[Congressional Record Volume 145, Number 114 (Thursday, August 5, 1999)]
[Senate]
[Pages S10305-S10340]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

[[Page S10305]]

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                                 Senate

       TAXPAYER REFUND AND RELIEF ACT OF 1999--CONFERENCE REPORT

                              (Continued)

  Mr. ROTH. Mr. President, I yield 5 minutes to the distinguished 
Senator from Arizona.
  Mr. KYL. Mr. President, I begin by commending the chairman of the 
Finance Committee, Senator Roth, and our leadership, Senators Lott and 
Nickles, for their tremendous work on this bill. Members have heard 
Senator Nickles discuss the details of the bill, the many things that 
have been included in this bill. Through his leadership, a lot of the 
things that Members of the Republican Party and people I represent who 
have talked to me about tax policy wanted in this bill have gotten 
included in the bill. I think they did a tremendous job in ensuring 
that the tax relief for taxpayers became a part of this tax package.
  I won't go over the details of the bill as Senator Nickles has just 
done, but I want to note that this is, as he said, the largest middle-
class tax cut since Ronald Reagan was President. It is based on the 
same kind of progrowth, broad-based policies that will let all 
taxpayers keep more of their hard-earned money.
  Mr. NICKLES. Will the Senator yield?
  Mr. KYL. I am happy to yield to the Senator.
  Mr. NICKLES. I want to take a minute to congratulate and thank my 
friend and colleague from Arizona for his leadership in the entire tax 
reduction effort, but particularly in estate taxes. The Senator from 
Arizona has been principal sponsor of a bill to reduce and eliminate 
the estate taxes. We have incorporated most all of that provision in 
this bill.
  I want to compliment him because I am confident eventually--maybe 
this bill will be vetoed; I hope not; I hope the President 
reconsiders--we will pass a bill to eliminate the death tax. The 
Senator from Arizona deserves great accolades and credit for being a 
principal player in making that happen.
  Mr. KYL. I thank the distinguished assistant majority leader. I agree 
that by including the repeal of the estate tax, sometimes called the 
death tax, in this legislation, we have laid down a marker and pretty 
well ensured that sooner or later it is going to be repealed.
  Obviously, for the time being, we may have to pay it down a little 
bit and find it is repealed in maybe the ninth or tenth year. 
Hopefully, by virtue of the fact we have agreed that it has to go 
eventually, we will repeal it, and hopefully it will be sooner rather 
than later because some of my friends have kidded, saying: You know, it 
is fine you get this repealed 9 years from now, but that means I have 
to hang on for another 9 years. I am not sure that is possible. Besides 
that, I have to do the expensive estate planning in the meantime.
  We prefer to get that eliminated sooner rather than later. I think it 
is a testament to the leadership of Senator Nickles, majority leader 
Senator Lott, and Senator Roth, as well as our friends in the House who 
were in agreement that the death tax had to go. That important 
provision was included in this election.
  Rather than describe the specifics of this program, let me note, when 
I turned on the television this morning I heard a report on CNN. 
Reporters had gone to Orange County in California. They found the 
average citizen on the street there really didn't like this tax relief 
that much.
  They said: Why do we need to do it? After all, shouldn't we be saving 
the Social Security surplus for paying down the debt or for Social 
Security?
  I say as plainly and clearly as I can: That is exactly what we do. We 
are not spending the Social Security surplus. Every dime of the Social 
Security surplus is set. It is not the subject of this tax bill.
  There are two kinds of surplus. First, FICA taxes fund the Social 
Security payments to seniors. We collect more in FICA taxes than 
current beneficiaries require under Social Security. So there is a 
surplus. We don't use that for the tax cut.
  Now, there are all of the other tax payment provisions of the code. 
We have to pay income tax, the estate tax, the capital gains tax, these 
other taxes. They, too, are producing more revenue than we need. We are 
not spending as much as we are collecting. That is the surplus we are 
talking about for tax relief.
  As Senator Nickles said a moment ago, out of the entire surplus, only 
25 cents of it is going for tax relief. When some of our friends on the 
other side of the aisle or the President say we can't afford tax 
relief; we should be saving the Social Security surplus, they are 
fooling the American people. The truth is, the Social Security surplus 
is not being used for this tax relief--not a penny of it.
  As a matter of fact, those people who say we should pay down the 
national debt should understand that both under the President's plan 
and under our plan, any amount of the Social Security surplus that 
isn't necessary for Social Security is used to do what? Pay down the 
national debt. That is what the Social Security surplus is being used 
for.
  Let's not be confused. There are good reasons for a tax cut. The 
money for the tax cut is not coming out of the money for Social 
Security or for paying off our national debt. That is the fundamental 
point I wanted to reiterate.
  Different provisions of the bill stress the point that Senator 
Nickles made, which is that finally we have achieved in law--we will by 
the time we vote for this--that the death tax is going to be repealed. 
I think that sends a very important message as we continue to craft tax 
legislation. Should the President veto this bill, that will permit us

[[Page S10306]]

to include that principle in whatever eventually is sent to the 
President and, hopefully, signed into law.
  The Taxpayer Refund and Relief Act, which is really the largest 
middle-class tax cut since Ronald Reagan was President, is based upon 
the kind of broad-based, pro-growth policies that will help all 
taxpayers and keep our nation's economic expansion on track.
  Mr. President, this measure really represents a departure from the 
kind of targeted tax cuts that we have seen in the past. Taxpayers will 
not have to jump through hoops, or behave exactly as Washington wants, 
to see relief. If you pay taxes, you get to keep more of what you earn. 
It is as simple as that. The marginal income-tax rate reductions in 
this bill refund to all taxpayers a share of the tax overpayment that 
has created our budget surpluses. Those in the lowest income-tax 
bracket will see a seven percent reduction in their taxes. Those in the 
highest tax bracket will see a reduction of about half that size. I 
would have preferred an across-the-board reduction that helped everyone 
more than this. But recognizing the constraints imposed on the Finance 
Committee by the budget resolution, I think this is a very good 
product.
  In addition to marginal rate reductions, the bill would eliminate two 
of the most egregious taxes imposed on the American people: the 
marriage-tax penalty and the death tax. There is simply no reason that 
two of life's milestones should trigger a tax, let alone the steep 
taxes that are imposed on people when they get married and when they 
die. Eliminating them is the right thing to do.
  To eliminate the marriage penalty for most taxpayers, the standard 
deduction for joint returns would be set at two times the single 
standard deduction, and the new 14 percent income-tax bracket would be 
adjusted to two times the single bracket, phased in over the life of 
the bill. This will solve the problem for most taxpayers, but we need 
to make clear that, although we have devoted fully 50 percent of the 
relief in this bill to broad-based and marriage-penalty relief, we will 
not have eliminated the marriage penalty entirely. We will still need 
to come back and address the problem for taxpayers who choose to 
itemize.
  The bill also phases out the death tax over the next several years, 
so that by 2009 it is completely eliminated. I would ask Senators to 
carefully review the details of what is proposed here, because I 
believe they will find that the bill offers a way for those on both 
sides of the aisle to bridge our differences with respect to how 
transfers at death are taxed.
  The beauty of the proposal is that it takes death out of the 
equation. Death would no longer be a taxable event. It would neither 
confer a benefit--the step-up in basis allowed under current law--nor a 
penalty--the punitive, confiscatory death tax.
  The provisions are based upon the bipartisan, Kyl-Kerrey Estate Tax 
Elimination Act, S. 1128, which would treat inherited assets like any 
other asset for tax purposes. A tax on the capital gain would be paid, 
the same as if the decedent had sold the property during his or her 
lifetime, but the tax would be paid only if and when the property is 
sold.
  If the beneficiaries of an estate hold onto an asset--for example, if 
they continue to run the family business or farm--there would be no tax 
at all. No death tax or capital-gains tax. It is only if they sell and 
realize income from the property that a tax would be due, and then it 
would be at the applicable capital-gains rate.
  This simple and straightforward concept attracted a bipartisan group 
of cosponsors, including Democratic Senators Kerrey, Breaux, Robb, 
Lincoln, and Wyden, and about a dozen Senators from the Republican 
side. If the President makes good on his threat to veto this tax-relief 
bill, our bipartisan initiative provides a blueprint for how we should 
deal with the death tax in future tax legislation.
  Mr. President, another important feature of this tax bill is its 
capital-gains tax-rate reduction. It will reduce capital-gains tax 
rates another two percent, so that the top rate is only about two-
thirds of where it was just a few years ago.
  Why is another capital-gains reduction important? Let me quote 
President John F. Kennedy, who answered that very question: ``The 
present tax treatment of capital gains and losses is both inequitable 
and a barrier to economic growth.'' He proposed excluding 70 percent of 
capital gains from tax, which, if you applied the same concept today, 
would result in a top rate of about 11.88 percent. That is lower than 
the top rate of 18 percent proposed in the bill we have before us.
  President Kennedy explained that ``[t]he tax on capital gains 
directly affects investment decisions, the mobility and flow of risk 
capital from static to more dynamic situations, the ease or difficulty 
experienced by new ventures in obtaining capital, and thereby the 
strength and potential for growth of the economy.''
  In other words, if we are concerned about whether new jobs are being 
created, whether new technology is developed, whether workers have the 
tools they need to do a more efficient job, we should support measures 
that reduce the cost of capital to facilitate the achievement of all of 
these things. Remember, for every employee, there was an employer who 
took risks, made investments, and created jobs. But that employer 
needed capital to start.

  President Kennedy recognized that. He recognized that our country is 
stronger and more prosperous when our people are united in support of a 
common goal--and that we are weaker and more vulnerable when punitive 
policies divide Americans, group against group, whether along racial 
lines or economic lines.
  While some politicians may employ divisive class warfare to their 
political advantage, President Kennedy had the courage to put good 
policy ahead of demagogic politics. I am with him, and I support the 
capital-gains reduction in this bill.
  There are several other provisions that I want to mention briefly, 
because they, too, will help keep the economic expansion going: the 
increase in the IRA contribution limit, the alternative minimum tax 
relief, and the increased expensing allowance. These are things that 
will encourage the capital formation needed to help keep the United 
States competitive in world markets, producing jobs and better pay for 
our citizens.
  The bill addresses the critical issue of health care as well, 
providing an above-the-line deduction for prescription-drug insurance, 
and a 100 percent deduction, phased in over time, for health-insurance 
costs for people not covered by employer plans.
  We encourage savings for education by increasing the amount that 
individuals can contribute to education savings accounts. Funds in 
these accounts could be used for elementary and secondary education 
expenses, in addition to higher education. The exclusion for employer-
provided educational assistance would be extended, and the 60-month 
limit for deducting interest on student loans would be repealed.
  Mr. President, a few final points before closing. Providing the tax 
relief in this bill will not require us to use any of the Social 
Security surplus in any year. In fact, all of the Social Security 
surplus will be reserved for Social Security. In all, about 75 percent 
of anticipated budget surpluses over the next decade would still be set 
aside for Social Security, Medicare, and other domestic priorities, 
including debt reduction.
  It is only the remaining 25 percent of the available surplus that 
would be refunded to American taxpayers. In other words, we are 
proposing to refund just 25 cents of every surplus dollar back to the 
people who sent it to Washington. It is a sensible and a modest 
initiative.
  Remember, the $792 billion in tax relief would be provided over a 10-
year period. If you include enough years in the calculation, of course, 
the amount sounds large, but we are really only talking about an 
average of $80 billion a year.
  To put that into perspective, the federal government will collect 
$1.8 trillion this year alone. It will collect $2.7 trillion by the end 
of the 10-year period, in 2009. The amount of tax relief we are 
considering is very modest--not risky, not irresponsible at all, as the 
President would have us believe.
  Even accounting for the proposed tax cut, the debt would be reduced 
substantially. The Budget Committee chairman gave us the numbers last 
week. Publicly held debt would decline from

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$3.8 trillion to $900 billion by 2009. Interest costs are forecast to 
decline from more than $200 billion annually to about $71 billion a 
year. In fact we reduce debt and debt-service costs more than the 
President would in his budget, because President Clinton would spend 
nearly $1 trillion on new initiatives. According to the Congressional 
Budget Office, part of the President's new spending would even be 
funded out of the Social Security surplus.
  To the extent that there is any surplus in the non-Social Security 
part of the budget, it is because we will have already taken care of 
the core obligations of government--things like education, health care, 
the environment, and defense. It is true that we may not launch some 
new initiatives, or fund lower priority programs, but I believe it is 
appropriate to refund part of the tax overpayment to hard-working 
taxpayers before funding new endeavors.
  Mr. President, if a corner business did what the federal government 
is doing, it would be accused of gouging. We are charging the taxpayers 
too much, taking more than the government needs to fund its 
obligations. We ought to return this overpayment to the people who 
earned it, instead of thinking up new ways to spend it in Washington.
  Mr. President, again I commend the leaders who were able to put this 
package together. I intend to vote for it and encourage my colleagues 
to do so.
  I yield whatever time is remaining to the Senator from Delaware.
  Mr. ROTH. I yield 7 minutes to the distinguished Senator from 
Kentucky.
  Mr. BUNNING. Mr. President, I rise in strong support on conference 
report on the Taxpayers Refund and Relief Act of 1999 and urge my 
colleaguess to support it. I congratulate Senator Roth and his staff on 
getting such a great bill to the floor of the Senate. I urge the 
President of the United States to reconsider his threat to veto it.
  It is a good bill. It is responsible in its timing. It is responsible 
in its provisions. And it is definitely responsible to let the American 
taxpayers keep a little more of their own money.
  On the basis of fact, it is difficult to dispute the fairness or the 
timing for a tax cut in general.
  Federal tax rates are at an all-time, peace-time high, consuming more 
than 20.6 percent of the Nation's economic output. That is a higher tax 
rate than any year except 1944 at the height of World War II when 
Federal taxes consumed 20.9 percent of the gross domestic product.
  At the same time, we are anticipating record budget surpluses. The 
economists tell us that over the next 10 years, the Federal Government 
will take in nearly $3 trillion more than it needs. Even if we set 
aside $1.9 trillion of that surplus to safeguard Social Security and 
pay down the public debt, the Federal Government will still have $1 
trillion more than it needs over the next 10 years.
  It is hard to imagine a more opportune or reasonable time to cut 
taxes. Tax rates are at record highs--budget surpluses are at record 
highs. What more do you need?
  In a similar vein, it is difficult to dispute any of the major 
provisions in this bill on the basis of fairness. It does a lot of good 
things.
  It reduces each of the personal income tax rates, which currently 
range from 15 percent to 39.6 percent by 1 percentage point so that 
low- and moderate-income taxpayers receive a larger real cut than those 
in higher income brackets.
  It reduces the capital gains tax moderately and indexes capital gains 
to account for inflation. It encourages savings by increasing IRA 
contribution limits from $2,000 to $5,000.
  It would eliminate the odious death tax which destroys family 
businesses and farms. Point by point, it is difficult to portray any of 
these provisions as radical or unfair.
  It is also difficult to question the fairness of the bill's 
provisions which try to eliminate the marriage penalty that exists 
under current tax law and which forces 20 million married couples to 
pay about $1,400 a year more in taxes than unmarried couples.
  In an effort to eliminate this inequity, the Taxpayer Refund Act 
increases the standard deduction and raises the upper limit of the 14-
percent bracket for married couples.

