[Congressional Record Volume 145, Number 105 (Thursday, July 22, 1999)]
[Senate]
[Pages S8976-S8980]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                TAX CUTS

  Mr. DORGAN. Mr. President, we now turn to another agenda in the 
Senate. By direction of the majority party, we turn to the subject of 
tax cuts. It is a corner that we have navigated before in this 
Congress. I was thinking that it might be useful to have had Daniel 
Webster in this Chamber to say to Members, as he said many years ago: 
``Necessity compels me to speak the truth rather than pleasing things. 
I should indeed like to please you, but I prefer to save you, whatever 
be your attitude toward me.''
  It certainly must be pleasing to say to constituents that we would 
like to give tax breaks as far as the eye can see, upwards of a half a 
trillion, three-quarters of a trillion, and some say $1 trillion. What 
a wonderful thing.
  This country is doing quite well. Its economy is moving ahead with 
significant health. Unemployment is way down. Inflation is way down. 
There are a lot of things in this country to be thankful for.
  Part of the reason to be thankful for that is, in 1993, some of us in 
Congress had the vision to steer this country to a different course. If 
we remember, in 1993, we were facing a $290 billion Federal deficit--
$290 billion. The economists told us that for the rest of the decade we 
would have anemic economic growth and deficits.
  We passed a piece of legislation in this Congress. I voted for it. I 
was proud to do so. When people said: We're

[[Page S8977]]

going to blame you for voting for that, I said: Don't blame me. Please 
give me credit for it. I won't run away from that vote.
  It was a tough, hard vote. It increased some taxes, mostly on those 
in top 1 or 2 percent, and it cut some spending. It was tough economic 
medicine, but it signaled to the country we were going to put this 
country back on track with a responsible fiscal policy that would lead 
someday to a balanced budget.
  We passed that by one vote in the House and one vote in the Senate--
one vote. We did not get one vote from the majority side--not one. We 
provided all of the votes to pass that legislation at that point. We 
were widely criticized for it. In fact, we had Members on the other 
side predict that it would lead to a depression; it would lead to 
massive unemployment; it would collapse our economy; it would be awful 
for our country.
  This country has had unprecedented economic growth, declining 
unemployment and low inflation. There are more people working and there 
is more home ownership. And now we find, instead of a $290 billion 
budget deficit, budget surpluses ahead.
  What happens at the first sign of surplus from this bridge on the 
ship of state? At the first sign of surplus, the majority party decides 
it is time to abandon the bridge and go down and get the champagne, pop 
the corks and pass out money to everybody--well, not to everybody--pass 
out money to all the friends from the ship's crew.
  Let's talk about what all this means.
  They rely on some vision for the next 10 and 20 years that we will 
have surpluses forever. Of course, this comes from economists that 
cannot remember their home phone number--telling us what is going to 
happen 3, 5, and 10 years from now. Those in the majority party say: 
Because we have all of this good economic news, although we didn't 
participate in helping make that happen--we voted against that economic 
plan in 1993--we are now deciding we are going to offer tax breaks of 
unprecedented size.
  This is what is proposed. The tax breaks that will come to the floor 
of the Senate and will be on the floor of the other body today have as 
their priorities that we will not provide any money to make Medicare 
solvent. We won't provide any money for our domestic priorities: 
education, health care, defense, and other key investments. We will 
provide no money for debt reduction. One would expect when times are 
good, we ought to be able to begin reducing the indebtedness we incur 
when times are bad, but there is no money for debt reduction and no 
money for Social Security solvency. We are going to have a tax cut of 
$792 billion.

