[Congressional Record Volume 143, Number 109 (Tuesday, July 29, 1997)]
[House]
[Pages H6002-H6011]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     A GREAT DAY IN WASHINGTON, DC

  The SPEAKER pro tempore (Mr. Hobson). Under the Speaker's announced 
policy of January 7, 1997, the

[[Page H6003]]

gentleman from Wisconsin [Mr. Neumann] is recognized for 60 minutes as 
the designee of the majority leader.
  Mr. NEUMANN. Mr. Speaker, I would like to begin tonight almost with 
an apology. This is one of the greatest days in American history, and 
what we need to be talking about this evening is not partisan bickering 
back and forth. What we need to be talking about is the great things 
that have happened out here today.
  It truly is an amazing day. It is a day when we look at both sides of 
Pennsylvania Avenue. The President and the Republicans down here in the 
House and the Senate, in a bipartisan way, have reached an agreement to 
balance the Federal budget probably as soon as next year, lower taxes 
on the American people, something that we all look forward to being 
able to talk about, and Medicare is restored so our senior citizens, 
once again for a full decade, can count on their Medicare going into 
the future. It truly is, for a change, a great day in Washington, DC. 
We really have some good things to talk about.
  But before I get into taking my special order, I would be happy to 
yield to my good friend, the honorable gentleman from Michigan [Mr. 
Ehlers].


                        Sanchez-Dornan Election

  Mr. EHLERS. Mr. Speaker, I thank the gentleman from Wisconsin [Mr. 
Neumann] for yielding and simply want to make a few comments about the 
discussion which just ended.
  I was disappointed in the tone of the conversation and disappointed 
to hear the results, particularly disappointed that all the speakers 
whom I invited to stay to hear the explanation have decided to leave 
the Chamber rather than to hear the facts.
  In particular, I respond to the last question which was asked; and 
that is, why were 1.3 million records in Orange County subpoenaed and 
why were they all Latino? The answer is, they were not subpoenaed and 
they were not all Latino. How can I respond to questions such as that 
which totally misstate it?
  As I said earlier, this is not a witch-hunt. This is following the 
law that was established by the U.S. Congress and signed into law by 
the President of the United States. This is not an attempt to discredit 
the gentlewoman from California [Ms. Sanchez], who was certified as 
having won the election. And we did seat her, and she has served since 
that time and is serving her district to the best of her ability.
  This is not a partisan attempt. It is simply a response. I wish the 
previous speakers had remained to hear some of the details of the law. 
The issuing of subpoenas is not unprecedented. It is the first time it 
has been done under the current law. But if we look over the 200-year 
history, we will find that in fact subpoenas have been issued a number 
of times in contested elections.
  Furthermore, I would point out that in the last election we had five 
contested elections. What is unusual about this year is that we have 
only one. Of the five that were filed last year, two I think were 
serious challenges. The committee dealt with those and, after due 
examination, dismissed all of them. But the last one was not dismissed 
for over 20 months. It took that long to verify that the election had 
been won. But in the meantime, that individual had sat in Congress, had 
served Congress and, after it was dismissed, continued to serve in 
Congress.
  I certainly want to clarify that this is not an attack on Latinos. As 
I mentioned in the discussion yesterday, a large number of the names 
that have emerged are Vietnamese. There are other nationalities present 
as well. And the names we are holding confidential, at the request of 
the INS.
  We do not at this point know whether this investigation will proceed 
or how far the investigation will proceed. We are simply following the 
process that has been outlined. Mr. Dornan filed the contest. The 
committee did not file the contest. My task force did not file the 
contest. Mr. Dornan chose to file it, just as five individuals chose to 
file contests in the previous election 2 years ago. It is not the 
choice of the Congress as to whether or not a contest is to be filed. 
It is a choice of the losers in the election.
  The subpoena power was not given by the committee. In fact, the 
committee restricted the subpoenas which were issued to Mr. Dornan by 
the court. He went to court and asked for the power to send out 
subpoenas. The first time a magistrate said yes. The opposition to Mr. 
Dornan went to court and said you are not supposed to do that. The 
judge ruled, yes, the magistrate should not have issued those 
subpoenas. And the judge said that he would issue those but under his 
conditions.
  He attached those conditions. We were then asked as a committee to 
review those by the judge. We did quash some subpoenas. We restricted 
some subpoenas, and others we let stand. I would point out, also, that 
the majority of the subpoenas have not been honored. And, therefore, 
the comments that people have been harassed by this is simply not true. 
They are simply giving a response in several cases, and particularly 
the largest cases, saying we do not plan to honor this, or have simply 
ignored it.
  These are some of the facts and I felt it incumbent to present to 
this body after the previous discussions some of the facts that we are 
dealing with. I will be happy to answer questions which are addressed 
to my office about this to try to clarify it as much as possible. But 
let me emphasize once again, I take personal umbrage at the reference 
to this as a witch-hunt. It clearly is not.
  One might use that term to apply to the 1984 election, which is quite 
a different situation. I would also point out that there is a Democrat 
on the task force, the gentleman from Maryland [Mr. Hoyer], and my 
colleagues can check with him as to whether or not I am attempting to 
run this task force as fairly as possible and in a bipartisan fashion.
  My colleagues can also ask those who attended the hearing we held in 
Orange County. I received many comments afterward from the audience and 
participants commending me for running it in a fair fashion, without 
trying to discredit either party or to shame either one.
  Obviously, we asked tough questions of those who appeared before us, 
including the gentlewoman from California [Ms. Sanchez]. Former 
Congressman Dornan also appeared but very, very briefly and did not 
give us much opportunity for questioning.
  I want to thank the gentleman from Wisconsin [Mr. Neumann] once again 
for yielding and for the opportunity to set the record straight on some 
of these issues.
  Mr. NEUMANN. Mr. Speaker, I rise this evening to talk about some very 
good news for the future of this country. What a great day this is here 
in Washington. And I truly have not said that very often.
  I came here as part of the class of 1995. We came here because we 
were like many people in this country, we were sick and tired of the 
tax increases. We were sick and tired of promises of a balanced budget 
whose words just plain rang hollow because they had no meaning. We had 
heard so many times it was going to happen and it did not happen. Then 
there were new promises made and it did not happen again. And then 
taxes were raised.
  What a great day it is here to bring the news of what has happened 
out in Washington and how different it is from 1995, looking at 1997. I 
am here today to talk about what has happened in Washington. It is the 
budget is balanced. We reach a bipartisan agreement, credit to the 
Republicans, to the gentleman from Ohio [Mr. Kasich], to the gentleman 
from Georgia [Mr. Gingrich], to the leadership here in the House, and 
to the Senate, also to the President, who could have threatened veto, 
could have put his feet in the ground and said, we are not going to do 
any of this stuff, we are not going to listen, we are going to continue 
infighting.
  But credit should be spread all around. It is important we start with 
the fact that the budget will be balanced by 2002 or sooner. I would 
like to go on record here and now this evening saying that, if we do 
not go into a major recession in the next 12 months, the budget is 
balanced not in the year 2002, but the budget is balanced in 1998.
  It is very important to begin with that discussion. Because with that 
discussion in mind, we will understand how reasonable it is to talk 
about providing tax relief. Tax relief without a balanced budget 
effectively means we are borrowing more money from our children's 
future and letting people keep it and spend it today and not

