[Congressional Record Volume 144, Number 21 (Thursday, March 5, 1998)]
[House]
[Pages H897-H899]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   THE PRESIDENT'S BUDGET PLAN THREATENS TO BRING BACK HUGE FEDERAL 
                                DEFICITS

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 7, 1997, the gentleman from South Dakota (Mr. Thune) is 
recognized for no more than 20 minutes.
  Mr. THUNE. Mr. Speaker, let me just say that this week we heard some 
remarkable news come out of the Congressional Budget Office. The 
Congressional Budget Office reported that we will see this year an $8 
billion surplus, and I think that is remarkable news for our country, 
and it is noteworthy to say that a lot of that progress has been made 
just in the last few years.
  I noticed here as I looked back at the 1995 projected deficit, the 
1996 projected deficit, and the 1997 projected deficit, that as 
recently as 1995 the projection was that the deficit this year would be 
$164 billion, in 1996 it was going to be $107 billion, and in 1997, $22 
billion, is what it actually ended up being, and this year we actually 
have erased the red ink and we are operating in the black.
  That is a remarkable achievement, considering from where we have come 
in these past few years. That is the good news. I think we ought to all 
reflect on the fact that that is good news. I think, again, it marks 
the first time in 30 years we have been able to operate in the black, 
and it is a tribute to the fiscal discipline that has been exercised by 
the Congress in the last couple of years in trying to get Federal 
spending under control.
  The bad news, of course, is the fact that after years of hard work to 
eliminate these deficits, President Clinton wants to send the Federal 
budget back into the red. That is what is shown also in the analysis of 
the President's budget which was released yesterday by the 
Congressional Budget Office. The President's plan breaks the budget and 
breaks the agreement that we just reached this last year. Worst of all, 
it breaks faith with the American people.
  It took us since 1969, when the first man walked on the Moon, to 
bring the Federal budget into balance. The President's plan will bring 
back deficits in just 2 short years. We should have expected that, 
because the President has proposed some 85 new initiatives costing $150 
billion over the next 5 years.
  In addition, he has proposed increasing taxes to their highest level 
on our society since 1945. Any budget that returns us to the era of 
more taxes, more spending, and deficits, even for one year, is 
unacceptable. I think we treated the President's budget with courtesy 
when it was received on the Hill but declared it dead on arrival, and I 
think CBO's findings should certainly slam the coffin lid shut on this 
ill-conceived plan which threatens to wipe out all the progress we have 
worked so hard to make in bringing down Federal spending and 
eliminating Federal deficits.
  There is an $8 billion surplus in 1998, a remarkable achievement, and 
I think that hopefully we can continue down that track to build on 
surpluses in the future. The other part of the bad news, of course, in 
all this debate and discussion is the fact that even though we are 
operating in the black this year on a unified basis, budgetary basis, 
we still have $5.5 trillion in debt that we have racked up over the 
last several years. We need, I think, again, to put a plan in place to 
retire that debt.
  One of the things that we have looked very seriously at, and in fact 
I have cosponsored, is a plan that has been offered by the gentleman 
from Wisconsin (Mr. Neumann) which would deal with that very issue. If 
we can assist and in a systematic way get the discipline that is 
necessary to reduce

[[Page H898]]

