[Congressional Record Volume 145, Number 24 (Wednesday, February 10, 1999)]
[House]
[Pages H574-H575]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




IMPORTANT CHOICES: HOW TO USE EMERGING SURPLUSES IN FEDERAL GOVERNMENT 
                                 FUNDS

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Florida (Mr. Davis) is recognized for 5 minutes.
  Mr. DAVIS of Florida. Mr. Speaker, I want to talk today about a very 
important choice before the Congress and before the United States. It 
has to do with how we use the surplus that has developed in the social 
security trust fund, and in the years ahead, the surpluses that will 
begin to develop elsewhere in the Federal Government if this economy 
continues to be as healthy as it has been.
  I support the President's position that we take the lion's share of 
this surplus in the social security trust fund and use it to pay down 
the debt. Those of us who serve on the Committee on the Budget have the 
job to begin to sort through the fine print on this.
  What is becoming clear is what the President has proposed is 
balanced. What the President has proposed is that as we pay down the 
debt, we will be protecting social security for the retirement of the 
baby boomers in the future. We will be protecting Medicare for the 
future as well.

                              {time}  1445

  The position that we should be taking, the balanced position we 
should be taking is, if we want additional spending as a Democrat or 
Republican for education or other programs, we find a place to cut the 
Federal budget to fund that, but do not use the surplus. Let us pay 
down the debt first.
  If we want to cut taxes, which we should do, find a place in the 
Federal Government to cut spending to support that tax cut, but do not 
use the surplus. Use the surplus to pay down the debt. This can be 
done.
  We did it in 1997 with the Balanced Budget Act. We enacted tax cuts 
of over $90 billion by cutting spending elsewhere in the Federal 
Government, not relying upon the lion's share of the surplus. That 
should go into paying down the Federal debt.
  Let me talk about the very important fact of how this benefits all of 
us at home. As we begin to pay down the debt, we will continue to enjoy 
a very healthy economy.
  Alan Greenspan who has testified before the House Committee on the 
Budget has made it clear that, as the Federal Government borrows less 
and less, as more and more money is available in the private sector, 
interest rates will go down. Interest rates could go down as much as 
two additional points if we continue our course of fiscal 
responsibility and do as the President has advocated, use the lion's 
share of the surplus in the Social Security Trust Fund to pay down the 
debt.
  What does that mean to us as the consumers? Look at the average 
mortgage, about $115,000 in many parts of the country. One is paying 
$844 every month on one's mortgage to keep one's home. If interest 
rates go down two additional points, that could mean a drop in one's 
monthly mortgage payment to $689. That is $155 in one's pocket that one 
did not have beforehand. One did not have to call one's accountant to

[[Page H575]]

figure out how to use the tax code to take that savings. It is money in 
one's pocket every month.
  That is what low interest rates are about. That is what it is about 
when we talk about using the lion's share of the surplus in the Social 
Security Trust Fund to pay down the debt.
  Let me give my colleagues another example. Many children and adults 
in this country have student loans. As interest rates drop in response 
to us paying down the Federal debt, it will have a positive impact on 
people that are working so very desperately to repay their student 
loans.
  In many parts of the country, the average student loan rate is about 
8\1/4\ percent and a balance of about $35,000. There are a lot of 
students and former students in this country that owe a lot of money to 
the Federal Government. If interest rates continue to decline as we pay 
down the debt, one can see as much as a $385 drop per month in student 
loans. That is money in one's pocket. That is better than most of the 
tax cuts one will hear advocated up here.
  We are doing it in a way that is responsible. We are paying down the 
Federal debt. We are protecting Medicare. We are protecting Social 
Security by doing the same thing that each of us does at home, which is 
try to keep our checkbook in order.
  So I support the President's position that we use the lion's share of 
the surplus in the Social Security Trust Fund to pay down the debt. It 
is the right thing to do. It is good for Social Security. It is good 
for Medicare. It will help consumers at home. It will lower interest 
rates.

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