[Congressional Record Volume 144, Number 34 (Tuesday, March 24, 1998)]
[House]
[Pages H1425-H1431]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                             FEDERAL BUDGET

  The SPEAKER pro tempore (Mr. Lewis of Kentucky). Under the Speaker's 
announced policy of January 7, 1997, the gentleman from Minnesota (Mr. 
Gutknecht) is recognized for 60 minutes as the designee of the majority 
leader.
  Mr. GUTKNECHT. Mr. Speaker, I have joining me tonight my 
distinguished colleague, the gentleman from the State of Arizona (Mr. 
Hayworth). We are going to talk for a good portion of our allotted time 
tonight about the Federal budget and principally about where we were 
just 3\1/2\ years ago, where we are today, and a little bit about where 
I think we should go.
  First of all, if I could before I yield to my friend, I would like to 
talk a little bit about what was happening back not so many years ago. 
This is a chart that anybody, and any of the Members who watch us on C-
SPAN from time to time, I am sure have seen. This is a chart that was 
put together by our colleague, the gentleman from Wisconsin (Mr. 
Neumann). What it shows is the budget deficit. This actually is the 
debt. The accumulated debt was growing out of control.
  In fact, there was a study by, I believe, the Congressional Budget 
Office, done just a few years ago, that said that if Congress did not 
get serious about this problem, by the time our children reached 
middle-age they could be paying a total tax rate of over 80 percent 
just to pay the interest on the national debt.
  I tell the people back home and sometimes they have trouble believing 
this, which does not surprise me because I have difficulty believing 
this as well, that the debt has become so large. But right now the debt 
is $5.5 trillion.
  And one of our other colleagues has done some calculations to try and 
explain how much a trillion dollars is; and the way he describes it is 
this, and I believe his numbers are accurate, that if you spent a 
million dollars a day every single day, it would take you 2,700 years 
to spend a trillion dollars.
  Previous Congresses have run up almost $5.5 trillion worth of debt 
that our kids are going to be responsible for. And worse than that, we 
have to pay the interest on that; that is like an entitlement, and it 
becomes the second or third largest single entry in the Federal budget.
  I tell people, as I say, back in my district that every single dollar 
of personal income taxes collected west of the Mississippi River now 
goes to pay the interest on the national debt. That is a very scary 
statistic. And I also remind people, and particularly where I come from 
back in Minnesota we still have an awful lot of farm families; in fact, 
many of the people who live in the cities like Rochester and Mankato 
and Winona and Austin and Albert Lea, they also understand that because 
many of them are no more than one generation removed from the farm.
  But the American dream back in farm country is, very simply, to pay 
off the mortgage and leave the kids the farm. But, unfortunately, what 
has been happening over the last 30 years is that Congress has 
literally been selling the farm and leaving the kids the mortgage. I 
think we all know that there is something fundamentally improper about 
that.
  Mr. Speaker, at this point, I would like to yield to my colleague, 
the gentleman from Arizona (Mr. Hayworth). It is nice to have him with 
me today.
  Mr. HAYWORTH. I thank my colleague from Minnesota for yielding. Mr. 
Speaker, it is good to join him coast to coast and beyond through the 
facilities of C-SPAN.
  There are many different ways to examine this debt. Mr. Speaker, lest 
there are those who join us who believe this is simply a statistical 
argument, I would urge them to think again. Because, as my colleague 
from Minnesota points out, this translates to a mortgage on the future 
of our children.
  A lot of things have changed in the 3 years since a new common-sense, 
conservative Congress came to town. I can

[[Page H1426]]

remember the almost dark humor that was employed that surrounded an 
item that each of us receive here in the Congress of the United States. 
It is our voting card. And the joke, which really was not so funny, 
that went along with this voting card went as follows:
  The people here in Washington, inside the Beltway, said, oh, well, 
you now have the world's most expensive charge card because when you 
received your copy as a Member of Congress, it came with a debt in 
excess of $5 trillion.
  My colleague from Minnesota broke it down for us, in fact, using 
figures that indeed came from the President's budgeteers, to his 
credit. He asked us to predict budgets into the future as this town was 
still held in the grip of a tax-and-spend philosophy; and it was the 
President's own budgeteers who told us if we did nothing but continue 
the cycle of debt and deficit and taxing and spending, then all our 
children could look forward to a future in which they would surrender 
in excess of 80 percent of their income to taxation.
  So what we have to remember is that this debt does not deal with the 
whole batch of zeros attached to a large number; it is not something 
for the green eye shades or the new fancy calculators, but instead is 
something that families have to deal with.
  What do I mean by that? My colleague from Minnesota, who has had a 
versatile time in the real world before coming to Congress, is a 
gentleman who worked as an auctioneer. He understands the challenge of 
family farmers and what goes on on the family farm in his district of 
Minnesota.
  I represent a district in square mileage about the size of the 
Commonwealth of Pennsylvania, incredibly diverse from metropolitan 
Phoenix to suburban Scottsdale and Mesa, and then around rural areas 
from the small town of Franklin in southern Greenlee County, north to 
four corners of the Navajo Nation, west to Flagstaff and south again to 
Florence, there is incredible diversity. But all those diverse areas 
are held together by some basic economic truths, and those truths, 
among them centrally is this notion that as we move to reduce the 
deficit and, ergo, the national debt, as we move to fiscal sanity, we 
help families.

