[Congressional Record Volume 144, Number 128 (Wednesday, September 23, 1998)]
[House]
[Pages H8509-H8516]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        THE SURPLUS AND TAX CUTS

  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 as the designee of the majority leader.
  Mr. NEUMANN. Mr. Speaker, I rise tonight to talk about a very current 
issue in Washington, D.C. I spent the weekend back in Wisconsin, and 
back in Wisconsin it seemed like when I turned on the news almost the 
only thing I heard about was the Clinton situation.
  I would like all of my colleagues to know that we are paying 
attention, and there is a lot more going on out here in Washington, 
D.C., right now than just the Clinton situation. As a matter of fact, 
we are at a point where we are going to next month, the first of 
October, report to the American people the amount of our first surplus 
since 1969.
  What is going on out here right now, it is almost like a feeding 
frenzy where, since we are seeing this surplus, some people want to use 
the surplus for tax cuts, some people want to use it for spending 
reductions, some people say it is Social Security.
  What I would like to dedicate this hour to this evening is talking 
about what the surplus really is, where it comes from; how we can cut 
taxes and how we have cut taxes in the past; in 1997 we had the first 
tax cut in 16 years, how did we get that done; what is different 
between the discussion today and last year, and how all these things 
fit together.
  I want to start by going way back in history to just help us all 
remember what has happened in our country and how we got into the 
financial problems that were staring us in the face, the fact that we 
have not had a balanced budget, a situation where our government spent 
less money than they had in their checkbook, that has not happened 
since 1969.
  I think before we go on in this, the fact that we are having some 
debates in this community about what to do with budget surpluses, we 
first need to put this into perspective and understand that having a 
surplus is a good thing. It is the first time since 1969 that that has 
happened. In deciding whether we are going to put it all aside for 
Social Security or cutting taxes or repaying debt, this is a discussion 
that could not have even been thought about for the last 30 years. So 
first I think we should give some credit to the people that took over 
in 1995 and led us to control spending, which we are

[[Page H8510]]

going to talk a little bit more about here, but led us to this 
situation that we are right now at today where we are in fact in 
surplus.
  Before we even get there, though, I want to go all the way back to 
1982 and I want to talk about what happened in Washington, D.C., and in 
America in 1982. I brought with me a chart that shows the growing debt 
facing the United States of America. Generally when I look at this 
chart I do not stop at any particular date.
  One can see from 1960 to 1980, the debt did not grow very much. Then 
all of a sudden this growing debt took a sharp turn and it started 
going right through the roof. What happened out here in these years 
that caused this debt to start growing as we can see in this picture it 
did?
  In the early 1980s what happened is the Republicans under Ronald 
Reagan looked at the tax burden in America and they said this tax 
burden is not right, it should be stopped, we are overtaxing the people 
and they ought to be allowed to keep more of their own money. They were 
right. I was in the private sector at that point in time. I was in a 
situation where literally the tax rate got to 70 percent of my earnings 
by October. I was in the real estate business, so if I did not sell any 
houses, I did not earn any money. By October of that year, I started 
paying 70 cents out of every dollar I earned to the government so I 
quit working, and this is a true story, I went pheasant hunting for 
most of the fall because it did not make any sense to work and pay the 
government. The tax rates were too high. Ronald Reagan was right when 
he said tax rates are too high and we need reduce the tax burden on 
Americans.
  What was wrong about it is the way they got the tax cuts passed. 
Because in exchange for passing tax cuts, they allowed increased 
spending, a massive increase in spending. So in 1982, in these early 
1980 years, they did partially the right thing and partially the wrong 
thing. The idea of reducing the tax burden on Americans was the right 
thing. But the idea of getting the votes to pass the tax cuts by 
allowing increased spending, that was the wrong thing.
  We are going to come back to that because that is really where we are 
right here in 1998. We are right on the edge of this whole thing and 
making the same mistake again. We have finally reached a balanced 
budget, finally reached a surplus, and there are many Republicans, 
myself included, recognizing that the tax burden is too high on 
Americans and we want to reduce taxes. The mistake we cannot afford to 
make again is the mistake that was made right back here in the early 
1980s that turned this deficit chart into growth. We can cut taxes if 
we also control spending. If we both lower taxes and lower spending, 
that is good. That is what I came here for, because I think government 
is too big and it spends too much of the people's money. So to the 
extent we can control spending and use the savings from spending for 
purposes of tax cuts, this is a good thing. But what we cannot do and 
what we are on the verge of doing is the same mistake that was made in 
the early 1980s, cutting taxes and getting the votes for tax cut 
packages by increasing spending.
  Mark my words right here and now tonight. Before this fall is over 
and before this Congress leaves, what is going to happen is the tax 
cuts that the House of Representatives wants and can pass are going to 
be rolled into a bill that the Senate wants to spend more money. So we 
are going to be right back in that situation where before this year is 
over, I will make the prediction here and now tonight to all my 
colleagues listening. Before this year is over, the tax cut package 
using Social Security money that the House is proposing is going to be 
rolled into the Senate proposals to spend more money, and before this 
year is over, we are going to be asked to vote on a bill that uses tax 
cuts, cuts revenue, and increases spending.
  I keep pointing back to this turn in our deficit chart, the growing 
debt facing America, I keep pointing back to that year. We need to 
learn from that history lesson. We need to learn that lower taxes are a 
fine thing, but when you lower taxes you also have to control spending. 
Because if you do not, the debt piles up in a hurry.
  I want to talk a little bit more about that debt so we know how far 
we came in these years basically since the early 1980s. The debt today 
is about $5.5 trillion. To translate that into something that is more 
understandable, if you divide the debt by the number of people in the 
United States of America, that is, the 5.5 by the number of people in 
our country, the United States Government has borrowed $20,500 on 
behalf of every man, woman and child in the United States of America. 
For a family of five like mine, I have got three kids and my wife back 
in Wisconsin, they have literally borrowed $102,000 basically over the 
last 15 to 20 years. It was that combination of tax cuts and getting 
the votes for a tax cut package by increasing spending that has led us 
to this mess.
  The real kicker in this picture is down here, because this is the 
legacy we are going to give our children. This is the legacy of our 
generation on the next generation. The kicker is down here. A family of 
five in America today is literally paying $580 a month every month to 
do absolutely nothing but pay interest on this Federal debt. If anybody 
thinks they are not paying $580 a month for a family of five, just 
think about buying those kids shoes in the store. When you go in the 
store and you buy a pair of shoes, naturally the store owner makes a 
profit, we hope the store owner makes a profit, otherwise they are 
going out of business, so you go in and you buy that pair of shoes and 
when you buy the pair of shoes the store owner makes a profit and part 
of that profit gets sent to Washington, D.C., in the form of taxes. In 
fact, one dollar out of every six that the United States Government 
spends today does nothing but pay interest on this Federal debt. That 
is what the mistakes of the early 1980s led us to. The lower taxes were 
a good idea, but getting the votes to pass tax cuts by increasing 
spending, that is a very bad idea. We are right on the verge of that 
again.