  The individual provisions in the tax cut bill are reasonable and 
fair.
  Still, the President insists that a $792 billion tax cut is 
irresponsible and reckless. Even though our Republican plan sets aside 
$1.9 trillion to secure Social Security and pay down the public debt--
even though it reserves another $277 billion to pay for Medicare reform 
or other essential services--even though the tax cuts are phased in 
slowly over 10 years, the President claims it is reckless and 
irresponsible.
  It is easy to understand why. He wants to spend more.
  He says cutting taxes $792 billion is reckless but he didn't have any 
qualms about proposing 81 new spending programs that would cost $1.033 
trillion in his budget proposal this year.
  He clearly believes that the money belongs to the Federal 
Government--not the taxpayers. And he clearly plans to find ways to 
spend that surplus if given the chance. That is the big question that 
faces the Nation right now. Whose money is it and is it more 
responsible to give some of it back to the taxpayers than it is to 
spend it?
  I have heard a lot about Federal Reserve Board Chairman, Allen 
Greenspan's recent testimony before a Senate Committee on which I serve 
and, admittedly, he was not overly enthusiastic about cutting taxes 
right now.
  He would prefer that we use all the budget surplus to pay down the 
debt. But, he also made it clear that the worst thing we could do is to 
spend the surplus on new programs. He made it clear that cutting taxes 
would be preferable to expanding Federal spending. Our tax bill already 
pays down the debt more than the President's plan and if we don't cut 
taxes now, make no mistake about it, the President will find plenty of 
ways to spend the rest of that surplus.
  This bill simply says that when tax rates are at record highs and the 
Government has more money than it needs to protect Social Security and 
Medicare and to pay down the debt, the responsible thing to do is to 
give some of that money back to the people who pay the taxes.
  There is nothing reckless about the Republican tax cut. It protects 
Social Security and Medicare. It reduces the debt more than the 
President's plan.
  It reserves several hundred billion to pay for essential services or 
to pay the debt down even more. The timing is right. The provisions are 
fair. It simply allows the Nation's taxpayers to keep a little more of 
their own money.
  I urge my colleagues to vote for it.
  Mr. ROTH. I now yield 5 minutes to the Senator from Missouri.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. ASHCROFT. Mr. President, I thank the Senator from Delaware and 
commend him for his outstanding work in respect to this piece of 
important legislation. The Republican plan is a good plan for several 
reasons, the first of which is that the Republican plan protects every 
single cent of the Social Security surplus. None of it is to be 
consumed in the tax cut or in tax relief. Every penny of money from the 
Social Security trust fund is to be protected--$1.9 trillion over 10 
years.
  When the President presented his budget earlier this year he said we 
should protect 62 percent of the Social Security trust fund. There is 
an important distinction. We would protect every cent. The President 
proposed spending $158 billion of the Social Security benefits over the 
next 5 years. We said zero. I am happy to say he went back to the 
drawing board. He still comes back with a plan that spends $1 trillion 
more in 10 years, including about $30 billion of the Social Security 
surplus, but it is closer to the Republican plan which protects Social 
Security. It is very important to understand the Republican plan does 
not invade Social Security in order to have a tax cut.
  Since Congress took Social Security off budget in 1969, the Democrats 
have never protected every dime of Social Security surpluses, and 
frankly neither have we until this year.
  In addition to protecting Social Security, the Republican plan pays 
down the national debt. What is important is that over the next 10 
years we will pay off almost half of the national debt. That is 
responsible. Most homeowners do not pay off half their mortgage in 10 
years. On a 30-year mortgage, it takes about 15 years to get halfway 
through the process.

[[Page S10308]]

  Mr. President, $1.9 trillion of the $3.6 trillion in publicly held 
national debt will be paid off. We will reduce the national debt from 
41 percent of the gross domestic product to only 14 percent of the 
gross domestic product.
  On the other side, in contrast, they want to spend more money and 
leave Americans with a higher national debt. President Clinton's plan 
provides $223 billion less in debt reduction than does ours.
  The Republican plan also saves more money for Medicare. Over the next 
10 years, the Republican plan sets aside $90 billion for fixing 
Medicare, in contrast to President Clinton's new Medicare entitlement 
that provides only $46 billion for additional funding over that period.
  After attending to all these priorities, after setting aside Social 
Security, after attending to and making sure we pay down half the debt, 
running it down from 41 percent of the gross domestic product to 14 
percent of the gross domestic product, the Republican plan cuts taxes 
for every taxpayer; it cuts taxes for married couples, for savings in 
IRAs, for college education, for health care, cutting the bottom rate 
and every other rate by 1 percent.
  In addition, the Republican plan reduces the marriage penalty for 
couples, thanks to the outstanding work of Senator Hutchison of Texas. 
I was pleased to have joined her, along with Senator Brownback of 
Kansas, in accelerating that kind of relief in our effort. The 
Republican plan will make the standard deduction for married couples 
double that for singles. We will also increase the rate bracket for 
married couples, making it possible for them to become married couples 
without paying a penalty. In contrast, the President's plan and the 
Democratic plan would spend more money on Government, leaving less 
money for our families.
  If your faith is in government and in bureaucracy and your faith is 
not in families and in our communities, then you want to sweep 
resources to Washington and spend it here. If you believe the greatness 
of America is in the families and the hearts of the American people, 
then leaving some of their resources, which they have earned, with them 
is wise policy.
  President Clinton's plan calls for $1 trillion more in spending over 
the next 10 years. The American people did not balance the budget just 
so they could be the victims of more spending. Out of approximately $3 
trillion in total surpluses over the next 10 years, our plan devotes 
only $792 billion, less than a quarter of the entire total surplus, to 
tax cuts. The Republican plan protects Social Security, cuts the 
publicly held debt in half, and provides needed relief to every 
taxpayer while protecting the opportunity to reform and address the 
needs of Medicare.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. ROTH. Mr. President, I yield 5 minutes to Senator Hagel.
  Mr. HAGEL. I thank the Chair.
  Mr. President, first I add my thanks and appreciation to the chairman 
of the Senate Finance Committee, Senator Roth, for the leadership he 
has provided in getting a very fair, responsible, realistic, reasonable 
tax cut this far. It has been a rather remarkable achievement. It is 
the right thing for America.
  I rise to state my strong support for this bill. We have heard a lot 
of talk about standards of fairness, is this right, does it help 
everyone. That is a good question, an appropriate question.
  I ask these questions: What can be more fair than an across-the-board 
reduction in marginal tax rates? Everyone who pays Federal income tax 
benefits.
  Let's put some perspective on this. This tax cut bill is focused on 
those who pay taxes. It might be a revelation for some, but actually it 
is true and we acknowledge that right from the beginning. This is about 
tax relief for those who pay Federal income taxes.
  Another relevant question is: What is more fair than ensuring people 
do not pay more in taxes just because they are married? Was it fair 
that we penalized married couples? No. This tax bill addresses that 
issue, and we do something about it. In fact, we make it fair.
  Are only rich people married? I don't think so. I think a lot of 
middle-class people are married. I think a lot of people at the bottom 
of the economic structure who pay Federal income taxes are married. 
Surely, they will benefit from this tax bill.
  Another question: What is more fair than making sure farmers--we have 
been talking about farmers all week--and small businesspeople, the 
engine of economic growth in America, don't have to sell their farms or 
their businesses in order to pass them on to their children so they, in 
fact, can keep farming?
  That is fair. Are there people in the middle-class economic structure 
of America who so fit? I think so.
  Another question: What is more fair than making sure self-employed 
individuals have the same opportunities as big corporations when it 
comes to deducting the cost of health insurance? I think that is rather 
fair.
  What about this: What is more fundamentally fair than giving back to 
the American people their money when they are paying too much in taxes, 
say, over $3 trillion more in taxes projected over the next 10 years?
  This bill does that. It does it fairly; it does it reasonably; it 
does it realistically; and it does it responsibly.
  We have heard in this Chamber over the last few minutes some of my 
colleagues talk about Social Security. My goodness, all responsible 
legislators, all responsible Americans would not dare take Social 
Security surpluses and use those for tax cuts. We are not talking about 
that. If the American public gets a sense that there is just a hint of 
demagoguery in this, they might be right and they actually might be on 
to something because the fact is, this plan does not do that.
  All Social Security surpluses are laid aside. We do not cut Medicare. 
We do not cut into spending. We provide for the adequate national 
defense requirements and, in fact, increase national defense spending 
over the next 10 years, veterans' benefits, and education benefits. 
That is where every 75 cents of this $1 overpayment goes. The other 25 
cents goes back to the taxpayer.
  This is not theory or some abstract debate. You either favor tax cuts 
or you do not. We can all dance around this and we can confuse each 
other and say: It's not fair and it's not reasonable.
  In the end, this place is about decisionmaking, hard choices. It is 
about hard choices, and you either agree that we should cut taxes or 
you do not. That is what we are going to vote on today. There are two 
clear choices: Give the American people a tax cut or keep the money in 
Washington where it surely will be spent.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. HAGEL. Mr. President, I appreciate the opportunity to register my 
strong support and yield the floor.
  Mr. ROTH. I yield 5 minutes to the Senator from Pennsylvania.
  Mr. SANTORUM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SANTORUM. I thank the Chair and thank the chairman for yielding 
me time.
  I, too, rise, as the Senator from Nebraska just did, in strong 
support of returning to the American public what they have overpaid. 
And that, to me, is good business practice. If a business gets 
overpaid, we think they would be honest enough to see that they have 
been overpaid and give back the money to the person who paid more money 
than was needed for what they were buying. In fact, if business did not 
do that, you would think they were ripping you off.
  It is somewhat incredible to me to imagine how the American public, 
when they see they are overpaying their taxes--we have more money than 
is needed to pay for the needs of Government, which are immense; $1.9 
trillion, some pretty big need--the American public, at least through 
the polls, are saying: Well, keep it. We really don't need it. We don't 
really need a tax cut. At least that is what the polls would have you 
believe. I do not believe that.
  I do not believe it is good business for the Government to keep money 
that it does not need because what the Government will do is what a 
business would do. They will take it and use it to benefit themselves, 
not benefit the customer.
  I think that is what we are seeing happen already this year in 
Washington with the surplus projected for

[[Page S10309]]

next year to be some $14 billion. People are just banging down the door 
to spend that money. We spent half the surplus last night. The 
projected surplus is half gone. If we pass the Ag appropriations bill 
in the form it passed last night, it will be half gone. My guess is the 
House, and others, will want to pass even more than that.
  So what my big concern is--I think the Senator from Nebraska hit the 
nail on the head--if we leave the money here, it will be spent. It will 
not be spent to benefit the broad economy. It will not be spent to 
benefit the average taxpayer in America. It will be spent to benefit 
those who are loud enough or politically powerful enough to get that 
money set aside for them.
  That is not the way things should operate when, you, the taxpayer 
have paid more than you should, that we are going to take that money 
and give it to someone who screams the loudest to get that money here 
in Washington, or who has the political clout to get that extra money 
here in Washington. No.
  What we have done in this modest tax relief package--everyone says 
how big this tax relief package is. This is modest tax relief. This is 
incremental tax relief. This phases in over a 10-year period of time. 
This is tied to meeting our surplus targets. In other words, if our 
debt payments do not go down as projected, guess what. Most of this tax 
cut, or a big portion of it, does not even happen in the future years.
  So what is being talked about is this calamitous idea that we are 
going to give all this money--this horrible thing--back to the people 
who overpaid it. And at the same time, many are standing up saying: 
Look, we need this money to spend on all this. We need it here. Of 
course, the American public doesn't need it. You have more money than 
you need back home.
  As someone who is raising four children, and one due in a month and a 
half, I can tell you that raising a family is very expensive. I am not 
too sure anybody would, if you think about it, mind having a couple 
extra hundred dollars to be able to do some things to help them and 
their family.
  That is what we are talking about. It is not a huge tax cut. I wish 
it were. I wish we could reduce taxes more, give more surplus back. I 
wish we could cut Government spending, pare down the growth of this 
Government. But we are not even talking about that. We are talking 
about letting Government continue to increase its spending, letting the 
entitlement programs continue to flourish, and just giving a little bit 
of what is overpaid back.
  I am excited about this particular package. There are lots of goods 
things in this package--reductions in rates, the marriage penalty tax 
relief, and one particular provision I want to speak about for a minute 
or two is the American Community Renewal Act.
  The American Community Renewal Act was not in the bill that passed in 
the Senate. I entered into a colloquy with Senator Roth, and he agreed 
he would look at what was included in the House package. He did. And 
included in this bill out of conference is a bill that does not just 
provide tax relief, which is what we talked about, but a provision that 
helps those people in poor inner-city and rural communities who are not 
being lifted by the rising tide of this economy with incentives, such 
as the zero capital gains tax within these renewal communities.
  One hundred of them would be designated. Twenty percent of them at 
least would have to be in rural areas, with a zero capital gains rate 
to help businesses start in those communities; to provide help for home 
ownership; expensing of businesses would be increased; wage credits; 
real powerful incentives for employment opportunities to happen within 
these communities, housing opportunities to happen within these 
communities, to see a real transformation, using, again, the private 
sector, not public-sector programs, not the Department of Housing and 
Urban Development, but, in fact, private sector incentives for private 
sector development and home ownership, which is the real key to success 
in America.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. SANTORUM. I thank the chairman for including that in the bill 
today.
  Mr. ROTH. Mr. President, I yield 6 minutes to the Senator from 
Minnesota.
  Mr. GRAMS. I thank the Chair.
  Mr. President, in a few hours we are going to cast a very important 
vote to return tax overpayments to working Americans. The passage of 
the conference report of the Taxpayer Reform Act will signal a clear 
victory for all Americans. I commend the Senate Republican leadership 
and especially Chairman Roth for their strong commitment to major tax 
relief in this Congress.
  We promised to return to American families the non-Social Security 
tax overcharges they paid to the Government, and today we are going to 
fulfill that solemn promise. We can now proudly declare that: promises 
made are promises kept.
  The proposed tax relief significantly reduces taxes for millions of 
American families and individuals and immediately eases working 
Americans' tax burden and allows them to keep a little more of their 
own money, again, for their own family's priorities.
  The American people have every reason to celebrate this victory 
because they are the winners in this debate on tax cuts.
  This tax relief is a victory for all Americans, particularly the 
middle-class, who will receive a $800 billion tax refund over the next 
10 years.
  It is a victory for millions of Minnesotans because each family in my 
state of Minnesota is expected to receive $8,000 in tax relief over 10 
years.
  It is a victory for the 22 million American couples who will no 
longer be penalized by the marriage penalty tax, because we completely 
eliminate this unfair tax.
  It is a victory for millions of farmers and small business owners 
because this tax relief enables them to pass their hard-earned legacies 
to their children without being subject to the cruel death tax.
  It is a victory for millions of self-employed and uninsured because 
health care is made more affordable to them with full tax benefits.
  It is a victory for millions of baby-boomers because the pension 
reform allows them to set aside more money for their retirement.
  It is a victory for millions of entrepreneurs and investors because 
the capital gains tax is reduced to stimulate the economy.
  It is also a victory for millions of parents, students, teachers, and 
workers because higher and better education will be available and 
affordable with a variety of tax benefits included in this package.
  By any standard, the working men and women of this country are the 
winners, not Washington.
  Moreover, in my judgment, this tax relief plan is a highly sensible, 
responsible and prudent one. It reflects American values and is based 
on sound tax and fiscal policy. It comes at the right time for working 
Americans.
  We must recall that Americans have long been overtaxed, and millions 
of middle-class families cannot even make ends meet due to the growing 
tax burden. They are desperately in need of the largest tax relief 
possible.
  The budget surplus comes directly from income tax increases. These 
overpaid taxes are taken from American workers and they have every 
right to get it all back.
  This tax relief takes only a small portion of the total budget 
surplus. In fact, only 23 cents of every dollar of the budget surplus 
goes for tax relief.
  After providing this 23 cent tax relief, we have reserved enough 
budget surplus to protect Social Security and to reform Medicare, 
including prescription drug coverage for needy seniors. We further 
reduce the national debt and reserve funding for essential federal 
programs.
  Contrary to Mr. Clinton's rhetoric that tax relief will cause 
recession, cutting taxes will keep our economy strong, will create 
jobs, increase savings and productivity, forestall a recession and 
produce more tax revenues. Somehow, he believes that if Americans spend 
the money, it is bad, but if it is left here for Washington to spend, 
it is good. History has proved again and again that tax cuts work. It 
will prove this tax relief is a sound one as well.
  I am also pleased that this tax relief does not come at the expense 
of seniors. We have locked in every penny of the $1.9 trillion Social 
Security surplus over the next 10 years, not for government programs, 
not for tax cuts, but