the debt over time, we will also eliminate the $250 billion that we 
spend annually just to pay interest on the debt.
  If we think about the drain on the economy, the drain on the 
taxpayers of this country, to write a check every year through the 
appropriations process before we fund anything else, roads and bridges, 
education, defense, any other priority, the $250 billion comes off the 
top to pay the interest on this $5.5 trillion debt. That is a very 
serious problem and one we need to come to grips with.
  Having said that, I have cosponsored a plan which will address that. 
It does it in a very simple way. First of all, it says that any time we 
run a surplus in this country, that we ought to take two-thirds of that 
surplus and dedicate it to paying down the debt, to retiring the debt, 
and secondly, to restoring the trust funds: the Social Security trust 
fund, the highway trust fund, the environmental trust funds. That has 
to be the priority, first of all, to deal with those issues. Then 
finally, the last third would be used to lower taxes on the hardworking 
people of this country.
  But it basically makes a statement, an assertion, that we will not 
commit ourselves to embark down a path or journey down the road towards 
additional Washington spending and new Washington spending, new 
Washington programs, until first we have taken care of the debt that is 
looming out there, and that is going to choke off future generations; 
that we have addressed the trust fund issues and ensured that Social 
Security will be there, not only for people who depend upon it today, 
but also in the future. Then finally, that we give something back to 
the taxpayers, after all, whose money it is in the first place. I 
believe that is a very logical, commonsensical approach to dealing with 
the potential surplus.
  Furthermore, this plan over time would completely eliminate the debt 
by saying that over the course of the next several years we will not 
spend any more than 99 percent of the revenue that the government 
collects. In other words, each year we will run a 1 percent surplus 
that will be directly applied to the debt, so that over time, based 
upon current economic assumptions, we can, by the year 2026, 
systematically do away with the debt that is hanging like a cloud over 
our country's future.
  So I believe it is a plan that merits the consideration, the debate, 
of this body, and hopefully the support on both sides of the aisle, 
because realistically, I think we have all proven in the past that 
Congress does not have the discipline, short of a plan like this, that 
will enable us to deal with the debt and also to continue to keep 
Federal spending under control.

                              {time}  1615

  Any time in Washington we start talking surplus, we have all kinds of 
people who have ways of spending it. And I think, again, it is 
something that may be a liberal politician's dream to talk surpluses, 
but it should be the taxpayers' nightmare.
  We need to have a plan in place which addresses that not only for the 
short term but for the long term, and this legislation, H.R. 2191, the 
Debt Repayment Act, deals with that very issue.
  Having said that, I also believe that in terms of the longevity of 
Social Security and where we need to be going with respect to that 
program, that we need some serious fundamental reforms. I think for the 
first time in a long time in a bipartisan way we are talking about the 
looming crisis that is ahead of us, and I find that to be very 
encouraging.
  The fact of the matter is, as well, that we also borrow each year 
about $100 billion from the Social Security Trust Fund and use it, 
apply it to the overall budget. It makes the budget deficit look 
smaller. But this year to the extent that we have done that, $100 
billion has been used out of the Social Security Trust Fund to mask the 
true size of the Federal deficit. $650 billion has been borrowed from 
the Social Security trust fund and applied to the overall cost of 
running the government.
  That is an issue that I also think we need to address, and erect a 
fire wall between the trust fund and the general budget so that in the 
future the people that pay into the Social Security Trust Fund through 
payroll tax have an assurance that their dollars are going to be used 
for the purpose they were intended. That should be a matter of practice 
and policy, that we have truth in budgeting and that we have 
accountability from our government and that no Social Security dollars 
are robbed to pay for new Washington spending. I think that is what we 
have been doing these last many years, and that is a practice which 
certainly needs to be stopped.
  Mr. Speaker, as we move into this discussion of potential budget 
surpluses, it is again very important that we deal with the long-range 
issues, the debt, the trust funds. But before we again embark upon 
long-term new spending for government programs, we must do a serious 
evaluation about what is in the best interest of the people in this 
country who have needs.
  As I travel my State of South Dakota, I hear a lot of different 
concerns. I talk to young families, husbands and wives who are trying 
very hard to juggle jobs and schedules so that they can pay the bills, 
pay for day care, think about their children's education, look at 
retirement issues, what they can do to put some aside, and then hope to 
have enough time to see their kids and each other at the end of the 
week.
  I talk to college students who are taking full loads of classes plus 
trying to work on top of that, 40 hours a week in some cases, in order 
to pay for their education. I talk to retired senior citizens who are 
concerned because they see what Washington is doing with the Social 
Security and Medicare programs, and they want to see that those 
programs are there not only for them but there for their children and 
grandchildren.
  I talk to young professionals who are starting out their careers and 
who laugh when asked if they think that Social Security will be there 
for them when they retire. That question was recently asked of young 
people in this country, and the survey results found that more people 
believe in UFOs than believe that Social Security is going to be around 
for retirement.
  We may have today a budget surplus, but we have some serious 
challenges ahead of us and ones which I think we need to come to grips 
with. It is going to take continued fiscal discipline along the lines 
of the plan that I have just been discussing.
  When we look beyond those issues at whether or not, in terms of 
addressing society's needs out there, whether it is child care or 
education or retirement or health care, should we create new 
Washington-based programs to address those. Or should we say, again as 
a matter of fundamental policy, that we believe the people of this 
country are in a better position to make decisions about how to meet 
their needs, and therefore we ought to give more money back to them in 
the form of tax relief. I think that is a very clear choice.
  We ought to allow the people of this country to participate in the 
benefits of a growing economy. When we look at where the American 
economy is today and the tax burden that we place on Americans, as I 
noted earlier in terms of the overall tax burden, entirely in terms of 
tax revenues collected, we are now approaching right at 20 percent of 
the total gross domestic product of our entire economy going in the 
form of tax revenues. The highest level since 1945. That is the 
collective burden.
  How that plays out with individuals and families, when we sit down 
and figure it out, there were some statistics that came out the other 
day which said that over the past couple of decades that the tax burden 
has grown, the collective burden, Federal, State and local, to 38.2 
percent. That is a remarkable number, when we think that 38 cents out 
of every dollar that a family in this country makes is going to pay 
taxes in one form or another.
  Again, I think it ought to be a goal and it has been a goal 
articulated by our majority, the Republican leadership in the Congress, 
that we ought to work toward a 25 percent tax burden. Federal, State 
and local taxes should not exceed 25 percent of a family's income.
  Mr. Speaker, I think that ought to be more than a goal and we ought 
to systematically work to where that becomes a reality. Someone said 
that God only asks for 10 percent, certainly the government could get 
by on two-