  What happened in the 1980s? Well, the deficits grew. They kept 
getting bigger and bigger and bigger. Many people remember the Gramm-
Rudman-Hollings Act. In 1985 under the Gramm-Rudman-Hollings Act, I was 
in the private sector, we were building houses by then, and I started 
cheering. Our government said under Gramm-Rudman-Hollings that they 
were going to balance the budget, that they were going to quit 
overdrawing their checkbook, quit spending our kids' money and get to a 
balanced budget. That was the promise of Gramm-Rudman-Hollings in 1985. 
Then 1987 came along and they said, ``Well, we can't really keep that 
promise we made in 1985, but here's a new promise,'' and they gave us 
Gramm-Rudman-Hollings of 1987. They broke that. Then came 1990, then 
came 1993 and, of course, the infamous tax increases of 1993.
  I brought a chart along that shows what was supposed to happen to the 
deficit under Gramm-Rudman-Hollings of 1987. This blue line shows how 
it was supposed to go to zero. Well, the red line shows what actually 
happened to the deficit. Again that concept of cutting taxes and 
getting the votes to cut taxes by raising spending, which is not what 
it is going to appear like initially out here in Washington, but before 
the year is over that is where we are going to be, that is what 
happened. They promised a balanced budget and we had the deficits.
  I would point out that 1993 came along and those deficits were still 
there. We recognized that we had a serious financial problem facing our 
country. But in 1993 the people that were in Washington at that point 
made the wrong decision. They looked at this deficit and they concluded 
that the only thing they could do is raise taxes on Americans. So they 
raised the gas tax, they raised taxes on Social Security benefits, they 
raised small business taxes. They raised taxes to try and solve this 
problem. That is the wrong answer. The American people did not want 
higher taxes. The American people wanted less wasteful government 
spending. That is really what this is all about. That is what the 
change is about in 1994.
  In 1994, America changed. I did not do it. The class with 73 new 
members out here, we did not do it. The American people did it. Because 
in the 1994 elections the American people said:

       We've had it right up to here with this. We've had it with 
     this wasteful government

[[Page H8511]]

     spending and the idea that every time the government can't 
     control their pocketbook, they simply take more out of our 
     pocketbooks. They collect more taxes.