  What do I mean? Well, my colleague from Minnesota is well aware of 
the appearance a couple years ago of Alan Greenspan, the chairman of 
the Federal Reserve, who projected what it meant to balance our Federal 
budget, as we now have done. He said that would mean a reduction 
basically of 2 full percentage points in interest rates.
  Now stop and think, Mr. Speaker, and all my colleagues who deal with 
paying the family mortgage or paying off a loan on a family car or 
paying a student loan, think what a reduction in interest rates of 2 
points means, especially on a 30-year mortgage. We are talking about 
thousands of dollars.
  On a car loan over a span of 5 years, we are talking hundreds of 
dollars. And that money makes a difference. Because, in essence, what 
we pay, if you will, as we continue to generate deficits and have that 
large national debt is in essence a debt tax.
  But my colleague from Minnesota who joined me here in the well of the 
House, as a Member of the new common-sense, conservative Congress in 
January of 1995, is well aware of what has transpired and the progress 
we have made. When we took office on that day back in 1995, the 
budgeteers in this town were saying that the annual deficit in the year 
2002 would be some $320 billion. Today those self-same budgeteers say 
now, in the year 2002 there will be a surplus of at least, at least, 
$32 billion. Imagine what that means to the American people.
  Again, my good friend from Minnesota has the figures, but more than 
that, has the stories of the American people and the folks in his 
district who are coming to grips with this and, by extension, how 
Washington is coming to grips with this challenge.
  Mr. GUTKNECHT. Mr. Speaker, reclaiming my time, I appreciate the 
point that my colleague has made, because I think sometimes when we 
talk about $5.5 trillion and $1.7 trillion and all of this interest and 
all of these numbers and all of these statistics, I think sometimes 
people do sort of tune out and they say, well, you know, that is green-
eye-shade accounting stuff and it does not really matter in my life. 
But the point I make is that the debate about balancing the budget, the 
debate about ultimately paying off that national debt is really a 
debate about what kind of a future we are going to leave to our kids. I 
mean, is it going to be a future of hope, growth, and opportunity, or 
is it going to be a future of debt and dependency?
  We have made some real progress. I want to talk a little more 
accounting talk about what this really means, because sometimes it is 
hard and you have to almost break this down.
  What does $5.5 trillion in debt mean? If you divide that up by the 
number of Americans, 270 million Americans in this country, it works 
out to over $20,000 for every man, woman, and child.
  My wife Mary and I have 3 children. If we multiply our family of 5, 
that means we have a debt hanging over our heads larger than the 
mortgage on our home. Now, we might say, well, but we do not have to 
pay that. Yes, we do. The interest has to be paid.
  Last year we paid an average of about 7 percent interest on that 
national debt. Break that down and it works out to about $7,000 per 
family in interest that has to be paid. And people say, well, I do not 
pay $7,000 in Federal income tax. The average family may not pay that 
much. But one way or another, that has to be paid. And much of that is 
hidden in the price of the products that we pay.
  For example, a grocer buys a loaf of bread; whatever he pays for the 
bread, he has got some costs. He has got to pay salaries and he has got 
to pay overhead, but he also has to pay taxes. And hidden in the price 
of that loaf of bread when the consumer ultimately goes there and buys 
it for his family is the price of this interest bill that has to be 
paid. And that is distributed all through the economy because there is 
one debt that has to be paid. We have to finance that debt.
  So what we are really talking about, for the average family, the 
interest on the national debt equals about the average family's house 
payment. And as the gentleman has indicated, if we began to use some 
fiscal restraint, if we began to do the things that I think the 
American people really want us to do, the good news is not only do you 
preserve a better future for our kids, but we are starting to see the 
benefits right now.
  Real interest rates in the United States since we came to Congress 
have dropped by 25 percent. And we believe that they can drop more. Now 
that is perhaps the best tax cut we could ever give the American family 
because it affects their car payments, it affects their house payments, 
it affects how much that grocer has to pay, it affects everything.
  So we came here and there was some serious problems. And I will never 
forget a farmer in my district, and I think sometimes farmers make 
wonderful philosophers, and we were talking about this debt and we were 
talking about taxation and the old suggestion or the old policy in 
terms of balancing the budget was, I know, we will just raise taxes. 
But if raising taxes had been the solution, we would have had a 
balanced budget long ago. My colleague is a little younger than I am, 
but when I was a kid growing up, my parents could raise 3 boys on 1 
paycheck and part of the reason they could do that was because the 
average family in America sent about 4 percent of their gross income to 
the Federal Government. Today that number is almost 25 percent. And 
when we add total taxes, when we add State, Federal, and local taxes 
all together, the average family spends more for taxes than they do for 
food, clothing, and shelter combined.
  There was a conversation going on here on the floor of the House 
earlier about why so many women have joined the work force. The truth 
of the matter is, a lot of moms have had to leave their families and go 
to work just to pay the taxes. And this old farmer in my district, and 
he said it so well, he said, ``You know, Gil, you know the problem is 
not that we don't send enough money into Washington. The problem is 
that Washington spends it faster than we can send it in.''

