Congressional Record, Volume 143 Issue 114 (Wednesday, September 3, 1997)

[Congressional Record Volume 143, Number 114 (Wednesday, September 3, 1997)]
[House]
[Pages H6777-H6783]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

GOOD NEWS FOR AMERICA

The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 1997, the gentleman from Wisconsin [Mr. Neumann] is
recognized for 60 minutes.
Mr. NEUMANN. Mr. Speaker, I rise tonight to talk about good news for
America.
I just had a wonderful opportunity during the past month to see lots
of folks all across Wisconsin, and it was very educational for me and,
I hope, for some of the folks we saw that they picked up on some of the
good things that have happened here in the last month or thereabouts
out here in Washington.
The one thing that struck me, though, as I talked to more and more of
our families across Wisconsin and our senior citizens across Wisconsin
and some of our young people, college age students across Wisconsin,
they did not really realize that the tax cut bill has been signed into
law, so I would like to begin this evening by pointing out that the tax
cut bill, along with the first balanced budget since 1969 and restoring
Medicare, has all been signed.
It is done. The ink is dry. The President signed it. It has passed
the House. It has passed the Senate. First balanced budget since 1969,
taxes coming down for the first time in 16 years, and Medicare restored
for at least a decade. That is what was accomplished before we left for
recess in August.
The other thing I learned is that not very many people really
understood what was in the tax cut bill, and I would start talking to
people and I would say, ``Well, the budget is balanced, that's the most
important thing we could do, and that was our responsibility, and
that's done, and at the same time we've reduced your taxes.''
And they go, ``yeah, sure, but that affects somebody else.''
And then we would start through it, and the first question would be:
Do you have children? And this is so important. If you have children
age 17 or younger for virtually all families out there, 550,000
Wisconsin families alone, you are eligible to keep $400 more for each
one of your children in your own home next year instead of sending it
to Washington.
We should make this very clear. This is not somehow a gift from
Washington to the people. This is money that the people get up in the
morning, they go to their jobs, they work hard, and they earn the
money, but instead of sending it to Washington, they keep it in their
own homes to spend on their own families and the way they see fit. That
is the first part of the tax code.
And I am going to put this a little different so folks have a handle
on how important and significant this is.

[[Page H6778]]