  It was the wrong answer in 1993. So they sent a new group to 
Washington, D.C., and the idea with the new group, we did not 
understand everything about government because people like myself, we 
had never been in office before, but we understood one simple concept: 
Higher taxes means more Washington spending, and the right answer for 
the American people was not higher taxes but less wasteful government 
spending. That was the fundamental principle that we started on in 
1995.
  I brought another chart with me that illustrates that about as 
definitively as you possibly can. In 1993, the year before the biggest 
tax increase in American history, this is the fiscal year going on, we 
had spending increases that year of 2 percent. We had a growth rate of 
government spending of 2 percent. What does that mean? That means if 
government spent $100 last year, they spent $102 this year. That is a 
growth rate of 2 percent. Well, in 1993 they passed that big tax 
increase bill and look what happened to government spending. The growth 
rate of government spending nearly doubled the following year. Higher 
taxes very simply meant more government spending. It was the wrong 
answer and it could not possibly solve the problem.
  So in 1995 when we got here we said, ``Wait a second, we can't do it 
that way. The right answer is getting government spending under 
control.'' Again you can see in this chart now, fiscal year 1996 was 
the first year that the new Republican Congress dealt with spending, 
you can see how the spending growth rates have now started back down 
again. It is that controlled growth of government spending that has put 
us in the position where we now have these surpluses. The economy is 
strong, no doubt about it, but that strong economy coupled with 
controlled government spending has given us these surpluses. But you 
see how that is the opposite of the 1982 thing. We did not go out and 
all of a sudden just pass a tax cut plan and increase spending to get 
the votes to do it. We got spending under control first so that we 
could get to a balanced budget.
  What about 1997 and the 1997 tax cut plan? Why is it all right to cut 
taxes in 1997 and all of a sudden there is this debate going on in 
Washington whether it is all right in 1998? I brought two sheets of 
paper with me to help illustrate that. I am sure my colleagues are not 
going to be able to see them, but if they call my office they can 
certainly get copies of these. In one hand I have got the tax cut cost 
or the reduced revenue from the tax cut package of 1997. In the other 
hand I have the corresponding spending reductions. We cut taxes and we 
cut spending. If you cut taxes and cut spending, less government 
spending, lower taxes on the American people, this is a good thing. 
This is not a bad thing. This is a good thing. If we can get government 
spending under control and let the people then keep the money in their 
own homes to decide how they are going to spend it instead of having 
that money come out here to Washington, D.C., this is a good thing. 
That is what happened.
  Again I want to emphasize this. The 1997 tax cut cost was about $100 
billion in revenue. The 1997 spending reductions, $127 billion. So if 
you take these numbers and you look at them, we reduced spending, we 
reduced taxes. This is a good thing. Government is too big, it spends 
too much of the people's money and to the extent that we can get to 
lower taxes and lower spending, this is a good thing. This is 1997.
  But it is not, and I emphasize again, it is not 1998. The tax cut 
proposal that is currently out here today is going into the Social 
Security surplus and using Social Security surpluses for purposes of 
cutting taxes. I ran a business out in the private sector. I guess this 
is why I am so adamantly opposed to this idea. In the private sector, 
if you are running a pension fund for your employees, you could not 
possibly put IOUs in the pension fund and use the cash to go out and 
buy a new car for the executive. That does not work in the private 
sector. You would be arrested for that. So what we are suggesting out 
here in Washington is that somehow it is all right to go into the 
Social Security trust fund, that pension fund called Social Security, 
and take that money out and use it to cut taxes.

                              {time}  1845

  That is the wrong answer. Tax cuts are good. The tax cut package that 
the gentleman from Texas (Mr. Archer) wrote is dynamite, it is great. I 
am a hundred percent in favor of cutting taxes provided we 
correspondingly reduce spending. But if we are going to cut taxes by 
using Social Security money, you could not do that in any business in 
America, and government had not ought to be doing it either.
  Now I want to go into detail in the Social Security discussion, and I 
want to make this as clear as I possibly can so that there is no 
mistaking where we are at in the Social Security discussion.
  Mr. Speaker, where we are at now is we were about to start into a 
detailed discussion on Social Security, and remember we have gotten to 
this point, and this is a wonderful discussion. I realize I am in 
opposition to some of my Republican colleagues who would like to cut 
taxes even if it means using some of the Social Security money to do 
it. I realize I am in opposition with them, but before we get into this 
debate with my Republican colleagues and, I might add, some of the 
Democrat colleagues from the other side, I think it is important that 
we give them the appropriate amount of credit, what a wonderful 
opportunity that we have that for the first time since 1969 our 
government spent less money than they have in their checkbook.
  So, before we get into this debate where we may disagree, I think it 
is very important we give the appropriate credit.
  Also on the tax cut package that has been written by Chairman Archer, 
I think it is a tax cut package, and I think in all fairness that he 
should get credit for it. But I also think that we should find 
corresponding spending to reduce so that we are not using Social 
Security money to offset the tax cuts that we are about to pass, and I 
do disagree with some of my colleagues on that issue. Tax cuts are good 
provided they are paid for by spending reductions or they come from the 
general fund surplus. But tax cuts that come from the Social Security 
surplus should not be done, and I feel very adamantly about that.
  Let me go to Social Security, and I am going to go into some details 
tonight that I do not usually go into in this discussion, but for my 
colleagues that might be watching this evening I want to make sure that 
this is clear, and Chairman Archer just asked me that when I do this 
presentation tonight that I make absolutely certain that I clarify the 
differences between us because there are some people on the other side 
of the aisle that are going to use this issue to demagogue because, 
after all, it is an election season.
  So, I want make sure I am very, very clear.
  Social Security this year will collect $480 billion in revenue. It is 
going to pay back out to seniors in benefits $382 billion. Now to put 
this in perspective as to how this thing is working, I would like to 
forget the billions for just a minute and forget that it is Social 
Security, and I would like my colleagues to think about their own 
personal checkbooks.
  If you have 480 bucks in your checkbook, and you wrote out a $382 
check, your checkbook would not be overdrawn, and in fact that is how 
Social Security is working right now. We are collecting more money than 
we are paying back out to our seniors in benefits. Social Security is 
collecting $98 billion this year more than it is paying back out to 
seniors in benefits.
  Now that extra money that they are collecting that is supposed to be 
put away and saved, because you see the baby boom generation people in 
my age group, and there is lots of us; when we go to retirement, there 
will be too much money going out and not enough money coming in, and 
again if we go to the personal checkbook analysis or comparison here, 
if you got yourself in a situation where over a period of years you 
have put these surpluses away into a savings account, and then you get 
to a point you overdraw your checkbook, that is when the baby boom 
generation gets to retirement, we spend too much money and do not take 
enough in. The