                              {time}  2030

  I thought, what a brilliant way to say it. The problem is that 
Washington continues, no matter how much money the American people were 
sending in to

[[Page H1427]]

Washington, they always spent more. I do have some numbers. I used to 
have a chart, I have a chart somewhere. It is on my web site so if 
people want to look it up. But this is a great statistic. In the 20 
years previous to our coming here, Congress spent on average a $1.21 
for every dollar it took in. It really did not matter what the tax 
rates were. Taxes went up a little bit, then they went down a little 
during the Reagan revolution. But Congress tended to spend an average 
of $1.21 for every dollar it took in. That is the bad news.
  The good news is since we came to Congress, that number has dropped 
to $1.01. This year we will actually for the first time, in fact the 
Congressional Budget Office tells us we will actually take in more than 
we spend for the first time since I was in high school. That was in 
1969. We believe that if we continue that kind of fiscal discipline we 
will talk a little more about what that has meant and what we have done 
since we came here; frankly, what we got beat up for in the last 
election.
  Do you remember the discussion? I am sure they ran many of the same 
ads against the gentleman from Arizona that they did against me, saying 
they were going to throw grandma out in the street, that the school 
lunch program would stop, that Medicare is going to be destroyed and 
all these things are just going to come to a screeching halt. And guess 
what? It was not true. We did make some serious changes, though. We did 
reform the welfare system. We need to talk a little bit about welfare 
too, I think, tonight, the good news about welfare reform, and of 
course it has saved money. It has saved a little money to the Federal 
Government, it has saved a lot of money for the States.
  The reason is welfare rolls around the United States have dropped 
dramatically. That is partly because of our reform and it is partly 
because of a stronger economy, and frankly I think the two work hand in 
hand. But because of what we did, because of the welfare reform and 
because of that stronger economy, the really good news is this, not 
just that we are saving money but 2.2 million American families who 
were on the welfare rolls have now moved onto payrolls.
  I want to share a story tonight if I could. I was at a school in my 
district, we were talking to some of the teachers. We talked about 
title 1, we talked about title 3, we talked about some of the other 
school problems. Finally, one of the teachers said, ``Of all the things 
you guys have done, the single most important I think is this welfare 
reform.'' I said, ``Really? Why do you say that?'' She said, ``Let me 
tell you a story about a little boy in my classroom.'' She said, 
``Let's call him Johnny.'' All of a sudden Johnny started to behave 
better. He had a better attitude. He was a better student. He was a 
better kid in every respect. Finally the teacher said, ``Johnny, is 
there something different at your house?'' The little boy said, ``Yeah, 
my dad got a job.'' It is easy for some of us who have had at least one 
job since we were 15, as a matter of fact during a lot of my lifetime I 
have had two jobs. It is easy for us to sometimes forget that a job is 
more than the way you earn your living. A job helps to define your very 
life.
  We have given a certain number of American families just a little 
nudge and moved them off the welfare rolls and onto payrolls. As I told 
people, the real goal of welfare reform was not so much to save money 
but it was to save people. It was about saving families. It was about 
saving children from one more generation of dependency and despair. 
That is just one area we have reformed. We have reformed Medicare and 
other things.
  I yield to the gentleman from Arizona.
  Mr. HAYWORTH. I thank the gentleman from Minnesota. I do not believe 
too much can be said about what welfare reform means. I think part of 
it, the gentleman talked about some of the static, if you will, and the 
disagreement in terms of public policy and, to be diplomatic, the 
efforts by some within the liberal community to paint a false contrast 
of caring. But, Mr. Speaker, the true measure of compassion and caring 
is not the number of people added to the welfare rolls. Quite the 
contrary, it is the number of people who are able to leave to become 
gainfully employed, to take pride in themselves, pride in their 
endeavors and as my colleague from Minnesota points out, there is no 
greater social program than a job, a job where people can work to earn 
a decent wage, to have pride in themselves, to have a portion of the 
productivity and the fruits of their labor, and it does wonders. That 
is what is vitally important.
  So your teacher in the district had it absolutely right. That is what 
I hear in many parts of the Sixth District, that work makes all the 
difference in the world. What we have seen is a change in attitude. We 
have changed the paradigm, in that buzzspeak of the late 1990s, to take 
a different outlook.
  In my district, in the town of Holbrook, a lady named Pee Wee Maestas 
told the same story, how she privately would invite the young unwed 
mothers of her town to come to work at her small restaurant, to have a 
chance to work before there was this official welfare reform, and 
inevitably she told me nine times out of 10 the call would come from 
one of the young ladies about 3 weeks into her work program. The call 
would come, ``Gee, Pee Wee, I really appreciate what you're doing for 
me, but, you see, the government pays me more to stay at home and do 
nothing than to come down and get a job.''
  What we have done is to change that thinking, turn that paradigm 
around, say there is value in work, there is pride in performance, and 
as we measure the true barometer of compassion, it is found in gainful 
employment, where it was said by one of our dear friends from Texas in 
the other body, ensuring that yes, there is a safety net but that that 
safety net does not become a hammock.
  Mr. GUTKNECHT. I think that is the wonderful thing. It is not just 
about welfare reform. It is also about Medicare reform. In fact, most 
Americans are not aware, again I am on the Committee on the Budget, the 
gentleman from Arizona is on the Committee on Ways and Means. Sometimes 
we risk sounding like accountants, but I think sometimes numbers do 
illustrate very powerful points. Something most Americans do not know 
and we need to remind them as often as we can, that 53 percent of the 
Federal budget is what we call entitlements; in other words, things 
that have to be paid, Medicare, Medicaid, Social Security, welfare. 
Those are the 4 largest entitlements, 53 percent. That had pretty much 
been put on autopilot. That happened in Congress back in about 1975.
  The important thing this Congress did when we came here is we said, 
``We've got to get control of entitlements. Because if we don't control 
entitlements, they're going to eat us alive.'' Entitlements were 
growing at something like 10 percent per year at a time inflation was 
only going up 3 percent. This is where we had some very pivotal fights 
here on this floor and ultimately I think that were played out in many 
districts around the United States in the last congressional elections 
where there were ads run that said, you know, if so and so has their 
way, kids are not going to get school lunch and if so and so has their 
way kids are going to get thrown out in the streets and Medicare is 
going to, quote, wither on the vine, which was, I was going to say 
deceptive, but it was downright dishonest.