In January of next year, a family with a child, with one child,
should go into their place of employment, they should talk to the
person that handles the W-4 forms, they should increase their
exemptions so as to increase their take-home pay by $33 per month. It
is $33 per month in increased take-home pay for each one of the
children in the house.
And my fear is people are not going to do this. My fear is what is
going to happen is they are just going to go through the year and
Washington is going to see all this extra money coming out here that
those families should be keeping in their own home, and, of course,
when Washington sees money, sometimes they spend it out here, and I
will admit, as hard as we try to stop that and as hard as I personally
worked to stop them from spending on new programs, it would be much,
much better if our families out there did the right thing.
And, again, let me make this very clear. Starting in January of next
year, a family with children should go into their place of employment,
they should talk to the personnel director, whoever it is that handles
the W-4 forms, they should change the number of exemptions so as to
allow their take-home pay to increase for $33 per month per child.
Let me put this another way. If you have three children in your
family, for most families you should start taking home $100 a month
more in your take-home paycheck than what you were in December. So the
difference between your take-home pay in December and January should be
$100 a month for a family with three children.
That is significant; it is real. The bill is signed. You should do it
in January of next year, increase your take-home pay. Keep the money in
your own home; do not send it out here to Washington.
But that is not all in the tax cut bill. The other thing that people
seemed when I talked with them out in Wisconsin to be generally
familiar with was the capital gains reduction. The capital gains tax in
the past was 28 percent, and that has been reduced to 20 percent. So
the good news is that capital gains, the amount of money that you send
to Washington, is lower when you sell a stock or a bond or whatever it
is that you might have held and made a profit on.
Good news is that drops even further in the year 2000, to 18 percent,
and it depends on your income bracket there. If you are in a $41,000-a-
year or higher income bracket, the capital gains are 20 percent, and if
you are lower than that, they dropped all the way down to 10 percent.
Those two people seem to be vaguely familiar with, at least out
there, but there is a whole bunch of others that they were not familiar
with at all. Let me start with the first one.
If people own a home, homeowners for the most part when they sell
their home will no longer owe any Federal taxes. In the vast majority
of the cases, very few exceptions, and only on the very higher-priced
homes, will people owe any money in Federal taxes. If you have lived in
your residence, it is your personal residence, you have lived there for
2 years or more, you will not owe any Federal taxes when you go to sell
your home. This affects a whole bunch of people.
There were a lot of folks out there, empty nesters, people whose
children are grown and gone who are waiting for that one-time exclusion
at age 55 to sell their home and downsize. That is no longer necessary.
The age 55 one-time exclusion is gone. It is no longer there. If you
lived in your home for 2 years, you sell the home, you make a profit,
there is no tax on it.
It was interesting. I was in Green Bay, WI. I was doing a radio talk
show about the tax cuts, and I had a young lady call in, and she said,
``Well, I bought my home for $22,000, and I'm now about to sell it for
$60,000.'' So a period of years have gone by, and she said, ``How much
taxes am I going to owe?''
And I said, ``Well, you're not going to owe any Federal taxes on the
sale of your home.''
So she said, ``Does that mean I owe income taxes?''
And I said, ``No, no, you do not owe any Federal taxes when you go to
sell that house.''
And she said, ``Even though it went from $22,000, I'm going to get
$60,000 back, how much taxes do I owe?'' She asked me three times the
same question because folks are having a hard time believing that
Washington actually did something right, they actually lowered taxes