[[Page H8512]]

idea is that we are supposed to be able to go to that savings account, 
get the money and make good on Social Security, because you see if we 
do not have that savings account, and we get to this point, and it 
happens in the next 15 years where there is too much money going out 
and not enough money coming in, the question we have to ask is where do 
you think the government is going to get the money from to repay those 
IOUs that are in the trust fund? Where is government going to get the 
money to make up this shortfall in Social Security if we have not put 
the money away the way we are supposed to? And the alternatives, of 
course, are higher taxes, and I mean it is ironic we are here tonight 
fighting about whether we should do tax cuts with Social Security money 
and doing it effectively means that we are going to wind up raising 
taxes in the not distant future to offset the shortfalls in Social 
Security.
  So it just does not make sense to do it. But one option is raising 
taxes; another is to reduce benefits on seniors because, of course, if 
you reduce benefits, then you do not need the money out of the savings 
account. Neither of those are acceptable as we look at what is 
happening in Social Security.
  All right, back to the Social Security analysis.
  They are taking in $480 billion. We are writing checks out to seniors 
of $382 billion. It leaves a $98 billion surplus. This money that is 
coming in comes from a variety of sources, and I brought with me just a 
little bit of discussion here on where those sources are. Part of the 
Social Security money, part of that $480 billion, it is money collected 
out of workers' paychecks. That is the bulk of it. So the largest 
portion of the 480 is money collected out of workers' paychecks, but 
that is not all. You see this surplus has been accumulating over a 
period of years, and there is a whole pile of IOUs sitting off here on 
the side that are supposed to be accumulating interest. So part of that 
$480 billion is interest on those IOUs.
  Now it should come as no great surprise to anybody that the 
government is currently paying the interest on those IOUs with, you 
guessed it, another IOU. So when we talk about this Social Security 
revenue, part of the Social Security revenue is those IOUs and the 
interest on those IOUs. So we have got $480 billion total. It comes 
from workers' paychecks, comes from interest on the IOUs and one other 
significant source, and that is called intergovernmental transfers.
  You see, if you are an employer out there in America, you are already 
providing a portion of the Social Security payment on behalf of your 
employees. Well, the government has got lots of employees. That portion 
of the Social Security payment for the government employees, well, that 
is called intergovernmental transfers. So there is really three sources 
for this $480 billion. One is the money that comes straight out of 
workers' paychecks, one is the interest on the IOUs, and one is the 
intergovernmental transfers.
  Now the debate that is going on here, and I am going to be a little 
more technical than usual on this, but the debate that is going on 
here: the Republicans are saying that we can put all the money that is 
collected from workers' paychecks aside and still have a tax cut. That 
is true. We can put all the money that is coming in from workers' 
paychecks over and above what is being paid back out to seniors in 
benefits aside and still have a tax cut; that is true. But what we 
cannot do is put all the money that is coming in from workers' 
paychecks, plus the intergovernmental transfers that is supposed to be 
going into Social Security and the interest on the savings. So the 
debate that is going on out here is when we look at this Social 
Security revenue, should we count just the money that is coming from 
workers' paychecks, or should we count the money that is coming from 
workers' paychecks plus the intergovernmental transfers, plus the 
interest on those IOUs?
  And again, you know, I am not an expert at this from the government 
side of it, but I can tell you in the private sector if I am looking at 
a pension fund and I look at how much money I have accumulated in that 
pension fund to pay my employees benefits, it would not be acceptable 
in any business practice to say I am only going to count the new money 
going in this year and for the interest on the pension fund I am going 
to write an IOU to the account. That would not work. That interest gets 
paid in real money to any pension fund in America, so I respectfully 
disagree with my colleagues when they somehow indicate that we do not 
have to count that interest on the IOUs or these intergovernmental 
transfers. From a private sector prospective running a pension fund for 
employees you could not possibly get away with having a pension fund 
there, pulling the earnings out, replacing the earnings with an IOU and 
spending those earnings on something different. That is just absolutely 
you could not get away with that in the private sector.

  So again I go back to if it makes sense out there in America, and 
that is the way the rest of the country runs, why in the world should 
we just because we are government work under a different set of rules? 
I think we should go back to the private sector, look at how the 
pension funds are run and do the best we can to do the same things here 
that we would consider acceptable and write off in the private sector.
  All right, back to this picture then. We do have $480 billion total 
coming in for Social Security this year. We are writing out about 382 
billion in checks to our seniors, leaving a $98 billion surplus. The 
problem we have today out here in Washington is that $98 billion 
surplus is deposited directly into, and think of this middle circle as 
the big government checkbook. So government gets this surplus, they put 
the money in the big government checkbook, and they spend all the money 
out of that big checkbook so, of course, there is no money left at the 
end of the year, so they simply write an IOU down here in the Social 
Security trust fund.
  But now this year is a little bit different because you see this year 
we are taking the money, putting it in the big government checkbook, 
but for the first time since 1969, when we get out here and look at the 
checkbook at the end of the year, there is money left. Now the amazing 
thing to me is that our government and what we are doing today is we 
are looking at this 98 billion, we are putting it in our checkbook, we 
are getting to the end of the year and there is a little bit of money 
left out there, and we are going, great, we got money to spend; great, 
we got money to reduce revenue. But the point is if we did not put that 
money in the big government checkbook, we would have zero left in our 
checkbook. It is still balanced; I mean I am very happy to report the 
progress that has been made here. We would still be in balance or for 
all intents and purposes in balance this year, but we certainly do not 
have money left over to do tax cuts with.
  So when you hear this debate unfolding before us and you say should 
we do tax cuts or should we not do tax cuts, the question you have got 
to ask yourself is: Is it fair to take that surplus and use it for 
something, new spending or tax cuts, when in fact it belongs down here 
in the Social Security trust fund?
  Now in my office we have written a bill. It is called the Social 
Security Preservation Act and it would effectively solve this problem. 
What the Social Security Preservation Act does is it simply takes that 
$98 billion and puts it down here in the Social Security trust fund, 
and to most people in America that does not look like Einstein kind of 
thinking. It really is not. In the private sector if I was running a 
pension fund and I had money that was supposed to go into the pension 
fund at the end of the year, I sure as shooting would not put it in my 
government, in my business checkbook and spend the money. I would have 
to put the money down here in the trust fund, where it belonged.
  So what we are doing here is no different than what any company in 
America is doing as it relates to pension. So our Social Security 
Preservation Act would simply take the $98 billion and put it directly 
down here in the Social Security trust fund, and you can see I kind of 
got it walled off. The idea is we do not want that money to wind up 
being spent out of the big government checkbook.
  Now as far as the big government checkbook, and I think this is real 
important in understanding because we are about to move into a new era; 
you see, the Social Security fund has been

