[Congressional Record Volume 145, Number 107 (Tuesday, July 27, 1999)]
[House]
[Page H6567]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     TRIGGER FOR DEBT/TAX REDUCTION

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Michigan (Mr. Smith) is recognized for 5 minutes.
  Mr. SMITH of Michigan. Mr. Speaker, I wish to make comments today on 
the importance of not only a tax reduction but a reduction in the 
Federal debt and the trigger that we imposed within the tax bill to 
help assure that both happen.
  America's tax burden is the highest in the history of the Republic, 
not only in nominal terms but in actual percentage of income.
  Our Government has grown so large that if we repeal the entire income 
tax today, the total income coming into the Federal Government would 
still be as large as it was just 10 years ago. If we did away with the 
total income tax, other revenue coming into the Federal Government 
would be as much as the total revenue in 1990. It is past time for 
Americans to receive some relief from their ever-expanding tax burdens.
  Now on the issue of debt. At the same time, our Nation's debt stands 
at 5 trillion, 600 billion dollars. The interest expense on the debt 
last fiscal year was larger than the entire Federal budget in 1972. 
Interest on the Federal debt last year was larger than the entire 
Federal budget in 1972.
  A reduction in the debt would reduce interest rates and encourage 
economic expansion. It would also reduce the chances that our kids are 
going to have to pay huge taxes to make up for the over indulgence of 
their parents and grandparents as we spend and spend a bigger and 
bigger Government.
  While the need for both tax reduction and debt reduction is obvious, 
a major difficulty facing Congress is the proper mix. Economists from 
the time of David Ricardo in the 19th century to today disagree on the 
relative effect of tax reduction and debt reduction on the economy.
  However, the important thing is to keep Government from turning into 
what Thomas Hobbes called a ``leviathan,'' an ever-hungry monster 
gobbling up the Nation's resources.
  Last week it became apparent that a conflict of opinion about the 
size of the tax cut relative to the debt reduction jeopardized the 
passage of any tax relief.
  It was at that point that I recalled experience that the State of 
Michigan has had in allowing both sides of an issue such as this to get 
their way.
  Back in 1983, I was part of an effort, a tax rate reduction, that we 
would gradually tie to a certain target to make sure that tax reduction 
occurred. This year in Michigan, we tied a tax cut to economic 
conditions in a manner nearly identical to what I proposed in this 
House last week.
  What I proposed and what the gentleman from California (Mr. 
Kuykendall) proposed and what the past House passed was tax reduction 
tied to our efforts to reduce the debt. Specifically, income tax rate 
would be reduced gradually in stages over 10 years. But if the interest 
expense on the Federal debt is not less than the prior year's interest 
expense, then the next stage of the reduction would be postponed.
  The concept is that those who are afraid that tax cuts may lead to 
greater debt and, thus, greater interest expense would have an 
automatic hold on further tax cuts until interest expenses went down.
  Those who felt and predicted tax cuts are going to spur greater 
economic growth and, therefore, bring in more revenue and pay down that 
debt and, therefore, lower the interest rates would get the full tax 
cut proposed in the original bill.
  While the trigger is probably not the perfect trigger, it 
accomplished the goal of moving the process forward both on reducing 
the debt and reducing taxes. The concept of using a trigger to allow 
both sides of the issue to really put your money where the other 
person's mouth is is a concept of win-win.
  It may be crucial to the final passage of this bill that will be 
acceptable to the White House as well as this House as we review what 
comes out of conference committee.
  I will continue to work this week on perfecting the trigger mechanism 
since this House, the Senate, and the President must agree on the final 
outcome before it becomes law.
  Debt reduction is important to strengthen the economy and taking the 
pressure off our kids and grandkids, and tax reduction in a system that 
has the highest tax rates in history is in need very desperately of the 
kind of tax cuts that leaves money in the pockets of the people that 
earn it.

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