[[Page H899]]

and-a-half times that amount, so 25 percent ought to be the goal that 
we strive for.
  Before we go back into the budget wilderness that we have been 
wandering in for the last 30 years, we ought to look at what we can do 
to return some of the dollars that the people in this country who are 
very hard-working and are contributing and making this economy grow, 
how we can give some of that back to them in the form of tax relief.
  Mr. Speaker, I have introduced a couple of pieces of legislation 
which I think are consistent with that principle, and also address the 
issue of tax relief in a way which I think is consistent with what 
certainly is my philosophy and I would hope would be the philosophy of 
most Americans; that is that we ought to allow everybody to participate 
as much as they can in a very broad-based way in the benefits of a 
growing economy. That is one of the principles that underscores our 
legislation.
  Secondly, to the extent that we can provide any form of tax relief in 
this body, that we ought to do it in a way that further simplifies, not 
complicates, the Tax Code. Every time the Congress touches the Tax 
Code, as they have repeatedly since 1986, which was supposed to be the 
tax reform movement to end all tax reforms, we have had some 4,000 
modifications to the Tax Code in this country. More laws, more 
regulations, more rules, more pages of instruction to the point 
that today we have 34\1/2\ pounds of laws, regulations and rules and 
instructions, 480 tax forms. It becomes increasingly more complicated.