  That is the GOP priority. That is not new. That has always been their 
priority. It is full speed ahead on our priority, and everything else 
can wait.
  If you have a pie and you show who get the tax breaks, here is how 
the pie gets cut. If you are in the top 1 percent of the income earners 
of this country, you get this large piece. If you are in the next 4 
percent, between 95 and 99, you also get a large piece of the pie. But 
the lowest 20 percent of the income earners of this country get this 
little sliver, just a crumb off the corner. It is always the same, and 
it never changes. The big tax breaks go to the upper-income folks, and 
the rest are left with tiny crumbs, if any at all.
  This chart shows the same thing. The top 1 percent get a $23,000-a-
year average tax cut. The bottom 60 percent of the wage earners in this 
country get a $139 a year tax cut. This chart shows what is going to 
happen over the next 20 years. The period of time 2000-2004, 2005-2009, 
the cost of the GOP tax grows substantially. In the second decade, it 
literally explodes. It will head us right back to the same circumstance 
we had before of huge Federal deficits.
  This chart shows the same thing in a different style. These are back 
loaded, exploding tax breaks that benefit the upper-income folks and 
will, in my judgment, lead to very significant risks for this country.
  I will ask this question over and over again: If this is your 
priority, just tax cuts above everything else, and tax cuts that go 
largely to the upper-income folks in this country, do you decide, then, 
that Head Start, for example, is not important because the domestic 
discretionary portion of this budget is fixing to be shrunk like a 
prune? You look at the kind of cuts that are necessary in all of the 
programs that make this a good country, the investment in our children, 
the investment in nutrition, the investment in health care, you will 
find massive cuts in all of those programs in order to pay for tax 
breaks that say to the folks in this country: We believe if you are in 
the top 1 percent, you ought to get $22,900 back in tax refunds each 
year because we think you contribute the most to this country. And if 
you happen to be in the lowest 20 percent of the income earners of this 
country, we have designed a plan that says you are going to get about a 
$1.59 a month.
  Is that surprising? No. It is the GOP plan from the beginning of 
political time. It is what they have always proposed. It is what they 
always fight for. It is always at the expense of every other priority.
  We are going to have a big debate about this and should have a big 
debate. I believe some tax cuts are appropriate, if they are fashioned 
the right way and they don't put this country's economy at risk. But I 
believe they ought not come at the expense of Head Start, education, 
health care and so many other key priorities, and especially paying 
down the debt during good economic times and making sure we extend the 
life and solvency of Medicare and Social Security. That ought to be 
part of the priority that comes out of this Chamber as well. That is 
what we will try to force in this debate on tax breaks in the coming 
days.
  Mr. President, I yield the floor.
  Mr. JOHNSON addressed the Chair.
  The ACTING PRESIDENT pro tempore. The Senator from South Dakota.
  Mr. JOHNSON. Mr. President, does the Senator from North Dakota 
control the time?
  The ACTING PRESIDENT pro tempore. The Senator from Illinois controls 
the time.
  Mr. DURBIN. I inquire of the Senator from South Dakota how much time 
he would like to have.
  Mr. JOHNSON. I ask the Senator from Illinois for 10 minutes.
  Mr. DURBIN. I yield 10 minutes to the Senator from South Dakota.
  The ACTING PRESIDENT pro tempore. The Senator is recognized for 10 
minutes.
  Mr. JOHNSON. Mr. President, on the floor of the other body today and 
coming to the floor of the Senate this coming week is going to be 
legislation having to do with taxation, having to do with tax cuts. 
Just when we think we have seen just about everything in terms of 
irresponsibility and foolishness, we see something literally taking the 
cake. We are seeing some pandering irresponsibility of record 
proportions that would be so serious and so injurious to this Nation's 
economic future and to the priorities of this country that we simply 
have to begin to speak about this issue today.
  What does this issue revolve around? It revolves around the 
Congressional Budget Office's projections that we will have about a 
$964 billion budget surplus over the coming 10 years, over and above 
what is needed for Social Security. Those are projections 10 years out, 
incredibly tenuous given the fact that in the past we haven't been able 
to make projections for a year out that have been accurate, much less 
for 10 years. But nonetheless, that is the baseline for this debate.
  Given the economic prosperity this administration has brought us, 
particularly the 1993 Budget Act, passed without a single Republican 
vote in either body, we do have a unique opportunity now to do some 
extraordinary things for ourselves and for the coming generation of 
Americans in terms of eliminating the accumulated Federal debt, make 
some key investments and, yes, assisting with some targeted tax relief 
to those families who need it most.
  But what do we see coming to us from the other body? What do we see 
coming on this floor this coming week? We see a tax plan from our 
Republican majority friends suggesting that with this $964 billion, if 
you even believe it is going to happen, first of all, nothing be set 
aside for the preservation and the strengthening of Medicare, nothing.
  Second, in order to give essentially this entire amount of money back 
as

