[Congressional Record Volume 144, Number 126 (Monday, September 21, 1998)]
[Senate]
[Pages S10640-S10641]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               TAX CUTS AND THE GOOD GOVERNMENT AMENDMENT

  Mr. GRAMS. Mr. President, I rise today to talk a little bit about tax 
relief and the obligation I feel this Congress has to the American 
people in the remaining days of this session.
  I also compliment the Senator from Alabama, who now occupies the 
Chair, for talking about the need to be better stewards of the tax 
money we do collect from Americans today.
  Instead of beginning with the American experience, I will start 
overseas for just a moment, and that is in Japan.
  After years of rapid economic growth, which many called an ``economic 
miracle,'' Japan's economy is now stagnating. To a large degree, the 
sickening Japanese economy has dragged the world economy down with it.
  The U.S. government has been pushing Japan to pursue vigorous reforms 
to boost the economy again. One of the recommended measures is tax 
relief. President Clinton and Secretary of the Treasury, Robert Rubin, 
have repeatedly asked Japan to permanently reduce its income tax. As a 
result, the Japanese government proposed a tax cut of 7 trillion yen, 
but it is now suggested that this tax relief is too small and that 
deeper cuts are needed. I think this is a sound policy and the right 
approach to helping cure Japan's ills and I commend the administration 
for such advice. I just wish they would have that same advice for 
Congress. The question is, if tax relief will work for Japan as it has 
worked for many other countries, including our own during the Reagan 
administration, why do we not we pursue that same policy here in this 
country once again?
  Mr. President, what these two events tell us is, first, the Federal 
tax burden has grown too high, too ridiculous. And second, the best 
solution to maintaining economic growth in this country is tax relief.
  We have debated this issue in this Chamber again and again and the 
conclusion is clear to me: a high tax burden distorts economic 
behaviors. It discourages work, saving, and investment. It slows 
productivity and growth and decreases our competitiveness. Tax relief, 
on the other hand, does just the opposite. It will benefit millions of 
American families and will keep our economy healthy and strong.
  Mr. President, I firmly believe that it is still critical to provide 
meaningful tax relief for the American people this year. The average 
American family today spends more on taxes than it does on food, 
clothing, and housing combined. A typical median-income family can 
expect to pay nearly 40 percent of its income in Federal, State, and 
local taxes. This means more than 3 hours of every 8-hour working day 
are dedicated just to paying taxes. In 1996, an average household with 
an annual income between $22,500 and $30,000 paid an average of $9,073 
for food, clothing, and housing, and paid $11,311 in total taxes. 
Households with incomes ranging from $45,000 to $60,000 averaged 
$16,043 for basic necessities, and paid the tax collector $25,276.
  If the ``hidden taxes'' that result from the high cost of government 
regulations are factored in, a family today gives up more than 50 
percent of its annual income to the Government.
  When the Government takes more, families get less. Between 1989 and 
1995, the typical American family's real income fell by 5.2 percent. 
Most economists point out that the decreased income was the result of 
slow economic growth, a direct result of higher Federal taxes.
  The American taxpayers desperately demand real tax relief and reform. 
They ushered in a new congressional majority in 1994 on our pledge that 
we would provide that relief. While we have delivered on a portion of 
our promises, much work remains to be done. Reforming the tax system 
for the taxpayers who sent us here begins with cutting their taxes. Our 
mission has not yet been completed.
  We should not walk away from our obligation to the American taxpayers 
to pursue a Federal Government that serves with accountability and 
leaves working families a little more of their own money at the end of 
the day. We must pass meaningful tax relief this year.
  In the next 5 years, for example, the Federal Government will take in 
more than $9.4 trillion from the pockets of the American people. The 
Congressional Budget Office has projected that in the next 10 years, we 
will have a $1.6 trillion budget surplus. Even after excluding the 
Social Security surplus, we will still have a surplus of $169 billion. 
The Government has no claim on any surplus because the Government did 
not generate it--it will be the result of the hard work of the American 
people, and it therefore should be returned to them in the form of tax 
relief.
  I agree that reforming the Social Security and Medicare programs to 
ensure their solvency is vitally important. Any projected budget 
surplus should be used partly for that purpose. Yet, I believe strongly 
that the surplus alone will not save Social Security and, therefore, 
fundamental reform is needed to change it from a pay-as-you-go system 
to a fully funded one.
  What truly bothers me, Mr. President, is Washington's continuation of