  If we could do something that would liberate the people of this 
country, the individuals, the families, the businesses, from the burden 
that is imposed by just the complexity of this Tax Code, I think we 
would create more jobs, we would see the economy continue to grow even 
faster, because it is an incredible drag on the economy to see what we 
do in terms of our tax policy.
  But having said that, let me briefly describe the nature of our two 
tax bills. First of all, we have said that one of the ways we can 
deliver tax relief is by raising the personal exemption. Everybody in 
this country claims a personal exemption and then one for their 
dependents. We would raise that from the current $2,700 to $3,400, 
thereby reducing the taxable income that each individual and each 
family in this country is responsible for.
  If a taxpayer is paying at the 15 percent category and they are a 
family of four, that is going to amount to $400 of tax relief. For 
someone in the 28 percent tax bracket, that is $800 of tax relief each 
year. That is real relief. That allows people in this country to make 
real choices about what their priorities are and how they want to spend 
those tax dollars. If it is on child care, they could buy 12 weeks of 
child care with that, or 16 weeks of groceries. They could make a 
couple of mortgage payments or car payments, or start putting something 
aside for education. That is real relief for working Americans. That is 
the philosophy that we bring to this.
  The second bill is also geared toward the concept of simplifying the 
code, moving more people into the 15 percent tax bracket. It would 
raise the income thresholds at which the 28 percent rate applies today. 
For example, for a married couple that is currently $42,350; we would 
raise that to $70,000. So, in other words, they could make $70,000 
before they start paying taxes at the 28 percent level as opposed to 
the 15 percent level.
  Mr. Speaker, that gives people in this country an incentive to work 
harder, to earn more, to improve their lot in life because they know 
that each time they earn an additional dollar, they are only going to 
have 15 cents taken in taxes as opposed to a higher 28 cents if they 
fall into that tax category.
  What our legislation does is it drops 10 million filers out of the 
higher 28 percent bracket down into the 15 percent bracket, thereby 
lowering their tax bracket on average about $1,200 on average per 
filer. Mr. Speaker, 29 million people in this country would see their 
tax bills lowered as a result of our legislation.
  These are bills that bring real relief and real choices to working 
families in this country. They do it, as I said earlier, in a way that 
delivers relief in a broad-based way. People in the lower and middle 
income categories realize the biggest proportionate share of the tax 
relief, but everybody up through the income structure, rate structure, 
will realize tax relief, and that is significant because it gets us 
away from this notion of targeting and picking winners and losers out 
of Washington.
  I think a big mistake in tax policy in the past is that we try to 
micromanage behavior. We try to say to people if they will behave this 
way or jump through these hoops, that we will reward them. We in 
Washington will reward them by giving them some form of tax relief.
  Our bills, on the other hand, are consistent with the philosophy that 
says that in an equal way, everybody in this country, whether they are 
single or whether they are married or whether they have children or 
whatever their status is, if they are a working person who pays taxes, 
they get tax relief. That is straightforward and simple and common 
sense. It delivers tax relief in a way that is consistent with our 
principles and philosophy.
  Recently I was reading a Wall Street Journal op-ed piece by Charles 
Murray on Friday, February 20, which reinforces this philosophy. What 
he says is, ``The power of incentives to affect behavior is not at 
issue, nor is the power of government to effect incentives. But just as 
the information needed to organize an economy is too complex for 
central economic planners to collect and use, so are the incentives 
that shape human behavior too complex for central planners to engineer. 
The legislators write a law that pushes policy lever A and opens 
spending valve B, and they may indeed produce a measurable behavioral 
output. But it usually has no relationship to the intended output, or 
worse, it is the exact opposite.''
  Mr. Speaker, I think as we head down the road in looking again at any 
kind of tax relief that we might be able to do this year or next year, 
whenever the budget situation that we are dealing with enables us to do 
that, we ought to be looking at tax relief that is consistent with the 
principles that are outlined in our legislation.
  I want to credit the gentlewoman from Washington (Ms. Dunn), who is 
an original cosponsor, in helping me with this legislation. The 
gentlewoman is a member of the House Committee on Ways and Means, a 
member of the House leadership, and we have since that time added 
several cosponsors. We are going to continue to advance this particular 
proposal in a way that again I think will resonate with the American 
people, the people who pay the taxes, and hopefully will draw the 
attention of policymakers here in Washington.
  I would just like to, in winding up today, point out the favorable 
review it is meeting with in my home State of South Dakota. Look at the 
Brookings Register, the editorial, ``In Thune, Taxpayers Should 
Trust.'' I do not think that is a reflection on me, but it is the 
proposal that we have outlined and one that they said is very much 
consistent with principles.
  The Mitchell Daily Republic, ``Thune Tax Plan is Real Tax Relief.'' 
That is the kind of reviews our proposal is meeting with back home. And 
out here, in New York, Investor's Business Daily calls it ``real tax 
relief.'' This is the kind of response that we are meeting with.
  Again, I think it is very, very much in line with where we ought to 
be going in this country in terms of tax policy, again with the long-
term goal in the year 2000 of coming up with a new Tax Code for a new 
century. That is where we ultimately need to be.
  I am going to continue to advocate for tax reform. But until we get 
there, to the extent that we are able to offer tax relief, it ought to 
be consistent with the legislation that we have introduced. I look 
forward to working with other Members of this body to see that this 
becomes a reality.

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