[[Page S10310]]

exclusively to protect all Americans' retirement.
  We have been working hard to reform Medicare to ensure it will be 
there for seniors. Prescription drug coverage for the needy will be 
part of our commitment to seniors to protect their Medicare benefits. 
Had the White House and Democrats cooperated with us, we could have 
fixed Medicare by now. The President discounted his own commission on 
Medicare reform.
  In any event, we will continue our effort to preserve Medicare as 
Chairman Roth reveals his Medicare bill in the near future.
  We have reduced the national debt and will continue to dramatically 
reduce it. Debt held by the public will decrease to $0.9 trillion by 
2009. The interest payment to service the debt will drop from $229 
billion in 1999 to $71 billion in 2009. We will eliminate the entire 
debt held by the public by 2012.
  As I indicated before, we have not ignored spending needs to focus on 
tax cuts as has been charged. We not only have funded all the functions 
of the government, but also significantly increased funding for our 
budget priorities, such as defense, education, Medicare, agriculture 
and others.
  In fact, we set aside over $505 billion in non-Social Security 
surplus to meet these needs. This proves we can provide $792 billion in 
tax relief while not ignoring other important priorities.
  This major tax relief does not come at the expense of seniors, 
farmers, women, children or any other deserving group.
  On the contrary, it benefits all Americans and keeps our economy 
strong. And most importantly, this tax relief will give every working 
American more freedom to decide what's best for themselves and their 
families.
  Mr. President, let me conclude my remarks by citing President Reagan 
who once said: ``Every major tax cut in this century has strengthened 
the economy, generated renewed productivity, and ended up yielding new 
revenues for the government by creating new investment, new jobs and 
more commerce among our people.''
  President Reagan was right. This tax relief will do the same.
  Now, Mr. President, we have done our job, and it is up to President 
Clinton to decide if he wants to give back the tax overpayments to 
American families or spend them to expand the government.
  In Buffalo, NY, earlier this year, the President said: If we give the 
money back to the American people, what if they don't spend it right? 
In other words, the President looked down his nose at working Americans 
and said they are too dumb to spend their money right. They are smart 
enough to earn it, not smart enough to spend it. I hope the President 
will trust the American people and make the right decision.
  Mr. ROTH. Mr. President, I yield 5 minutes to the Senator from 
Wyoming.
  The PRESIDING OFFICER (Mr. Thomas). The Senator from Wyoming.
  Mr. ENZI. I thank the Senator.
  Mr. President, I rise in strong support of the Financial Freedom Act 
of 1999. This bill represents the third prong in our plan to restore 
financial security to America's families. Along with saving Social 
Security and reducing the national debt, the Financial Freedom Act of 
1999 marks another significant chapter in our continuing effort to 
bring stability to our national budget and financial discipline to 
Congress.
  I congratulate the chairman of the Finance Committee, Senator Roth, 
for his unwavering determination to provide greater financial freedom 
to America's families. Let there be no doubt about what we are debating 
today. We are debating whether we should return part of the overpayment 
by the taxpayers to the taxpayers, true overpayment. As an accountant, 
I am particularly concerned with that. We need to return the 
overpayment to the people who made the overpayment.
  Or should we keep it in Washington to fund President Clinton's new 
bureaucracies and unproven Government programs? I am not talking about 
funding adequately the ones we have. I am talking about brand new ones 
that will require continuing additional funds. The choice is between 
tax relief and new spending, plain and simple.
  I, for one, believe it is time to reward the ingenuity and hard work 
of our taxpayers by allowing Americans to keep more of what they earn. 
The Financial Freedom Act provides tax relief over the next 10 years 
with cutoffs if the surplus doesn't materialize. By phasing those tax 
cuts in over 10 years, this demonstration assures the American people 
that the money dedicated to Social Security will only be used for 
Social Security. Moreover, by making the majority of the broad-based 
across-the-board tax reduction contingent on reducing the national 
debt, this bill makes a real commitment to reducing the Federal debt 
and forces Congress to live within its means.
  This legislation not only reduces the overall tax burden but reduces 
all the marginal income tax rates, beginning with the lowest rate and 
increasing the ceiling on the new 14-percent bracket. This plan will 
reduce much of the damage imposed by President Clinton's mammoth tax 
hike of 1993 and by the bracket creep that millions of Americans have 
experienced as a result of job and wage growth over the past 10 years. 
This broad-based reduction, which is the backbone of the act, would 
provide tax relief for all taxpayers. Let me repeat that: Anyone who 
now pays Federal income tax will see their bill go down as a result of 
the 1-percent marginal rate decrease in each and every marginal tax 
rate.
  Moreover, this tax cut is especially aimed at the middle class. By 
increasing the income limits of the new 14-percent bracket by $2,000 
for single filers, millions of Americans will see their tax bill 
reduced by $400 per year by this provision alone.
  In addition to reducing all the marginal rates for taxpayers, the 
Financial Freedom Act eliminates one of the most egregious effects of 
our current Tax Code--the marriage penalty. We have heard a lot of talk 
about supporting the fundamental institution of marriage. This bill 
allows us to put our money where our mouths are by doubling the 
standard deduction and doubling the income limits of the new 14-percent 
tax bracket, bringing our tax policy in line with the rhetoric. If you 
are serious about helping the financial needs of millions of married 
couples across the country, you will support this legislation.

  It also reforms our Tax Code and our tax policy by eliminating the 
infamous death tax. We encourage savings and thrift, and we provide 
much-needed relief for millions of ranchers, farmers, and small 
businessmen around the country, people who at the time of death will 
have to end their family business. As a small businessman who worked 
with my wife and three children selling shoes to our neighbors and 
friends in several Wyoming towns, I know firsthand how difficult the 
choices can be when you have to make that kind of a decision. The 
current tax on death punishes countless small businesses and farm and 
ranch families.
  I congratulate, again, the people who have put together this, the 
cooperation there has been between the House and the Senate, the 
outstanding work of providing a balanced picture of tax relief to the 
American people while assuring that we can save Social Security, help 
Medicare, and pay down the national debt.
  Mr. ROTH. Mr. President, I yield 5 minutes to the distinguished 
Senator from Texas.
  Mrs. HUTCHISON. Mr. President, I thank the distinguished chairman of 
the committee for giving us tax relief for the hard-working American 
family.
  We have heard a lot of debate in this Chamber in the last few hours, 
but it comes down to a very simple issue, and that is whether we are 
for giving the people who earn the money the right to decide how to 
spend it. It comes down to one basic issue. We are for tax cuts, and I 
think the question is, Is the President for tax cuts? He campaigned 
saying he was for tax cuts for middle-income people, but the President 
has not supported tax cuts yet.
  In fact, the major area of tax policy that the President gave us was 
the largest increase in the history of America. We are trying to cut 
back on those tax increases because we have a surplus and because we 
believe that the surplus should be shared with the people who gave it 
to us in the first place.
  A lot has been said about Social Security and whether we are going to 
maintain the stability of Social Security. The answer is emphatically, 
we are; $2 trillion will come in over the next 10 years in Social 
Security surplus. The Republican plan that is before us today totally 
keeps that $2 trillion for Social Security stability.

[[Page S10311]]

  The other $1 trillion in surplus over the next 10 years is in income 
tax surplus, withholding surplus, people's hard-earned money that they 
have sent to Washington in too great a quantity. It is that $1 trillion 
that we are talking about. We are talking about giving 25 cents per 
dollar of that trillion back to the people who earn it, and we think 
that is not only fair; it is required.
  I worked very hard with Senator Ashcroft and Senator Brownback to 
eliminate the marriage tax penalty. This bill does it. We double the 
standard deduction so that people will not have a penalty because they 
get married. And, most of all, the people who need it the most are 
going to have total elimination of the tax on marriage. That is the 
schoolteacher and the nurse who get married and all of a sudden are in 
a double bracket, from 15 percent to 28 percent. One earns $25,000, the 
other earns $33,000, and together they go into the 28-percent bracket 
today. This bill eliminates that from the Tax Code forever, period--
gone.
  The President has said he is going to veto that tax relief, and I 
don't understand it.
  Let me talk about what it does for women. Of course, the marriage 
penalty tax hurts women. But we also know that women live longer and 
they have smaller pensions. They have smaller pensions because women go 
in and out of the workplace, and they lose the ability to have that 
growth in geometric proportions in their pensions. That has been an 
inequity for women in our country. We eliminate that in this bill, or 
at least we try. We help by allowing women over 50 who come back into 
the workplace to be able to set aside 50 percent more in their pensions 
to start catching up. So where most people--all of us--have a $10,000 
limit on a 401(k), a woman over 50 who comes back into the workforce 
after raising her children will be able to have a $15,000 set-aside in 
her 401(k). We also give help on IRAs.
  It is very important to a woman who is going to live longer to have 
equal pension rights because she is more likely to have children, raise 
her children, maybe through the 1st grade or maybe through the 12th 
grade. We want to make sure we equalize that and recognize it. We have 
done that. Yet the President says he is going to veto this bill.
  We have tax credits in this bill for those who would take care of 
their elderly parents, or an elderly relative, because we know one of 
the hardest things families face is how to take care of an elderly 
relative who doesn't want to go into a nursing home. Families would 
like to keep them. Sometimes they don't even want to do that, but long-
term care is so expensive that they can't afford it. So we have credits 
for long-term care insurance, and we have credits for those who would 
care for their elderly parents.
  So this bill lowers capital gains, lowers the death tax; it gives a 
benefit to everyone. The working people of this country deserve it. I 
hope the Senate will pass it. I hope the President will sign it and 
make good on all of our pledges to give the working people of this 
country relief.
  Thank you, Mr. President.
  Mr. ROTH. Mr. President, I yield 5 minutes to the Senator from 
Kansas.
  Mr. BROWNBACK. Mr. President, I thank the chairman, the Senator from 
Delaware, for his excellent work on crafting this compromise package 
and putting it together. I think it is a substantial bill of support 
for the American public. We need to give this money back to the 
American public for overpaying their taxes.
  I rise in strong support of the conference report being considered 
today. This important bill provides broad-based tax relief to America's 
families and returns their tax overpayment to them in the form of a tax 
reduction. It is important that Congress return this money to the 
American people and allow them to do with it what they see fit.
  I am particularly pleased to join in this effort on the elimination 
of the marriage penalty. The Senator from Texas, Mrs. Hutchison, has 
led this effort, along with Senator Ashcroft. This bill does important 
work on eliminating the marriage penalty tax and reducing that 
pernicious impact on our society. The American people need to get this 
rebate. I think we can do more and better with it than the Government 
can.
  The conference report before us takes important steps, as I stated, 
toward eliminating the marriage penalty. It doubles the standard 
deduction, as well as widening the tax brackets, which does much to 
alleviate that terrible impact that the marriage penalty has on 
America's families. It impacts nearly 21 million American couples in 
this country.
  Doubling the standard deduction helps families. Our families 
certainly need help. I am, therefore, pleased that the conferees kept 
this provision, and I am hopeful that the President will sign the 
conference report and provide America's families with this important 
tax relief which they clearly deserve and clearly need.

  Congress has drafted a tax bill. Now it will be up to the President. 
This session, Congress utilized its opportunity to provide for 
comprehensive tax relief. It has done that. Now the President must make 
use of this unique opportunity to help eliminate the marriage penalty.
  It affects so many couples in our country--21 million--by forcing 
them to pay, on average, an additional $1,400 in taxes a year. The 
Government should not use the coercive power of the Tax Code to erode 
the foundation of our society.
  We should support the sacred institution and the sacred bonds of 
marriage. Marriage in America certainly is in enough trouble the way it 
is, and it doesn't need to be penalized by the Government. According to 
a recent report out of Rutgers University, marriage is already in a 
state of decline. From 1960 to 1996, the annual number of marriages per 
1,000 adult women declined by almost 43 percent.
  Now, when marriage as an institution breaks down, children do suffer. 
The past few decades have seen a huge increase in out-of-wedlock births 
and divorce, the combination of which has substantially had an overall 
impact on the well-being of our children in many ways. It has affected 
every family in this country. People struggle, and they try to help to 
support the family and the children as much as they can. But this 
institution of marriage has had great difficulty. In my own family, 
there has been difficulty as well. The Government should not tax 
marriage and further penalize it. There is a clear maxim of Government 
that if you want less of something, tax it; if you want more of 
something, subsidize it. Well, we don't want less of marriage. We 
should not tax it.
  Study after study has shown that children do best when they can grow 
up in a stable home environment, with two loving, caring parents who 
are committed to each other through marriage. Newlyweds face enough 
challenges without paying punitive damages in the form of a marriage 
tax. The last thing the Government should do is penalize the 
institution that is foundational in this civil society.
  This year we change that. The new budget estimates, from both the 
Office of Management and Budget and CBO, show higher-than-expected 
surplus revenue, even after accounting for Social Security. Of course, 
for some, this is no surprise. We have known all along that growth does 
work. It helps and it works. Of course, the surging surplus is as a 
result of nonpayroll tax receipts. It is really a tax overpayment to 
the Government in personal income and capital gains tax. We must give 
the American people the growth rebate they deserve and return the 
overpayment. I believe we can, and must, start--and start now--to rid 
the American people of the marriage tax penalty. I look forward to 
working with the Chairman, as well as other colleagues, to make sure we 
get this job done.
  In closing, this is a day we should celebrate. We are able to do 
something that sends a strong signal of support to families across this 
country, which is critically important to do. Yes, this has an impact 
overall, but I think it is a very positive impact to send that sort of 
signal to our struggling young families across this country. I think we 
clearly should do that.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, I have the pleasure to yield 15 minutes 
to the distinguished Senator Lautenberg, my neighbor and friend from 
New Jersey, followed by 5 minutes to the distinguished Senator from 
South Dakota.

[[Page S10312]]

  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. I ask whether or not the Senator from South Dakota 
would like to go first.
  Mr. JOHNSON. I say to the Senator that I am certainly prepared to go 
at this time. But I would accommodate my friend.
  Mr. LAUTENBERG. I suggest that he go first.
  Mr. MOYNIHAN. Mr. President, I reverse my request.
  The PRESIDING OFFICER. The Senator from South Dakota is recognized 
for 5 minutes.
  Mr. JOHNSON. I thank my friend from New Jersey.
  Our Nation deserves a thoughtful tax and budget plan from Congress 
that places an emphasis on paying down our existing accumulated 
national debt, while protecting Social Security and Medicare, and 
investing in key domestic priorities and providing targeted tax relief 
for middle-class and working families.
  On the marriage penalty, for instance, most families in America get a 
marriage tax bonus, not a penalty. But for those who are penalized, we 
can address that in the Democratic plan while approaching this in a 
balanced fashion. But, sadly, the radical tax cut bill being considered 
by congressional Republicans could be described as simply ``foolish,'' 
were it not so seriously dangerous to the future prosperity and 
security of every American family.
  There are obvious reasons why even leading Republican economists so 
vigorously are condemning this irresponsible bill, and why it has 
become the butt of so much ridicule.
  First, the bill assumes that a $964 billion surplus over that needed 
for Social Security will absolutely materialize over the coming decades 
while our budget estimators in the past haven't even been able to 
estimate the economic growth over a year much less over 10 years. 
Common sense tells us that we should be careful about committing to use 
money that we do not yet have and may never have.
  Second, this plan fails to use even a cent of the supposed $1 
trillion surplus above Social Security to help pay down the $3.7 
trillion public debt that our Nation currently owes. Paying down our 
debts would do more to keep the American economy growing than any other 
single thing the Government could do.
  Third, in order to find room for a $792 billion tax cut, we would 
have to not only pay down the accumulated debt but we would have to cut 
defense buying power by 17 percent and domestic programs, meaning law 
enforcement, VA, health, education, school construction, medical 
research, national parks, and so on by 23 percent over the coming 10 
years. If we decline to cut defense, under this plan we then would have 
to cut these domestic initiatives by an outrageous 38 percent. What is 
even worse is that this tax bill is cynically constructed so that the 
drain on the Treasury will explode and triple in cost during the second 
decade after passage.

  Fourth, economic experts all over the country tell us that this tax 
package would cause interest rates to go up. At the current time, the 
Federal Reserve is raising interest rates and warning us that putting 
one foot on the gas and one foot on the brake is not a sensible 
economic policy for our country.
  The small tax cut that most Americans would receive would be negated 
through higher costs for financing everything from a house, to a car, 
to college education, to business expansion, and farming and ranching 
operations. If this bill becomes law, our middle-class families will 
wind up with fewer and not more dollars in their pockets.
  Fifth, this bill does absolutely nothing to prolong the life of 
Medicare much less provide for drug coverage payment reform that 
hospitals and clinics and medical institutions all over our country are 
in dire need of securing.
  Specifically, this legislation outrageously provides an average 
$22,500 tax cut for the wealthiest 1 percent of Americans. But a 
typical American family--a family in my State of South Dakota with an 
income of $38,000--would get a couple of bucks a week while paying 
higher interest costs for everything they buy.
  Wouldn't it make more sense to use a large portion of any surplus 
that actually materializes to pay down the accumulated national debt 
and then provide for targeted tax relief for middle-class and working 
families, protect Social Security and Medicare, and make some key 
investments in education, in the environment, infrastructure, and the 
things that we need to continue the economic growth in America?
  I yield the remainder of time that I may have to my colleague from 
New Jersey, Senator Lautenberg.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. Mr. President, I obviously oppose this Republican tax 
bill. I am going to explain why in a minute.
  But I would like to start off by using an expression that we heard 
kind of invented around here, and that is: There they go again. There 
they go again. Or: There you go again.
  The party that claims that its mission is fiscal responsibility has, 
once again, resorted to tax cuts to establish its role in fiscal 
management.
  I find it shocking. I must tell you that we suddenly wanted to 
distribute a tax cut, which everybody likes to do. Make no mistake 
about it. I heard the President this morning say: After we finish 
securing Social Security and securing some extra longevity for 
Medicare, then we ought to distribute some tax cuts to people.
  But if you ask anybody who has a mortgage--and most people I know 
have one--whether they would like to get rid of the mortgage before 
they do anything else, if they had a choice, they would take the 
mortgage relief. I will tell you that. They would say: Look, that is 
the one thing that bedevils us, and especially if the mortgage lives on 
beyond their existence on Earth, and it passes on to their children and 
their grandchildren. They would say: Look, let's get rid of that 
mortgage.
  That is what we are talking about. We are all mortgagees in common 
when it comes to the national debt. We owe it. My kids owe it. My 
grandchildren will owe it if we don't get rid of that debt.
  What is proposed by the Democrats is that we pay down the debt, that 
we have a target of 15 years to get rid of all the public debt. It 
would be unheard of in contemporary terms, and maybe in historical 
terms as well, because I don't think there is any country in the world 
that has any advancement that would find itself without significant 
debt outside the government. But that is what is being proposed.