[[Page H8513]]

in surplus now for quite some years, and they have been spending the 
money and for the first time we are in a position we could actually put 
it aside, which is the right thing to do. But there is another dynamic 
happening here. This general fund without the Social Security money is 
also about to go into surplus, and that is an entirely different 
discussion. The Social Security trust fund is in surplus. That money 
should not be spent, it should not be used for tax cuts. Social 
Security money should be set aside for Social Security. But when the 
general fund gets into surplus, that is a different story, and we have 
got to start asking ourselves the question now, if we are not using the 
Social Security money, but the general fund is in surplus any way, and 
when we get done at the end of the year, we have got money left in our 
checkbook, what should we do with it?
  I mean after all this money does not belong to Mark Neumann and the 
Members of Congress. This is the people's money. This comes from the 
people's paycheck. It is their taxes that we are talking about. So when 
we look at this general fund, assuming we set Social Security aside, 
what should we be doing?
  And let me just lay out my plan and where I think we should be going. 
I wrote a bill called the National Debt Repayment Act. The National 
Debt Repayment Act says, if we get in surplus in the general fund, we 
use it really for two things. First, we use it to make a payment on the 
Federal debt and we pay off the Federal mortgage much like you would 
pay off a home mortgage anywhere in America. So as we get into surplus 
in the general fund, we first make a mortgage payment on the Federal 
debt. Under our bill we would pay off the entire Federal debt within 30 
years, much the same way as any American might pay off their home 
mortgage.
  What about the rest of it after we made our mortgage payment? Well, I 
think that should go back to the people in the form of tax cuts.

  So you see how this picture can all work together. We can set the 
Social Security money aside and when we are in surplus now, which we 
physically are in Fiscal Year 1999 unless we go into a severe 
recession, and I do think that we should wait and see that we have 
actually got the money in hand before we go spend it, but assuming 
things stay as they are and we are in surplus in the general fund, not 
the Social Security money, in the general fund, if we are in surplus in 
Fiscal Year 1999, I think we should look seriously at doing tax cuts 
with general fund surpluses, and I think we should look seriously at 
starting to repay the Federal debt.
  When you think about this picture for the economics of a country we 
are now saying that we can put the Social Security money aside because 
we are in that position today, and as we go into surplus, we start 
making payments on the Federal debt, we pay off the debt in its 
entirety so we can pass America on to our children debt free, and the 
leftover money we get to use for tax cuts so we can actually reduce the 
tax burden on American citizens.
  That is kind of my vision for what we ought to be doing out here. Now 
how does that relate back then to what the discussions that we are 
having right now? First off, I hear it all the time. In our district 
the AFL-CIO started running ads implying ironically that I support the 
tax cut using Social Security money even after I have given several 
speeches like this on the floor. But at any rate the other side is 
basically implying that we want to cut taxes with Social Security 
money, and at the same time what they are not telling the American 
people is about all these proposals for new spending. And I keep going 
right back to this. It is every bit as wrong to propose new spending 
with the Social Security money as it is to propose tax cuts. But what 
the American people are hearing about, aside from Clinton, what they 
are hearing about is the Social Security money being used for tax cuts, 
and what they are not being told about is this thing called emergency 
spending that effectively spends Social Security money for new 
government spending programs, and they are both wrong.