instead of raising them like they were doing previously.
So the third part here that I would like to talk about then in the
tax cut, if you owned your home, you have lived there for 2 years or
more, and you sell your home, in the vast majority of the cases, the
only exceptions are the very high priced homes, you will not owe any
Federal taxes on the sale of that home.
This affects a lot of senior citizens, also. In Wisconsin, 74 percent
of our senior citizens still own their home, and it may be people that
took the one-time 55 exclusion that had bought a different home at age
56, maybe a smaller home or whatever, but if they have lived in the
house for 2 years and they are now 60, let us say, for example, they
can now sell that home, move to a different home, if they like, own it
for 2 years, sell it again, so there is no one-time exclusion, you can
do this as many times as you want as long as you live in the home for
at least 2 years.
So this part was very unfamiliar with most of the people out there.
Then I went on to the part and I started talking about saving up for
their children's education, because we had a lot of families that we
were talking with, and we started talking about the fact that it is now
possible to put $500 per year per child into what is called an
education savings account. The money then accumulates tax free, and the
student can then take it out when they reach age 18 and are ready to go
off to college.
I talked to a lot of grandparents about this account because it seems
that there are a lot of grandparents that are interested in giving
their grandchildren some sort of a gift, whether it be a Christmas or
their birthday or whatever, and it makes an ideal gift from a
grandparent to a grandchild, and I know everybody cannot afford it, but
there are some grandparents out there who would like to give this sort
of a gift to their grandchildren, and it is certainly an ideal way to
provide their grandchildren with a college education.
Again, the education savings account, you can put $500 a year into
this savings account, the money accumulates tax free, and when the kids
take it out at age 18 they pay on the lower tax rate that they would be
at. So it is money for them for college.
Speaking of college, very, very important. I took my daughter to her
first year of college. My son had left for--he is a junior in college,
and of course we talked to a lot of college students and the parents of
a lot of college students, and there is a general lack of understanding
of how this college tuition credit is going to work. Well, it works
like this:
If you have got a freshman or a sophomore in college and the cost of
their college education is $2,000 a year or more, and in Wisconsin at
least that is the vast majority of the cases, if it is 2,000 a year or
more in costs, the parents get to keep $1,500 more of their own hard-
earned money in their own home rather than sending it out here to
Washington.
And, again, I would point out this is not a gift from Washington.
This is money that the people have gotten up in the morning, gone to
work and earned. The only thing is instead of being taxed on it,
instead of that tax coming out here to Washington and Washington
spending it, you keep that money in your own home.
So if you have a freshman in college, and the costs of their college
tuition is $2,000, room, board and tuition is $2,000 or more, you
should start keeping $125 a month more in your take-home pay starting
in January of next year.
And, again, that is simply 1,500 divided by 12 is $125 a month more.
For juniors and seniors, if the cost is over $5,000, which in many
cases it is for room, board, and tuition, you should start keeping a
thousand dollars more of your own money in your own paycheck, and again
that should start in January.
This is very, very straightforward, and if the people do not start
keeping their own money, if they send it out here to Washington, we are
not sure Washington is not going to spend the

[[Page H6779]]

money. We here in Washington, many of us, want the people to start
keeping their own money next January. Why should you send it out here
to Washington when it is your money?
College tuition, then, freshman and sophomores, in most cases are
going to get a $1,500 credit; juniors and seniors in most cases, in
many, many cases, are going to get a $1,000 credit.