  Here we are. We want to give a tax break. And it works like this: The 
top 1 percent of wage earners who average $800,000-plus a year would 
get a $45,000 tax cut--just under $46,000. The person who works hard 
and struggles to keep their family intact, who struggles to keep 
opportunity available for their children's education and training and 
earns $38,000 a year, is going to get about 40 cents a day in tax 
relief. This fellow who earns over $800,000 is going to get a $45,000 
tax break.
  I have heard my colleagues on the other side say, well, they pay most 
of it; why shouldn't they get most of it? Why? Because what difference 
does it make in the life of someone earning $800,000 and some a year 
whether they get a $45,000 tax cut? I am not saying they shouldn't get 
anything, but it sure doesn't compare with the impact that it has when 
you take $157 and you give it to someone earning $38,000. It doesn't do 
much for them at all.
  It permits this guy to buy a new boat, maybe even to make a 
downpayment on a second home. But to the other people who are 
struggling, often two-wage earners in the family, struggling to manage 
the future, it is impossible if you make $38,000 a year and you have a 
couple of kids.
  The Republican plan is now stripped down to its bare essentials. It 
says to raid Social Security if we must to give this tax cut, and don't 
pay any attention to Medicare, while people all over this country worry 
about their health care. Over 40 million of them have no health 
insurance at all. We are talking about Medicare and the sensitivity of 
appropriate health care for people who are in their advanced years.
  Our Republican friends are saying: Don't worry about Medicare. Maybe 
we will find a way to take care of it one day. Or Social Security: 
Well, if it expires--I guess that is what they are saying--we will have 
to deal with it.

[[Page S10313]]

  Just think. With all of this robust economy and the surpluses that we 
have, the Republican tax plan says this: That in a mere 6 years we will 
be dipping into the Social Security surplus--6 years. With all the 
promises about the $2 trillion that is going to go into Social Security 
because it is earned there, it will start to be decimated within 6 
years under the Republican tax plan.
  I hope the message that goes out of here is that we are two different 
philosophies on how we ought to treat our treasure trough because we 
have been smart but we also have been lucky. We are lucky that we live 
in a country that is as rich in resources and talent and opportunity as 
is America. But, at the same time, it took a lot of work to plan for 
this. It took President Clinton's leadership when he arrived in office. 
Deficits were $290 billion a year--much of that attributed to the 
leadership of President Reagan who made a decision, in all due respect, 
that tax cuts were the most important thing in the world and cut taxes 
all over the place while he borrowed from the public to finance it. 
What was the result? Inflation out of sight, and a lot of joblessness 
as well. We don't want to do that again. We should have learned. We are 
smart enough to have learned it the first time we saw it.

  What will happen now? Beginning 6 years hence in 2005, Social 
Security starts to decline at a time when a lot of baby boomers arrive 
at retirement age. It could force inflation upon us and cost more for 
borrowing. Whether for a house mortgage, an automobile, appliance, 
people would be paying more.
  One of the most astounding things I find, all Members hover around 
Alan Greenspan because he has been so clever in the way he has managed 
his share of the economic policy in this country. We listen to every 
word. I know him well. He used to be on the board of my company when I 
was chairman of the company. We would listen carefully to his advice 
because it was so profound, so deep, so insightful. The Republican 
message is, ignore what Alan Greenspan says about the timing not being 
right; forget that he has warned Members in the Budget Committee--and I 
am the senior Democrat on the Budget Committee--that tax cuts are not 
the best way to go. He said rather than having an outright spending 
binge, maybe tax cuts, the best thing to do is pay down the debt.
  The message rings loud and clear. I am shocked that the wise heads 
who exist on the other side of this aisle don't understand that the 
risk they are taking is our economy at large. When we look at the 
projections and we hear what the Republicans are using to finance this 
tax cut--almost $800 billion direct in higher costs as a result of the 
interest on the remaining debt--it just doesn't make economic sense. It 
is not fair to our citizens to see the guys at the top, the people at 
the top who make all the money, get these incredible bonuses in tax 
cuts while the person who struggles to keep food on the table and a 
roof over their head gets a measly 40 cents a day in their tax cut.
  What will happen? What will happen is, tax cuts will come along if 
things go as they are, unless the President has the courage to step up 
and say, no, the American people don't want this; that is not their 
preference. Everybody wants to pay less in tax, but they want a stable 
society, a stable economy. They don't want their kids saddled with 
obligations in the future.
  This tax cut will also mean we will cut deeply into programs. We will 
cut education by 40 percent. Will we cut veterans' programs? The 
veterans now are screaming in pain because they are not being taken 
care of as they should be or as we promised they would be when they 
were recruited.
  Cut the FBI by 40 percent? Thank goodness we have trained FBI people. 
It is hard enough to recruit. Now we are talking of cutting 40 percent 
while we still have a significant crime problem in our country, despite 
prosperity? I don't think so.
  Will they cut border guards? Are we going to try to hold back the 
tide of illegal immigration, with fewer people to do it? That is what 
the result will be.
  The truth of the matter is, they are talking about a surplus that is 
largely imaginary. It is forecasting; it is anticipated; it is hoped 
for. That, enacted into legislation, will make an enormous difference. 
Once the tax cut plan is in place, that is mandatory. However, the 
surpluses are hoped for, anticipated.
  We have to alert the public what is going on. It will be a tax cut 
that will be talked about as a Republican accomplishment. I make a 
prediction--and I wish we could look inside everybody's thinking--that 
the Republicans know very well that this tax cut cannot go through, but 
what they want to do is have a speaking platform. They want politics, 
not policy. They want everybody to believe they are the only ones who 
are thinking about the average working person. The fact is, they are 
thinking about themselves because they know the President is committed 
to veto this. They know the economy could not stand this kind of a cut.

  Imagine cutting those programs and saying to the American people: We 
have to take 40 percent from various programs, and we will not do a 
thing to extend the solvency of Social Security, not do a thing about 
Medicare; when it dries up, it dries up, friends, in 2015. If you are 
at an age when Medicare will be important to you, don't count on it. 
You had better save your money because you will have to take care of 
yourself on that score.
  In Medicare, the cuts would exceed $10 billion a year. Medicare cuts 
are squeezing many hospitals and other health care providers.
  In sum, the game is over. We will be voting at a later time today. We 
have the disadvantage of being in the minority. It is not my preferred 
position, but the facts are there. The President is our last hope 
because the Republicans have decided that no matter what, they are 
going to give a tax break. No matter what the advice is, no matter what 
the inequity is, no matter what programs are cut, no matter what we do 
to veterans' care, no matter what we do to Head Start, no matter what 
we do to education generally, it doesn't matter.
  They say a tax cut is the most important thing on our agenda. The 
numbers are there, and the votes are there. We will lose this one. I 
believe it is possible some of our Republican friends will see the 
light and say, this is no time to do a roughly $800 billion tax cut, 
but it is time to continue to pay down our debt, improve our financial 
condition, and help preserve Medicare and Social Security for future 
generations.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, I congratulate the Senator from New 
Jersey on a forceful argument.
  I now have the pleasure to yield 10 minutes to the Senator from North 
Dakota and 10 minutes to the Senator from Connecticut.
  Mr. DORGAN. Mr. President, I am happy to allow the Senator from 
Connecticut to go first.
  The PRESIDING OFFICER (Mr. Brownback). The Senator from Connecticut 
is recognized.
  Mr. LIEBERMAN. Mr. President, I thank my colleagues.
  I rise to oppose this conference report and the $800 billion tax cut 
it contains. I do not rise reflexively. In fact, my reflex, similar to 
most of my colleagues, is to support tax cuts, not to oppose them.
  I was proud just 2 years ago to be a lead cosponsor, for instance, of 
the cut in the capital gains tax and to support so many of the 
initiatives of the chairman of the Finance Committee in encouraging 
savings. However, I am going to oppose this tax cut as I would tax cuts 
at any time when they were not needed to help our economy, not 
justified by the availability of money to support the tax cut. These 
are similar arguments I made against the reconciliation bill, this tax 
cut, when it was before the Senate last week.
  It reappears as a conference report. It is essentially the same. The 
chairs have been shuffled on this Titanic, but the fact remains that 
this big luxury liner of a tax cut is headed for an iceberg. It may 
well take the American economy down with it. The iceberg here is the 
cold, hard reality that there is no surplus to pay for the cut that 
this enacts. In fact, this Congress, in an act of legislative 
schizophrenia, is on one side saying there is a surplus, beginning with 
next year, that justifies this tax cut; on the other side, through 
fictional emergency appropriations, through double counting, through 
overspending, is spending more than the surplus projected for next 
year. So that

[[Page S10314]]

the reality is that ``there is no there there.'' There is no surplus 
there to pay for this tax cut.

  My colleagues cite the Congressional Budget Office saying there will 
be, for instance, a $14 billion surplus next year and almost $1 
trillion over the 10 years. But, as has been said on the floor, CBO, 
after making those surplus projections, also issued a report which 
makes very clear that they are based on Congress exercising self-
control, the kind of self-control over spending we are showing each day 
of this session we are unable to exercise.
  If you take the $1 trillion surplus the Congressional Budget Office 
estimated and then simply assume that Congresses over the next 10 years 
spends only the amount of money to operate our Government that we are 
spending this year, in 1999, adjusted only for inflation--real 
dollars--then that projected surplus of $1 trillion suddenly becomes 
$46 billion. What does it require to hold the $1 trillion surplus? Cuts 
in spending that we all know are untenable. They are not going to 
happen. This Congress, and no Congress over the next decade, would 
enact them.
  I am privileged to serve on the Senate Armed Services Committee. I 
think in that capacity I have learned some about the needs of our 
national security and our military, our defense. To achieve the $1 
trillion surplus and live within the caps that currently exist would 
require cuts in defense spending over the next decade of approximately 
$200 billion. We cannot fulfill our constitutional responsibility to 
provide for the common defense of the United States of America over the 
next decade with $200 billion in cuts.
  I have too much confidence in my colleagues who serve today, as well 
as those who will serve over the next decade, to believe we would ever 
so jeopardize our security. It is just another way of saying the 
surplus projections are not real, and therefore enacting a tax cut 
which will not be backed up by available revenue will take America back 
down the road to a deficit before we hardly have had a chance to even 
appreciate the possibilities of a surplus.
  Let us remember also a $1 trillion surplus estimate is based not only 
on a capacity in Congress to cut spending that we have clearly shown 
already in this session we do not possess because it is based on a 
projection of continued 2.4-percent growth in our economy over the next 
decade, extending what is already the longest peacetime growth in an 
economy in our history. Just look at the news in the last week or two 
and consider the probability that we will continue to grow over this 
next 10 years, unimpeded by the world and events in the world. The 
value of the dollar has weakened in recent weeks, creating great alarm 
in other industrialized democracies, particularly in Europe and Japan, 
our close allies, for fear of what that will do to their economies, and 
also for fear of what that will do to the foreign dollars that are 
currently invested in our economy that may be withdrawn and the 
consequences that would have for our economy.
  Have you been following the stock market in recent days and watching 
the extraordinary gyrations in the American market which show 
underlying unease? Do we want to put into that situation a large tax 
cut, a tax cut of this immense size that will further threaten 
inflation and instability in our economy? Why? Why take the risk? 
Fiscal responsibility helped to bring our economy to the point it is 
today: An unprecedented combination of high growth, low unemployment, 
low inflation. Why risk it all for a tax cut that is not needed to 
stimulate the economy and not demanded by the people of the United 
States of America?

  I think we have to be conscious of how our fiscal actions affect the 
very global economy which helps to give us our strength. We are the 
only G-7 country running a budget surplus today. We are the only 
leading industrial economy that is positioned to deal with the global 
demographic challenge of retiring baby boomers, if we discipline 
ourselves. As Asia and South America struggle through economic 
difficulties, we must remember that any sign of economic instability 
here could trigger an economic crisis there that will come back to bite 
us. We must have a strong economy. We have one now. Why jeopardize it? 
Why encumber it with debt? Why not save this money, pay down the debt, 
store it up to weather any economic crisis that may come our way?
  There are times when I think of the famous Biblical story where 
Joseph advised Pharaoh in good times to put some away because good 
times would not last forever. I think we are in such a time now so we 
dare not let the cows and corn absorb themselves, as occurred in 
Joseph's dream.
  The result, I fear, is by passing a major tax cut, one paid by an 
imaginary surplus, we would incur sizable debts for years to come. 
Besides the effects on the financial markets and on our economy, we 
would leave little or no money available for building the solvency of 
Medicare and Social Security and thus raise the specter of a major tax 
increase down the line when we will least be able to afford it to 
compensate for our profligacy now.
  Finally, as has been said, I think anybody who has been following 
what Chairman Greenspan has been saying does not have to pick at the 
tea leaves. It has been very clear. If we cut taxes to this size now, 
the Federal Reserve will increase interest rates soon after. That will 
help to depress the economy and also hit average working Americans 
literally where they live, driving up the cost of their mortgages, 
their car payments, their credit card bills, and student loans to the 
point it would dwarf any tax benefit they might receive from this 
conference report.
  I present as evidence an analysis done for Business Week magazine by 
Regional Financial Associates of West Chester, PA, which says that 
wiping out the debt, the national debt, by 2014 would raise the 
economy's growth rate by more than one-quarter of 1 percent at the end 
of the 15 years, and that real annual household income would grow by 
$1,500. That is more than three times, this study shows, what a tax cut 
of this size would boost the GDP and household income. A tax cut such 
as the one passed in the House, according to this study, would raise 
household income by $400; whereas paying down the debt would raise 
household income by $1,500.
  So I will vote against the conference report and say when the 
President vetoes this bill he will not just be making another smart 
partisan political move in a political chess game; he will be saving 
the American economy from real damage.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The time of the Senator has expired.
  The Senator from North Dakota is recognized for up to 10 minutes.
  Mr. DORGAN. Mr. President, I wanted to come and visit on the proposal 
on the floor briefly. I was trying to think of a word to describe all 
of this, and I was thinking of a story I had heard about Daniel Boone, 
who was a great Kentucky backwoodsman.
  He was most at home in the backwoods and known for his long hunts, 
traipsing through the backwoods of Kentucky without a compass. He was 
asked once if he had ever been lost. Daniel Boone said: No, I can't say 
I was ever lost, but I was bewildered once for 3 days.
  I thought of that term ``bewildered.'' I cannot think of anything 
that better describes my reaction to conservatives bringing a plan to 
the floor of the Senate that is so unconservative and so risky for this 
country. It is enough to bewilder the entire country, to see people who 
say they are conservatives decide that it is not their intent to help 
pay down the national debt during good economic times, it is not their 
intent to try to conduct the business we need to conduct to deal with 
the big challenges of Social Security and Medicare and the demographic 
time bombs that exist in those programs, it is not their intent to do 
that. Their intent is to package up a nearly $800 billion tax cut 
before we have had the first dollar of surplus and say for the next 10 
years they are going to have this sort of riverboat gamble with this 
fiscal policy.
  Let's talk just for a bit about where we are and then where we have 
been.
  What is happening in this country? First of all, the country has an 
economy that is the envy of the world. Unemployment is down, inflation 
is down, home ownership is up, personal income is up, the welfare rolls 
are down, crime is down, economic growth is up, and the budget deficit 
is about gone.

[[Page S10315]]

  Go back about 8 years. What was happening in this country then? A 
$290 billion annual deficit that was continuing to rise and economists 
predicted they would see these deficits rise forever into the future. 
We had a Dow Jones Industrial Average that had barely reached 3,000. We 
had a sluggish, anemic economy; job growth, 1988 to 1992 was one of the 
worst 4-year periods in history; unemployment rates, 7.1 percent 
annually from 1981 to 1992; median family income fell by $1,800 in a 4-
year period; real wages were falling; welfare rolls were increasing.
  Have things improved in this country? You bet they have improved in 
this country. They have improved because we passed a new fiscal policy, 
passed a plan in the form of legislation in 1993. Some of our 
colleagues predicted it would throw this country into kind of a train 
wreck and ruin the economy. The economy was in big trouble back then. 
It is much improved now. We all understand that.
  In fact, today's newspaper is really interesting. A tiny little 
article on page 5 says:

       Treasury plans to buy back debt.