[[Page H6004]]

being responsible for what is happening. But when we understand that, 
in all probability, the budget will be balanced probably in 1998, 1998 
at the latest, short of a major recession, we can also provide tax 
relief to the American people and do it in good conscience.
  I would like to spend a little bit of time talking about that tax 
relief tonight and going through some of the different aspects of it. 
Some of them are pretty well known. Some of them are not very known at 
all. I would like to start perhaps with the most well-known part of the 
tax cut package, and that is the $500 per child tax cut.
  Let me be very clear on this. It starts January 1 of next year. It is 
$400 per child in the first area and $500 in the years after that. What 
does this mean to a working family out there in America? Well if you 
are earning less than $110,000 a year for a couple and you have got two 
kids, or let us say you have got three kids in your house, if you are 
earning less than $110,000 a year and you have got three kids, what you 
need to do is next year, on January 1, you need to walk into your 
employer's office and tell your employer you want $100 more in your 
paycheck starting January of next year and you want to keep that money 
that they were sending out to Washington before.
  This is not Washington jargon or Washington nonsense. This is 
actually what happened out here today in Washington, DC. So a family 
with three kids should walk in the door next January 1 to their 
employer and tell their employer they want to keep $100 a month. That 
is $400 per child, times three, is $1,200 a year, or $100 a month that 
they should keep in their own paycheck instead of sending it down here 
to Washington, DC.
  Is it not a great day in Washington when we can talk about that, 
instead of the 1993 discussion about which taxes we should raise and 
how high we should raise them. Things have changed out here in 
Washington, DC. And again I emphasize that this discussion is going on 
in light of and in addition to a balanced budget probably 3, maybe even 
4 years ahead of schedule. What a great day it is here to be talking 
about these issues.
  So, again, for a family of three kids earning less than $110,000 a 
year, January 1 next year you walk into your employer and you tell him 
that you want to keep a hundred bucks more of the money they have been 
sending out here to Washington, DC. Because the job that they sent us 
here to do in 1995 is in fact done, and it is good news for the 
American people.
  I want to go on to some of the other things that are in here. The 
other one that has been well publicized is the capital gains tax 
reduction. I would like to be pretty explicit on this. There are some 
different details of this that are necessary for the American people to 
know about.
  If you are a senior citizen and you have a pension that accumulated 
while you were in the work force and you are now in a position where 
you are taking money out of that pension and the money, of course, you 
put in during the past years has raised in value, you will be paying 
capital gains on that money.
  Before, for every $100 you made in that pension fund, for every $100 
of capital gains, Washington took $28 away from you. Starting now, they 
will only take $20. So you keep an extra $8 of your own money. It is 
not Washington's money. It is your money. You keep an extra $8 for 
every $100 of profit that you made. For every $100 of profit you made, 
you keep an extra $8 in your own home instead of sending it on out here 
to Washington, DC.
  Let me be very clear about that. The capital gains tax rate is going 
from 28 percent, that it currently is, down to 20 percent for virtually 
all investments. The only exception to that rule, and if you own real 
estate, you want to pay particular attention to this exception, if you 
own real estate and you purchased a building, let us say, for $50,000 
and you have depreciated the building $10,000, and then you go and sell 
the building, and let us hope you made a profit, let us hope you sold 
it for $65,000, well, the money you depreciated from the purchase 
price, the $50,000 down to $40,000, that is called recapture.
  On the recapture portion, you will be paying a 25-percent tax. That 
tax is lower than it used to be too. I wish it was 20 percent across 
the board. If I had my way, it would be. But the bottom line is, that 
portion of the tax is going from 28 to 25. The rest of the tax, the 
appreciation in the property value, is going from 28 percent down to 
20.
  So good news for capital gains if you bought stocks and your stocks 
have appreciated in value, if you bought a piece of real estate and 
your real estate has appreciated in value and you sell that real 
estate, then when you report your capital gains, when you report your 
profit, you pay 20 percent tax instead of the 28 percent that you used 
to pay.
  There are a couple more portions of this that have not been very well 
publicized that are important to an awful lot of people. And again I 
will go to the real estate portion of this because there is a very 
significant change that has occurred in the real estate portion as far 
as the capital gains tax cut is concerned.
  Before, if you owned your own home and you were under the age of 55 
and you sold that home, for whatever reason, job transfer or you 
decided to live in an apartment and save money instead, or your kids 
have grown and gone away and you are 45 and your last child just left 
home and the home is now too big for you, so you decide to sell it and 
own a smaller home. But at any rate, you own this home and you sell it 
but you are under the age of 55. In the past you paid capital gains. If 
you bought a home 15 years ago for $30,000 and you are selling it today 
for $90,000, that would be a $60,000 appreciation. And in the past, if 
you were not 55 years old, you would have paid capital gains tax on 
$60,000.
  Let me make it very clear. This Tax Code changes that. Even if you 
are not 55 years old, you will no longer pay capital gains on the 
profit of the sale of your principal residence.

                              {time}  1930

  This is very, very significant to a lot of folks. If you are in a 
high-priced area in the country and you move to a lower-priced real 
estate area, you may not take all the money out of the higher-priced 
real estate that you own in one job; you take a job promotion into an 
area where home prices are lower, there may be a difference between 
what you sold and what you keep. You no longer pay taxes on that under 
this bill. As long as you have been in your home for 2 years and you 
sell the home, you do not pay taxes on whatever the appreciated value 
was. Very, very significant change for a lot of people.
  One other group of people that this affects that I have been hearing 
from off and on during the day. I have heard from some empty nesters 
whose kids are either grown and gone or folks that have not had kids 
for whatever reason, they decided not to or have not had them yet. This 
empty nester provision, or this provision where you can be in your 
principal residence and sell it 2 years later and not pay taxes on the 
profit affects lots and lots of those people, for what we call empty 
nesters, those people whose kids are grown and gone but have not yet 
reached the age of 55. That empty nester can now sell their home and 
move into a smaller home, if that is what they want to do, they can 
then put some of the money, the profit away for retirement instead of 
sending it on out here to Washington, D.C., a very significant change 
in the Tax Code for a lot of people in this country.
  Another portion of the Tax Code that is changed, and some people have 
been hearing about it, the estate tax has been changed, the exclusion 
for family businesses and family farms being passed on. If you are a 
farmer out there in our district and your farm has been in your family 
for generations, as many of them have in southeastern Wisconsin, all 
across Wisconsin, and you wish to pass that farm on to the next 
generation, the exclusion has been raised now to $1.3 million. And if 
there are two people in the family, you could pass on up to $2.6 
million total to the next generation. That goes for a small business 
and that goes for the farms. The $600,000 exclusion is going up to $1 
million over a period of time.
  I want to jump from there to another provision that has been talked 
about but I am not sure the details have been very well described on 
it, and that is the education tax credit. I happen to be very familiar 
with the cost of education. I have one who is going to be a junior in 
college this year, another one