{time} 2130

I said are you interested in saving more money for retirement. He
said yes, but I am in a pension funds already, so none of those IRA's
affect me.
I said well, no, that is not entirely true. In fact, this new IRA,
called the Roth IRA, you can put $2,000 per year into the Roth IRA per
person. So in this case a husband and wife could put $4,000 away for
their retirement.
You put after tax dollars into the Roth IRA, but when you take the
tax dollars out at retirement, it is tax free. This might be one of the
best provisions for middle age people in the entire country. This might
be one of the best savings accounts in terms of taking care of yourself
in retirement.
So even if you are in a different pension fund, and even if you are
already doing some other things to take care of yourself in retirement,
you may want to take a look at the Roth IRA, where you can literally
put $2,000 per person into this savings account, and at retirement, you
take the money out tax free.
It is very significant, because $2,000 put in at age, say, 40
typically will at least triple by the time you reach retirement. That
means it goes from $2,000 thousand to $6,000 in value when you take it
out, and there is no tax on that $4,000 on increased value. A very,
very significant change in the tax laws that people should be taking
advantage of.
Again, the idea here is to encourage savings and encourage people to
take care of themselves in retirement.
Then we went on to talk to some others. Farms, roughly 90 percent of
the farms transferred from one generation to another in this Nation
today will no longer have any taxes due because of the Tax Code change.
So for small farmers and businessowners, you will be able to pass that
small business or farm on to the next generation without the tax burden
that was there before.
It is very clear to farmers as you pass this on from one generation
to another, the benefit. But there a hidden benefit in here that not
many people have picked up on. When a business is held by a family and
the family has been running that business for a period of time, if the
owner of that business cannot pass it on to the next generation, many
times the business gets sold and somebody else takes over and the jobs
are moved out of that community to a different community. So by
allowing that business to stay in the family and be passed from one
generation to another, many times that means jobs stay in a community
that otherwise might not have stayed there.
There are so many different provisions in this Tax Code that provide
benefits to the American people that I found by the time I was done, we
virtually could not find anyone who was not in some way, shape or form
going to benefit by this Tax Code.
I have left out one other group, and that is young couples or young
working folks, singles, couples. Those folks have the benefit of being
able to save for education and their first home in this Roth IRA that I
was just describing, where they can then literally take the money out
tax free and use it for the down payment on their first home or for
college education.
So, again, there is a benefit for the young workers, the people in
their thirties, forties, and fifties preparing to retire for
themselves, there is a benefit for seniors who own a home and who want
to sell it, there is a benefit literally all across the generations
here, and certainly there are many, many benefits for our families
contained in the tax cut bill.
Again, I would be remiss to talk about these tax cuts without also
saying that the budget is balanced first. I would like to bring the
American people and my colleagues some other good news. Numbers have
come out now that reestimate the revenues coming into the Federal
Government, and, in fact, as we have been saying in our office for
quite some time, the economy is stronger than people were giving it
credit for and revenues are coming in faster.
What does that mean in English? The budget is balanced for the first
time since 1969 next year. Four years ahead of schedule, we are on
track to balancing the budget, the job is done, and your taxes are
coming down at a great time.
What a great time this is in this country. I never, 3 years ago when
I was first elected, thought we would be in a position to stand here
and talk seriously about a balanced budget in 1998, taxes coming down,
Medicare restored, welfare reform. Able-bodied welfare recipients have
now to go to work, and not heartlessly. They are guaranteed a job in
Wisconsin. We are seeing our welfare rolls fall dramatically. Good news
all across the specter in terms of what has happened in the last couple
years here in Washington.
With that, I would like to turn my attention now to another topic
that I find is very confusing as I talk with groups of people. A lot of
folks are saying if the budget is balanced, what about that $5 trillion
debt out there? It has to be smoke and mirrors, because we know there
is a $5 trillion debt out there.
Let me explain the difference between two terms. The first term is
deficit and the second term is debt. Deficit is like the family with
their checkbook. Deficit is like overdrawing your check book.
Since 1969, each and every year Washington has written out more in
checks than what it collected in taxes, so they have literally
overdrawn their checkbook each and every year since 1969. That is
called the deficit.
When they overdrew their checkbook, what they did was borrowed the
money, put it in their checkbook, and then, of course, the checks were
cashed and on we went.
So for each and every year since 1969 they have overdrawn their
checkbook, and then they went and borrowed the money, put in the
checkbook and made good on the checks. As you might imagine, since they
have been borrowing more and more money each and every year since 1969,
the debt has been growing each and every year, and that is the $5.3
trillion we have staring us in the face.
I am talking now about the debt and how fast it has been growing, and
I think it is very important that the American people realize that we
still have a very significant problem staring us in the face.
On this chart I show the growing debt facing America. From 1960 to
1980, the growth was relatively slow and relatively small. That is, The
deficits were not big because they did not borrow lots of money in each
one of those years.
But from 1980 forward, the debt has been growing in large amounts.
This is what brought many Members of the class of 1995 out here, the
Republican class of 1995. We watched this debt grow and realized we
were about here on this debt chart right now, and that if we don't do
something about this as a Nation, we are not going to have a future in
this country.
That is what brought many of us here in the first place, and that is
why it is such good news we are going to stop borrowing the money and
the red line will quit going up when we reach a balanced budget.
When I point to 1980, all my colleagues on that side of the aisle say
sure, that is the year Ronald Reagan was elected, and all my colleagues
on this year say yeah, I know, but that is the year the Democrat
Congress started spending out of control.
The fact of the matter is it doesn't matter which side it was
responsible. The fact is we as a nation have this debt staring us in
the face, and it is not a Republican problem or a Democrat problem, it
is an American problem, because this Government does represent the
people. It is time that we as a nation solve the problem, rather than
pass the blame back and forth in the House of Representatives and the
Senate and the presidency.
For those that have never seen this number, this is the amount of
money, it is $5.3 trillion, that is the amount of money that the
Federal Government has borrowed on behalf of the American people. This
is the accumulation of the overdrawn checkbook, the amount of money
that was necessary