  The truth of the matter is what we did is we slowed the rate of 
growth of those entitlements, we have dramatically slowed the rate of 
growth. We have encouraged work, we have encouraged personal 
responsibility. Even more important than that, we have encouraged 
families to stay together. The good news is it is working. It is 
working in part because of the kind of faith that Ronald Reagan had in 
the system and in the American people. He believed that if you give 
them just a modest amount of incentive to do the right things; in other 
words, lower the capital gains tax rates by 30 percent, which we did, 
you will encourage people to invest and save for their future. When 
they do that, it means there is more capital to expand businesses. It 
makes it more opportunity for all Americans. If you give people a 
little incentive to get out and work, people will work. People want to 
work. The real tragedy of American compassion was we had been so 
compassionate that we have destroyed people's initiative, their sense 
of personal responsibility, and their desire to build a better life on 
their own.

[[Page H1428]]

  I want to come back to a couple of more charts and if we can, I want 
to talk a little bit about why the American people I think sometimes 
distrust what is happening here in Washington. Sometimes I say to 
myself, why should they not distrust it because there have been so many 
broken promises. Let us give one example.
  Remember in 1987 we had the Gramm-Rudman bill. The Gramm-Rudman fix 
is this blue line right here. Basically they said we will use budget 
mechanisms to slow the rate of growth in Federal spending and by 1993 
we will balance the budget. That is the blue line. Here is what really 
happened. The reason of course is Congress did not have the courage to 
face some of those interest groups, to slow the rate of growth of 
entitlement spending, to eliminate Federal programs as we have, and we 
will talk a little bit about that as well. And so as a result, we had 
the Gramm-Rudman fix but all we got was a broken promise.
  But down here, what has really happened since 1994 we see, the 
elections of 1994. This is what our plan was, to balance the budget. It 
was not a perfectly straight line. We had a 7-year plan to balance the 
budget. Here is where we are. In fact, we have a balanced budget today.
  How has that happened? A couple of things have happened. Most 
Americans know that at least on the revenue side because we have had a 
stronger economy, because interest rates have gone down, there is more 
consumer confidence, there is more confidence on Main Street, there is 
more confidence on Wall Street, the economy is stronger.
  Everybody knows that we have taken in more revenue than we expected 
in our original 7-year balanced budget plan. What most Americans do not 
know is we have actually spent $50 billion less than we said we were 
going to spend in the summer of 1995, when we passed that 7-year 
balanced budget plan. Frankly, I cannot blame the American people for 
not knowing that because the truth of the matter is most Members of 
Congress do not know that, that we have slowed the rate of growth that 
much in entitlements plus we have eliminated over 300 programs.
  I tease people sometimes. I say, ``How is your coffee today?'' They 
say, ``well, it tasted like it always does.'' I said, ``Well, that's 
interesting. We eliminated the Coffee Tasters Commission.'' We 
eliminated a lot of commissions. We eliminated a lot of needless 
government. We have folded a number of programs together. There is so 
much more to be done. The truth of the matter is the more you get 
inside the budget, the more you realize there is still an enormous 
amount of duplication, of waste, of fat in this budget, but we have 
made enormous progress. We have dramatically slowed, in fact we have 
cut the rate of growth in spending almost in half. You combine that 
with a stronger economy and it is relatively easy to balance the 
budget.
  Mr. HAYWORTH. I think what the gentleman says bears repetition, 
because there is a tendency in our fast food, perishable throwaway 
society to forget some events that make up if not current events, then 
rather recent history. While there were many--it was interesting, the 
paradox at work in 1996 in the 104th Congress. There were those who 
attempted to paint what ultimately turned out to be an inaccurate 
picture for political reasons. There were others who were champions of 
the conservative cause who said, ``You haven't gone far enough, New 
Majority,'' and we understood and sympathized with that point of view. 
Yet even with the challenges confronted within our constitutional 
republic and our unique system of government, still what we were able 
to do was to reverse for the first time in the postwar era the notion 
of constant growth of government, not only the elimination of more than 
300 wasteful and duplicative programs and boards of absurdity, if you 
will, such as the Coffee Tasters Commission, but also in the process 
holding on and refusing to spend some $54 billion.
  That is something that cannot be overemphasized, because what that 
signaled to Main Street, to Wall Street, to our friends internationally 
and most importantly to the American people, although sometimes it gets 
lost in the context, was a willingness to say that government has grown 
too large, it has continued to grow out of control, we are going to 
rein in the growth of spending for spending sake. We are going to have 
controlled growth in a variety of areas where growth is not a bad thing 
and we are going to cut it out in those areas where we can, to 
eliminate the waste and fraud that had been so much a part.
  Please do not misunderstand me, Mr. Speaker. There is still a long 
way to go. But that pivotal step in the 104th Congress amidst all the 
wailing and gnashing of teeth, amidst the, shall we say, inaccurate 
political ads that littered the landscape, made a key difference. There 
is no escaping that fact. Indeed, as we look back to the changes that 
brought us to where we are today, I believe it can be argued that the 
strong hand of fiscal sanity from this, the legislative branch, helped 
the American worker succeed and helped show Main Street, Wall Street 
and everyone on every street the seriousness of our endeavor and that 
words were backed up with actions.
  Mr. GUTKNECHT. I just want to remind my colleagues or people who are 
listening that the information we have has all been scored by the 
Congressional Budget Office and is available to them. We are happy to 
share it with any of our colleagues. I just want to come back to that 
very important number, that for the 20 years previous to our coming 
here to Washington, for every dollar that Washington took in, it spent 
an average of $1.21. Now last year it was $1.01. This year we will 
actually have for the first time a surplus. Frankly, I believe the 
surplus is going to be much larger than the Congressional Budget Office 
says it is.

