[Congressional Record Volume 143, Number 109 (Tuesday, July 29, 1997)]
[Senate]
[Pages S8215-S8216]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                          THE BUDGET AGREEMENT

  Mr. GREGG. Mr. President, let me speak briefly on the budget 
agreement which was reached late last night, and mention my thoughts on 
this. This agreement is obviously not everything that everybody wanted. 
But it is a giant step in the right direction. It is especially a giant 
step on the issue of cutting taxes for the working American family, or 
that group of Americans in the middle-income brackets who are 
struggling with the costs of raising children and sending those 
children to college.
  For a family whose income is in the range of $32,000 or $35,000, this 
tax cut could well represent a tax cut of almost 50 percent for a 
family of four. That is a big tax cut. For that same family, should 
they have a child who is headed off to college, this could represent a 
tax cut of up to 75 percent. That is a huge tax cut.
  In addition, if you are in a working family situation and you are 
trying to make ends meet, you are going to be able to take advantage of 
this child credit coming to you to help you support the cost of raising 
your children--$500 per child. And all of these tax cuts that I am 
talking about are directed at middle-income Americans. In fact, almost 
all of them phase out as you get into incomes over $100,000.
  Further, if you are a family where one of the spouses is staying at 
home to try to raise your children, under today's law, you can't have 
an IRA account that is deductible. That stay-at-home spouse can't have 
an IRA account that is deductible. Under this bill, the mother that is 
home raising the children will have the opportunity to have an IRA 
account that will be deductible and safe for her retirement. That is a 
major step forward.
  In addition, there is a significant estate tax savings, especially 
for small business people and for farmers. Estate tax savings, which 
means that when somebody works all their life to build up a grocery 
store, a restaurant, or a gas station business, or some other small 
business, they are not going to lose that business to taxes when they 
die. They are going to be able to pass on that business to their 
children. That is very important.
  So this is a major step forward. It is the first significant tax 
cut--it is the first tax cut for middle-income Americans in 16 
years. It should have been done a long time ago. But it has taken a 
Republican Congress and a commitment of a Republican Congress to have 
this as our No. 1 goal, and a commitment to accomplishment. While we 
have accomplished this tax cut, we have at the same time put in place a 
spending pattern which controls the rate of growth of Federal spending 
so that we can reach a balanced budget by the year 2002. We may even 
reach it before that, according to present estimates. But that was 
another major goal of this Republican Congress--to balance the budget.

  So we have done two very significant things here. We have balanced 
the budget, and we managed to cut taxes

[[Page S8216]]

for working Americans, and especially for working Americans who have 
families to raise. That is good news. Is it everything we want? Of 
course not. I would like to see more action in the area of Medicare, 
for example. But the will wasn't there--both at the White House and, 
unfortunately, in the other body. But as a practical matter, the 
spending restraints in this bill are very significant.
  The rate of growth in spending in this bill is approximately one-half 
of 1 percent over the next 5 years in discretionary nondefense 
accounts--one-half of 1 percent. That is the lowest rate of growth of 
spending that has occurred in the last 20 years in this Government in 
the area of discretionary accounts. That is significant. Because we 
have that low rate of growth of spending on the discretionary side of 
the ledger, we are able to bring into balance the budget agreement of 
this Government by the year 2002. We will have to go back and we will 
have to revise the issue of Medicare. There is no question about that. 
That remains a big issue of public policy. But within the Medicare 
accounts we made some very substantive and positive changes in this 
bill.
  In the spending package is the proposal for Choice Care. Choice Care 
gives seniors approximately the same type of options which we as 
Members of Congress have--the ability to go out into the marketplace 
and choose from a variety of different health care plans. The practical 
effect of that is to bring the market forces into play to control the 
rate of growth of the cost of Medicare and, at the same time, give 
seniors much more choice, many more options, in the way they get their 
health care provided. Choice Care is a very positive, substantive, 
long-term reform for the Medicare system, and it is in this bill. So 
there were significant steps taken in that account, too.
  But, most importantly, you have to return to the fact that not only 
do we balance the budget, but we give these very significant tax cuts 
to working Americans--especially working Americans who are trying to 
raise a family. Isn't it about time? This is relief that is long 
overdue. As this Government finally gets its fiscal house in order, as 
we move toward a balanced budget, who should be the recipient of that 
positive event, of that good fiscal management? Well, the people who 
paid for the Government should be the recipient of that.
  That is what this bill essentially does. It turns back to those folks 
who are paying the cost of the Government some of their hard-earned 
dollars so that they can make the decision as to how they are spent 
rather than having that decision made here in Washington. We do not 
happen to believe, those of us who support this tax cut, that the 
Federal Government is a better manager of your dollars if you are 
running a household than you are. We think that if you have money to 
decide how you want to raise your children and to use it on spending 
for your children's education, you are going to do a better job of 
spending that in educating your children than if the Federal Government 
takes your money, brings it here to Washington, and then redistributes 
it to you.
  So this tax cut is a very important event, and a big win--a big win--
for the working American family. Thus, I am certainly hopeful that we 
will pass this package later this week and make that major step 
forward, or that significant step forward, in assisting families in 
this country meet the costs of raising kids and see that at the same 
time we move this Government toward a balanced budget.

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