[[Page H6780]]

to make the checkbook balance since 1969.
Let me translate that into English. I used to be a math teacher, so
you will see some of the math still in here. If we divided this debt up
by the number of people in the United States of America, if each and
every American were to pay just their share of the Federal debt, they
would need to pay $20,000. The Federal Government has borrowed $20,000
on behalf of the every man, woman, and child in the United States of
America basically within the last 15 to 20 years.

The real problem, you look at a family of five like mine, my kids are
here, my wife is here, we have got five of us in our House, the Federal
Government literally borrowed and spent $100,000 on behalf of my
family.
The real problem, the kicker, is the bottom line number. You see
every family of five in the country today or the average family of five
is paying $580 a month to do nothing but pay the interest on this debt.
This money is owed to people. It is a real debt. Interest is being
paid on it. The cost of interest alone to a family of five in the
United States of America today, or any group of five people, is $580 a
month. A lot of people say, I do not really pay $580 a month in income
tax. I don't have to worry about it.
But it is not only income tax. If you do something as simple as walk
in the store and buy a loaf of bread, the store owner makes a profit on
that loaf of bread and, of course, part of that profit gets sent out
here to Washington, and, you guessed it, it goes to help pay the
interest on the Federal debt.
As a matter of fact, one dollar out of every six collected in taxes
goes to paying the interest on the Federal debt. So the real problem
with this picture is that there are real people out there, real
families out there, that are paying $580 a month to do nothing but pay
the interest on the debt.
It would be logical to ask the question, how in the world did we get
into this mess and didn't anybody try to correct it in the past?
I wanted to talk specifically about the past, the past. Let me define
the past to be pre-1995. Again, this is very specific, what we are
talking about here. The American people were promised a balanced budget
repeatedly. This is not news that all of a sudden we have a $5 trillion
debt staring us in the face. As a matter of fact, the Gramm-Rudman-
Hollings bill, first passed in 1985, promised the American people a
balanced budget in 1991. Well, we look at the deficit line in this
chart, and what actually happened, and it is clear that the promise
made from Washington was broken.
The promise was not kept. But they knew what to do. When they
couldn't keep the first promise, Washington made a series of new
promises. Again, I emphasize this is the past. This is what led many of
us into leaving the private sector and coming to Washington.
This blue line shows the fixed Gramm-Rudman-Hollings bill, and it was
promising a balanced budget in 1993. I think that 1992 and 1993, those
are real important dates to look at out there because, you see, when
the budget was supposed to be balanced, instead we had huge and growing
deficits. So rather than balance the budget as was promised then under
this bill, when we got to the early 1990's, instead we had huge,
growing deficits.
So what did Washington do? In 1993, passed the biggest tax increase
in American history. Washington looked at this picture and concluded
that the right answer was to reach into the pockets of the American
people and take more money out of their pockets and bring it out here
to Washington.
Why would they do that? Well, because if they take more money out of
the pockets of the American people and bring it out here to Washington,
they can keep their Washington spending programs going and still bring
the deficit down. You see, that is what the tax increase of 1993 was
all about.
To pass the tax increase of 1993, what it really allowed them to do
is keep spending going out here in Washington. Again I emphasize, this
is the past, because in 1994, the American people decided to change
what was going on in Washington, D.C. In 1994, the people for the first
time in many, many, many years elected a Republican House of
Representatives and a Republican Senate. This history of broken
promises, this history of tax increases, that changed in 1995.
We had this theory when we came here in 1995 that went like this:
Rather than raising taxes on the people and taking more money out here
to Washington, why don't we slow the growth of spending here in
Washington, have fewer Washington spending programs and get to a
balanced budget, because Washington is spending less, not because they
are taking more money out of the pockets of the American people. That
was our theory.
Our theory went like this: If we can just get Washington to spend
less money, that means they would borrow less money out of the private
sector. If they borrowed less money out of the private sector, of
course, that means more money available in the private sector; more
money available in the private sector, the law of supply and demand is
straightforward, the interest rates stay down.
So if we could just get Washington to spend less money, they would
borrow less money. That would leave more money available in the private
sector, and with more money available, the interest rates would stay
down. If the interest rates stayed down, our theory was, people would
buy more houses, buy more cars; and of course when people bought more
houses and cars, that meant other people had to go to work building the
houses and cars, and that meant job opportunities and less welfare and
less cost to the Government and more people paying taxes in. This was
the 1995 theory.
I think it is more than fair that the American people should at this
point start asking how did they do? How are the Republicans doing? They
came here in 1995, laid down a plan to balance the budget in 7 years,
how are they doing?
I think that is a legitimate question. I brought the next chart along
to show exactly how the new Congress, since 1995, is doing. The red
columns in this chart show the promises that were made in 1995. These
are the deficit amounts that the Republican Congress said we would keep
the deficit to in order to reach a balanced budget by the year 2002.
I am happy to say that in the first year, and this is in, this is not
a promise, an empty promise, we not only hit our target, but we were
about $50 billion ahead of schedule.
So the good news is, in year one, the Republican plan not only hit
our target, we were well ahead of schedule. Year two came. Year two,
the change was significant. Washington borrowed over $100 billion less
than was projected out here until year two and it worked exactly the
way the theory we had hoped would work.
That is when Washington borrowed less money, because their deficit
was lower, that left $100 billion more money available in the private
sector; $100 billion more in the private sector kept the interest rates
down, and sure enough, it worked. People bought more houses and cars
and stoves and refrigerators and all the other things that go with it,
and that provided job opportunities so the unemployment rate dropped to
the lowest level in years. That meant job opportunities for people.
They went to work and started paying taxes in, and of course, that made
the program go better.
The rest of this chart was kind of theory a few days ago. We found
out recently that the theory was way too lacking the optimism that
should be there because of the strong economy we are in. We are now
finding we are going to reach a balanced budget, this blue column, the
actual deficit is going to go to zero sometime between the year 1998
and the year 1999, 3 or 4 years ahead of the promise that was made by
the Republicans back in 1995. Is this a change or what?
Before 1995, we had the broken promises of Gramm-Rudman-Hollings and
the higher taxes. Post-1995, well, we are 3 years into the plan and are
now looking at balancing the budget 3 years ahead of schedule for the
first time since 1969, and lowering taxes and restoring Medicare at the
same time because the idea of constraining the growth of Washington
spending works.

{time} 2145

A lot of folks say, well, you are just plain lucky out there in
Washington. You are just plain lucky. The economy is booming, and since
the economy is booming there is more revenue coming