                              {time}  2045

  And it has happened, hatched through a combination of efforts. It has 
happened because we have had the courage to eliminate programs, we have 
had the courage to fold programs together, we have had the courage to 
tackle those entitlements, to reform welfare, to reform Medicare, to 
reform Medicaid and begin to put back on a commonsense course what I 
think the American people have wanted the Congress to do for so many 
years.
  In some respects it is, you know, those of us in Washington and those 
of us with election certificates sometimes want to take more credit 
than perhaps we really deserve. The credit really does go to the 
American people. They have been way out in front of the Congress for so 
many years. They understand.
  You know the average family, this is another thing that I find when I 
talk to regular folks, how they balance their budgets. The average 
family, and you may know this, J.D., the average family in America 
today clips over a hundred million coupons from the Sunday newspaper. 
They sit around their coffee tables, their kitchen tables, and they 
clip over a hundred million coupons out of their Sunday papers, worth 
an average of 53 cents. They watch their pennies, and they make certain 
that they get good value for every dollar that they spend, and as a 
result that is how they balance their budgets every week, and frankly 
that is what they expect from us. They expect us to watch our pennies 
to make sure we balance the budget.
  I want to show another chart here, and this just underscores what we 
have been talking about. This is sort of where we were, this is what we 
have done, and this is where we are going. And I think we need to spend 
a little bit of time tonight to talk about, you know, it is great that 
we finally turned the corner and we are moving towards what I think 
will be a future, assuming the American people do not decide to turn 
back and change course and go back to tax and spend and some of the 
failed policies of the past. Unless the voters decide to do that this 
November, I think there is a very good chance that we will see 
surpluses well into the future.
  Now that is good news, but we have to think a little bit about what 
are we going to do with that. Are we going to start to pay down some of 
that debt? And I have become a supporter and an advocate of a plan--
well, I will show another chart in a minute. Maybe we ought to talk 
about this chart because this is a scary chart, and this is what this 
demonstrates, what we agreed to with the White House; and I think you 
know this, Congressman Hayworth, that last year on August 5, the 
President and the Congress came to a very

[[Page H1429]]

historic agreement, and we put in place spending caps within what are 
called the discretionary accounts on how much we can spend in each of 
the next 5 years. And the blue line represents what those spending caps 
are. The red line, unfortunately, represents what the President has 
proposed in the budget that he submitted to Congress just about a month 
ago. And this is of great concern because over the next 5 years the 
President wants to spend about a hundred--almost $150 billion more than 
we agreed to spend just last year.
  Now worse than that he wants to raise taxes and fees by about $130 
billion, and that is where the battle is going to be fought over the 
next several months as we argue about the budget. Now if we have the 
courage to stick to our agreement, and in fact I have said that I think 
Congress ought to live up to its end of the bargain, even if the 
President does not want to, and we are going to have a fight here on 
the floor of the House very soon about a supplemental appropriation 
bill and whether or not that should be offset with spending cuts 
elsewhere in the budget. I happen to believe that it should. It is 
about keeping faith and it is not just about keeping faith here now 
with the agreement, it is about keeping faith with the American people 
and ultimately with interest rates and the money markets because they 
are watching, are we serious.
  And I yield to my friend from Arizona.
  Mr. HAYWORTH. I thank my colleague from Minnesota, and again I think 
he points out the key issue that confronts us, because there will 
always be those who find themselves susceptible to the roar of the 
grease paint, the smell of the crowd, and the adulation of those for 
whom they can try to find more spending or they can paint an incredibly 
rosy scenario but fail to offer the price tag along with it.
  And indeed, Mr. Speaker, I would argue the reason there is such 
cynicism among citizens of this Nation and so much ``We will believe it 
when we see it'' is because of two factors: No. 1, in so many ways the 
repeated contradictions in policy pronouncements and other actions that 
emanate from the other end of Pennsylvania Avenue, policy with a wink, 
a nudge, a smile, and, sadly, policy that does not equate with 
agreements nor an acknowledgment of reality in very many cases. And so 
given that, coupled with the fact that previous Congresses, as my 
colleague from Minnesota points out, spend an average of $1.21 for 
every dollar in taxation, that explosive combination has led to the 
cynicism there.
  And again, right here on this chart my colleague shows us, again 
based on the numbers from this administration, that, sadly, they are 
willing in almost hauntingly familiar tones, in a very real policy 
sense, to break a commitment.
  There are reasons why within our constitutional republic we have many 
different tensions. We have the challenges of the executive branch and 
the legislative branch and the judicial branch of government, and we 
have different outlooks and philosophies. But when we put aside our 
differences and make a commitment, the American people deserve that the 
commitment be upheld, not swept away in roguish embellishment of 
oratory and a little something for everybody and pet projects based on 
emergency focus groups to focus attention into a type of Nirvana.
  No. What this needs to be based on is the truth, and basic choices, 
and basic agreements and bedrock principles that this Nation should not 
spend more than it takes in, that we should all live within our means, 
that by holding down spending and reaching agreements we could allow 
the American people to hold onto more of their money and send less of 
it here to Washington because after all, Mr. Speaker, that is the 
central truth here. All the money we have talked about, all of the 
figures we have offered tonight, large, small, and in-between, one 
central fact is inescapable; the money does not belong to the 
government, it is not hoarded into the Treasury. The money belongs to 
the American people who voluntarily, although with some reluctance, 
confer it and offer it to the government in the form of taxation.
  We ought to make sure that American families continue to hang onto 
more of their hard-earned money to save, spend, and invest as they see 
fit. Why should a family have to change its plans and priorities and 
make sacrifices so that Washington bureaucrats can make decisions? We 
believe the opposite should be true, that Washington ought to alter its 
behavior and make sacrifices so the American families can realize their 
own dreams and their potentials, and that is the importance of the 
agreement we reached, setting aside some partisan and philosophical 
differences, and that is the very real danger we confront at this 
juncture in our constitutional republic, eerily familiar in so many 
different areas, when some in this city and nationally want to abandon 
commitments they made.