  My Lord, that ought to be on the front page with 3-inch headlines:

       Treasury plans to buy back debt.

  This country has $5.7 trillion in debt, and when we started with this 
plan we had a $290 billion deficit in that year alone, and it was 
expected to continue to grow. Now we have a balanced budget, and the 
Treasury is beginning to buy back debt.
  If we have surpluses that economists say they can see well into the 
future, what do we do? During tough economic times, it seems to me, a 
country always borrows money. How about during good economic times? 
Does a country pay it back? Does this country say, in giving that rare 
gift to the young people in this country: We will reduce the Federal 
debt; we ran it up during tough times, but in good times when we have a 
surplus, we will reduce the Federal debt? No, that is not what the 
majority party says. The majority party says: Here are our choices. Big 
tax cuts, most of it going to the upper-income folks; nothing for 
Medicare extension; nothing for education and other key investments; 
nothing for Social Security solvency; nothing for debt reduction. They 
say big tax cuts.
  How big are the tax cuts? Here are the pie charts. The top 1 percent 
of income earners in this country get a $46,000 tax cut, and the bottom 
20 percent get $24. Is that surprising? No. It is the same tired, 
chronic problem that always is brought to us in the Senate when the 
majority party writes a tax bill.

  This is a bar graph. You can barely see the bottom 60 percent. They 
only get $138; the top 1 percent, $46,000.
  How about this Social Security issue? This plan also raids the Social 
Security program after the first 5 years. That is a plain fact.
  What are our choices? The enduring truth of this country's existence 
for a number of decades has been two things: One, a cold war with the 
Soviet Union; and, two, a budget deficit that seemed always to grow 
worse. For four or five decades, that was the enduring truth that was 
overhanging all of our choices. Now the Soviet Union does not exist, 
the cold war is over, the budget deficits are gone, and everything has 
changed.
  Economists predict surpluses well into the future, and I said before 
these are economists who cannot remember their home phone numbers or 
addresses and they are telling us what is going to happen 3 years, 5 
years, 10 years into the future. God bless them, maybe they are right, 
maybe not. Forty of the forty-five leading economists the year prior to 
the last recession predicted it would be a year of economic growth. So 
economists do not always hit the mark. Economics, as you know, is 
psychology pumped with a little helium, an advanced degree, and then 
they give us projections. Our friends on the other side say just 
projections, that is enough, just projections alone will compel us to 
pass a bill that will take $800 billion and put it in the form of tax 
cuts, the substantial majority of which will go to the wealthiest 
Americans, and they will decide to take that gamble with the American 
economy.
  It is their right. They have the votes. We do not weigh them here, we 
count them. And when you count up the votes, they win. But it is a 
risky riverboat gamble for this country's economy. Those who have been 
giving us the most advice about this plan of theirs and how wonderful 
it is for our country are the very same people who were so 
fundamentally wrong 8 years ago.
  Now they say: We have a new plan. I say: What about your old one? It 
seems to me what we ought to do is make rational, thoughtful choices. 
Yes, there is room for a tax cut if we get the surpluses that the 
economists predict.
  The first choice, it seems to me, ought to be, during good economic 
times you pay down part of the Federal debt. That is the best gift we 
could give the children of this country, and that would also stimulate 
lower interest rates and more economic growth.
  The second choice for us to decide as a country is, we are going to 
confront a demographic time bomb in Medicare and Social Security, and 
we must confront it; let's use some of these surpluses to do that.
  Third, let's also make sure our investments that make this a better 
country and better place in which to live are provided for. Yes, 
education, health care. Does anybody really believe it is going to help 
this country to have massive cuts in a program such as WIC, the 
investment we make in low-income pregnant women and children? Does 
anybody think massive cuts in those kinds of programs or massive cuts 
in Pell grants for poor students to go to college are going to help 
this country? I don't think so. That is where this plan leads us.
  Our choices, in my judgment, are use this projected surplus when it 
exists to make a real dent in this country's debt and, second, let's 
have some targeted tax cuts, but after we have committed ourselves to 
extend the solvency of Social Security and extend the solvency of 
Medicare. Then let's make sure those programs that invest in human 
potential really do work; those programs in education and health care 
that make this a better country, let's make sure those programs are 
provided for as well.
  To develop a plan that implicitly assumes--and, yes, it does, no 
matter how much they decry that is not part of what they are doing--
that implicitly assumes you are going to have 20-, 30-, and up to 40-
percent cuts in programs that we know in this country work, that 
strengthen this country and improve this country and invest in the 
lives of people in this country in a very positive way, makes no sense 
at all.

  My colleagues have used charts to describe this tax proposal. There 
is, it seems to me, no chart that is better than this chart, which is 
where we were and where we are going. I hope we will decide to vote 
against this tax cut and have a more sensible fiscal policy as we go 
forward.
  I yield the floor.
  The PRESIDING OFFICER. The Senator's time has expired.
  Who yields time?
  Mr. GRAMM. Mr. President, I yield myself 20 minutes.
  The PRESIDING OFFICER. The Senator from Texas is recognized for 20 
minutes.
  Mr. GRAMM. Mr. President, I have been called many things, some not 
always so flattering or nice, but I have never been called 
unconservative because I thought we ought not to let Government spend 
working people's money rather than giving it back to them.
  There have been a lot of issues raised, and I want to go through and 
answer each and every one of them. Let me start with the rhetoric of 
our dear Democrat colleagues about, let's pay down this debt; don't 
give this money back to working people; we don't know what they are 
going to do with it; they might waste it; they might use it in an 
unwise way. Let Government keep it and we will pay down the debt, our 
Democrat colleagues say. But the problem with that rhetoric is it does 
not comport with the facts. Our problem is what they are doing speaks 
so loudly on this issue that we cannot hear their words.

  I have here a chart. I know this chart is hard to read because my 
mama saw it on television and could not read it. But believe me, I can 
read it, and I am going to read it to you.
  Both sides tend to claim we are right about figures. But to make 
Government work, we have a nonpartisan organization called the 
Congressional

[[Page S10316]]

Budget Office that is made up of experts, accountants, economists, that 
basically serve as a reality check on both Democrats and Republicans.
  They just completed what they call their Mid-Session Review, where in 
the middle of the year they looked at the President's budget, which our 
Democrat colleagues are supporting, and they looked at our budget 
resolution, which included our $792 billion; and they reported to the 
Congress and the American people about these two competing programs and 
what they would mean in terms of the Government budget.
  If you listened to our Democrat colleagues, they are trying to tell 
you it is a bad idea for us to give back roughly 25 cents out of every 
dollar of the projected surplus to working people. They say: Let us pay 
down debt.
  But when the Congressional Budget Office looked at the President's 
budget, they found that the President is proposing, over the next 10 
years, in his budget, to spend $1.033 trillion on increases for 81 
Government programs. They found that the President proposes spending 
$1.033 trillion on 81 programs as an alternative to our tax cut, and 
since our tax cut under the Republican budget is $792 billion, we 
actually pay off $219 billion more in debt than the President does. 
They talk about this money being used to pay down debt, but the 
President not only spends every penny of the non-Social Security 
surplus, he has to plunder the Social Security trust fund in 3 of the 
10 years just to pay for all of his new spending.
  So when you hear one of our Democrat colleagues say: Oh, it is a 
terrible idea to give working people back roughly 25 cents out of every 
dollar of the surplus because wouldn't it be better to use it to buy 
down debt? Please remember that the budget they support, written by 
President Clinton, spends every penny of the non-Social Security 
surplus, plus roughly $29 billion. So while they say: Let us buy down 
debt. Their program is to spend every penny of that money on increasing 
81 government programs.
  The reason this is so important that people understand is, this is 
not a debate between buying down debt and tax cuts. In fact, as the 
nonpartisan Congressional Budget Office has shown, after you look at 
all the spending the President wants to do, he would buy down debt 
$1.959 trillion. Our budget, with this tax cut, would buy down debt 
$2.178 trillion, or $219 billion more.
  The debate is not between buying down debt--in fact, we pay off more 
debt than the Democrats do. The debate is between spending the money on 
these 81 Government programs versus letting Americans keep more of what 
they earn.
  If we were going to have a totally honest debate, it would be our 
Democrat colleagues standing up and talking about these 81 Government 
programs and the $1 trillion they would spend, and asking working 
Americans tonight to listen to what they say; listen to our tax cut; 
and then sit down around their kitchen table and ask themselves a 
question: Can Government in Washington, with President Clinton's 
programs, spend this money to help our family more than we could if we 
got to keep the money to spend on our own family? Can they do a better 
job spending our money than we can?
  Obviously, that is a very different debate. Our colleagues do not 
want to have that debate. But their budget would spend every penny of 
the non-Social Security surplus.
  So when people are saying: Don't give this tax cut. Let us buy down 
debt, their budget spends every penny of this money, plus plundering 
some of the Social Security trust fund.

  So the debate is about whether we let the American people have the 
money and save it or spend it or invest it or whether they want to let 
Government spend it.
  Our colleague said: Let's put some money away in case the good times 
don't last. Who is better to put money away in case the good times 
don't last? Working people, with their own money, or Government? When 
is the last time anybody remembers the Government putting money away 
for a rainy day?
  I don't remember it. We are already $21 billion over the spending 
totals that the President and the Congress agreed to. We are not 
putting any money away here in Washington.
  Yesterday, we had the adoption of a farm bill that spent another $7.4 
billion, taking every penny of it right out of the surplus. So this 
money is being spent, is the first point, and that is the debate.
  The second point is, some of our colleagues have said: Well, boy, 
this is a huge tax cut, and we don't need this tax cut.
  And so I have two sets of figures I want to ask you to look at. The 
first is very interesting to me. These are the 7 years in American 
history where the tax burden on the American people has been at its 
highest level. One of my staffers, clever as he is, summed this up by 
saying, the ``Causes of Record Taxes: War and Clinton.'' Because if you 
look at the record tax burdens in American history, out of the six 
highest, four of them are Clinton years, and two of them are World War 
II--Harry Truman and Franklin Roosevelt--when defense was 38 percent of 
the economy and 37 percent of the economy. Now it is less than 3 
percent.
  The only other year where we have had a tax burden even approaching 
the one we have now was the year Ronald Reagan became President, and we 
were debating cutting taxes across the board by 25 percent.
  Our colleagues say: Well, it was just a terrible thing to do. We 
should have never cut taxes when Ronald Reagan was President.
  A couple making $50,000 a year, had we not had the Roth-Kemp tax cut, 
would have been paying $12,626 a year now in income taxes instead of 
paying $6,242. Our Democrat colleagues think that would be great. We 
thought it was a bad idea. So in the Reagan budget we cut taxes. The 
economy started to grow. We rebuilt defense. We won the cold war. We 
tore down the Berlin Wall. A lot of good things happened.
  But this is the most telling chart of all. You hear all this stuff 
about: Oh, this is a huge tax cut, and many of the writers and many of 
the columnists are beginning to pick this up. But nobody goes back and 
looks at the facts.
  Mr. DURBIN. Would the Senator yield for a question?
  Mr. GRAMM. I will be glad to yield when I get through if I have time.
  Now here are the facts. If you take revenues over the next 10 years 
that are projected, our tax cut is less than 3.5 percent. In other 
words, our tax cut cuts taxes, in terms of projected revenue, by under 
3.5 percent. That is this huge tax cut we are talking about.
  But this chart is really telling. The day Bill Clinton became 
President, before we raised taxes--or President Clinton raised taxes--
many of our colleagues have pointed out that not one Republican voted 
for that tax increase; and I am proud to say that is true--before he 
raised taxes in 1993, the Government was taking 17.8 cents out of every 
dollar earned by every American in Federal taxes.
  Today the Federal Government is taking 20.6 cents out of every dollar 
earned by every American in Federal taxes. That is the highest 
peacetime level of government taxes in American history, the second 
highest tax burden, second only to 1944 in American history. If we took 
the whole $1 trillion non-Social Security surplus--and I note that we 
are taking less than $800 billion--if we took all of it and cut taxes, 
we would still be taking, when the full tax cut is in effect 10 years 
from now, 18.8 cents out of every dollar earned by every American in 
Federal taxes.
  Why is that important? It is important because what is being called a 
huge tax cut actually leaves taxes substantially above where they were 
the day Bill Clinton became President. So what is being called a huge, 
irresponsible, riverboat gamble--I was thinking Senator Breaux might 
want to defend riverboat gambling--what is being called a huge gamble, 
we are simply talking about giving back some of this huge tax increase. 
By the way, the President said later, at a fund-raiser, that he raised 
taxes too much in 1993. Our tax cut would still leave the tax burden 
substantially above where it was when Bill Clinton became President.
  Let me address the issue very briefly about rich people getting this 
tax cut. You need to understand when our Democrat colleagues speak that 
they have a code. The code is, every tax increase is on rich people; 
every tax cut is for rich people. So you don't ever want to cut taxes 
because it helps rich people.

[[Page S10317]]

 You always want to raise them because it hurts rich people. You are 
not for rich people.
  The problem is, when that argument was made on the President's tax 
increase in 1993, they taxed gasoline, and gasoline is bought by both 
the rich and the poor. They taxed Social Security benefits on incomes 
of $25,000 or more. That is hardly what we call rich.
  When we debated this issue when it first came to the Senate, one of 
our colleagues got up and said: The Roth tax bill gives 60 percent of 
the tax cut to the top 25 percent of income earners in America. Can you 
imagine that this tax cut gives 60 percent of the benefits to the top 
25 percent of income earners? But nobody bothered to point out that the 
top 25 percent of income earners pay 81.3 percent of the taxes. The 
truth is that the Roth tax cut, in terms of the rate cut, actually 
makes taxes more progressive, even though it reduces everybody's taxes. 
It reduces lower-income people's taxes more.
  Actually, I wanted it to be cut across the board. You have heard many 
people say: Some 30 percent of Americans under this tax cut get no tax 
cut. Can you imagine a tax cut where almost 30 percent of the people 
get no income tax cut? That sounds crazy until you realize that roughly 
30 percent of Americans pay no income taxes. Most taxpayers don't get 
food stamps. They don't get TANF. They don't get Medicaid because they 
are not poor. Those programs are not for them.
  Tax cuts are for taxpayers. If you don't pay taxes, you don't get a 
tax cut. It is not because we don't love you. It is not because there 
is something wrong with you. It is just that tax cuts are for 
taxpayers. So we are cutting income taxes. If you don't pay income 
taxes, you don't get a tax cut. Remember that when you hear all this 
business about rich people and poor people.
  Quite frankly, I think we do our country an injustice when we keep 
trying to pit people against each other based on their income. The 
plain truth is, if we could calculate this out, the Roth tax cut, the 
parts of it that we have enough data on in this short period of time to 
look at, it probably makes the tax code a little more progressive than 
it is. I don't think we ought to be doing that. I don't have any 
problem in saying, if you don't pay any taxes, you don't get a tax cut. 
If you pay a lot of taxes, you get a lot of tax cut.
  If we had a 10-percent across-the-board cut--unfortunately, we don't 
quite get that; I am proud of what we got--but if Senator Rockefeller 
makes 10 times as much money as I do, he would get 10 times as big a 
tax cut. Some people get upset about that, but I don't get upset about 
it.

  Alan Greenspan has become, his utterances at least, almost like a 
bible. Everybody quotes him to make their point. Generally the people 
quote him to make points that are 180 degrees out of sync. If you 
listen to the quotes by many of our Democrat colleagues, you would 
believe that Alan Greenspan has said: Never, ever, ever, under any 
circumstance, should we give anybody a tax cut. The reality is, what 
Alan Greenspan has said is very clear. His first preference would be to 
not spend any of the surplus and to not give any of it back in taxes. 
But Alan Greenspan says:

       If you find that as a consequence of those surpluses they 
     tend to be spent, then I would be more in the camp of cutting 
     taxes, because the least desirable outcome is using those 
     surpluses for expanded outlays.