[[Page H6781]]

in, and you guys can get your job done and you all look great out there
doing it, and everybody is bragging about it.
I brought with me a chart to show the actual facts on that particular
argument as well, because I hear that quite a few different places that
I go to. We have had booming economies in the past. In the past every
time Washington went into a booming economy Washington subsequently
went into booming spending cycles. In fact, all the extra revenue that
came in, they spent it, so we never did get the deficit down. We never
did get to a balanced budget.
In fact, this Congress since 1995 is very different. We are in a
booming economy. Yes, the revenues are coming in stronger than
expected. But rather than go and spend the extra money, this Congress
has seen fit to slow the growth of Washington spending by over 40
percent at the same time the economy remains strong.
This is how fast Washington spending was growing before 1995. This is
how fast it is growing since 1995 on through the year 2002. So let us
make this very clear. In the face of a strong economy and more revenues
coming in, instead of Washington doing what it has always done in the
past, going and spending the extra money, what Washington did is at the
same time the economy was strong they slowed the growth of Washington
spending.
So in the face of a slowed growth of Washington spending and a strong
economy, we hit our deficit targets, we are on track, we are ahead of
schedule, and we are about to balance the budget for the first time
since 1969, while at the same time lowering taxes and restoring
Medicare.
For those that are interested in inflation-adjusted dollars, it is
even more dramatic. The Washington spending was increasing by 1.8
percent. It has now been slowed to .6 percent. We are down to a point
where Washington spending in real dollars has virtually stopped in
terms of increasing spending. That is good news, and that is why we are
also able to both balance the budget and reduce taxes at the same time
for the good of the American people.
I brought one more chart with me that I think says it all, because a
lot of people are saying, well, how can all of this stuff happen at the
same time? You know, in fact, would this all have happened anyhow?
This chart shows what would have happened if when we got here back in
1995 we had played golf, tennis and basketball instead of doing our
jobs. The deficit line that is shown here in the red, this is what we
inherited when we got here, back in 1995. In fact, Members can see that
the deficits were projected to go all the way up to $350 billion at
that point in time.
A lot of people remember 1995. They remember the 100 days. They
remember the government shutdowns. They remember the hassles and what
seemed like a constant battle out here in Washington. I want to say
something. I was here. It was a constant battle. It was worse here
living through it than what the American people saw out there in
public.
But at the end of 1995, we had made progress. This yellow line in the
chart shows what the deficit projections were after one year of very
difficult battles. The green line shows what we had hoped to do. We
laid this out in 1995, and again, we hoped to get to that balanced
budget by the year 2002.
The good news is here. The good news is what we have actually
accomplished is below either one of those projections, and in fact we
are now going to reach zero right here in the year 1998 or 1999. So not
only are we not losing what was given to us in 1995 when we got here,
but we are going to reach a balanced budget in 1998 or 1999 for the
first time in more than a generation.
Again, I cannot emphasize this enough. The last time the budget was
balanced I was a sophomore in high school. My son is now a junior in
college, my daughter is a freshman in college, and my youngest is a
freshman in high school. This is more than a full generation ago, the
last time we balanced the Federal budget. It is great news for the
future of this country.
I have been real upbeat and I have been real optimistic about this,
as well we should be. We should be celebrating this first balanced
budget in a generation; welfare reform, taxes coming down, Medicare
restored, we should be celebrating this. But we would be remiss if we
did not recognize that even after we got a balanced budget, we still
have this $5.3 trillion debt hanging over our head.
Remember, when we say the budget is balanced, that is just a
checkbook. All we mean is that we are taking in as many dollars as we
are spending in this given year. That does not pay this debt off. I
have good news on that front, though, too. We are working on it. We
have a plan on the table right now, it is called the National Debt
Repayment Act.
What the plan does is this. It says after we reach a balanced budget,
we recognize we still have this huge problem. We have a responsibility
to future generations to do something about this problem. So after we
reach a balanced budget, we are going to cap the growth of Washington
spending at a rate of at least 1 percent under the rate of revenue
growth. So spending is now going up slower than revenue growth.
With spending going up slower than the rate of revenue growth, if you
start a balance, that creates a surplus. With the surplus, we take one-
third of that surplus and provide additional tax cuts to the American
people, so the American people should expect a tax cut every year from
here on out. Two-thirds of it goes to repaying the Federal debt.
I have great news. If we were to enact this plan, by the year 2026
the entire Federal debt would be repaid, and we would pass this Nation
on to our children debt-free. But there is another hidden advantage to
doing that. As we are paying down the Federal debt, the money that has
been taken out of the Social Security Trust Fund would also be
returned.
Social Security is collecting more dollars than it is paying back out
to our senior citizens in benefits each year. As a matter of fact, this
year alone the Social Security system will collect about $70 billion
more in tax revenue than what it is paying back out to our senior
citizens in benefits.
The idea is that money is supposed to be set aside in a savings
account so when the baby boom generation gets to retirement, you can go
to the savings account, get the money, put it in the checkbook, and
make good on the Social Security payments to our senior citizens.
That money, though, it is not in that savings account. That money is
all part of this $5.3 trillion debt. What Social Security is doing is
instead of putting the money in the savings account, they are
collecting the Social Security tax dollars, more than what they are
paying out to seniors in benefits, they are putting all the money in
the general fund, in the big government checkbook, if you like. They
are writing out checks out of that checkbook, and of course there is no
money left at the end. That is the deficit. Then they are simply
putting an IOU down in the Social Security Trust Fund.

