[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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