[[Page S8978]]

tax relief--primarily to the most wealthy people who are making the 
political contributions in this body; the typical American family gets 
about a buck a week tax relief--we will have to then reduce over the 
coming 10 years defense spending buying power by about 17 percent, at a 
time when we are having a hard time trying to figure out how to 
maintain our security responsibilities around the world as it is. This 
tax package would assume, then, that we will have a 23-percent 
reduction in domestic spending buying power over the coming 10 years.
  If you buy into this tax package, that means you close veterans 
hospitals. That means you have significant reductions in Head Start 
programs, education programs. That means you give up on the idea we 
will have some sort of partnership for rebuilding our schools and 
bringing new technology into our schools. It means gutting education 
and agricultural programs. It means severe cuts in parks, law 
enforcement, in medical research, all the things most Americans think 
are crucial to our Federal, State and local, public and private 
partnerships that make this the great country it is.
  On top of that, if you think that is not bad enough, there is zero 
set aside for the reduction of the accumulated Federal national debt we 
have accumulated over the 200-year history of this country but which 
primarily came about during the 1980s, during the Reagan and Bush years 
and now stands at $5.6 trillion. It does nothing to buy down that 
existing debt.
  And if the decision is made down the road we are not going to knock 
defense spending down by 17 percent, then the consequence of that, 
under this plan, would be that we would have to reduce domestic 
spending--Head Start, education, parks, law enforcement, medical 
research, VA hospitals, agriculture, all that range of initiatives, by 
38 percent.
  This is a radical, extremist agenda for the Nation. The American 
people deserve better than this.
  Just when you think that is as bad as things can get, you look at the 
way this tax package is constructed, with the tax reductions, 
especially back loaded for the very wealthy, and then what do you find 
on the next page? Not only have you given up your entire domestic 
agenda, not only have you done nothing to reduce the accumulated 
Federal deficit, not only have you done nothing for Medicare, but the 
cost of this recipe explodes to double the cost in the next 10 years. 
What a radical agenda. It would be foolish, were it not so serious and 
so injurious to our Nation.
  Then one last thought: The Federal Reserve has recently raised 
interest rates by about a quarter percent. Some are attempting in this 
tax package to put one foot on the gas while the other foot is on the 
brake. If we were to do this, the obvious next consequence would be a 
significant increase in interest rates by the Federal Reserve. There is 
already a rise in interest rates now, without any tax cut whatever. 
That is a silent tax on every American.
  On every parent who wants to send a child to college or a vocational 
school, and on everyone who wants to buy a house, or buy a car, or a 
farmer who wants to finance his operation, or a businessperson who 
wants to expand his business and create new jobs, that is a killing 
tax. It is a higher interest rate as a consequence of this incredible 
irresponsibility that we see going on in the House today and coming to 
the Senate this coming week.
  Thank goodness for the future of America President Clinton has 
indicated he will veto this nonsense. But wouldn't it be better if we 
could work together in a bipartisan fashion on a constructive, positive 
agenda that, yes, would provide some tax relief to working class 
people, working families, the families who struggle to make a car 
payment, a house payment, and to keep jeans and tennis shoes on the 
kids, the people who make the economy go. Let's provide tax relief 
there, but let's pay down some of the national debt, which is probably 
the single-best thing we can do in any kind of budget plan. We should 
make sure we make key investments in education, in Head Start, in 
medical research, and keep the VA hospitals open. We can do all of 
these things with thoughtful balance and moderation. But moderation 
seems to be the last thing in the world our Republican friends want to 
bring to either the other body or this floor in terms of tax and budget 
agendas.
  I think where you put your money says a great deal about the 
character of any government because rhetoric is cheap. Everybody is for 
everything around here, until it is time to put some money where your 
mouth is and do the balancing that needs to be done. That is what we 
see not happening on the other side. What we are seeing is pandering 
and irresponsibility and radical agendas that may make a statement for 
the coming elections. Who knows? It seems to me it makes a very 
negative statement.