[[Page H6005]]

going to be a freshman in college, another one is a freshman in high 
school. When I think about these provisions and I think about making 
the payments every year on these college tuition bills, I know this 
provision is going to be important to many, many, many people across 
this country.
  Let me start with your first 2 years of college. In your first 2 
years of college you get a deduction; this is a tax credit of up to 
$1,500 per year, provided you spend $3,000 total on your college costs. 
If your college costs are over $3,000, you will get a $1,500 tax 
credit.
  It is very important that we talk about the difference between a tax 
deduction and a tax credit. A tax credit means that if your taxes were 
$10,000 before and you get a $1,500 credit, that means your taxes go 
down to $8,500. It literally is a dollar-for-dollar deduction in your 
taxes.
  So the good news is as we look at college students, in your first 2 
years it is up to $1,500 per year in additional help to go to college. 
Some people do not like this provision in the bill, and I guess I have 
to look at this and say, well, anything that we can do here in 
Washington to allow the people to keep more of their own money instead 
of sending it on out here to Washington I think is a good provision, 
and I think about all the families across Wisconsin and across America 
that this provision is going to help, allowing those students to go off 
to college, and I just think it is a good move in the right direction.
  I want to add one more thing in the college tuition part here. In our 
house, before my kids talk to me about my helping them by signing a 
note or whatever for them to go to college, they first have to earn 
$3,000 and bring it to the table. So in our house, before we start 
talking about help from other sources, whether it be the government or 
mom and dad or wherever, first the kids are expected to do something to 
provide for themselves. If there is one thing I would encourage every 
parent in the United States of America to do who has students who are 
either in college or thinking of going to college, I think the best 
thing that we can do as parents for our kids is to ask them to pay part 
of the cost of college themselves, because it will teach them many of 
the things they need to know after college and in some ways it will 
provide an education that is equally as important as college.
  I have found in America today, at least in Wisconsin where we are 
from, that it is very possible for a student to earn $3,000 over the 
course of a year, during the summer, where there are 10, 12, 14 weeks 
available, and during the school year it does not hurt to work a few 
hours a week if necessary to make up for the addition. So I would 
encourage the parents to ask the students first to do something on 
their own to provide for their own education, but after they reach that 
point I am happy to say that Washington is going to let parents keep 
more of their own money to apply some of that money to a college 
education.
  Let me kind of sum up where we are so far. If you are a family with 
three kids, you have got one of those children in college and you have 
got two of them still at home, you are earning less than $110,000 a 
year, January 1, next year, I am back to that magic date again, January 
1 of next year, if you have got one in college, two still at home, you 
should go into your employer and not ask for $100 extra a month to keep 
in your own paycheck instead of sending it to Washington, you should at 
that point walk in the door and ask to keep $200 a month extra because 
you would get the $1,500 for the college help; in addition to that you 
would get $800 more, $400 per child in the first year, so just under 
$200 a month you keep instead of sending it on out here to Washington.
  I smile when I say this, I have a lot of confidence in the people in 
this great Nation. I know they can do a better job spending their own 
money than the people here in Washington. This is a great day in 
Washington, DC.
  I want to go on to a couple of other things that are maybe not quite 
as well publicized out there. One is the individual retirement, the 
IRA, the expansion of the availability of IRAs. Under the new 
provisions, for individuals if you earn $60,000 and up to $100,000, you 
will be eligible to start your own IRA. I think that is very important. 
I heard a lot from the young couples with no children that somehow the 
Tax Code did not affect them. I would like those people to know that 
you can open an IRA now and you will be permitted under this American 
dream IRA to withdraw money that you have saved up, tax free, for 
purposes of purchasing a home. You will be permitted to put money into 
this American dream IRA, aftertax dollars; but the accumulation of 
interest and all the rest on those aftertax dollars that you have put 
in there, that money stays in there untaxed. And if you are saving to 
buy your first home, you can take that money out tax free to buy your 
first home, a great provision for young folks who are looking forward 
to living the American dream, purchasing their first home. I think it 
is a very important part of this overall tax package.

  The one other part that I want to just mention is the home office 
deduction availability for a lot of people has been increased. In the 
day and age that we live in, it is time that we recognize that there 
are many parents, single parents in particular, who are learning to 
make their living out of their own home so that they can both be home 
with their children, see their kids off to school and at the same time 
earn some of that money. The home office deduction that has been so 
hard to claim in the past has been put back and there have been some 
significant changes in that area to help people be able to accept that.
  I have been summarizing what has happened out here today. It truly is 
a great day in Washington, DC. I think this is the first time I have 
ever been on the floor that I said it is truly a great day in 
Washington. I have to admit when I came here 2 years ago, I was not 
sure that I would ever stand on the floor of the House of 
Representatives and say that it has been a great day in Washington, DC. 
But to be able to stand here and talk about accomplishing so many 
things that we were sent here to do, the balanced budget, and we are 
not talking about 2002 now, although that is the outer bounds of when 
it may be balanced, the reality of this picture is that if we can 
finish what is in this budget agreement and hold those spending caps, 
we are looking at the balanced budget in 1998, in 1999 at the latest, 
on track, ahead of schedule.
  What a magnificent change we have had since 1995 and what a 
magnificent change it is for the future of this great Nation we live 
in.
  Having said that, I would like to talk a little bit about the past, 
and then how we got to where we are today, and then where we are going 
in the future. Let me start just briefly with a little bit about the 
past.
  I almost hate to talk about this on a great day like today because 
when I do talk about the past, we get a picture of what has been going 
on out here before the American people rejected what was happening in 
1994 and sent a new group out here to control Washington, DC. It is 
important we understand the difference between a checkbook and 
borrowing money to buy a house, between Federal deficit spending which 
is the checkbook, and Federal debt which is the amount of money that 
gets borrowed. Every year since 1969, this government has spent more 
money than it had in its checkbook. It reached into your pockets, the 
pockets of the American people, it collected tax dollars, it put those 
dollars in a checkbook, then it started writing out checks. But they 
have not been paying very close attention to how many checks they write 
out because at the end of the year they overdrew their check book each 
year. That is called the deficit.
  When they talk about balancing the budget in Washington, what they 
mean is they are going to stop overdrawing their checkbook every year. 
But when you think about overdrawing your checkbook every year since 
1969, it is not hard to figure out that the debt has started to 
explode. The debt is when they go and borrow money to cover their 
overdrawn checkbook. It is no different than sitting around your own 
kitchen table writing out checks to pay your bills and overdrawing your 
checkbook. Well, that does not work. You have to get the money from 
somewhere.
  What Washington has been doing is they have been borrowing it. This 
chart shows the growth of the Federal debt, it shows how year after 
year after