                              {time}  1900

  One is as wrong as the other.
  I am optimistic that as we move forward, we will move into an 
opportunity to stop both of those things from happening, but it is 
going to be a huge debate this fall.
  For my colleagues that might be watching this evening, watching this 
floor speech, I would reiterate my prediction: That before this fall is 
over, you are going to be asked to vote on a joint package that 
includes $80 billion of tax cuts and at least $80 billion over five 
years of new spending.
  I reiterate where we started the hour this evening, and that is that 
we are effectively going back to 1982. In 1982, President Reagan wanted 
tax cuts, and he was right to want tax cuts, but he got the votes for 
those tax cuts by allowing new spending, and that is exactly what is 
going on out here in 1998. There is such a mess going on in the media 
with, of course, all of the Clinton problems, that what is happening is 
this is being buried below the surface so the American people are 
really not very aware of this at this point in time, that we are about 
to start making the same mistakes that I think we made back in 1992.
  I am optimistic we can get it under control and stop that from 
happening, but it is very, very important that my colleagues engage in 
this discussion with their constituents and that the constituents 
provide that feedback to my colleagues on how they feel about using 
Social Security money for tax cuts or about how they feel about using 
Social Security money for new spending.
  I would hope that what would happen is as my colleagues engage in 
this interaction with their constituents, I would hope in their 
district they ask their constituents how they feel, and I think they 
would find they feel much the same as the people do in Wisconsin.
  Tax cuts are good. No one disagrees with the facts the taxes are too 
high. The '97 tax cut package, and, again, I reiterate, we think of the 
tax cut package, here are the tax cuts, here are the spending 
reductions that went with them, lower spending, lower taxes, this is a 
good thing, no one disagrees with that.
  But when you ask the other question, when you ask the question, and I 
have seen all the poll numbers floating around Washington, D.C., the 
Republicans have one set, the Democrats have a different set, but I 
would like to encourage our pollsters to start asking the question that 
I ask to normal typical people, which, by the way, all tell me they 
never get these poll calls, but I think what they ought to start asking 
is, okay, you support tax cuts, and I think you will find most people 
believe taxes are too high and they support tax cuts. But then you 
ought to ask the next question: Is it all right to use the Social 
Security money for tax cuts? I think you are going to find a dramatic 
answer ``no.'' I think it is our responsibility to see to it that we 
start treating Social Security properly.
  One more thing before I end this hour this evening that I would like 
to talk a little bit more about, because I found when I traveled 
Wisconsin, there are so few people talking about the tax cut package 
that is already passed. It is like there is this frenzy out here, it is 
election season, we have to pass another tax cut package. When I go 
around Wisconsin, most of the people do not know about the package 
passed already. So I would like to stop talking for a minute about what 
we might do this fall and talk about what has already happened and what 
has already been passed into law.
  Last year, 1997, we passed a tax cut package for middle income 
Americans. When middle income Americans do their tax returns next 
April, they are going to find that they get a $400 per child tax 
refund. This is not an additional deduction or anything like that. You 
do your taxes, you get to the bottom line, and when you get to the 
bottom line you get $400 back in the form of a refund for each child 
under the age of 17.
  If you have a college student, and costs of college are astronomical, 
it is very difficult for middle income families to pay for college 
today, if you have a freshman or sophomore in college, you get to the 
bottom line on your taxes and subtract 1,500 off. You get literally a 
tax-free fund of $1,500 to help pay college tuition. If you are a 
junior or a senior, it is 20 percent of the first $5,000, but basically 
it is $1,000 for most middle income families.

[[Page H8514]]

  Let me put that in perspective. For a family of five in Janesville, 
Wisconsin, with two kids at home and a freshman in college, they would 
expect a tax refund of $2,300 next April. This is real money. We are 
talking middle income, $50,000 a year family in Janesville, Wisconsin, 
with two kids at home and a freshman in college, they are going to get 
a $2,300 refund next year.
  I will tell you, this is not really about just the money. It is not 
about money. It is about those families having the opportunity to spend 
more time with their kids, because, you see, when they keep that 
$2,300, they might be able to make a choice of not taking an extra job, 
and when they do not take the extra job, they have more of an 
opportunity to spend time with their kids and their families, and that 
really is what the tax cuts are all about.
  Then I hear well, but that is only for families with kids, Mark. What 
did you do for the rest of us?
  They do not know at this point, some people know that the capital 
gains tax has been reduced from 28 to 20, and it is going to 18. That 
has already passed into law and is on the books. Some people, 
especially our young people, and some middle income people my age, 
especially when they get to be empty-nesters, when you turn 45, 46, 47, 
a funny thing happens, when your kids start leaving home to go to 
college or maybe they get married and start their own families, all of 
a sudden you realize you are a full generation now closer to retirement 
yourself.
  We start looking at these empty-nesters and we start saying, what is 
happening with empty-nesters? A couple things happen. One is many of 
them sell their home and buy a smaller home, that is one, and another 
thing is they start saving money for their own retirement.
  There are two significant changes passed last year. The first is the 
Roth IRA. For those empty-nesters, that are now with the kids in 
college or out of college even starting their own families, and they 
are thinking about their own retirement, those empty-nesters can now 
put $2,000 each into an account; the interest accumulates tax-free all 
the way to retirement; and when they take the money out at retirement, 
there is no taxes to pay. So they can start saving in a much better way 
for their own retirement.
  One more thing on the Roth IRA that I think is real important, 
because I saw it with my own family, I have a 21-year-old son who 
started his own Roth IRA. The Roth IRA for young people is very, very 
important because it allows them to put money away that they can later 
take out tax-free to either buy a home or continue their education.
  So when my Andy literally gets out of school and decides it is time 
to buy his own home, the money he put into the Roth IRA, whatever it 
has earned, he can take it back out tax-free and use it to purchase his 
first home, up to $10,000, or he could use it to return to college as 
well. So that Roth IRA is very important for the young people, it is 
also very important for the empty-nesters starting to think about 
taking care of themselves in their own retirement.
  But there a second thing that I mentioned with the empty-nesters 
happening to lots of people between 45 and 55. That is that their home 
that they had when they had their kids is too big, so they buy a 
smaller home to now maybe help save additional money as they move 
toward retirement. There is no longer any Federal taxes due on the sale 
of virtually any home in America. There is a way-high like $500,000 top 
end cap on this, but if you sell a home for less than the $500,000 
number, virtually all homes in Wisconsin, if you sell a home for less 
than that, there is no Federal taxes due. So if an empty-nester makes 
the decision to sell the larger home and move into a smaller home, 
there is no taxes due when you sell that house.
  One more thing. For senior citizens who may have made that decision 
in the past, they sold that larger home and moved into a smaller home, 
they took the onetime age 55 exclusion which would have allowed them to 
avoid paying taxes at age 55 on a certain amount of the profit they 
made only their home. For our senior citizens who sold their home, took 
the one time exclusion and bought another home, when those seniors make 
the decision to sell their home again now, there are no taxes due.