  Mr. GUTKNECHT. If the gentleman will yield back, and I think it is a 
telling point because particularly you get out on the farms where I 
come from and you go to an auction and literally 100,000 pieces of 
equipment are bought or sold, and sometimes all that is really 
exchanged on the day of the sale is a handshake; a handshake, and 
people out there believe that handshake means something. And frankly, 
out there, and without being overly disparaging of lawyers, they tend 
to resent that, the whole notion that something has to be written down 
on paper and that you need a contract, although we have contracts and 
we have attorneys and I do not want to sound--but there is still an 
awful lot of old farmers who believe that a man's word is his bond and 
that when you make an agreement, and I want to remind my colleagues, 
you know, we did not make this chart up. I mean, this is according to 
the Congressional Budget Office. They are nonpartisan, this is not a 
Republican chart. This just shows what they believe we agreed to last 
year on August 5, and then they have overlaid what the President is 
requesting in his budget, and the two numbers are quite divergent. And 
this is really about trust, and it is about faith and it is about 
breaking faith with an agreement that we had.
  The problem, of course, is a lot of people around this town are 
saying well, yeah, but that was then this is now, and the economy is 
booming and unemployment is down and more revenues coming into the 
Federal Government, and we have got to spend more money on all these 
programs.
  But is that not what got us into the mess in the first place? I mean, 
is that not really--the heart of the problem is it is so easy to spend 
other people's money, and it is even easier to spend people's money who 
have not even been born yet. And that is where we got into the problem 
in borrowing against future generations of Americans without their 
consent. And that is why Jefferson warned over 200 years ago that 
public debt was one of the greatest evils to be feared, and this 
represents turning away from the direction that we have been on for the 
last 3 years and saying well, yeah, now things are good, let us go back 
and begin to resume spending normally.
  And we are going to have some really heated debates and fights here 
on the floor of the House and in the Committee on the Budget and the 
Committee on Ways and Means, but I think it is so critical that we keep 
that faith, that we say not only to Americans living today but 
generations of Americans yet unborn that we were serious, we meant what 
we said, we said what we meant; our agreement was we would limit and 
cap spending, and we are going to do the best to keep that cap.
  Mr. HAYWORTH. And it sets up another challenge because as we 
transition from the policies and the politics of debt, if you will, to 
the policies and politics of surplus, that can be fraught with 
challenges as well. We have seen one of the temptations here to say, 
well, there is a surplus so let the good times roll, let us spend as if 
there is a never-ending spending spree.
  And it reminds me, if I can personalize this to a certain degree at 
my own expense and self-deprecation, Mr. Speaker, and viewers from 
coast to coast will note that some would say I have somewhat of a 
robust physique. One of the challenges I face is when I go on a diet 
and I lose 5 to 10 pounds, I celebrate by cracking open a pack of cream 
puffs. That kind of defeats the purpose. And I do not mean to 
trivialize this debate but try to bring it home because it is so easy 
to rush back into old familiar habits that may not be good for us and 
in the process negate the very real progress that has

[[Page H1430]]

been made, and, doubly defeating, rush right back into the failed 
policies of taxing and spending and debt and deficit and create 
conditions that, far from a continued and sustained growth pattern 
economically, lead us back into cycles of boom and bust.
  Indeed, much talk has been proffered around this city of dangerous 
schemes. I can think of no more dangerous scheme than to rush headlong 
back into the failed policies of the past, try to claim everything for 
everybody and promise everything except stronger shoelaces through 
increased Federal spending, and then continue to ask for more and more 
and more of the American people's hard-earned paycheck.
  My colleague from Minnesota, and indeed the delegate from the 
District of Columbia, in the preceding hour, I believe, offer a 
compelling case. The gentlelady from the District was talking about the 
choices of women in the workplace and the challenges of economic 
equality, and certainly I agree with a portion of what she had to say. 
But as my colleague from Minnesota pointed out earlier, one of the 
problems we face today in two-parent households is the fact that both 
spouses ofttimes have to work, not by choice but by necessity, one 
spouse working to essentially pay the tax bills of the family so that 
the other spouse can bring home the paycheck.
  And while we have those conditions right now, we need to look at a 
way again to move forward to cut taxes further. We made a modest start 
last year. I think we will take another step this year, but, again, to 
continue to allow families to hold onto more of their money so they can 
save spend and invest it.
  Mr. GUTKNECHT. Mr. Speaker, I think we need to remind people what 
some of the cynics said. We originally came to Washington and said, you 
know, we are going to limit the growth of entitlements, we are going to 
cut domestic discretionary spending, we are going to put a flexible 
freeze on defense spending, and we are going to cut taxes, and we are 
going to balance the budget.