[[Page H6006]]

year as they overspent their checkbook, they borrowed more and more and 
more money. I would point out that around about 1980 is when this thing 
really started climbing. I know all the Democrats out there go, 
``That's the year that Republican President Reagan took over'' and all 
the Republicans go, ``Yeah, that's the year the Democrat Congress spent 
way too much money.'' We blame each other out here. It is time we get 
past blaming each other and it is time we accept the fact that this is 
a problem facing our Nation and do something about it, and in fact that 
is what has happened since 1995.
  I would also point out that we are about here on this chart right 
now. The debt facing our Nation has grown to huge proportions. 
Remember, this is the part that is like borrowing money to buy your 
house. I have brought another chart that shows how big this number 
actually is. I am a former math teacher. We used to do these problems 
in my math classrooms. The debt currently stands at $5.3 trillion. Even 
when we are through the euphoria of today, the good news that we have 
reached a balanced budget and we are lowering taxes, we still have this 
$5.3 trillion debt hanging over our heads; $5.3 trillion divided up 
amongst the people in the country, if every person were to pay just 
their share of the Federal debt, it would be $20,000 for every man, 
woman and child in the United States. Let me put this another way. This 
government, the people in Washington, DC, especially before 1995, saw 
fit to spend $20,000 of our children's money more than what they 
collected in taxes from our generation. For a family of five like mine, 
they spent $100,000. They have literally borrowed $100,000 on behalf of 
every group of five people in the United States of America. Here is the 
kicker. A family of 5 in America today is paying $580 a month to do 
nothing but pay their share of the interest on this Federal debt.
  A lot of people say, ``Well, I don't pay $580 a month in taxes, so 
how could I possibly be paying $580 a month to pay our share on that 
Federal debt?'' The reality is when you walk in a store and you buy a 
new pair of jeans or when you walk in a store and you buy a loaf of 
bread, the store owner makes a small profit on the sale of that loaf of 
bread to the person that walked in and bought it. Part of that profit 
gets sent out here to Washington, DC. When you add up all the different 
parts of the taxes that you pay through society, every family of five 
in America today or every group of five people is paying $580 a month 
to do nothing but pay the interest on the Federal debt. It is 
staggering.
  In spite of the fact we had a great day, we are getting to a point 
where we are at least balancing our budget, we are not going to keep 
adding to that Federal debt as we go forward. In spite of the fact that 
we have had a great day out here today and we have moved in the right 
direction, this debt is still hanging over our head after we reach a 
balanced budget.
  It would seem logical to ask how in the world did we get into this 
kind of a mess. How did we get to a point where a family of five is in 
debt on behalf of their Government $100,000? I think that is the next 
logical thing that should be looked at.
  To do that, I would like to refer back to what was going on in the 
late 1980's and the early 1990's in Washington, DC. This is before what 
I call the revolt of the American people in 1994, because remember it 
was 1994 where the American people said, ``Enough is enough, we've had 
it with the tax increases, the broken promises, we're going to try a 
new party in control in the House of Representatives and in the 
Senate.'' First time in 40 years they did that. This is the late 1980's 
and the early 1990's. This is the Gram-Rudman-Hollings promises first 
of 1985 to balance the budget by 1991.

  The blue line shows the promises that they made. The red line shows 
the actual deficits. It is not hard to see in this picture that the 
promises made were not what they did out here in Washington, DC. So 
even though they made these promises to the American people, they broke 
them. When they found out they could not hit these targets, they did 
what all good people in Washington do; they made a new set of promises. 
It is no wonder the American people got so cynical about what is being 
said out of this city. They made a whole new set of promises.
  The blue line shows what they promised the second time and the red 
line shows the broken promises again. It is not hard to figure out why 
the American people are so cynical. When I call home to my district and 
I say, ``Hey, guess what, the budget's balanced probably next year, 
maybe the year after at the latest, but certainly before 2002,'' 
sometimes people do not believe us. It is not hard for me to figure out 
why they do not believe it because when I look at the track record of 
what went on out here in Washington before 1995, it is very easy to see 
these broken promises. So what happened? Well, they broke the promises; 
1993 came and went, there was no balanced budget. But in 1993, a very 
significant happening occurred. The people in Washington said, ``We're 
going to get serious about balancing the budget, we know how to do it, 
we're going to raise taxes on the American people because if we just 
collect enough money out of the pockets of the American people, if we 
get enough money out here in Washington, we'll know how to spend it 
best for the people and then we can balance the budget.'' That was 
1993. The tax increase passed by a single vote in the House of 
Representatives, the tax increase passed by a single vote in the 
Senate, not a single Republican in either body voted for the bill, the 
tax increase went through.
  That was the best thing that ever happened in a lot of ways. Let me 
explain why. The American people looked at this picture and the broken 
promises and they looked at the tax increases of 1993, and they said, 
``Enough is enough, we're going to change what is going on in 
Washington, DC'' and in 1995 an amazing thing happened. They elected a 
new group to control it. They put the Republicans in control of both 
the House and the Senate.

                              {time}  1945

  And interesting things happened, things changed. The Republicans got 
here, and much like the people that were in control in the past, they 
gave a set of promises to the American people, too. They said we are 
going to balance the budget by the year 2002 and not only that, we are 
going to cut your taxes while we are doing it. And they laid a plan 
out. I think it is more than fair that at this point the American 
people should say: ``Look, 1995 is 2 years ago you're really in the 
third year of your 7-year plan to balance the budget. How you doing?''
  And I think that is a fair question, and I think it deserves an 
answer because it helps people see how different things are from how 
they were before.
  The red in this chart, the red columns show the promises made in 1995 
by the Republicans when they took over. This is our plan to balance the 
budget by the year 2002, and in this chart you will notice that in the 
year 2002 it zeros out, that it is a balanced budget.
  This is our promises that we made back in 1995. We are now in the 
third year. Let us see how we are doing.
  Well, the first year came and went. We promised the deficit would be 
lower than $154 billion, it came in at $107 billion. First year, on 
track ahead of schedule.
  Think back to those Gramm-Rudman-Hollings charts I had up here a 
minute ago. What a change, on track, ahead of schedule.
  Second year came. Second year we promised deficits below $174 
billion. This shows $67 billion. The good news is this is probably 
going to be $30 billion. This is great news for America. We are over a 
$100 billion ahead.
  How in the world did that happen? Well, it is pretty straightforward. 
We had this working model that we put into place back in 1995. Here is 
our theory:
  Our theory was that if we curtailed the growth of the American 
spending, we left the money in the pockets of the people, we did not 
want to hear about tax increases. Instead we curtailed the growth of 
Government spending. If we curtailed the growth of Government spending, 
that meant Washington was going to spend less, so they would borrow 
less. When they borrowed less that meant more money available in the 
private sector.
  Well, if there is more money available in the private sector, more 
money available means lower interest rates. Lower interest rates would 
mean people would buy more houses and cars,