  I submit that is exactly where we find ourselves when we look at the 
fact that we are spending the surplus as quickly as we can spend it, 
and the President has proposed spending $1 trillion of it over the next 
10 years.
  The final point I will make, before summing up, is that several of my 
colleagues have been joshing me--and boy, it is legitimate. When I was 
in economics, I never made predictions that would either prove true or 
false within 100 years. And then I didn't worry about it.
  It is true that when President Clinton submitted his economic 
program, as we debated it in those first 2 years, I said some awfully 
unkind things about it--not things you couldn't print in the paper, but 
they weren't generous. I suggested that if it was adopted, we would 
have a recession.
  Our colleagues have said: Well, look at the wonderful economy we 
have.
  In my final, major points, I will, as Paul Harvey, give you the rest 
of the story. To listen to our colleagues today, they would have you 
believe that all of the Clinton program was just a tax increase. But 
there were two other parts of it. If we are going to be fair to my 
quote, we need to be fair in saying there were two other parts of the 
Clinton program in those first 2 years. It certainly did raise taxes. I 
certainly was against it, and I still believe the economy would be 
better off if we had not done it. But the other two parts our Democrat 
colleagues want to forget. The first was a major spending program that 
spent $17 billion in the first year.
  The PRESIDING OFFICER (Mr. Smith of Oregon). The Senator's time has 
expired.
  Mr. GRAMM. I ask for 5 additional minutes.
  Mr. ROTH. I yield 5 additional minutes.
  Mr. GRAMM. The second part of the program that everybody doesn't talk 
about is a proposal to spend $17 billion to ``stimulate the economy.'' 
Our colleague from Oklahoma remembers it because we discovered, in one 
of the happiest discoveries in recent political history, that when you 
looked at that program, it was going to spend money on programs off a 
list submitted by communities, and on that list was an Alpine slide in 
Puerto Rico and an ice-skating warming hut in Connecticut. We had 
endless good times about that and, in the end, while we had a 
Republican minority and a Democrat majority, we actually filibustered 
and killed the $17 billion of spending.

  I don't have my copy of the Clinton health care plan here, and that 
is probably good because if I picked it up, I might get a hernia. The 
third part of the program was for the Government to take over one-
eighth of the economy by having one giant HMO--I think it was called a 
health care purchasing collective, or something--and all the doctors 
would work for the Government and the Government would run the health 
care system. So if we are going to be fair in quoting my statement, 
let's remember that the plan had three parts; we killed two of the 
three.
  The final thing--and I probably ought not do this, but we are getting 
ready to go on recess, so why not. ``Bill Clinton balanced the budget 
and made everything wonderful.'' We have all heard that. We heard it 
right before I got up to speak. But I have in my hand President 
Clinton's budget for fiscal year 1996. This was the budget that the new 
Republican Congress got in January of 1995. I do remember this. One of 
my staff provided me with these unkind remarks, when I said in 1993, 
regarding this Clinton health care bill, ``If we pass it, we will be 
hunting Democrats down with dogs all over America.'' Well, we didn't 
pass it, but we did elect the first Republican majority in both Houses 
of Congress since 1952.
  In any case, to finish my point, when this new Republican Congress 
got here, this was the budget the President had sent them. This budget, 
right on page 2, projected a deficit of roughly $200 billion through 
the year 2000. The new Republican majority took this budget and threw 
it into the trash can, and we adopted a new budget.
  On this chart, here is the Clinton deficit projected in 1996. This is 
what we achieved with the Republican majority. Now, did we really do 
all that? No. Did Clinton do all that? No. The plain truth is that we 
had basically a stalemate, and we stopped virtually all new spending. 
In fact, with all this talk about the gloom and doom, we were able to 
control spending a little bit. The economy took off and we balanced the 
Federal budget.
  So let me sum up by simply saying this. I want to congratulate our 
chairman, who has put together a tax bill that is as good a tax bill as 
you can write in the Senate and get 51 people to vote for. I want to 
congratulate him for his leadership. If you trust the American people 
and their ability to spend their own money better than the Government, 
vote for this tax cut. If you believe the Government can spend it 
better and will make America richer, freer, and happier by spending it, 
rather than letting them have it, then you ought to vote against it. 
That is the choice.
  I yield the floor.

[[Page S10318]]

  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. May I point out that 80 percent of non-retired American 
adults pay more in Social Security taxes than income taxes. That is a 
point we are not dealing with much.
  I have the honor and privilege to yield 5 minutes to my friend from 
Louisiana.
  Mr. BREAUX. Mr. President, I thank the Senator from New York and also 
the distinguished chairman of the full committee, the Senator from 
Delaware. They are both distinguished gentlemen.
  I just make a note that when we use the term ``distinguished 
gentleman,'' we use it sometimes lackadaisically in the Senate. In this 
case, I think it is important for us to note that there are probably no 
two finer gentlemen in this body today than the Senator from Delaware, 
the chairman of the committee, and the Senator from New York, the 
ranking member of our committee. They are gentlemen in the sense of how 
they have had to conduct the affairs of bringing this conference report 
and this tax bill to the American public. Although they have had 
differences in what they thought the ultimate product should look like, 
both of these two distinguished Senators have conducted themselves in 
the finest sense of being a gentleman, and they have worked together in 
a fashion that I think has kept our committee together. I congratulate 
them for that.

  Let me say a couple of words about where we are. Unfortunately, the 
debate we are hearing on the floor today is about something that is not 
going to happen. We are spending all of this time talking about 
something that is not going to become law; it is not going to occur 
because none of this will, in fact, become legislation. It will only be 
something about which we have talked. Many colleagues on this side of 
the aisle are talking about how bad the provisions are in the 
conference report, and many colleagues on that side of the aisle are 
talking about how wonderful the provisions in the bill are.
  The bottom line is we are talking about something that is not going 
to happen because it is very clear to everybody in America, and 
everybody in Washington knows, that when this bill gets down to the 
President in this form, it is going to be vetoed. The veto will not be 
overridden.
  All of this exercise today, while I am sure it is important to make 
our political points, is not talking about what is going to benefit the 
people of our country. As a result of where we are, there will be no 
reduction in the marriage penalty. It is not going to be fixed. It is 
not going to be addressed by this product. There will be no reduction 
of income rates from 15 percent to 14 percent. That is not going to 
become law. There is not going to be any increase in the standard 
deduction for hard-working Americans. The standard deduction is not 
going to go up. The marriage penalty is not going to go down. Estate 
taxes are not going to be repealed. Estate taxes are not going to be 
reduced. It will be the same after this bill is disposed of. Child care 
credits are not going to go up. Health care credits for people who 
don't have health care will not be assisted because all of the things 
we have in these various pieces of legislation that we tried to get 
into a package that could be signed will, in fact, not be signed into 
law.
  In many ways, this is an exercise in futility--in the sense that we 
know it will never become law. This debate, however, I think is still 
important. It is important to point out some of the things that are in 
the bill, which I find sort of interesting. I know my colleagues have 
looked at this list. It is a list of all of the things that are in the 
bill that are going to be sunsetted. We have more sunsets in this bill 
than they had in the movie ``South Pacific.'' The broad-based tax 
relief is going to be sunsetted. The marriage penalty will be 
sunsetted. The AMT relief, the capital gains reduction, and the 
individual retirement accounts, which Senator Roth has worked so hard 
on, will be sunsetted. Assistance for distressed communities will be 
sunsetted. There is a sunset on every page. It is enough to put us to 
sleep. The problem is that all of these things we have are not going to 
become law.
  But I think the debate we have is important because I always remain 
optimistic. I guess when I lose my optimism, I will lose my interest in 
serving in this esteemed body; and I haven't reached that point yet. I 
think it is important to have this debate. It is unfortunate that we 
only have 10 hours. It is unfortunate that we had 20 hours for 100 
Senators to debate a major reform in the Tax Code of this country. I 
think we have to recognize that the system in which we bring tax bills 
to the Senate floor for open debate needs to go back to that old system 
where we have open debate on something as important as tax policy. We 
used to do it and produce good bills. The distinguished ranking member 
and the chairman remembers those days. We need to go back to the 
process whereby we have open and complete debate on tax laws in this 
country.
  The final point I will make is that I hope sometime when we come 
back--after we have had the veto ceremony and the response to the veto 
ceremony, and everybody has gotten it off their chests, we can come 
back in September, as the chairman has said, and address the real issue 
of Medicare, try to look at what amount of money we really need in 
Medicare. We have a plug number in the Democratic bill of $320 billion. 
We don't need that much. I don't think we can spend $320 billion more 
in Medicare and make it any better than it is today. But we can reform 
it; we can figure out how much money we do need because we do need more 
money.
  We can figure out how to craft a program that brings Medicare into 
the 21st century. It was a great program in 1965. This is approaching 
the 21st century, and the model of 1965 does not fit what we need to do 
for the 21st century. We need to reform it and figure out how much 
money we need for a good, solid prescription drug program, particularly 
one with catastrophic protection, and try to combine that legislation 
with a realistic tax bill.
  I recommend that we also consider doing something on Social 
Security--certainly a lockbox, a temporary protection, but we need real 
reform for that program as well. We need to look at the private sector 
to help increase the return on Social Security investments from what we 
have right now as part of any real reform effort.
  I hope that sometime late in September we will have an opportunity to 
look at trying to combine the business recommendations from all of our 
Members on Social Security reform and on true Medicare reform, and 
figure out what we actually need to put into a tax bill that would give 
real relief to all of these things we are sunsetting right and left, 
and come up with something that helps people who need the greatest 
help.
  I voted for this bill in the Finance Committee to keep the process 
going forward. I voted for it when it passed the Senate the first time 
to keep the process going forward. Unfortunately, at this stage the 
process has now gone backwards. What we have before the Senate is more 
reflective of the House-passed bill, which I think does not really 
direct the limited tax help to those who need it the most.
  It is interesting to note that, with all the trigger mechanisms, it 
looks like a shooting gallery as far as all the triggers that have to 
go into effect before the tax bill goes into effect. Add the sunset 
provisions with the trigger mechanisms, and I doubt that anybody in 
this body can tell you what the real tax benefits are going to be for 
the American people. Is it going to be $800 billion, or $545 billion, 
which is sort of pretty close to what a centrist group recommended of 
$500 billion. I suggest that we have, at best, a mishmash of differing 
recommendations and viewpoints about what the tax bill ought to look 
like.
  I am not sure, with all the sunsets and everything else we have in 
here, that anybody can really describe exactly what we are presenting 
to the American public other than a political issue. We are going to 
have a great political debate on this from both sides of the aisle. We 
are going to criticize everything coming from our opponents from both 
perspectives, but we are going to ultimately be talking about what we 
didn't do. We are going to be talking about failure, and we are going 
to talk about whose fault it is that we didn't accomplish anything. 
That is really unfortunate.

[[Page S10319]]

  I happen to think the American people would much prefer for us to 
have a debate on success: You did it. We did it. No. You did it. But at 
least we would be talking about success. We would be talking about 
something we did instead of debating failure and whose fault it was 
that we weren't able to come together.
  We have a divided government. The President is a Democrat. He is 
going to be there until the next election. And who knows what after 
that?
  I conclude by saying that I congratulate our two leaders. They did a 
terrific job. I greatly respect them for it. Hopefully, we can come 
back and do it later in a better fashion.
  Mr. MOYNIHAN. Mr. President, I hope we have listened carefully to 
what the Senator from Louisiana has said. He is generous and 
optimistic, and it might just turn out to be true.
  I yield the floor.
  Mr. ROTH. Mr. President, I yield 10 minutes to the distinguished 
Senator from Idaho.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Mr. President, I thank the chairman for yielding. Let me 
thank him for the tremendous work he has done in the last several 
months to produce a tax package that is here on the floor.
  Let me turn to my colleague from Louisiana first. I wish the 
President would follow that Senator's leadership, for if he had 
followed his leadership, we would have a Medicare package and be 
working on it right now. But the President chose to politicize Medicare 
and to walk away from his Democratic colleagues whom he placed onto the 
Commission to do the work that they did so well in a bipartisan way.
  And we are here today without a fix for Medicare because the 
President did not awaken to the responsibility he had in that regard 
and the opportunity that the Senator from Louisiana and the Senator 
from Nebraska had helped create in the Medicare Commission. I wish the 
President had awakened, but he chose not to.
  We are here today debating a tax relief bill for the American people, 
a relief bill that, in my opinion, is responsible, reasonable. In all 
fairness, given the total picture of our budget and our projected 
revenues, it is, in fact, modest tax relief.
  Some would be surprised by that statement on the modest size of this 
tax relief package if they were to listen to the rhetoric from the 
other side of the aisle. But that is the truth. It is responsible tax 
relief, within the responsible budget plan which we passed earlier this 
year.
  Under this plan, we use three-fourths of the total budget surplus to 
pay down the public debt by nearly one-half over 10 years and 
completely protect the Social Security system. For the first time in 
the history of our Government, our budget commits us to reserving all 
of future Social Security surpluses and all future Social Security 
revenues exclusively for Social Security beneficiaries. That is a first 
for all of us; it is an important and responsible first.
  If we continue to hold the line on new spending, that discipline plus 
some of the leftover surplus funds, also will allow us to accommodate 
prudent Medicare reforms, meet emergencies, and address additional 
priorities that we may face, also all within that three-fourths of the 
surplus that we are setting aside.
  This tax relief bill draws on the remaining one-fourth of the total 
surplus. This is hardly not reckless, like some have said. It is 
responsible, reasonable, and modest to take just one-fourth of the 
total surplus and return it to the American people.
  These facts seem to go unrecognized on the other side of the aisle. 
After we safeguard Social Security, meet the true and real 
responsibilities of Government, account for Medicare and other 
priorities, what we do in this bill is say to those whom we have 
overcharged, those who have overpaid their income taxes, we are going 
to refund to you a little of your own money.
  Too many in Government and the press seem to miss this fundamental 
question: Who earns the money in the first place? Whose money is it? I 
am always fascinated by the debate on taxes when the other side seems 
to think that nearly everything the working person owns is the 
Government's. And if we are providing tax relief, somehow in our 
generosity, we are turning to them and smiling, and saying: We are 
going to give you back just a little.
  Are we, to quote some on the other side, ``spending'' this money on a 
tax cut? Are we giving it back? No. We are saying it belongs to the 
worker who earned it, and that he or she should be able to keep a 
little more of the fruits of his or her own labors.
  What we are suggesting is that we don't take so much in the first 
place--that we have enough right now to fund Government in a 
responsible way, and we ought to recognize that it is the working 
person out there we are taking it from, and we ought to return the 
overcharge.
  This tax relief is phased in, meaning future Congresses will have 
plenty of time to react if the economic conditions of our country 
change. That is also part of the argument why this bill is responsible.

  The bill represents only a 3.5-percent tax cut. That is modest, 
especially for the most heavily taxed generation in American history.
  Some of the future tax relief won't even kick in unless the national 
debt is in fact being reduced. I think that is responsible. Yet we hear 
the mantra again of, pay down the debt, pay down the debt.
  If you would read the facts of this tax relief bill we have put 
together, and the budget it implements, we are paying down a very 
substantial part of the debt--more than one-half of it. In fact, we 
already have paid down $142 billion in the public debt in the last 2 
years.
  Under our budget, and on top of this tax relief, we will pay down 
over $200 billion in debt more than the President's budget called for, 
even though he is one of those out there talking about debt reduction 
at this moment.
  Let me make you a deal, Mr. President. You say you are going to veto 
the tax cut. Well, if you veto the tax cut, why don't you bring to us a 
lockbox proposal that puts all of the surplus in a lockbox to pay down 
the debt? A lockbox that makes a binding guarantee that not one cent of 
the surplus will go to new spending. You are not about to do that, Mr. 
President. But if you would, I would support you in it because debt 
reduction is important. It would help the economy of this country.
  But one has to wonder if the President just flat isn't speaking with 
all of the truth that he ought to be. Look at his budget this year--tax 
increases and new spending. In fact, his own budget this year calls for 
spending the entire non-Social Security surplus, and then raiding the 
Social Security trust funds for some more new spending. I am sorry, Mr. 
President. What you say and what you do don't come together--they don't 
add up. What you say about new spending in your budget doesn't match 
what you say about debt reduction when you oppose this tax relief.
  I don't think I would have to eat my hat on that kind of a promise to 
the President--that I would be willing to support him if he would take 
all of the surplus and put it in a fund to pay down the debt, because 
that is just not about to happen.
  No, the real issue here is not tax relief versus paying down the 
debt.
  The real issue is tax relief versus spending. We all know that. We 
were spending money yesterday. Frankly, I was helping spend some of it. 
That spending used some of the surplus and is going to relieve the 
current crisis circumstance in producing agriculture today across this 
country. I supported that agriculture appropriations bill because our 
farm families are facing an emergency. But I also know if we leave all 
the taxpayers' money in Washington, DC, all the surplus, it will get 
spent, and not just on emergencies. If we send it back to the people 
who earned it and own it, then it won't get spent by government. At 
least then, we would have to go back to the people and ask them for the 
right to spend more, by changing the tax structure to increase future 
revenues.
  Who believes if Government takes in $3 trillion in surplus revenue 
over the next 10 years, that Government won't spend it? We know they 
will spend it.
  The National Taxpayers Union Foundation does a little thing called 
``Bill Tally.'' They tally up all of the new bills introduced by 
Members of Congress every year and what those new bills will represent 
in new and increased government spending. Mr.