  So this tax cut package of 1997, very, very few people even know what 
was in it at this point in time, and I think what we should be doing, 
to my colleagues that are listening this evening, is rather than make a 
decision to cut taxes using Social Security money, let me give you my 
first choice. My first choice would be to do the tax cuts, find 
corresponding spending reductions, so we have less spending and less 
taxes. That would be my first choice.
  But if we find that this body between the House and Senate does not 
have the will power to find the corresponding spending reductions in 
order to reduce taxes, if we do not have that willpower today, and, by 
the way I would do it in a heartbeat myself, but it takes 218 votes to 
pass these things, so if we do not have the will and we do not have the 
votes to find the spending reductions, for goodness' sake, let us not 
go and cut taxes using Social Security money. That is the wrong answer.
  Let us just give this thing a little chance. Let us talk about the 
tax cuts of '97, let us let America know what we have already 
accomplished in reaching a balanced budget. Let us let America know we 
have actually takes passed a tax cut package that going to 
significantly impact them. Let us let our country know about the 
improvements that have been made in Medicare, where diseases and 
testing for diseases that were never covered in the past are now 
covered, and how we save money by doing things like testing for 
diabetes ahead of time, instead of making the senior get sick before 
Medicare kicks in and covers that.
  Let us get that information out to the American people during this 
fall, as opposed to going ahead and doing something that I think 
repeats the mistakes of 1982, and that was decreasing taxes effectively 
using Social Security money to do it. Decreasing taxes while we 
increase spending is such a bad precedent to set and that is not what 
we came here for in 1995. That is not what the American people elected 
us to do. I sincerely hope as we look at this fall and we look at the 
days ahead of us this fall, I sincerely hope we make the right decision 
and do not allow that to happen.
  I would just like to conclude with my vision of where I hope we go as 
we move forward. I think from the economic side of a vision for the 
future of this country, I think the first thing we need to do is make 
sure that Social Security is safe and secure for our senior citizens.
  We talked about the Social Security Preservation Act. That extra 
money coming in for Social Security, this needs to be used for Social 
Security. It needs to go into a safe, secure savings account for our 
senior citizens. That is goal one.
  Goal two: This debt that we have accumulated, we need to start making 
payments on the debt. The National Debt Repayment Act would repay the 
Federal debt, much like you would repay a home mortgage over a period 
of 30 years. So goal two for the future of this country, wouldn't it be 
great if our generation, while we are still in the work force, could 
pay off the bills that we have run up over the last 15 years and give 
America to our children absolutely debt free? Remember, that means that 
you can simply reduce the tax burden by $1 out of every $6 simply by 
not having the debt, because that is how much the interest on the 
Federal debt costs today.
  So the second goal that I would make on the economic side, let us pay 
off the Federal debt and leave our children the legacy of a debt-free 
Nation, where they do not have to pay $580 a month to do nothing but 
pay interest on the Federal debt.
  The third goal, and I think it is equally important, the tax burden 
today is nearly 50 percent higher than it was a generation ago. When my 
parents had me 40-odd years ago in the fifties, the bottom line was the 
tax burden then was about 25 cents out of every dollar they earned. 
Today that number is all the way up to 37.
  So I keep asking this question, what is it that government is doing 
today that is so much more important that they did not have to do 
before, that my parents were doing for themselves back in the fifties 
that now government can do better than my parents could do for 
themselves back in the fifties? What is it that would allow your 
government

[[Page H8515]]

to collect this extra 12 cents on the dollar, forcing so many second 
and third jobs in our families all across America?
  So when I look at our goals as we move from this generation forward, 
I think we need to get the tax burden down to where it was in the 
fifties, not more than 25 cents out of the dollar at all levels of 
taxation, state, Federal, local, property taxes, the whole shooting 
match, not more than 25 cents out of the workers' paycheck out of a 
dollar should be used for taxes. So that is the economic side.
  On the social side, I think the most important issue facing America 
today is education. We look at our kids and where they were once up 
here ranking in the world, we are now down in the twenties, depending 
on which study you look at, as to where we rank in the world. And, you 
know, government's answer to this education problem has been hey, I am 
out here in Washington and I know how to educate your kids, so I am 
going to start a new government program; and when I get done, because I 
am in Washington and know how to educate your kids, education will 
improve.
  Well, education did not improve. Government started 760 different 
programs with a course of bureaucracy to go with every one of those 760 
programs, and our kids just kept dropping in the rankings more and more 
and more.
  The reason they kept going down in the rankings is because every time 
government takes a responsibility away from the parents, the parents 
have less say in the education of their kids, and the less the parents 
are involved in that education, naturally the poorer the success rate 
with education.
  So I think as we look at this education problem, the right answer is 
to do everything we can to get the Federal Government out of the way 
and return the power of education to decide what the kids are taught, 
where it is taught, and how it is taught, that needs to be returned to 
our parents, to our teachers, to our communities, to our school boards, 
and not be controlled out here.
  There is an interesting side benefit from this, and we voted on this 
bill last week. If we could get that money back to the control of the 
local schools, and we get these bureaucracies, because, remember, 760 
different education programs, 760 different bureaucracies, all the 
bureaucrats getting paid before any money gets to the classroom to help 
the kids.
  If we could require that 95 cents of every dollar that the Federal 
Government spends on education actually winds up in the classroom, it 
would mean there would be an additional $9,000 for every school in the 
country without raising taxes open the people, $400-plus for every 
classroom in America if we just get the Federal Government out of the 
way. That money today is paying government bureaucrats in Washington.