Under the National Debt Repayment Act, as we go about paying off the
Federal debt, we would also be putting the money back into the Social
Security Trust Fund. So under the National Debt Repayment Act, we
create a surplus by slowing the growth of Washington spending, which we
have already been successful doing.
We just continue what we have done for the last 2 years, continue it
on forward. We create that surplus, we take one-third of the surplus
and work to reduce taxes further each year for the American people. We
take two-thirds and apply it to the Federal debt, and when we are
repaying the debt, it is completely repaid by the year 2026, we are
also restoring the Social Security Trust Fund.
Just think about this. It is not only the fact that we are doing the
right thing, we are paying the bills we have run up over the last
generation; it is not only that. It is not only that we are going to
give this Nation to our children debt free.
It goes a step further. When the debt goes away $1 out of every $6
that the Federal Government is now spending no longer needs to be
spent. That opens the door for huge tax cuts for the American people.
When we start talking about these tax cuts, let us talk about some of
the possibilities here, because under the National Debt Repayment Act,
as the debt gets paid down, lower interest

[[Page H6782]]

payments, the government needs less money, we can now talk about
revamping the entire tax system.
I do not know how all of my colleagues feel and all the listeners
this evening feel, but many of us do not like the fact that the IRS is
so complicated it is almost impossible to understand. In all fairness,
the new Tax Code did not make it any easier. It did lower taxes. We
should not complain about the fact that taxes are coming down. But the
fact is the IRS is far too cumbersome and far too difficult to
understand.
As we look at these tax cuts down the road, therefore, it gives us
the opportunity to throw out the IRS as we know it and bring in a new
tax system that would be a lot simpler than the one we have today.
Until we get this in hand, we cannot do that.
So the good news under the National Debt Repayment Act, and again I
would encourage all of my colleagues that are not already on board as
cosponsors to join us in the National Debt Repayment Act, what it does
is it pays off the debt by the year 2026 so our children get this
Nation debt-free, restores the Social Security trust fund for our
senior citizens, and for those people in the work force today, for
those people in the work force today, they should expect additional tax
cuts each and every year as far as the eye can see. It is great news to
the American people.
When we start thinking about the future tax cuts, I opened the hour
here by talking about the fact that I had listened to a lot of people
out there in Wisconsin. What the people told me when I listened to them
is two tax cuts they were most interested in. The first one is the
marriage tax penalty. This is just totally unfair in our society today.
I could not find anybody who did not think we should not get rid of the
marriage tax penalty.
That works like this. If you have 4 people all working in the same
place at the same time earning exactly the same salary, but two of
those people are married to each other and two of those people are not
married to each other, the two people not married to each other pay
less tax than the two people that are married to each other. That is
called the marriage tax penalty, and that is just plain wrong. That is
one thing I heard.
The other thing I heard repeatedly is, Mark, just simplify the entire
Tax Code. Just make it a lot simpler. If you are going to do more tax
cuts, for goodness sakes, just cut it across board. I can tell the
Members, we are going to look forward to eliminating the marriage tax
penalty and work towards an across-the-board tax cut for virtually all
Americans out there. So whatever bracket you are in, it would be very
easy to compute if your taxes went down by 5 percent or 10 percent or
whatever the number is.
I would like to wrap up my part this evening by again going back and
just comparing the past, the present, and the future.
The past: broken promises of the Gramm-Rudman-Hollings bill, the
higher taxes of 1990, 1993; especially 1993, the biggest tax increase
in American history, taxes went up with a gasoline tax increase. For
those who were not paying real close attention, the discussion went
like, well, that tax increase is only on the rich. But you were rich if
you bought gasoline at a gas pump, because it went up 4.3 cents a
gallon.
So the tax increases of 1993, the broken promises of a balanced
budget of Gramm-Rudman-Hollings, all of these deficits that ran up this
huge 5.3 trillion dollar debt, that is all in the past. In 1994, the
American people, and the credit should go to the American people, the
American people changed what was going on. They sent a new group out
here to run Washington.
Under that new group, where are we at? I think it is a fair question
to ask, where are we at? We are in the third year of a 7-year plan to
balance the Federal budget. We are not only on track, we are ahead of
schedule. We will have our first balanced budget since 1969 next year,
three or four years ahead of what was promised back in 1995. So for the
first time since 1969 the budget will be balanced. It has changed here
in Washington. Instead of the broken promises of the past, we will have
a balanced budget for the first time.
How about the higher taxes of 1993? That is not happening under this
Congress, either. As a matter of fact, taxes are coming down. Just to
run through that list of tax cuts and what is all in this bill, again,
just briefly, $500 per child, starting--it is $400 next year and goes
up to $500 the year after; capital gains going from 28 to 20, or even
to 10, depending on your income bracket. If you sell your home, it is
your principal residence, you have lived there for 2 years, in general
there will be no taxes on the sale of your home. However old you are,
the one-time exclusion age 55 is no longer there.
Grandparents, parents, to save up for your children's education you
can put up to $500 per year per child into a savings account. The
interest accumulates tax-free. College tuition for most freshmen and
sophomores out there, the parents are going to keep $125 a month more.
That is $125 a month more if you have a freshman or sophomore in
college, in most cases you keep that money in your house. You earned
it. It is not a gift. You earned it. It is your money. You keep it
instead of sending it out here to Washington. $1,500 is the total for
freshmen or sophomores, $1,500, and in most cases for a junior or
senior it is $1,000 that you keep in your own home.
If you are in a pension fund today, wherever you are, if you are
saving for retirement, if you would like to increase the amount that
you are saving for your retirement, there is a new IRA called the Roth
IRA that most everybody watching tonight, my colleagues, are eligible
for. You can put up to $2,000 per year per person into the Roth IRA for
a husband and wife, $4,000 a year you put in after-tax dollars, which
means you have already paid taxes on that money. But the good news is
the interest accumulates tax-free, and when you take it out, it is tax-
free completely. So you put the money in, it accumulates, and at
retirement when you take the money out it is tax-free.