                              {time}  2100

  The cynics said you cannot do that; I mean, you cannot balance the 
budget. In fact, you used the term earlier, you blow a hole in the 
budget. That is a reckless scheme to want to balance the budget while 
you are kiting taxes, because some of our liberal friends believe that 
it is their money and that Washington can spend it best; the last thing 
we should ever do here in this city is cut taxes on American families.
  But thanks to the leadership of the chairman of the Committee on Ways 
and Means and the leadership here in the House as well as the Senate, 
they said no, no, we are going to balance the budget and we are going 
to cut tax.
  We even had some of our Republican friends who have criticized us 
because the tax cut was not large enough, but I would tell you this, 
for a lot of families in my district have figured out it is $400-per-
child tax credit this year and $500 next year.
  I was in a radio station, and one of the people who worked there, I 
was trying to explain this to. We had a radio town hall meeting. He 
said, wait a second. Let me see if I understand this. I have got three 
kids, and they are all under 17, so you mean I get to keep an extra 
$1,200? I said yes.
  I know to some of our friends $1,200 is not a whole lot of money. But 
to a lot of typical families out there, $1,200 is a lot of money. That 
will help pay for a vacation. That will help pay for an addition onto 
the home. That will help pay for a newer car. It will do a lot of 
things for that family.
  Our friend from Texas, Senator Phil Gramm, one day he really said it 
so well. One of his colleagues said this is about how much we are going 
to spend on children and their education and their health care. He said 
no, no. This is not a debate about how much we are going to spend on 
children or their education or their health care. He said, this is a 
debate about who gets to do the spending.
  He said, I know the family, and I know the Federal government, and I 
know the difference. We all know who can spend that $1,200 smarter. We 
know that that family can.
  It was not just the per-child tax credit. I want to give a lot of 
credit to Senator Rod Grams from my home State of Minnesota, because 
when he first came here as a freshman Member of this House, he made the 
per-child tax credit one of his top priorities. He doggedly has pursued 
that, and ultimately it has become reality. He deserves a lot of 
credit. So I want to at least acknowledge my colleague from the other 
body from my State.
  The other thing we did is we said, you know, for the typical family, 
one of the worst fears that most American families have is when their 
oldest child begins to look at college catalogs. They begin to say, 
wow, I had no idea it was going to cost this much.
  When you are paying 38 percent of your gross income in taxes and you 
have got a mortgage over your head and you have got to pay for all 
these sneakers and everything else it costs to raise kids nowadays, 
most families are not able to save enough money to send their kids off 
to college or technical schools.
  We said there is a real problem there, and that is one area we ought 
to give families another little boost. So we provided the $1,500-per-
child HOPE scholarship. It is going to make it a lot easier for a lot 
of families to send their kids to school and get the education they are 
going to need in an increasingly competitive marketplace.
  So that was not the end of it either. We said we ought to encourage 
families to invest and save for their future. So we gave them almost a 
30 percent cut in capital gains taxes. Guess what? Revenues have gone 
up geometrically because people are investing, people are saving, 
people are selling assets, people are trading, businesses are being 
bought and sold, assets are being bought and sold, farms are being 
bought and sold.
  I will tell you a story of a farmer in my district who lives near 
Faribault, Minnesota. He would call me about every month, and he would 
say, Mr. Gutknecht, when are you guys to cut this capital gains tax 
because, you know, I want to sell my farm, and I have got some people 
who want to buy it, but I do not want to pay all that money in capital 
gains taxes. He said, I believe you are going to cut that capital gains 
tax, and I am not going to sell my farm until you do.
  I think he represented literally millions of Americans who are 
sitting on assets that actually would have been better in the hands of 
someone else, but they did not want to pay that high capital gains tax. 
We lowered the rate, and guess what? Total receipts have gone up 
geometrically.
  Mr. HAYWORTH. Mr. Speaker, as the gentleman from Minnesota tells us 
the story of real people in his district, I could not help but reflect, 
listening to the opportunities for tax relief offered last spring by 
this 105th Congress, taking a look at the opportunities that exist.
  I look at the tremendous number of housing starts, and I look at the 
homes now throughout north Scottsdale, and the East Valley around Mesa 
in the Sixth Congressional District of Arizona.
  I take a look at what has transpired because of capital gains tax 
relief for the average family selling their principal residence and 
moving into another house. A married couple able to have and reinvest 
profits in the sale of a primary residence up to half a million 
dollars, or a single person hanging on and having tax-free profits up 
to one-quarter of a million dollars. Again, for a lot of people, the 
figures are not that high, but they are just as dramatic an 
opportunity.
  And other opportunities that we have opened up in terms of home 
buying. I take a look at the new Roth Individual Retirement Accounts. I 
think about and I reflect back on our early days of marriage when Mary 
and I were trying to buy a home. Yes, I had a conventional IRA or what 
the tax law provided at that time, and I was a private citizen. How I 
wish I had had an opportunity with a Roth IRA to have money invested 
for 5 years in that type of forced savings program that could be taken 
out, penalty free, at the end of 5 years as a down payment on a first 
purchase of a home, what is so vitally important.
  I think about young Americans 5 years hence as we continue to sustain 
this economic growth in part on some very simple commonsensical 
philosophies of tax relief, allowing Americans to save, spend, and 
invest their own

[[Page H1431]]

money, because there is no greater myth ever articulated in this 
Chamber than those who would try to drive the wedge between economic 
stations in life, to claim that tax relief helps only the wealthy.
  Because even as the gentleman from Minnesota told about one of my 
former colleagues in broadcasting, I thought about the young man in 
Payson, Arizona who owns a print shop, who I saw the other week at a 
luncheon, who has four children, who the per-child tax credit will help 
immensely with $1,600 staying in that family budget, and then elevating 
that to some $2,000 on next year's tax return with the $500-per-child 
tax credit.
  Yet, our challenge, Mr. Speaker, is how do we expand this, because I 
will go in other town halls in communities like Maricopa, just south of 
Phoenix in the metropolitan area, and have people come to me and say, 
look, I am not married, I do not have a child, I do not have any of 
those targeted areas that are covered with tax relief right now. What 
about my circumstance?