  But we deserve better than that. This Nation deserves better, and 
this Nation needs better than that. We need to come up with a budget 
and tax reduction package that is moderate, thoughtful, and deals with 
some of the tax relief that is needed but makes investments that are 
needed and pays down the accumulated Federal debt. That will keep the 
cost of money down and make it easier to send a kid to college or 
vocational school, buy a house, buy a car, or keep a farming or 
ranching operation going, all of those things, if we make the right 
decisions.
  But this is a once-in-a-lifetime opportunity. Many of us thought, in 
the years we have had the opportunity to serve in Congress, several 
things would never happen in our lifetime: The fall of the Berlin Wall, 
the collapse of the Soviet Union, and the possibility that we would 
ever be on the floor arguing about what to do about budget surpluses. 
We have that opportunity. Let's not waste that opportunity.
  Let's take a thoughtful, constructive, positive approach to how to 
use those dollars as we embark on this next millennium and revisit this 
tax package so we emerge from this debate with a package that, in fact, 
does address the priorities that I think the American people want us to 
address, and that does it, hopefully, in a bipartisan fashion and in a 
way that will leave our economy stronger and leave our families 
stronger going into the coming century than we are now and, certainly, 
far stronger than what would happen if we tragically actually passed 
and enacted the tax agenda that we see occurring on the House floor 
today and is coming to this body next week.
  I yield back my time.
  The PRESIDING OFFICER (Mr. Roberts). The Senator from Illinois is 
recognized.
  Mr. DURBIN. Mr. President, how much time remains on the Democratic 
side?
  The PRESIDING OFFICER. The Senator has 11 minutes 30 seconds.
  Mr. DURBIN. Mr. President, I thank the Chair and I thank the Senator 
from South Dakota.
  Yogi Berra, one of the greatest ``political philosophers'' of all 
time, may have said, ``This is deja vu all over again.'' If he didn't 
say it, he should have because this debate that you are hearing on the 
floor of the Senate is almost a carbon copy of the debate of 1981. 
Think about that for a moment. We were in the first year of the Reagan 
Presidency. We had accumulated, in the entire history of the United 
States of America, $1 trillion in debt, and the Republican Party came 
to the floor and said now is the time for a massive tax cut. Their 
supporters cheered, they enacted their massive tax cut, and what 
happened? Two significant things:
  First, we saw a dramatic increase in the national debt. A $1 trillion 
accumulated debt in the entire history of the United States grew into 
more than $4 trillion over the span of the Reagan and Bush Presidencies 
because of that 1981 decision.
  Second, it was such a bad decision that the American economy 
struggled from recession to recession. That is what happened the last 
time the Republican Party brought their vision of America to the floor 
of the Congress.
  In 1992, the American voters said: Enough; this isn't working. We 
want a change. And they elected the Clinton-Gore administration, which, 
in 1993, came to Congress and said: Let us try to get back on the right 
track; let us try to reduce the deficits on an annual basis, and let us 
try to get the economy moving again.
  You should have heard the Republican Senators who came to the floor--
the same ones who begged for a tax cut when the Clinton plan was 
debated.

[[Page S8979]]

  Remember, not a single Republican Senator or House Member voted for 
that plan. Some of the things they said are absolutely classic. The 
Senator from Texas, Phil Gramm, who is very outspoken in favor of this 
tax cut, said of the Clinton plan:

       I want to predict tonight that if we adopt this bill, the 
     American economy is going to get weaker and not stronger, the 
     deficit 4 years from today will be higher than it is today.