For young folks, if you want to save up to buy a house or college
education, put money into an IRA type account and you are allowed to
take it out without the penalty. For small businesses, and I may not
have mentioned this one earlier, the health care deduction for self-
employed people is going all the way up to 100 percent over a period of
years.
Death taxes are reformed. Ninety percent of farms are passed from one
generation to another with no taxes paid. Businesses, family owned
businesses will pass on to the next generation in many cases without
taxes so the jobs can stay there in the community.
The point of this is we are in a very, very changed Washington, DC.
The tax hike of 1993 versus the tax cut of 1997, that is dramatically
different. There has been a dramatic change that has been brought on by
the American people, sending a new group out here to control the House
and Senate, and the American people have a right to understand just how
far we have come.
The present: a balanced budget for the first time since 1969. The
present, tax cuts, the first time in 16 years. The present: Medicare
restored for our senior citizens. The present: welfare recipients,
able-bodied welfare recipients having the opportunity to work so they
have a chance at a job promotion and a better life for themselves and
their families. That is the present. It is very, very different than it
was just a couple of short years ago out here. I do not believe the
American people fully understand the magnitude of the change yet. That
is the present.
Where are we going? Well, even after we get the budget balanced, even
after we started with the first tax reduction in 16 years, Medicare
restored for a decade, we still have a $5.3 trillion debt hanging over
our heads.

{time} 2200

We have introduced the National Debt Repayment Act, which would repay
the debt in its entirety by the year 2026, giving this Nation to our
children debt-free. It would restore the Social Security Trust Fund for
our senior citizens and, as it creates surpluses by controlling the
growth of Washington spending, one-third of those surpluses would be
used to provide additional tax cuts.
Think what a changed environment this is: The budget is balanced,
taxes coming down, and a plan on the table

[[Page H6783]]

that actually talks about paying off the Federal debt, instead of how
we are going to stop borrowing this money. What a changed country this
is.
We as the American people should start having optimistic visions of
the future again for our children. Growth, opportunities, our kids are
going to have opportunities in America just like we did to start from
scratch and build a company from the ground up, or do what they want to
do in this society. Those opportunities will once again be there
because instead of passing them an ever growing debt, instead of giving
them a legacy of virtual bankruptcy, we are now in a position to talk
seriously about repaying the debt, passing the Nation on to our
children debt-free, restoring Social Security for our senior citizens,
and additional tax cuts for people in the work force today.
That is what this is all about, and I sincerely hope that is what my
service to this country is all about, because it is a worthwhile
endeavor if we reach those goals.

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