
suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. SHELBY. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. SHELBY. What is the pending business?
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