[Congressional Record Volume 143, Number 112 (Friday, August 1, 1997)]
[Extensions of Remarks]
[Pages E1598-E1599]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         BUDGET RECONCILIATION

                                 ______
                                 

                          HON. JOSE E. SERRANO

                              of new york

                    in the house of representatives

                        Thursday, July 31, 1997

  Mr. SERRANO. Mr. Speaker, I rise to explain my vote yesterday against 
the conference report on H.R. 2015, the Balanced Budget Act of 1997, 
and to express my opposition to adoption today of the conference report 
on H.R. 2014, the Revenue Reconciliation Act. Reconciliation has always 
meant one bill on revenues and spending, and these two bills must be 
viewed as a single package.
  As many speakers before me have said, there are good things in both 
bills--restored SSI and Medicaid for legal immigrants; tax credits for 
children and for education; funds for health insurance for uninsured 
children; empowerment zones and brownfields; Medicare coverage of 
preventive services; funds to soften some of the worst provisions of 
last year's welfare reform.
  Both bills are certainly far, far better than the versions that 
passed the House and the Senate--gone are the hits on Medicare 
beneficiaries; the consignment of workfare participants to a second 
class status; denial of child

[[Page E1599]]

tax credits to lower income working families; indexing of capital gains 
rates; expansion of the definition of ``independent contractor''--and 
Democrats, including the gentleman from New York [Mr. Rangel], the 
gentleman from South Carolina [Mr. Spratt], and the President and his 
team, deserve credit for that.
  But they still aren't good enough. Beyond the pluses and minuses, and 
the tables showing who gains and who loses, there are fundamental 
problems with this budget package.
  First, it widens the gap between rich and poor in this Nation, when 
we should be working to increase fairness and narrow the income gap.
  Republicans seem to think money made from money is superior to money 
made from work. Under these bills, working people's salaries will 
continue to be taxed at existing rates, but rates will be cut on 
profits from securities or property.
  People who earn just enough to get by will get a small break--if they 
have children--but people who have spare money to put into the new 
back-loaded IRA's will get all their future interest tax-free. And 
people leaving large estates will be able to pass on much more without 
tax.
  A Citizens for Tax Justice analysis of the tax bill shows that, among 
income groups, the lowest 20 percent will actually pay more taxes, 
while the top 20 percent will get more than 75 percent of the benefits. 
The top 1 percent alone will get more than 30 percent of the benefits.
  In dollar terms, this means that those in the lowest 20 percent will 
pay $39 a year more in taxes, while those in the highest 1 percent will 
get a $16,000 break. Doesn't sound like tax fairness to me.
  My second problem is that the reconciliation package rewards the rich 
with immediate tax cuts and puts off the tough decisions on spending 
cuts and entitlement reforms.
  The justification for separating this year's reconciliation 
legislation into two bills seems to be to avoid accusations that 
Medicare cuts are to pay for tax cuts for the wealthy--to try to fool 
the American people by not including both in one bill.
  But it is a fact that in the current climate of deficit reduction we 
cannot afford to give anyone tax cuts unless we also cut spending. 
Yesterday's spending reduction bill is not needed to reform Medicare--
it won't--or to make tough specific cuts in spending--it doesn't--but 
to make room for tax cuts.
  The future cuts in appropriations required to reach the goal of a 
balanced budget by 2002 are not specified, but examples given by our 
colleagues yesterday and today make it clear how deep they would have 
to be and how unlikely a future Congress would be to inflict such pain.
  Medicare savings are business as usual--cuts in provider payments--
and reform is left to a commission.
  Medicaid cuts are almost entirely taken from the hospitals that serve 
large numbers of poor and uninsured people, hospitals that are already 
reeling from prior cuts and from the changes going on in the health 
care industry.
  But the tax cuts begin kicking in now--the capital gains rate cuts 
are even retroactive.
  My third problem is that these bills threaten to starve our future. 
Even if all the rosy assumptions are correct, and the economy continues 
to flourish, and tax losses don't explode, many necessary investments 
in our physical and social infrastructure will be unaffordable. I don't 
believe in term limits, and I hope to be here in 5 years, even in 10 
years, but I certainly don't look forward to dealing with the budget 
situation we will face then because of these bills.
  Mr. Speaker, there are highly visible problems with these bills, but 
I am also worried about the invisible. In the Republicans' unseemly 
rush to pass something--anything--and go on vacation, few Members have 
had the time to thoroughly study and understand both bills. Already, 
there are reports of ``rifle shot'' tax breaks and other goodies tucked 
in, in obscure language. Who knows what's in there. By itself, that 
should be reason enough to delay the conference report until September.
  Mr. Speaker, I can count. I know this tax bill will pass as easily as 
yesterday's spending bill did, and the President will sign both, but 
you should be aware that Democrats will make every effort in the months 
and years to come to correct the excesses and restore fairness to our 
government's taxing and spending policies.
  Mr. Speaker, I urge my colleagues to join me and vote against this 
regressive bill.

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