  That was Phil Gramm of Texas, August 5, 1993. Completely wrong. 
Completely wrong.
  The Clinton plan passed, and two things happened. Annual deficits 
started to come down, and, in addition to that, the economy started 
moving forward. Just look at the news. You don't have to believe a 
politician. Unemployment is down. Housing starts are up. Business 
starts are up. Inflation is under control. America is moving forward, 
and we can feel it. Consumer confidence and business confidence is at 
an all-time high.
  Two years ago, if you would have come to this Senate Chamber, the 
Republican Members were so despondent over the deficits that they 
wanted to amend the Constitution. That isn't done very often in 
America, but they said: We need to pass a balanced budget amendment. 
Why? So the Federal courts can force Congress not to overspend. A 
constitutional amendment to give a Federal judge the power to stop 
Congress from spending because deficits were out of control. That was 
only 2 years ago.
  Now what debate do we hear on the floor? It isn't about deficits and 
constitutional amendments; it is about the surplus and tax cuts. And I 
have to tell you, quite honestly, the Republican agenda is out of 
control. What they are suggesting now is a $1 trillion tax cut that, 
frankly, will not only imperil the state of our economy but also could 
drive us right back into deficits again. How will we pay for that?
  I would like to yield to the Senator from California because she made 
an observation that I think should be part of the record of this 
debate. I yield to her for a question.
  Mrs. BOXER. Mr. President, I thank my colleague very much for his 
very fine summation of where we are.
  It is amazing to me to see how far we have come in this economy, from 
the worst of all days when people were despondent. I remember when 
President George Bush went to Japan and he became ill, and it became 
kind of a symbol of what was wrong with this country. We went to Japan 
to find out how they were doing it and what was wrong with our country. 
Why could we not get our economy under control? Now we finally have it 
under control. It is in the best place it has been for generations, as 
my friend has shown us, in terms of employment, in terms of job 
creation, in terms of no more deficit, in terms of being able to 
finally pay down the debt, in terms of housing starts and business 
starts--you name it--inflation. It is all going right.

  What do our friends say? Whoops. Let's change course. We finally have 
it right, but let's turn around and go back to the bad old days.
  It is amazing to me. I want to ask my friend a question about the so-
called surplus. I was rather stunned to see my chairman, Senator 
Domenici, of the Budget Committee, for whom I have great respect, hold 
a press conference yesterday and tell the press that there is a $3 
trillion surplus. I sort of thought maybe I misheard it. He repeated it 
four times, at least. He said there is a $3 trillion surplus. 
Therefore, all we are giving is a $1 trillion tax cut. It is a very 
small part of the overall surplus. Don't the American people deserve a 
refund?
  I want to ask my friend a couple of questions. Is it not true that $2 
trillion of that $3 trillion so-called surplus is Social Security? It 
isn't anyone else's; it belongs to Social Security. Is my friend in 
agreement with me on that point?
  Mr. DURBIN. The Senator from California is right because we are not 
dealing with a real surplus. We are dealing with a surplus in the 
Social Security trust fund which the Republican Party now wants to give 
away as a tax cut. Does that make sense? Does it make sense to any of 
us paying into Social Security, or those who hope to derive some 
benefit from it, at this point in time to decide to spend Social 
Security funds to give a tax cut?
  I might say to the Senator from California: Look at the tax cut. 
There they go again. The Republicans cannot leave well enough alone. 
The economy is moving forward. Annual deficits are coming down. They 
want to put a tax cut package in place.
  And look carefully at the winners under the Republican tax cut plan. 
For Mr. Bill Gates, good news. If you are in the top 1 percent, for the 
Republican tax, a cut of $22,000 a year--not bad. Will he notice?
  But, look, if you are in the lowest 20 percent of average wage 
earners in America, under the Republican tax cut plan, listen to this, 
$22 a year--not bad--$22 a year for the average working family in 
America, and $22,000 for Mr. Trump and Mr. Gates.
  There they go again.
  Mrs. BOXER. Will my friend yield? I want him to know something. That 
$22,000 a year, back to the top 1 percent, is an average, I say to my 
friend. I can assure you that Mr. Trump and Mr. Gates will get far more 
than that in a refund.
  As we discussed yesterday on this floor, when you think of people who 
work at the minimum wage and get dirt under their nails, and work hard 
and sometimes have two jobs, that average refund to the top 1 percent 
is twice as much as they earn in 1 year. There they go again. It is 
right on target.
  I want to ask another question of my friend. We don't have a $3 
trillion surplus because we already agreed that $2 trillion belongs to 
Social Security. That leaves $1 trillion. We know Medicare is in 
trouble. We know Social Security and Medicare are the twin pillars of 
the safety net. What good does it do someone on Social Security if they 
know they get that but their Medicare premium is going to go up so high 
that they can't afford to buy their food or pay their rent? So we need 
to take care of Medicare. How much is in the Republican plan to save 
Medicare?