[[Page S10641]]

its tax-and-spending policies. Despite a shrinking Federal deficit, the 
Government is getting bigger, not smaller. Total taxation is at an all-
time high. So is total Government spending.
  The White House and my colleagues have been talking about fencing off 
the budget surplus to save Social Security, but even as they talk, they 
continue to spend this budget surplus. Before the surplus even 
materialized, Washington had already spent $6 billion of it in the last 
supplemental bill. It is reported that another proposed supplemental 
bill will spend another $18 to $20 billion of this budget surplus.
  Mr. President, when it comes to Federal spending, Washington rarely 
asks how the American taxpayers can afford to give up more of their 
income to Government, and how such excessive spending will affect a 
working family's budget and finances. Equally upsetting is the fact 
that when it comes to tax relief, Washington is always reluctant to 
act. Congress even goes so far as to require the tax cut advocates to 
pay for any tax relief via Washington's PAYGO rule that requires 
increasing taxes in order to cut taxes. Increase taxes on some 
Americans so we can get tax relief to others, but that is the only way 
that the system can work. Nothing is more ridiculous than this 
requirement of the PAYGO rule. We must repeal it so we can shrink the 
size of the Government and we can let working families keep more of the 
money they earn, to spend on their priorities--not Washington 
priorities.
  Washington's tax-and-spend policies have systematically ignored our 
children's future and severely undermined the basic functions of the 
family. We must abandon those policies and help restore the family to 
an economic position capable of fulfilling its vital responsibilities. 
Therefore, we must provide American families with meaningful tax 
relief, allowing them to keep more of their hard-earned money.
  I commend our colleague in the House, Chairman Archer, Chairman of 
the Ways and Means Committee, for his so-called ``90-10'' plan. The 
proposed plan includes many good tax relief measures that will help 
working Americans. I think this is a step in the right direction.
  However, there are two things in the proposal that concern me.
  First, the proposed $80 billion in tax relief over 5 years is just 
too small, compared with the possible budget surplus and total 
government spending.
  By the way, an $80 billion surplus, or $80 billion in tax relief, 
over the next 5 years amounts to about $4 per person per month. That is 
not real tax relief, that is token tax relief. We need to do more.
  It leaves only $30 billion for relief of the $150 billion marriage 
penalty tax, and this means millions of American couples will continue 
suffering from this tax injustice. We can and should do better.
  Second, I do not have any problem at all returning some of the budget 
surplus to the taxpayers. In fact, I have argued repeatedly that the 
budget surplus should be returned to the taxpayers in the form of tax 
relief, Social Security reform and debt reduction. But what bothers me 
is that the proposed plan does nothing to reduce Government spending. 
In fact, we are talking about spending billions of dollars of the 
surplus in a supplemental spending bill this year. I believe we should 
cut the Government's wasteful programs and overhead, and let the 
taxpayers benefit from a more efficient, effective Government.
  In the next few weeks, I will work with my colleagues to improve the 
House tax bill and deliver tax relief at the highest possible levels to 
America's families.
  My final point is that we must pass a contingency plan to avoid a 
future government shutdown, and we must do it this year.
  I have asked both the Senate majority and minority leaders several 
times to honor the commitment they made during the consideration of 
last year's disaster relief legislation to support an automatic CR to 
avoid a Government shutdown. But so far there is little interest in 
this good Government legislation. We need to pass that.
  And here we are again, with just a few weeks left in this session, 
with only one appropriations bill signed into law. Clearly, we will not 
have a budget conference report this year, and I sincerely doubt we 
will complete all the appropriations bills before this fiscal year 
ends.
  So tell me--do you not think we need a contingency plan, something to 
avoid the end-of-session battles that often result in more government 
spending?
  Different priorities on spending and tax cuts often prevent us from 
completing all of the appropriations bills. Competing policy 
differences, particularly during an election year, make our budget and 
appropriations process more uncertain.
  We need a contingency plan to avoid a government shutdown. There are 
essential functions and services of the federal government we must 
continue regardless of our differences in budget priorities.
  Mr. President, I will wrap this up quickly. I know our time is 
running out. But let us not hold the American people hostage because of 
disagreement in Washington. I urge the leadership to support a sizable 
tax cut this year and take up the good Government legislation that 
would prevent a shutdown.
  Thank you very much. I yield the floor. I thank the Senator from 
Idaho for securing this time for us to be able to talk this morning.
  Mr. CRAIG. Mr. President, I ask unanimous consent that the majority 
side be allowed to continue until 1:10.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CRAIG. With that, I thank my colleague from Minnesota for that 
excellent speech. In my opinion, he is right on about the effective use 
of a surplus to grant tax relief and to shore up the Social Security 
system to reform it. Clearly, we have to hold down on the issue of 
supplemental spending.
  With that, I now yield to my colleague from Colorado, Senator Allard, 
to wrap up this special order with his observations as to welfare 
reform--truly one of the great successes of our Republican Congress.
  Mr. ALLARD. I thank the Senator from Idaho for yielding to me to make 
a few comments.

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