[[Page S10320]]

President, 84 of 100 Senators--that means Democrat and Republican 
alike--last year introduced new legislation that would lead to an 
additional $28 billion in spending per year, on average. Not over the 
next 10 years but in one alone--Democrat and Republican alike. New 
ideas, new bills, new spending. It is the habit of Government. Of 
course, we know that. That represents about a $232 increase in spending 
from every American taxpayer that is already on the wish list of most 
of the Senate.
  I hope and believe we can resist the temptation to spend the three-
fourths of the surplus we reserve to pay down the debt, save Social 
Security, and reserve some for other future priorities. That is what we 
ought to be doing with it. That is what we promised in the 
Congressional budget we passed earlier this year. Yet, the temptation 
will be there to spend the remaining one-forth, and part of that three-
fourths, as well.
  The choice is very simple. The debate today is about bigger 
Government versus bigger household budgets--private citizen household 
budgets. I hope helping those American household budgets is what this 
Senate ultimately will support. I hope over the course of August we can 
convince this President that he really ought to be more on the side of 
the American taxpayer than on the side of ever-bigger Government.
  This tax relief bill is fair. Yes, it is fair. I know we have heard 
the debate about tax cuts only going to the rich. The Senator from 
Texas did a marvelous job a few moments ago talking about how the folks 
on the other side of the aisle think it only goes to the rich. I am 
amazed and, frankly, frustrated that every time we talk tax relief, 
immediately Democrats run to the microphones and say it is for the 
rich, the rich are going to get the benefit of a tax relief proposal.
  That just ``ain't'' so in this bill. The chairman of the Finance 
Committee in the Senate deserves a lot of credit for focusing this bill 
right on middle America, right at husbands and wives, working and 
trying to raise a family out there in the market place, wage-earners 
who are paying the bulk of these taxes.
  Every American who pays income taxes will receive some benefit from 
this bill. The middle class Americans who pay most of the income taxes 
will get, by far, most of the income tax reduction. That is the way it 
ought to be.
  What we are actually doing in this proposal is making the tax code a 
little more progressive. Middle-income taxpayers will receive 
proportionately more relief, for the taxes they pay, than upper-income 
taxpayers. But everyone who pays income taxes gets income tax relief.
  This bill is fair because it shows compassion for the most heavily 
taxed generation in American history.
  Several of my colleagues have come to the floor to talk about that 
tax burden. But I am amazed my Democrat friends and colleagues don't 
seem to recognize it. Surely they do. In fact, somehow, they actually 
are allowing their President to propose more taxes, which he did in his 
budget proposal this year.
  That heavy tax burden has hurt people. It has robbed a whole 
generation of the opportunity to plan their retirement. It has forced 
families into adding a second and third income, rather than spending 
time taking care of children or elderly parents. It has robbed 
Americans of a major part of their freedom.
  Today's baby boomer family is paying, on average, 50 percent more in 
taxes at all levels, as a portion of income, then their parents did 
when they were raising their families.
  Only one year in history, 1944, at the height of the largest war in 
the history of the world, requiring incredible financial sacrifice, saw 
the federal government take in taxes a larger share of the national 
income than we are now paying.
  This tax relief bill will help real people with real needs. There are 
two ways we can help people: We can create bigger government, with more 
bureaucrats, with more programs and red tape, regulating more behavior, 
and hope we produce some more government checks for some beneficiaries. 
Or we can let Americans keep a little more of their own money and meet 
their needs without Uncle Sam as the middle man. We can provide broad-
based tax relief. We can provide targeted tax relief and incentives for 
folks to use for specific, beneficial purposes.
  If we really care about people, we care about helping them in the 
most direct, most effective way possible.
  Here's some of how we do that in this tax relief bill:
  Marriage penalty relief: It just isn't fair to force two individuals 
to pay hundreds of dollars more in taxes simply because they get 
married.
  Death tax relief: It just isn't fair that working families sometimes 
have to sell part or all of the family farm or the family business just 
to pay taxes. I've seen family farms carved up because of the death 
tax. The other side would have us believe that this is a debate about 
the so-called ``estates'' of rich people. It's not.
  Help for families with children:
  It would allow more parents to afford child care, both because it 
increases and expands the child care tax credit.
  It allows more modest- and middle-income families to make full use of 
the child tax credit we enacted in the 1997 Tax Relief Act.
  It expands the tax exclusion for foster care payments.
  Help for individuals and families with education:
  It would make education more affordable and available to individuals 
and families.
  It includes tax-free, qualified tuition plans; extends the employer-
provided tuition assistance; makes our 1997 education tax credits more 
fully available to modest- and middle-income families, by taking it out 
of the Alternative Minimum Tax calculations; and includes the 
Coverdell-Torricelli education savings account.
  Help with health care, long-term care, and eldercare:
  It increases the affordability of prescription drug insurance; health 
insurance for those who aren't covered by a corporate plan; long-term 
insurance, both for those who must pay for their own and those with 
cafeteria plans.
  Farmers, small businesses, and workers will benefit from making the 
self-paid health insurance deduction 100 percent deductible.
  Help for farm families: America's farm families are in a period of 
economic crisis today.
  It provides for increased expensing, to $30,000; create FARRM 
Accounts--Farm and Ranch Risk Management Accounts; and protect income 
averaging from the Alternative Minimum Tax.
  Help for folks who need retirement security: It includes expanded 
IRAs, 401(k) plans, and other provisions too numerous to mention, that 
especially will benefit folks over age 50.
  Help for disadvantaged individuals seeking work: The Work Opportunity 
tax credit is reinstated.
  Help for charities and charitable giving: 70 percent of taxpayers 
receive no recognition of charitable giving--because they don't itemize 
their deductions. This bill would reward and encourage those middle-
class taxpayers who benefit their community, help the less fortunate, 
and promote the social good, with an above-the-line deduction for 
charitable donations.
  This bill is needed by the American people.
  When the facts are known, I am confident they will send one message 
back to Washington, DC: Please Mr. President, sign this bill into law. 
Let us keep one-fourth of the surplus for our families, our communities 
and our future financial security, instead of confiscating it for more 
big government.
  I conclude by saying this is a fair tax proposal. In all fairness, 
compared with the total size of the Federal budget and the Federal 
government tax burden, it is modest. I close by once again recognizing 
the chairman of the Finance Committee for the tremendous work he has 
done to build that balance and fairness into this bill.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, I have the great pleasure to yield 10 
minutes to my good friend and colleague on the Finance Committee, the 
Senator from Montana.
  Mr. BAUCUS. I very much thank my good friend from New York.
  In a couple of years when the Senator is no longer here, we will miss 
him very much. I know of no Senator more provocative, in the best sense 
of the term, in forcing Members to think. That is something which too 
often is in short commodity on the floor of the Senate. I very much 
thank my friend.

[[Page S10321]]

  This is a strange debate. I heard earlier my good friend from North 
Dakota, Senator Dorgan, say he is bewildered. I myself have referred to 
this debate as surreal. My friend from Louisiana, Senator Breaux, 
asked: What are we talking about? Why are we here?
  Those are apt comments in many ways.
  One, because we know this bill will be vetoed. We know this tax cut 
that has been proposed is not going to happen. Yet both those who favor 
the tax cut and those who favor a veto are trying to score political 
points with the American people. There are a lot of games being played 
around here. I don't think that is any news to the American people. 
They know what is going on. They are pretty smart.
  It is similar to President Lincoln saying you can fool some of the 
people some of the time but you can't fool all the people all the time.
  The American people are smarter than the Congress thinks they are.
  Let me go through some of the reasons. First, the assumptions behind 
this big tax cut are unrealistic and we all know they are unrealistic. 
I daresay that many on the other side of the aisle would agree 
privately with our public statements on this side of the aisle that the 
assumptions are unrealistic. There is no way in the world the Congress 
will jeopardize national defense by cutting national defense a couple 
hundred billion over the next decade. There is no way in the world the 
Congress is going to hurt veterans by dramatically cutting veterans' 
benefits. There is no way in the world the Congress is going to cut 
education and do all that is assumed behind this tax cut. Yet virtually 
the entire projected surplus we are spending in this bill is based upon 
exactly these things happening. That is one reason this is a surreal, 
unrealistic, illusionary, and strange debate. It is not based upon 
facts.
  As others have pointed out, much more persuasively than I, the 
numbers of this tax cut as proposed do not add up. There is no way in 
the world we will be able to cut taxes $800 billion, pay the additional 
interest on the debt, and provide for a modicum of services that people 
need. Some have suggested--and nobody has disputed this number--that 
this tax cut will require about a $600 billion cut in spending over the 
next 10 years. It is unrealistic. It is not right. It is wrong to 
attempt to fool the American people that these levels of cuts are good 
for the country.
  Beyond that, this bill is based upon such ephemeral, illusionary 
projections, it baffles me that anybody could stand on the floor and 
say it is necessarily going to happen--that we will have a $1 trillion 
budget surplus from tax revenues over the next 10 years. Past 
projections have been so far off the mark that it is foolish to assume 
this projection will be accurate.
  On average, our projections are about 13 percent off the mark over 5 
years. This is a 10-year projection. I point out that CBO, the agency 
on which we base our projections, stated in January of this year they 
were off $200 billion when they came up with their midcourse review in 
July of this year. The projections were $200 billion off over a period 
of just 6 months. Who knows how far off a 10 year projection could be? 
If we are honest with ourselves, we know most people are concerned that 
the economy is now overheated, rather than underheated, and therefore 
the projections will probably fall off and we will have much less of a 
budget surplus than we assume.
  I point this out because it defies common sense that we lock in law 
tax cuts far out in the future based on these very flimsy assumptions. 
Why are we doing that?  Most people wouldn't do that. Most people, 
putting their family budgets together, wouldn't do that. Certainly no 
business would do that. No business would assume that its revenues 10 
years out were going to be absolutely a certain amount and therefore 
they are going to spend all this money today. You just cannot make that 
assumption. You have to be prudent.

  I talked to the CEO of a major company just last week. I asked him 
how their company makes projections.
  He said: We cannot. We try to make a 5-year projection, but we are 
always way off. The best we can do is we put together a 5-year plan and 
try to anticipate what the future is going to be like, but we are 
constantly modifying it because times are changing so quickly.
  I think that probably makes sense. That is what we should be doing. 
We should not lock in tax cuts so far out. Rather, if we think tax cuts 
make some sense, they should be modest, to leave room for corrections 
if we have made a mistake.
  Times do change very much. So, again, I say this bill is reckless. It 
is based on an illusion. It is just not prudent. I say to the American 
people, I hope you understand how imprudent all this is.
  I must also make another point, and this point saddens me. We are in 
this strange, surreal situation, in part because there is so much 
partisanship in this body as well as in the other body. When I first 
came to the Senate about 20 years ago, I must say there was much less 
partisanship then than there is now. It is just too partisan now.
  By that I mean the other side of the aisle is totally controlling and 
secretive in what they are doing. They have put together their tax bill 
on their own; behind closed doors. No Democratic Senators were allowed. 
The same with the conference report; behind closed doors, on their own, 
with no Democratic Senator allowed.
  Not too many years ago when the Democrats were in the majority, both 
sides were included in drafting bills, both Republicans and Democrats. 
I think that is what the American people want. They want us to work 
together. They really do not care whether we are Republicans or 
Democrats; they really care that all 100 of us sit down, do the best we 
can, and recognize this is a democracy with different States, and 
different people who have different points of view, but achieve some 
rough justice and rough common sense.
  I think there is a reason for the secrecy. There is a reason for the 
closed doors; that is, they can do things they know are not right, 
things that could not stand the light of day. If the doors were open 
and if both sides of the aisle were included, we would not have such 
phony budget projections. By ``phony'' I mean in the last couple of 
weeks, the other side directed CBO to come up with some new numbers 
based upon their own new assumptions to fit the conclusions they 
wanted.
  What was the conclusion they wanted? The conclusion they wanted was 
to show we could cut taxes by $800 billion and still come up with $400 
billion or $500 billion in spending revenue.
  CBO said, ``No, you cannot do that,'' before. So the other side said, 
``Just change some assumptions around so you can reach that 
conclusion.'' That is what they did. They did it privately. In fact, 
they distributed that chart on their side. They didn't even distribute 
it on this side because they knew, if we looked at it, we could 
probably find out how erroneous it was, how fallacious it was. We 
finally did.
  I very much lament the secrecy and partisanship which is producing 
this product. I guess what bothers me most is, when I ran for the 
Senate and I think when most of us sought this office and were 
privileged enough to get elected, we came here because we wanted to 
address the major, big problems facing this country. We are not doing 
that. We are poised to move into the next century, the next millennium. 
Who are we as Americans? What do we want? What is our role in the 
world?

  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. BAUCUS. I ask for an additional 2 minutes.
  Mr. MOYNIHAN. Of course.
  Mr. BAUCUS. I thank my friend.
  Who are we? How much do we want to spend on defense? What is our role 
in the Far East? Who are we as a country? What about countries like 
Bosnia and Yugoslavia? How much should we spend there? What is our role 
there? What is the proper role of Government? Not the false debate that 
is set up here--turn the money back or don't turn the money back. That 
is a vacuous, vacant, insipid argument. It is so simple-minded. That 
argument avoids asking the real questions. Questions like what is the 
proper level of government, what taxes should be collected from where, 
how and when should we stimulate the private sector? Let's have a real 
honest debate on policy, not a phony debate on politics.
  This has been a phony debate on politics, this last week, on this tax 
bill. It

[[Page S10322]]

has not been an honest debate on public policy, on what is right, on 
what the right levels of spending should be. It is not based upon the 
same set of numbers, the same facts. Everybody comes up with his own 
charts, his own different facts.
  You know the old saying: Liars figure and figures lie. We cannot even 
agree on the same baseline. We can't agree on the same facts. By 
definition, we are just talking past each other. I guess that is what 
bothers me most and that is why I think this whole debate is most 
unreal and why it is sad. It is, in a large sense, not only a waste of 
time because we are not addressing the points that should be addressed, 
but it is a disservice to the American people.
  I very much hope in the next month, in September and next year, the 
leadership on both sides of the aisle will work harder to put politics 
aside and the Senators themselves will work hard to put politics aside. 
I know that might sound like a political statement, but it is what I 
believe. In every ounce of my body, I believe it because that is why we 
are here and that is what we should be doing.
  I very much hope after the President vetoes this bill, either there 
is no bill so we can start all over again, or we can come together in 
some appropriate way so we can get down to the real issues that face 
this country.
  The PRESIDING OFFICER. The time of the Senator has expired.
  The Senator from New York.
  Mr. MOYNIHAN. Mr. President, we now have a sense of why the Senator 
from Montana is an appreciated treasure in this body.
  Now I yield 5 minutes to my friend from Massachusetts.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. Mr. President I thank the distinguished ranking member. I 
share the affection and feeling expressed by the Senator from Montana, 
about how much we will miss the remarkable insightfulness and 
stewardship of the Senator from New York.
  Let me also associate myself with his praise of the Senator from 
Montana. That was a very thoughtful and very honest statement about 
what has happened in the Senate. I haven't been here quite as long as 
the Senator from Montana. I have been here 15 years. But I have never 
seen this body as polarized, as personalized, and as partisan as it is 
at this moment. I think it is very dangerous. It is dangerous for the 
country; divisive and difficult for the institution itself. I find it 
very hard, frankly, to understand.
  I guess I can understand it in macro terms. I find it hard to 
understand in the context of why we all run for the Senate and what we 
are in politics to try to achieve. There is something more than just 
winning elections. There are some people around here who do not believe 
that, but I am convinced the American people believe that. Indeed, I 
think an adherence to that notion is what has made us different from 
other countries, and the best moments of the Senate have been when we 
have tried to adhere to that notion.
  This is not a bill. This is not a tax bill. This is a political 
statement, a raw, fundamental, basic political statement. The statement 
is essentially one that seeks to say: Democrats want to spend money. 
Republicans want to give you back your money. That is the political 
statement. But it is not real when you look underneath it because the 
Republicans will join in September and October in spending the money 
because none of them are going to go back and tell the citizens of 
their State they are going to cut veterans hospitals, they are going to 
cut the Coast Guard, they are going to cut the FBI, and a host of other 
programs. None of them are going to do that. They are positioning 
themselves to say to their electorate: Gee, Clinton made me do it, but 
I wanted to give you back your money, even though the money wasn't 
there to give back.