[[Page H6007]]

and if they bought more houses and cars, other people would have to go 
to work building the houses and cars and that would be a long ways 
toward solving the welfare problems because of course they would leave 
the welfare rolls, go to work and start paying taxes.
  The bottom line is that theory, that working theory of curtailing the 
growth of Government spending so Washington borrows less, leaving more 
available in the private sector, keeping the interest rates down so 
people will buy more houses and cars, so others will have job 
opportunities building those houses and cars, the model worked, and 
that is why we are so far ahead of schedule here in the second year.
  It led to a booming economy, and we hear in the news now that the 
economy is booming and making us all work absolutely. Part of this is 
the booming economy that is making it work. Part of the reason the 
economy is booming is because the interest rates have stayed down, and 
here is part of the picture why.
  Well, that was the second year, on track, ahead of schedule. We are 
now in the third year. The third year we promised a deficit below $139 
billion, and I would like to make a projection here now tonight. My 
chart shows $90 billion deficit next year or in the fiscal year we are 
now working in. I would like to predict that that number is going to 
read zero. I would like to suggest that in fact we are going to find 
out in the next few months that the budget is going to be balanced in 
fiscal year 1998, fiscal year 1999 at the latest, if we just stay with 
the economy the way it is now. No big boom, no massive downturn, if it 
just stays just the way it is right now and we continue to hold 
spending in check, we will have a balanced budget as soon as next year.
  Folks, we are not only on target, we are in the third year of a 7-
year plan to balance the Federal budget, and we are not only on track, 
but we are significantly ahead of schedule to the point where we can 
both balance the budget and provide tax relief for the American people. 
Great news for America and, like I said, it is just great to look at 
these numbers and be able to talk positive about what has happened out 
here in spite of all the rest of the stuff.
  If you were tuned in earlier and you saw the bickering that went on 
on this floor just before we got here and took over for this hour, all 
of the partisan bickering aside, everything else that has happened out 
here, the bottom line is if we look at the war, the war to balance the 
Federal budget and preserve this Nation for the future generations, we 
are winning the war right now and it is almost over.
  Now I have heard a lot in the news media that the only thing going on 
is the economy is booming, and in fact there is a lot of folks that 
would like to say, well, Washington is still so fouled up and the only 
thing going on is the economy is booming.
  Well, I brought a chart with me to help see that in fact there are 
two parts to this thing working; one is the economy, and certainly we 
do not want to take anything away from that, but the other one is again 
things have changed since 1995. In the 7 years before Republicans took 
over in 1995 the average growth in spending for the Federal Government 
was 5.2 percent. Since Republicans have taken over and in the first 7 
years of the Republicans, including the balance of 4 years have not yet 
occurred, growth is 3.2 percent. So under the first 7 years of 
Republican control, 3.2 percent growth. Under the last 7 years, 
Democrat control, 5.2 percent growth.
  Now what does this really mean? There is a couple of things that are 
pretty significant in this chart.
  First, the American people have been told repeatedly that there are 
draconian cuts in Washington. Well, the first thing I would point out 
is that there are no cuts. Spending in Washington is still going up by 
3.2 percent. But the growth in Government spending has been curtailed 
by 40 percent. That is about a 40-percent reduction in the growth of 
Government spending.
  That is good news, and that is part of what has led us to success.
  On the other side we see in real dollars or inflation-adjusted 
dollars before we got here was going up about 1.8 percent per year and 
it is now going up about 0.6, so it has been about a two-thirds 
reduction in the growth of Government spending.
  The idea that there are massive, draconian cuts in Washington 
programs is nonsense. In fact, do we still have a long ways to go to 
get the growth of Government spending completely under control? Yes is 
the answer to that question. We still have a way to go.
  There is a lot of very conservative Republicans who are saying the 
budget agreement is no good because, and you can fill in the blank for 
what they put in. They would like this blue area to read zero. They 
would like absolutely no growth in Government spending, and if I were 
perfectly honest about it, I probably fall into that category. I would 
prefer less growth in Government spending and let the people keep more 
of their own money and decide how to spend it themselves. But I do not 
think that means we should look away from the progress that has been 
made, and there clearly has been progress made reducing the growth in 
Government spending, putting us in the third year of a 7-year plan to 
balance the Federal budget and being on track and ahead of schedule. 
That is not all bad, that is good, and we are on the right track. We 
have turned a very significant corner for the future of this great 
Nation that we live in.

  I would like to put this all in perspective another way. If when we 
came to Washington, DC instead of doing our jobs we played basketball 
and golf, what would have happened? And that is what this chart shows. 
This is what we found when we got to Washington in 1995, when the 
American people made that change, the revolt of 1994, rejecting the tax 
increases of 1993, rejecting the broken promises of the early 1990's 
and late 1980's. This is what we found.
  The deficit was about $175-, $180 billion at that point, and this red 
line shows you what would have happened had we decided to play 
basketball and golf and not done our job out here.
  But instead of doing that in the first 12 months we made some 
progress, and it was--there was no bullets fired but it was just short 
of a war. Some folks remember what was called a government shutdown and 
all the negative ``cutting Medicare'' stuff and all of the negative 
misinformation that was put out of this city.
  We did go through a war. At the end of 12 months this yellow line 
shows how far we would come if we quit at that point. We could not quit 
at that point because the job was not done.
  The green line shows the plan that we laid in place to balance the 
Federal budget and again thinking back to the Gramm-Rudman-Hollings and 
how they never hit their targets. The blue line shows you where we 
actually are today. This is how much progress has been made. This is 
what would have happened if we did nothing. This is what did happen in 
the first 12 months' progress that was made. We did not quit. This is 
the plan and this is where we are.
  What great news for America: We are winning this war. We are winning 
the war to preserve the future of this Nation. What other Nations could 
not do with military power we almost did to ourselves by running up 
such a huge debt that we would have no ability to repay it.
  This is not the end of the picture, and again I point out where we 
had this discussion a little bit after the budget is balanced, when we 
reach zero, when we are no longer overdrawing our checkbook, the job is 
not done. We still have a $5.3 trillion debt staring us in the face, 
and the logical question is: What are you going to do about that?
  Well, before we answer that question I think we ought to pause long 
enough to applaud the progress that has been made. There has not been a 
balanced budget in this community since 1969. There has not been a tax 
cut in this community since 1982. There has been a lot of tax 
increases, but no tax cuts.
  So before we go on to what is next let us at least pause long enough 
to recognize that from 1995 forward things have changed in this 
community, and I would encourage anyone watching tonight, and I would 
encourage my colleagues to congratulate each other on what has happened 
out here in Washington and the change that has occurred since 1995.
  It should be a tribute to the American people is who it should be a 
tribute to because had they not changed what was going on in Washington 
by