  Mr. DURBIN. The answer is clear. Zero. Medicare is a word about which 
the Republicans don't want to talk. They don't want to use it. Yet we 
all know that, unless we do something significant for the Medicare 
program, by the year 2015 this program will be bankrupt and 40 million 
Americans, elderly and disabled, who rely on Medicare for their health 
insurance have a time of reckoning that is just over the horizon.
  We on the Democratic side believe that if there is going to be any 
surplus, as the President has suggested, we should dedicate it, first, 
to any surplus we realize to Social Security; second, to Medicare; and, 
third, to reducing the national debt.
  I ask you: Which is the party of fiscal conservatism?
  Listen to this debate: $1 trillion taken out of funds such as the 
Social Security trust fund to give away to the wealthiest of Americans, 
which is the Republican plan, or the Democratic plan, which says to 
take care of priorities--reducing our debt, reducing our need to 
appropriate money each year for interest on the debt, and making sure 
that Medicare and Social Security are strong enough to survive.
  I think our position is not only fiscally conservative but I think it 
is fiscally sane. Others will characterize an alternative.
  Mr. DORGAN. Mr. President, will the Senator yield?
  Mr. DURBIN. Yes.
  Mr. DORGAN. I wanted to ask the Senator from Illinois if it is not 
the case that the proposal by the Republicans for very significant tax 
cuts, much of which will go to the upper income folks, would mean that 
they have nothing for debt reduction? Isn't it the case that in tough 
economic times--for example, when we passed the Deficit Reduction Act 
in 1993, with no help from the other side and not one vote even--in 
tough economic times your debt increases? During good economic times, 
you ought to reduce the debt. Isn't it the case that this fiscal policy 
plan of theirs provides nothing for debt reduction during good economic 
times? Is that fiscal conservatism?
  Mr. DURBIN. It is fiscal insanity. I would say to the Senator from 
North Dakota that we hope this economy will continue to progress.
  The PRESIDING OFFICER. The time of the distinguished Senator has 
expired.
  Mr. DURBIN. I ask unanimous consent for 30 additional seconds.

[[Page S8980]]

  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  Mr. DURBIN. I say to the Senator from North Dakota that if we are 
going to prepare ourselves for the future, we have to prepare for the 
possibility of a reduction. I don't think that is wild-eyed thinking.
  The Republican plan makes no contingency plan that suggests we might 
have a downturn in the economy. We should be reducing the debt and 
pledging our surplus, whatever it may be, to reducing that debt and 
making certain Social Security and Medicare are there for years to 
come.
  I yield the remainder of my time.
  The PRESIDING OFFICER. Under the previous order, the Senator from 
Maine is recognized to speak for up to 10 minutes.
  The distinguished Senator is recognized.
  Ms. COLLINS. Thank you, Mr. President.
  I further ask unanimous consent that the time reserved for the 
Senator from Ohio, Mr. Voinovich, be given to the Senator from Ohio, 
Mr. DeWine.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (The remarks of Ms. Collins and Mr. DeWine pertaining to the 
introduction of S. 1412 are located in today's Record under 
``Statements on Introduced Bills and Joint Resolutions.'')
  Ms. COLLINS. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative assistant proceed to call the roll.
  Mr. GREGG. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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