  And so one of the things we are examining is how to broaden that base 
and how to offer simple, sane, reasonable tax relief to even more 
Americans. And that is one of the challenges we confront.
  But it is vital to remember that these are not the stories of micro 
or macroeconomic incidents in a textbook or even despite the graphic 
nature of these charts that have been presented tonight, Mr. Speaker. 
No, these are the stories of flesh-and-blood families in the American 
heartland who may have studied economics but who know the reality of 
their economic situation, who sit around the kitchen table on a weekly 
basis making those tough decisions that have the most impact on their 
futures, decisions about education for their children, decisions about 
how much to put away, to save, spend, and invest if that is possible, 
decisions about mom joining the work force, ofttimes out of necessity 
rather than choice.
  In this land of the free, we must work to ensure economic freedom and 
prosperity by allowing people that freedom to make decisions based on 
what they feel is best for their family, not on what some Washington 
person feels is best for some Washington program.
  Mr. GUTKNECHT. Mr. Speaker, if the gentleman would yield, I just want 
to go over just a few of the facts. And one of my favorite quotes is 
from John Adams. And he said that facts are stubborn things. And you 
know Winston Churchill said it slightly different. He said, you can 
ignore the facts, you can deny the facts, but in the end there they 
are.
  The facts are these: Since we came here, the deficit has been 
slashed. And for the first time since 1969, we have a balanced budget. 
That, in part, has driven interest rates down by 25 percent. The stock 
market has more than doubled. Eight million new jobs have been created. 
Unemployment is lower than it has been in 27 years. Violent crime is 
actually down to its lowest point in 24 years. We cut taxes for the 
first time since Tiger Woods was 5 years old. That is an amazing thing 
when you think about that.
  We have allowed families to keep and invest more of their money. We 
have made it easier for them to send their kids on to higher education. 
Over 2 million families have gone off the welfare rolls and onto 
payrolls. We have eliminated over 300 government programs.
  Well, the American people expect results. We are a results society. 
We have produced some results. But there is so much more to be done. I 
think we do need to spend a few minutes talking about will we return to 
the old policies of tax and spend, or will we start to take some of 
those surplus dollars that we believe are going to be created in the 
next several years, and are we going to start to pay down some of that 
debt.
  There was an architect from Chicago, and he said something very 
simply but very powerfully. He said, make no small plans. If you think 
about that, the American people have always been big dreamers and big 
thinkers.
  The people who came here, our ancestors, as Winston Churchill said, 
you did not cross the oceans, ford the streams, traverse the mountains, 
and deal with the droughts and pestilence because you were made of 
sugar candy.
  I think the American people have always wanted big dreams and big 
goals. I think we ought to set this goal and this marker out before the 
American people. I think we ought to pay off that $5.5 trillion worth 
of debt in this generation.
  The fact of the matter is, if we will exercise the same kind of 
fiscal discipline that we have exercised for the last 3 years, if we 
will limit the growth in Federal spending to about 1 percent greater 
than the inflation rate, the good news is pay off the debt in 22 years.
  I cannot think of a better thing to leave our kids than a debt-free 
future. It is within our grasp; that can be done. What is the great 
news about that? It means they do not have to pay that $7,000 per 
family in interest that ultimately gets paid today. It means we leave 
our kids a brighter future, and we do what those farmers talked about, 
as I mentioned earlier. You pay off the mortgage and you leave your 
kids the farm. In some respects, that is generational fairness. That is 
generational equity.
  As you pay down that debt, the good news is 40 percent of the debt is 
owed to the Social Security trust fund. So you make Social Security 
solvent again. Congress has been borrowing from Social Security since 
1964. I think, again, we all know that is wrong. We have been borrowing 
from our kids, and we have also been borrowing from our parents. I 
think it has been left to our generation to make things right. So we 
are headed in the right direction.
  I am delighted that you joined me tonight. If you have got any 
closing remarks, we certainly would like to hear them, and we will 
yield to the next speaker.
  Mr. HAYWORTH. Mr. Speaker, I thank the gentleman from Minnesota very 
much. I would simply remind all of us assembled of the observations of 
Abraham Lincoln, who reminded us that you do not strengthen the weak by 
weakening the strong; that you do not enrich the poor by sending 
impoverishment upon the well-to-do; that, indeed, our strength is not 
from finding divisions among us bred from envy; but, in fact, the 
American dream is best summed up by allowing all families the freedom 
to pursue faith as they see fit, to reinvest faith in this remarkable 
grand experiment called the United States, by letting them choose their 
destinies with their economic resources for their futures and the 
future of their children.
  Let us all pledge to do that, no matter our partisan stripe or 
political label. Even though we champion disagreements within this 
Chamber, we will be better off. The American Nation will be better off 
because we recognized these basic truths. Again, I thank the gentleman 
from Minnesota and the American people, Mr. Speaker, for this time in 
this Chamber to discuss these topics.
  Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman from Arizona for 
joining me tonight, and I just want to say that sometimes, as I said 
earlier, we talk about these issues, and we sound as if we are 
accountants, and we talk about numbers and statistics, but in the end, 
this is really about what kind of a country we are going to leave to 
our kids.

                              {time}  2115

  And it is about what kind of a country we are going to have for 
ourselves. Is it going to be a future of debt and dependency, or will 
it be a future of hope, growth and opportunity?
  The good news is we have made so much progress, but we still have 
those challenges. There are people who want to turn back to the old 
policies of tax and spend, but as long as we are here, we are going to 
fight the good fight. We have been making a difference, we are going to 
continue to make a difference, not just for this generation of 
Americans, but for generations of Americans to come.

                          ____________________