[[Page H6008]]

electing different people, the same stuff would be going on again. 
There is no reason to believe anything different.
  What is next? Well, we still have a $5.4 trillion debt staring us in 
the face.
  We introduced last week a bill called the National Debt Repayment 
Act, and what the National Debt Repayment Act does is it recognizes 
that we are soon going to have a balanced budget, and after we balance 
the budget it caps the growth in Government spending at a rate 1 
percent lower than the rate of revenue growth. By capping the growth in 
Government spending 1 percent lower than the rate of revenue growth, 
that creates a surplus. The surplus is taken two-thirds to pay down the 
debt and one-third to further reduce taxes. It is the National Debt 
Repayment Act. I am happy to say there is currently about 100 
cosponsors in the House of Representatives: Newt Gingrich, John Kasich, 
Jerry Solomon, Bob Livingston, Bill Paxon, a large group of the 
Republican leadership is already on board as cosponsors. I am happy to 
say that the Democrats have joined us. It is a bipartisan bill doing 
what is good for the future of our country. Gary Condit, Dave Minge, 
Mr. Goode from Virginia, a large group, a good number of Democrats have 
joined us as well, and I am happy to report that we also have the 
support of one of the Nation's leading Independents in Ross Perot.
  So when you start looking at this bill with Republican House 
leadership on board, Democrats from the House on board, Independents on 
board, it is time for the rest of the people in this community.
  To my colleagues, I encourage you to call our office tomorrow, join 
us as cosponsors on this bill to repay the Federal debt so that we can 
give this Nation to our children debt free.
  Now with that, I would like to open another topic because there is 
another very important topic that is directly related to this debt, and 
that is Social Security. When we repay the Federal debt, we are also 
restoring the Social Security trust fund, and I think it is significant 
that we understand what is happening in Social Security.
  Every year the Federal Government is going into the paychecks of 
working Americans and collecting Social Security tax. Well, they are 
collecting more in tax dollars than what they are paying back out to 
our seniors in benefits. That is creating a surplus in Social Security. 
That surplus is supposed to be set aside into the Social Security trust 
fund; $75 billion this year alone is supposed to go into the Social 
Security trust fund.
  Now it should be no big surprise to anyone out there thinking back to 
before 1995 that in Washington, DC when they got this surplus in their 
hands, they spent all the money. So there is no money left. What they 
do with that surplus is they put it in their Government checkbook, they 
spend it in other Government programs, and they then write an IOU for 
the Social Security trust fund.
  So the system is working today, they are collecting more money than 
they are paying back out in benefits. That extra money though, and that 
is where the system breaks down, is supposed to be put into Social 
Security trust fund. Instead, it goes into the big government 
checkbook, it then gets spent on other government programs. Since there 
is no money left in the checkbook at the end, they put IOUs down the 
trust.

  And I have got a picture to help see that.
  When we think about balancing the budget in Washington, DC, because 
of the way they are doing it with Social Security, when we say the 
budget in Washington is balanced, we are effectively getting rid of the 
reported deficit. What we report to the American people from Washington 
of a deficit is this blue area on the chart. What we do not tell the 
American people is that in addition to that we are taking the money out 
of the Social Security trust fund.
  In 1996, for example, the deficit was reported at $107 billion, and 
there was $65 billion more taken out of the Social Security trust fund. 
Well, the real deficit was $172 billion, so if we had reported the real 
deficit, it would have been much larger, and of course when we say we 
are going to balance the budget, this is my last chart of the evening, 
but when we say we are going to balance the budget, what we mean is we 
are going to take that blue area and make it disappear. In the year 
that we balance the budget we will still be taking $104 billion out of 
the Social Security trust fund to make our budget look balanced.
  Now we have had all good news here tonight, we have made huge 
progress in the right direction, but I think we need to understand that 
we still have a huge problem with the Social Security trust fund.
  What is going on is that extra money that is coming in is being used 
to make the budget appear balanced. We need to enact a bill called the 
Social Security Preservation Act, and again I would encourage our 
colleagues if you have not already joined us on this join us on it. The 
Social Security Preservation Act would require that this extra money, 
the money for the Social Security trust fund, actually be put into the 
Social Security trust fund.
  Now if out in America that sounds like common sense, I have to admit 
it sounds like common sense to me, too. In our business had we taken 
our pension money, spent it on other parts of the business and put 
IOU's in the pension they would have literally locked me up in jail. It 
would have been illegal and against the rules. This practice needs to 
be stopped, and the logical next step after we get to a balanced budget 
is to stop the practice of taking the Social Security trust fund money.
  How does this all tie together? Well, the National Debt Repayment 
Act, as we are repaying the Federal debt, we would also be putting real 
dollars back in place of these IOU's that are put in here. This was 
money that was taken out, for example, last year. That all becomes part 
of the $5.3 trillion debt. So as we are paying down the Federal debt we 
would also be restoring or putting this money back that has been taken 
out and spent in other Government programs.

                              {time}  2000

  It brings us back to the National Debt Repayment Act. Under the 
National Debt Repayment Act we would start running surpluses after we 
reached a balanced budget. We would cap the growth of government 
spending at least 1 percent below the rate of revenue growth, thereby 
creating a surplus. With that surplus, one-third goes to additional tax 
cuts, two-thirds go to paying back the debt.
  When we are paying back the debt, it is very, very significant for 
our senior citizens to understand that we would also be putting the 
money back into the Social Security trust fund that has been taken out 
over the last 15 years.
  If there are senior citizens paying attention this evening that get 
angry at this, they are not alone. There are a lot of people in this 
country that are very upset when they find out that the money that was 
supposed to be set aside for Social Security has actually been set 
aside for other programs. I would not say they are surprised, but they 
are very upset that the process is going on that way.
  I am happy to say that either passing the Social Security 
Preservation Act, a bill we introduced about 2 months ago, or the 
National Debt Repayment Act, either one of these bills will solve this 
problem and restore the Social Security trust fund.
  So why should our colleagues join us in the National Debt Repayment 
Act? Good news out of Washington today; turn on any network TV you want 
to see and you will find that the Republicans and the Democrats have 
reached agreement on a balanced budget. They are still saying 2002. I 
am here to tell the Members if we do not go into a major recession, it 
could be next year, it could be the year after.
  The national debt repayment answers the question of what next. What 
next is after we reach a balanced budget, we start repaying the Federal 
debt. When we repay the Federal debt, three things happen: First and 
most important, we get to pass this Nation on to our children debt 
free. By the year 2026, the entire Federal debt would be repaid and we 
could give this Nation to our children debt free.
  The second thing that happens under this, for the people that are in 
the work force today, we started with the children and let us go to the 
next generation up, for people in the work force today, under the 
National Debt Repayment Act one-third of all surpluses guarantee 
additional tax cuts.
  Just think about this. Instead of a tax cut once every 16 years, 
under the

[[Page H6009]]

