[Congressional Record Volume 144, Number 144 (Monday, October 12, 1998)]
[House]
[Pages H10643-H10644]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              WHO GETS THE CREDIT FOR THE BUDGET SURPLUS?

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Colorado (Mr. Bob Schaffer) is recognized for 5 minutes.
  Mr. BOB SCHAFFER of Colorado. Mr. Speaker, last week the Treasury 
Department announced that the Federal budget is in surplus for the 
first time since 1969. Only 2 short years ago the President had 
submitted a budget with $200 billion deficits as far as the eye can 
see, as many will recall.
  What happened? There are a lot of Americans who do not care much who 
gets the credit for the current fine state of our economy, and then 
tend to take the President at his word when he takes the credit for the 
budget surplus we have at least achieved.
  But it is important to understand how we got here so that we may 
continue on the path of sound economic policy in the future. When the 
country was faced with large, chronic deficits at the beginning of the 
1990s, Congress faced a choice. To cut the deficit, lawmakers 
essentially had two choices, cut spending or raise taxes.
  President Clinton and his liberal allies in Congress naturally chose 
to raise taxes. Congress at the time was still under the control of the 
Democrat party, and so President Clinton was

[[Page H10644]]

able to pass the largest tax increase in American history. Republicans, 
on the other hand, wanted to reduce the deficit by cutting spending.
  Republicans believe that government is too big; in fact, way too big. 
They believe that Washington wastes too much of the taxpayers' money. 
One would think that this is an obvious point. After all, even the 
President himself said, in his 1996 State of the Union address, that 
the era of big government is over. If only that were true.
  We can see now that this declaration was nothing more than words. Big 
government is alive and well; in fact, bigger than ever. In fact, the 
Democrats have come back with still more ways to increase the size and 
power of the government every year since.
  While we can say that government is not quite as big as it would be 
if the Republicans had not taken control of Congress in 1995, the truth 
is that government continues to grow. Any attempts to cut government, 
no matter how wasteful and counterproductive the program, the liberals 
will immediately attack them as extremist or mean-spirited.
  It has never occurred to them that it is perhaps mean-spirited on the 
part of politicians to have so little respect for the working man's 
labor that Washington takes between one-fourth and one-third of the 
middle class family's paycheck just to pay off Uncle Sam.
  So that leaves us with the question, how did we go from $200 billion 
deficits as far as the eye can see only 2\1/2\ years ago to the budget 
surplus we now enjoy. It is true that there have been some reductions 
in spending, but almost all of them have come out of one place that it 
should not have come out of, the Pentagon.
  Defense spending is now dangerously low, and our military forces are 
not what they used to be, but liberals, in their boundless faith in 
human nature, ignore history and simply do not believe in the 
fundamental precept of peace through strength.
  As for other spending, Republicans did manage to limit the number of 
new spending initiatives by President Clinton and the Democrats over 
the past few years. But the primary reason why the budget is in surplus 
today is because revenues are way, way up.
  Liberals will point to the President's 1993 tax increase as the 
reason revenues are up, hoping that we will not examine the budget 
tables to see if in fact it is true. Revenues are up primarily from the 
number of people who are taking advantage of low tax rates on capital 
gains, the part of the economy that is the lifeblood of a dynamic, 
growing economy.
  President Reagan cut the tax on capital gains and the Republicans cut 
it again just last year. Savers, investors, entrepreneurs, and other 
job creators have taken advantage of that. The economy is benefiting 
from jobs. Jobs are being created and revenues have soared. That has 
been the primary reason why the budget is now in surplus, when it was 
deep in red only a few years ago.
  I would invite any of my Democrat colleagues who dispute these 
findings to come forward and show me otherwise. Perhaps the liberals 
have access to another set of government documents with a different set 
of statistics, but if they use the same Treasury figures that I do, 
they will have to admit that the Reagan tax cuts and the Republican tax 
cuts are the most significant reason behind our current economic boom.
  With all due credit to Alan Greenspan, chairman of the Federal 
Reserve, for his outstanding stewardship of monetary policy, we should 
mostly thank President Reagan for turning around an economy that was in 
the ditch. We are still benefiting from his decision to make the United 
States a low-tax, low-regulation economy, and thus able to compete in 
the world better than any other.

                              {time}  1945

  The Republicans forced President Clinton to renounce his own budget 
with $200 billion deficits as far as the eye can see. We are grateful 
that he at least accepted the need for the government to balance the 
budget and put its financial house in order.
  We would like to encourage him to continue on this path. Especially 
if he accepts the view that Washington can still afford to cut 
spending, cut taxes, and make good on its promise that the end of big 
government is over.
  The SPEAKER pro tempore (Mr. Blunt). Under a previous order of the 
House, the gentlewoman from California (Ms. Pelosi) is recognized for 5 
minutes.
  (Ms. PELOSI addressed the House. Her remarks will appear hereafter in 
the Extensions of Remarks.)

                          ____________________