  Again, I just keep going back, I almost think of Washington people 
kind of grabbing their coat and saying well, I know better about 
education than all you people out there in America. Why in the world 
would anyone believe that just because you are here in Washington, you 
know better how to educate Wisconsin kids than people in Wisconsin do? 
It just makes absolutely no sense to me.
  So when I look at the education, how we are going to fix the problem, 
get control of education back in the hands of the parents, let us let 
our parents decide what the kids are taught, where it is taught and how 
it is taught, there is a huge by-product if we can do that.
  We looked to the study of thousands of teenagers, and what we found 
was not unexpected. Some had drug problems, there were crime problems, 
there were teen pregnancies, there was teen smoking, but there was also 
a whole mess of good kids. There was a whole bunch of good kids that we 
found. So we started looking at the difference between the ones that 
had crime problems and the ones that did not; the ones that had drug 
problems and the ones that did not; the ones that had teen pregnancies 
and the ones that did not; and teen smoking, and the list goes on.
  The single most important factor in determining which group these 
kids are going to be in, and, again, this does not come as a surprise, 
it is the amount of involvement of the parents in the kids' lives.
  So when we look at our social problems facing America, if we could 
solve the education problem, or at least move in the right direction by 
reempowering our parents to be more actively involved in our kids' 
education, we would also see significant improvement in areas of crime, 
drugs, teen pregnancies and teen smoking.

                              {time}  1915

  One other thing on the social side that I think should be mentioned, 
today we have a practice in America called partial birth abortions. The 
Senate just voted last week to not override the President's veto of a 
partial birth abortion ban.
  Many people in America still do not know exactly what a partial birth 
abortion is. This is not going to be anywhere near as graphic as what 
we have seen about the President, but I do think it is important we 
understand what it is.
  In a partial birth abortion, it occurs as late as the 7th, 8th, or 
9th month of a woman's pregnancy. The child is partially delivered feet 
first, all the way up to the head. The delivery is stopped, the child's 
life is ended, and they then complete the delivery. Remember, just 
seconds more on that delivery and the child lives. We are talking about 
a healthy baby whose life is ended just before it takes its first 
breath.
  Folks, I think when we look at America, this partial birth abortion 
issue, it is not about Republicans or Democrats or even pro-choice or 
pro-life. Many pro-choice Democrats voted the same way as pro-life 
Republicans like myself to end the practice of partial birth abortion.
  We can have this other abortion debate, and I at least understand, I 
do not agree with, but I understand the other side in the abortion 
debate. But when we talk about partial-birth abortions, it says 
something about us as a Nation. If we are going to allow this sort of a 
practice to continue, what does it say about America as a country? What 
does it say about us as a people? That is why we need to keep at that, 
on the social side of problems facing this country, and we do need to 
end partial birth abortions.
  Let me paint this picture and just kind of wrap up tonight with a 
total picture, here. If we can pay down the Federal debt, the 
government no longer needs to pay the interest on the debt. That 
interest money makes it easier to put the money away for Social 
Security that should be put away so our seniors are safe. They get up 
in the morning knowing their Social Security is safe. It also makes it 
easier to lower taxes, because we do not need the interest money. That 
is $1 out of every $6 the government is spending today. It makes it 
much easier to lower the tax burden on all Americans.
  Let us think about lowering the tax burden for just a minute, because 
those ramifications are great. When we lower the tax burden, families 
can make decisions to not take second and third jobs, because they will 
be keeping more of their own money, rather than go out and earn that 
extra money they were sending to Washington before.
  As we lower the tax burden, parents will be able to make the decision 
to spend more time with their families, and when they spend more time 
with their families, hopefully they are actively involved in their 
kids' education. So we have reempowered the parents to have control of 
their kids' education, what they are taught, how it is taught, and 
where it is taught. They now have more free time.
  As we reduce this tax burden, they are not forced into the second, 
third, and fourth jobs, so they are more involved in their kids' 
education. It solves the education problem, or at least moves in the 
right direction of solving the education problem.
  Of course, the by-product is that those other social problems we 
mentioned, we expect to see lower crime rates, less drug use, fewer 
teen pregnancies, less teen smoking.
  When we put this picture together, we pay off the debt, no interest 
payments, it is easy to put money away for social security. Lower taxes 
empowers parents not to have to take a second and third job. It puts us 
in a position where we can now start seeing solutions to social 
problems, not by Washington mandates or somebody out here grabbing 
their jacket and say, I

[[Page H8516]]

know how to do it, but rather, empowering parents to be actively 
involved in the kids' lives.
  The greater involvement by the parents in the kids' lives, the 
farther we move down the road towards solving the social problems 
facing our country. That is how we spend the majority of our time.
  I should conclude by saying I am not so naive to think that I or 
somehow somebody in this city or any of my colleagues can wave a magic 
wand of some sort and say, okay, it all happens. I am not that naive.
  But when we start thinking about goals for a generation, paying off 
debt, restoring Social Security, reducing the tax burden so parents can 
have more time with their families, improving the involvement of 
parents in the education process, and as parents are more involved in 
their kids' lives, lower crime rates and fewer drugs, fewer teen 
pregnancies, those are the goals we need to be working for as a 
country.
  We need as Americans to focus on a positive bright light out there, 
and start looking again as to what we can do for the good of the future 
of this country over the course of the next 5, 10, 15, 20 years, over 
the course of the next generation.

                          ____________________