National Debt Repayment Act there is a guaranteed tax cut every year 
from now on, unless we fall into a recession, in which case the bill 
kicks out. So we are now looking at a debt-free Nation for our 
children, additional tax reductions for the people in the work force 
today.
  Now we turn to seniors. For our senior citizens, the National Debt 
Repayment Act means that the Social Security trust fund is restored and 
they can once again look forward to receiving Social Security. The 
solvency of the Social Security trust fund becomes real under the 
National Debt Repayment Act. The IOU's are repaid with real assets.
  The Social Security trust fund, by the way, is bankrupt by the year 
2012 if this sort of bill is not put into place. Either the Social 
Security Preservation Act or our National Debt Repayment Act will 
restore the Social Security trust fund and make it solvent beyond the 
year 2002.
  That is a lot of different information. I have gone through a lot of 
charts here tonight. I think it would be reasonable to summarize this 
whole thing by maybe starting with the past, what happened before, 
summarizing where we are today, and then just a brief review on the 
future of where we go to next.
  The past: Gramm-Rudman-Hollings, promises of a balanced budget that 
were regularly broken. The late 1980's, early 1990's: promises of 
targets, we would reach a balanced budget, but no balanced budget. The 
American people became somewhat cynical. They stopped believing in the 
people they sent to Washington, and when they told them that they were 
going to have a balanced budget, the American people quit believing it 
because they had been misled so many times. That is the past, the late 
1980's, the early 1990's.
  The American people finally revolted after 1991, the tax increase. 
That is the past. Broken promises of a balanced budget, the past; tax 
increases, giving Washington more money so Washington can maintain its 
programs and still try and balance the budget. The past is tax 
increases, the past is more Washington.
  The present, a very different place. In the present, we are in the 
third year of a 7-year plan to balance the Federal budget. We are not 
only on track but we are ahead of schedule, to a point where we may 
very well have a balanced budget next year for the first time since 
1969. We are in a position where, because of the theory of 1995, the 
theory of curtailing the growth of Washington spending, Washington not 
having spending growth as high means they borrow less money. There is 
more money in the private sector. More money in the private sector 
means lower interest rates. Lower interest rates mean more houses and 
cars are sold. More house and car sales means more job opportunities 
for people who build them.
  That is the working model of 1995. It is in place and it is working. 
We are in the third year of a 7-year plan to balance the budget. We are 
not only on track, we are ahead of schedule. The good news is there are 
tax cuts coming for the American people virtually across the board.
  I would like to just review a little bit those tax cuts, because it 
is such good news. If you have children in your household and are 
earning less than $110,000 a year, on January 1 of next year take the 
number of children times 400 and divide by 12, and then ask your boss 
to keep that much of your own money instead of sending it here to 
Washington.
  If you have three kids in your house, 3 times 400 is $1,200. Divide 
that by 12, because are 12 months in the year, one-twelfth of that is 
$100. On January 1 of next year if you have three kids in your house, 
walk in to your employer and tell your employer you want to keep $100 
more of your own money instead of sending it to Washington; get your 
pay raise January 1 of next year, do not wait. You might as well get 
the money then, instead of sending it out to Washington. The good news, 
the 400 number goes to 500 the following year.
  Capital gains. If you are a senior drawing out of your pension fund 
and your pension made a profit, if you own stocks that have appreciated 
in value and wish to sell them, if you own real estate and you are 
going to transfer ownership, the 28 percent you used to pay in capital 
gains, it goes to 20 percent for all capital gains with the exception 
of real estate that has been depreciated, and on that portion of real 
estate that you have depreciated, it is called the recapture portion, 
it remains at 25 percent. So it is a 3-percent reduction on that area, 
it is an 8 percent across-the-board reduction on the rest.
  And again, let me translate this. If you are a senior citizen and you 
get money out of your pension fund and that money has appreciated in 
value over the last 20 years because you saved up to take care of 
yourself, called personal responsibility, if you are that senior 
citizen, and you take $100 of profit out, instead of sending $28 to 
Washington, you only send 20, and you keep the extra 8 in your own 
house. It is your money.

  So I am happy to say in the present we are in the third year to 
balance the budget. We are on track. We are ahead of schedule. The 
budget will be balanced probably next year, 1999 at the latest. The 
good news is you should expect additional tax cuts in the not too 
distant future.
  If anyone out there can figure out a way they are not affected by 
this tax cut, they need to let us know so in the next round we can make 
sure anybody missed in the first round gets picked up. If anyone is 
upset about the tax cuts, I would just encourage them to think back to 
1993 when the discussion was about tax increases, and think what a 
wonderful privilege it is to be here having a fight about which taxes 
to cut and how far to cut them.
  The future, even after we get to a balanced budget we still have some 
problems facing our country. The problems are a $5.3 trillion debt. The 
problems are the money that has been taken out of the Social Security 
trust fund. The good news is the National Debt Repayment Act.
  What is next? We are going to pay off that Federal debt by capping 
the growth of Government spending, hear this clearly, not reaching into 
the pockets of the American people and taking out more tax dollars, but 
by controlling the growth of Government spending in Washington.
  We cap the growth of Government spending at least 1 percent below the 
rate of revenue growth. That creates a surplus. Two-thirds of the 
surplus goes to repaying the debt, one-third goes to additional tax 
cuts. As we repay the debt, the money that has been taken out of the 
Social Security trust fund is also put back in.
  What a great vision for the future of this Nation: a balanced budget, 
lower taxes, the debt repaid so our children get this Nation debt free, 
and the Social Security trust fund restored so our seniors can once 
again be confident as they look forward to their future in the great 
Nation that we live in.
  Mr. HOEKSTRA. Mr. Speaker, will the gentleman yield?
  Mr. NEUMANN. I yield to the gentleman from Michigan.
  Mr. HOEKSTRA. Mr. Speaker, I thank the gentleman for yielding. I 
think it is good news, the amount of progress we have made. I came in 
1993. We were looking at $260 billion deficits as far as the eye could 
see. We were looking at increasing taxes. We were looking at proposals 
that said to stimulate the economy we have to spend in Washington.
  Now, 4 years later, we are in double digits in the deficit.
  Mr. NEUMANN. I would ask the gentleman, there is a real important 
distinction to be made. I ran as a Republican, even though in the past 
I had voted both Democrat and Republican. I ran as a Republican because 
the ``we'' the gentleman was talking about was on the other side of the 
aisle. Not a single solitary Republican voted for that tax increase in 
1993. That was passed with Democrat votes. I think that distinction is 
very important.
  Mr. HOEKSTRA. I thank the gentleman for adding that clarity. He is 
right, it was passed by Democratic votes, by one vote, I think, in both 
the House and Senate. But it is a much different vision than what we 
have now. We are in double digits with the deficit, we are maybe as low 
as $20 to $30 billion very soon, within the next year or 2. We are 
looking at a surplus budget.
  I think my colleague would agree that getting to a surplus budget is 
really going to free us now to take a look at paying off the debt, 
paying it down, building a better future for our kids,

[[Page H6010]]

building a better future and a more secure future for our seniors.
  The surplus budget I think will not only enable us to talk about tax 
breaks for people who have missed out in this one, but I do think tax 
breaks the way Republicans believe they should happen, across-the-board 
tax cuts, rather than picking out winners and losers and carving out 
these things, which much of this has. But it is very, very good and 
very broad-based in this tax bill.
  But where we want to go is to go to a simpler tax system, a fairer 
tax system that has lower rates for everyone, so for those that want to 
invest in a small business or a farm or education or whatever, they 
make those choices, rather than that heavy inducement from Washington 
saying, you really ought to go and do this, or, this is what we want 
you to do. Let people explore their own potential.
  I know in my own State, with the automobile industry, we need kids in 
college, we need high-tech people. We also need the journeyman, the 
machinists who are now working on high-tech million-dollar machines, 
making the tool and die equipment we are going to need after the year 
2000.
  Mr. NEUMANN. Mr. Speaker, we need young people who are going to dream 
about the future of America, and their dream is not going to be so 
influenced by Washington control that they can once again open their 
own minds to think about what they can do, work hard, achieve, get 
ahead, live the American dream. We need our young people to once again 
look at this great Nation and see that they have the opportunity, if 
they work hard, take care of themselves, to get ahead in our country.
  That is what made America great in the first place is people who were 
able to look not with government influence and not to Washington, but 
were able to reach down deep inside of themselves and figure out what 
it was that was going to make themselves and their Nation a better 
place. That is what we need. We need people who are willing to dream 
again.
  Mr. HOEKSTRA. If the gentleman will yield further, Mr. Speaker, I 
think getting this American dream alive and giving people the 
opportunity to design and choose for their own future is where we are 
headed. That is why the decisions and the bills and the legislation 
that we will pass in the next couple of days are only an initial step 
for smaller government, more freedom, lower taxes, and enabling people 
to make decisions that impact their lives, rather than Washington 
making those decisions for them.
  So yes, from 1993, boy, we have turned this ship around. We are 
headed in the right direction, but this is only the first step, and we 
have a lot of steps to go to get us to where we need to be and where we 
want to be, which I think will be a much better place, a much better 
place for our kids, a much better place for families. I think it will 
be an exciting place, because when you take the strains off, people 
will blossom, they will grow, and we will relive and we will rekindle 
the entrepreneurial spirit hopefully in every American.
  Mr. NEUMANN. Mr. Speaker, one thing that happens out here, and I used 
to coach basketball, and we would have games like back to back. We 
would win the first game, and we would right away turn our focus to the 
next game, and we would forget to stop long enough to realize that we 
had just won the first game. It was almost like, wow, we won. Let us 
get going to the next game.

  I do think it is important that on a day like today we do pause and 
we do recognize that we do not have broken promises of a balanced 
budget; we actually have a balanced budget. We do not have broken 
promises of lower taxes; we actually have a tax cut and it is very 
real. It is so real that on January 1 of next year people can walk into 
their place of employment and reduce the amount of money that they are 
sending to Washington, DC. It is so real that if they are selling 
stocks or bonds or drawing pensions today and paying that capital gains 
tax on that pension money, they can reduce the amount they are sending 
to Washington and keep more in their own homes right now, today.
  We need to pause long enough to realize that we just won this 
basketball game before we go into the next game. It is a long season 
ahead, I agree. We have a long ways to go. But each one of these games 
that we win along the way, they are really not games, it is the future 
of America we are talking about here. But each time we make one of 
these significant days, days like today, we do need to pause long 
enough to acknowledge the successes that have occurred. Sometimes in 
Washington we forget that.
  Mr. HOEKSTRA. If the gentleman will continue to yield, Mr. Speaker, 
there are a significant number of things in here.
  A couple of weeks ago we were debating about the National Endowment 
for the Arts. I gave a presentation on that. I did not really think 
Washington should pick winners and losers for what art gets funded and 
what does not get funded.
  We gave this presentation and talked to a group of people in the arts 
community who said, you know, if you really want to help the arts 
community, give us the home office deduction, because for many of us 
our homes are our studios, and that would be a big help to us. Plus 
then you are not choosing, all of us would benefit from that, so we are 
not competing for this little grant.
  The other thing they said to us, give us a 100 percent tax deduction 
for health care. We are self-employed. We are entrepreneurs. We are not 
part of a large group or a large corporation. We need health insurance. 
We need health care. Let us buy this.
  This tax bill will have that in there, both of those features in 
there for them.
  Mr. NEUMANN. Mr. Speaker, would the gentleman go into a little more 
detail, because I did not cover that very well before about the health 
deduction for business owners. If you are self-employed and you are 
buying your own insurance, it used to be that you could not write off 
the cost of your insurance, but if you worked for a big company 
somewhere and got it as a benefit, it was a tax-free benefit. Would the 
gentleman explain that a little more?
  Mr. HOEKSTRA. Sure. The gentleman is exactly right. I worked for a 
Fortune 500 company before I came here in 1993. The company bought 
health insurance for me and my family. It was tax deductible. If I 
would have been an entrepreneur, I could not have deducted a comparable 
cost of buying insurance for myself.
  We have modified that. Did we do it last year? I think we did it with 
the Contract With America, and we said we are going to phase in the tax 
deductibility. I think we went all the way up to 85 percent over a 
period of time.

                              {time}  2015

  Now, with this bill, we are going to say that as an entrepreneur, as 
a small business person, as an individual we will be able to fully 
deduct 100 percent of our health care premiums just like the large 
Fortune 500 companies do for their employees.
  I am not sure of exactly the time line, but it is going to happen and 
we will get to 100 percent tax deductibility.
  Mr. NEUMANN. I was on the other side of that fixture, I was the 
entrepreneur out there starting my own business and working hard, and 
it was infuriating that many of the people we were selling homes to 
were allowed to have that deduction tax free, but somehow individuals 
out there trying to make it on their own, they were not eligible for 
the same treatment under the Tax Code.
  I am happy to say, I guess if I were to pick one area that I want to 
go to next personally, where I would like to see additional tax cuts, 
and what a great discussion this is, where do we go next, what taxes do 
we cut? How different from 1993 when they were talking about tax 
increases. I would like to see the marriage tax penalty eliminated.
  In our Nation today, if four people are working all at the same job, 
earning the same money, and two of those people are married to each 
other and two are not, the two people that are not married to each 
other pay less taxes than the two people in the same job earning the 
same money who are married to each other. And that does not seem fair. 
That is my top target next.
  Mr. HOEKSTRA. Just in closing, I think the gentleman is right, the 
exciting days are in front of us. We will get to a surplus budget. When 
we get there,

[[Page H6011]]

we will have a whole new range of options, debates and issues and new 
directions that we can talk about and that, I think, is going to be 
very exciting. I thank the gentleman for doing this special order and 
thank him for allowing me to participate.
  Mr. NEUMANN. Mr. Speaker, I want to close out my time this evening by 
paying tribute to so many people that are involved in this, from our 
families and kids who spend time without us so this can get done, to 
all the people across this Nation who elected a group of people in 1995 
that were going to come here to Washington, change what was going on, 
provide the Nation with a balanced budget, lower taxes, and Medicare 
restored.
  That is what this is all about, and I want to close tonight by paying 
tribute to all the people that have been involved in this process.


                             General Leave

  Ms. WATERS. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
on the subject of my special order this evening.
  The SPEAKER pro tempore [Mr. Metcalf]. Is there objection to the 
request of the gentlewoman from California?
  There was no objection.

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