  It is one of the great posturings and one of the great frauds of 
recent time from the very people who brought you Gramm-Rudman that fell 
on its face, the very people who built the great deficits of the early 
1980s when they adopted the Stockman philosophy of how to create crisis 
in Government and undo Government itself, the very people who predicted 
in 1993 that if we passed the 1993 Deficit Reduction Act there would be 
economic chaos, unemployment lines, massive economic failure.
  The results are, here we are today with the best economy we have ever 
had in this country, with unemployment at record low rates, with the 
stock market at high rates, with the greatest sustained period of 
growth, and the very same people who brought you those three great 
failures are now trying to sell this snake oil to the American people.
  Let's look at it as a political statement. That is what it is. It is 
a political statement. It is a political statement in which they are 
prepared to take the House tax bill that was worse than the Senate bill 
and bring most of it back so that their political statement is: 60 
percent of American taxpayers get 14 percent of the tax break that 
won't happen. On the other hand, their political belief is that the top 
10 percent of income earners in America ought to get 47.6 percent of 
the benefits of their tax statement that won't happen. So they can run 
around and say: Gee, we tried to service those who service us the best 
in the process of campaign financing. But the reality is, it is just a 
political statement.
  The conference report remarkably delays the Senate's marriage penalty 
tax relief for earned-income tax recipients. I cannot tell you how many 
times we heard people on the other side of the aisle saying: Oh, my 
God, marriage is being destroyed in America; we have a disincentive for 
marriage, particularly among the poor in this country.
  We heard it all through the welfare debate. We heard it from the 
Republicans year after year. Many of us say we ought to get rid of the 
marriage penalty. We voted to get rid of the marriage penalty, but they 
come back and delay for working people the capacity to get rid of the 
marriage penalty. In exchange for delaying getting rid of the marriage 
penalty, what do they think is more important?
  The PRESIDING OFFICER. The Senator's 5 minutes have expired.
  Mr. KERRY. Can I have a couple minutes?
  Mr. MOYNIHAN. Of course, 2 minutes because we are running down on 
time.
  Mr. KERRY. They eliminate the alternative minimum tax that guarantees 
that the wealthiest of Americans will pay some kind of tax. So they 
trade off: Don't give the marriage penalty to the working poor, but 
give the wealthiest of Americans an exemption from the alternative 
minimum tax that guarantees fairness.
  That is not all they do. They wipe away the tax relief for child 
care. They dropped the Senate provision. They provide additional 
capital gains tax relief for investors, but they provide no tax relief 
to the people who pay most of their taxes through the payroll tax in 
America, which is the vast majority of Americans.
  There are many other egregious transfers to the wealthy at the 
expense of the average American. So let's take this as the political 
statement it is. It is a political statement that makes clear the 
priorities of their party, and it makes clear that they are prepared to 
even risk the high-technology boom we have been through, because when 
you give a tax cut of this level without sufficient money to pay for it 
at a time when the economy is doing well, as Alan Greenspan and 
countless Nobel laureates and economists have said: You are going to 
reduce capital formation and increase interest rate costs and, in 
effect, may even reverse some of the plus side that has given us this 
option.
  It is a political statement that I think ultimately will come back to 
haunt them because Americans know better. There is no American in this 
country who does not appreciate the vast commitment we have had to 
children, to education, to higher education, to technology creation, 
transfers, to a host of things which make this country what it is: a 
better country and, in fact, an extraordinary country measured against 
all the other nations of the world in today's economy. I do not think 
we should put it at risk, and I hope colleagues will join in rejecting 
this political statement and in rejecting this irresponsible direction 
they seem prepared to adopt.
  I thank my friend for the time.
  Mr. MOYNIHAN. Mr. President, I thank the Senator from Massachusetts 
for a forceful and needed statement. It was not easy to hear. It is 
true.

[[Page S10323]]

  I am happy to yield 5 minutes to my friend from Virginia, known in 
the Finance Committee as ``commandant.''
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. ROBB. I thank the Chair. Mr. President, I thank the distinguished 
ranking member of the Finance Committee, the Senator from New York, and 
mentor to us all. His presence, at the end of this Congress, will be 
missed in ways I do not think any of us fully appreciate.
  First of all, I want to fully agree with the comments made by the 
Senator from Montana and the Senator from Massachusetts. I will try not 
to repeat those comments. My particular frustration in dealing with the 
bill before us today is that we are considering this huge tax cut, one 
which would normally be designed to stimulate the economy, and yet no 
economist I am aware of has suggested that such a stimulus is needed at 
this particular moment.
  In fact, what is truly needed is not being done. This bill does 
nothing to address the two most pressing structural systemic problems, 
Social Security and Medicare. Instead of trying to bring about some 
responsible changes to the Social Security system and the Medicare 
system, we are taking a projected surplus we hope will occur, but may 
or may not occur, and spend it in a way that provides a stimulus to 
those who least need a stimulus at this particular time. Indeed, it is 
very hard to find someone who represents the group who will be most 
benefited by this bill who is actually asking at this time that we 
provide them with a huge tax cut or an economic stimulus. We just do 
not need it.
  If we are going to enact a tax cut, it is my view that it should be 
in some targeted areas we know we are going to have to take care of 
anyhow. For example, we should have a permanent extension of the R&D 
tax credit, not cutting it back. Instead, we go through the same 
charade we go through each year, which makes it difficult for those who 
must make decisions about investing in research and development to make 
the kinds of decisions they need to make. The bill also fails to target 
tax credits for investment in information technology training, which is 
so clearly the cutting edge of our economy today. We are not making 
those investments in this bill.
  What we are doing is making a huge tax cut available to those who are 
disproportionately in the middle- and upper-income brackets in this 
country, and not providing the basic investment in infrastructure.
  My personal preference is to not have a tax bill at this point. If we 
cannot do better than the one we have, I would rather have nothing, 
notwithstanding some of the good things upon which both sides agree, 
and simply begin to pay down the debt. We are in such a hurry, however, 
to deliver the good news that we are going to give money back to you 
that ought to be yours in the first place, even if we are only going to 
give you $4 billion of it back in the year 2000. Even though it is only 
$4 billion, those who support this bill are attempting to take credit 
for full $792 billion, the lion's share of which will not be until the 
end of the next decade. This bill is going to lock in statutorily those 
changes which will make it very difficult for those who serve in 
succeeding Congresses and succeeding administrations to make the 
corrections they may well be called upon to make.
  I am certain we will hear a scream from those on the other side of 
the aisle if we even think about what could be scored in any way, 
shape, or form as a tax increase, even though it would only be 
correcting a tax cut that most people who have common sense and have 
some sense of fiscal responsibility view as a mistake today.
  I will not extend the debate. I will only observe that even though I 
disagreed with the original proposal, there were a small number from 
this side of the aisle who were willing to go along in the hope that 
some sort of compromise could be reached. And we took a bad bill and 
made it worse, and drove off the Democrats who were prepared to 
participate in a bipartisan solution.
  So it does go to what the Senator from Massachusetts just suggested. 
It is a political bill. It is regrettable because we have an 
opportunity, for the first time in a long time, to do something really 
fiscally responsible in terms of the kinds of obligations that we have 
in this body and the other body, in concert with the White House at the 
other end of Pennsylvania Avenue.
  I regret we are in a situation that we cannot act in a fiscally 
responsible manner and address the true pressing needs, such as Social 
Security and Medicare, instead of what we are doing.
  I know the time has expired.
  With that, I urge my colleagues to oppose this particular measure, 
and to work eventually with those on the other side of the aisle to 
come up with a constructive, fiscally responsible measure to meet our 
legitimate needs.
  With that, I thank the distinguished Senator from New York, as well 
as praise, although I am not in agreement with, the distinguished 
chairman of the committee, the Senator from Delaware.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, it would appear that the force of the 
argument on this side of the aisle has silenced our friends on the 
other side, in which case I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative assistant proceeded to call the roll.
  Mr. KENNEDY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Bennett). Without objection, it is so 
ordered.
  Mr. MOYNIHAN. I am happy to yield 5 minutes to my friend from 
Massachusetts.
  Mr. KENNEDY. Mr. President, in just a few moments we are going to be 
casting an extremely important vote that will in many ways have a 
dramatic impact on the economy of this country.
  I had the opportunity to be here in 1981 when we had a Republican 
proposal on a tax program. At that time there were 12 of us who voted 
in opposition to that program. But it passed, and we saw our Federal 
debt grow from $400 billion to close to $4 trillion over the period of 
the next years because of the economic forces that were put in place by 
that tax program.
  It had a very dramatic impact, particularly in terms of the 
allocations of wealth and the distribution of wealth here in the United 
States. Those that had resources benefited enormously, but for the 
great majority of the Americans, they had to work longer and harder 
just to hold on.
  Then in 1993, the Democrats passed a very important tax measure. The 
implications of that tax program, which took some belt tightening, so 
to speak, had a very dramatic impact in terms of our economy. That 
policy, more than any other single action we have seen, has had a more 
positive impact on our economy than any other action that has been 
taken by the Government. The point is that a tax bill of this magnitude 
has enormous impact on our economy as well as in relation to the issues 
of distribution. We now have before us, in 1999, a third rather 
dramatic proposal.
  Mr. President, very few decisions we make in Congress will have more 
impact on the long-term economic well-being of our nation than how we 
allocate the projected surplus. By our vote today, we are setting 
priorities that will determine whether the American economy is on firm 
ground or dangerously shifting sand as we enter the 21st century. This 
vote will determine whether we have the financial capacity to meet our 
responsibilities to future generations, and whether we have fairly 
shared the economic benefits of our current prosperity. Sadly, the 
legislation before us today fails all of these tests. We should vote to 
reject it.
  A tax cut of the enormous magnitude proposed by our Republican 
colleagues would reverse the sound fiscal management which has created 
the inflation-free economic growth of recent years. That is the clear 
view of the two principal architects of our current prosperity--Robert 
Rubin and Alan Greenspan. Devoting the entire on-budget surplus to tax 
cuts will deprive us of the funds essential to preserving Medicare and 
Social Security for future generations of retirees. It will force harsh 
cuts in education, in medical research, and in other vital domestic 
priorities. This tax cut jeopardizes our financial future--and it also 
dismally

[[Page S10324]]

flunks the test of fairness. When fully implemented, the Republican 
plan would give 80% of the tax cuts to the wealthiest 20% of the 
population. The richest 1%--those earning over $300,000 a year--would 
receive tax breaks as high as $46,000 a year, while working men and 
women would receive an average of only $138 a year--less than 40 cents 
a day.
  Republicans claim that the ten year surplus is three trillion dollars 
and that they are setting two-thirds of it aside for Social Security, 
and only spending one-third on tax cuts. That explanation is grossly 
misleading. The two trillion dollars they say they are giving to Social 
Security already belongs to Social Security. It consists of payroll tax 
dollars expressly raised for the purpose of paying future Social 
Security benefits. Clearly, these dollars are insufficient to achieve 
our goal of protecting Social Security for future generations. Yet, 
Republicans are not providing a single new dollar to strengthen Social 
Security. They are not extending the life of the Trust Fund for even 
one day. It is a mockery to characterize those payroll tax dollars as 
part of the surplus.
  That leaves the $964 billion on-budget surplus as the only funds 
which are available to address all of the nation's unmet needs over the 
next ten years. Republicans propose to use that entire amount to fund 
their tax cut scheme. Since CBO projections assume that all surplus 
dollars are devoted to debt reduction, the $964 billion figure includes 
over $140 billion in debt service savings. The amount which is 
available to be spent--either to address public needs or to cut taxes--
is only slightly above $800 billion. As a result, the $792 billion 
Republican tax cut will consume the entire surplus. It will inevitably 
usher in a new era of deficits--just as the baby boom generation is 
reaching retirement age.
  Most Americans understand the word ``surplus'' to mean dollars 
remaining after all financial obligations have been met. If that common 
sense definition is applied to the federal budget, the surplus would be 
far smaller than $964 billion.
  We have existing obligations which should be our first 
responsibility. We have an obligation to preserve Medicare for future 
generations of retirees, and to modernize Medicare benefits to include 
prescription drug assistance. The Republican budget does not provide 
one additional dollar to met these Medicare needs.
  The American people clearly believe that strengthening Social 
Security and Medicare should be our highest priority for using the 
surplus. By margins of more than two to one, they view preserving 
Social Security and Medicare as more important than cutting taxes.
  We should use the surplus to meet these existing responsibilities 
first, in order to fulfill the promise of a retirement with both 
financial security and health security. If we do nothing, Medicare will 
become insolvent by 2015. The surplus gives us a unique opportunity to 
preserve Medicare, without reducing medical care, or raising premiums 
for senior citizens, or raising the retirement age. The Republican tax 
cut would take the opportunity away. It would leave nothing for 
Medicare. In fact, this legislation will actually force additional cuts 
over the next five years. Under existing budget rules, which 
Republicans have refused to modify, the enactment of this tax bill will 
force a sequester of Medicare funds.
  Senate Democrats have a realistic alternative. We have proposed to 
use one-third of the surplus--$290 billion over the next ten years--to 
strength Medicare and to assist senior citizens with the cost of 
prescription drugs. The Administration's 15 year budget plan provides 
an additional $500 billion for Medicare between 2010 and 2014. 
Enactment of the Republican tax cut would make this $800 billion 
transfer to Medicare impossible. If we squander the entire surplus on 
tax breaks, there will be no money left to keep our commitment to the 
nation's elderly.
  Unless we use a portion of the surplus to strengthen Medicare, senior 
citizens will be confronted with nearly a trillion dollars in health 
care cuts and skyrocketing premiums. We know who the people are who 
will carry this enormous burden. The typical Medicare beneficiary is a 
widow, seventy-six years old, with an annual income of $10,000. She has 
one or more chronic illnesses. She is a mother and a grandmother. Yet 
the Republican budget would force deep cuts in her Medicare benefits in 
order to pay for this exorbitant tax out
  The Republican tax cut, if enacted, will also make it impossible for 
us to assist Medicare recipients with the high cost of prescription 
drugs. That is one of the choices each of us will make when we vote on 
this bill.
  The cost of prescription drugs eats up a disproportionately large 
share of the typical elderly household's income. Too many seniors today 
must choose between food on the table and the medicine they need to 
stay healthy or to treat their illnesses. Too many seniors take half 
the pills their doctor prescribes, or don't even fill needed 
prescriptions--because they cannot afford the high cost to prescription 
drugs. Too many seniors are ending up hospitalized--at immense costs to 
Medicare--because they are not receiving the drugs they need. 
Pharmaceutical products are increasingly the source of medical 
miracles--but senior citizens are being denied access to the full 
benefit of these new drug therapies. Remedying these inequities should 
be our priority. Instead, with these enormous GOP tax breaks, we are 
ignoring the basic needs of the elderly.

  The Republicans claim that their tax bill provides a prescription 
drug benefit for the elderly--but it is a meaningless provision which 
few if any seniors will ever be able to use. The provision is 
contingent on a whole series of other legislative actions that may not 
occur. Thus, it may never take effect. Even if it takes effect, it 
provides an above the line tax deduction for private insurance premiums 
which can only be used by the small percentage of more affluent senior 
citizens who itemize deductions. The vast majority of elderly taxpayers 
will never be able to use this provision.
  The projected surplus also assumes drastic cuts in a wide range of 
existing programs over the next decade--cuts in domestic programs such 
as education, medical research and environmental cleanup; and even cuts 
in national defense. We have an obligation to adequately fund these 
programs. If existing programs grow at the rate of inflation over the 
next decade--and no new programs are created and no existing programs 
are expanded--the surplus would be reduced by $584 billion. That is the 
amount it will cost to merely continue funding current discretionary 
programs at their inflation-adjusted level.
  In other words, the Republican tax breaks for the wealthy would 
necessitate more than a twenty percent across the board cut in 
discretionary spending--in both domestic programs and national 
defense--by the end of the next decade. If defense is funded at the 
Administration's proposed level--and it is highly unlikely that the 
Republican Congress will do less--domestic spending would have to be 
cut 38% by 2009. No one can reasonably argue that cuts that deep should 
be made, or will be made.
  We know what cuts of this magnitude would mean in human terms by the 
end of the decade. We know who will be hurt.
  375,000 fewer children will receive a Head Start.
  6.5 million fewer children will participate in Title I education 
programs for disadvantaged students.
  14,000 fewer biomedical research grants will be available from the 
National Institutes of Health.
  1,431,000 fewer veterans will receive VA medical care.
  These are losses that the American people will not be willing to 
accept.
  The Democratic alternative would restore $290 billion for such 
domestic priorities, substantially reducing the size of the proposed 
cuts. A significant reduction would still be required over the decade. 
One thing is clear--even with a bare bones budget, we cannot afford a 
tax cut of the magnitude the Republicans are proposing.
  Our Republican colleagues claim that these enormous tax cuts will 
have no impact on Social Security, because they are not using payroll 
tax revenues. On the contrary, the fact that the Republican budget 
commits every last dollar of the on-budget surplus to tax cuts does 
imperil Social Security.
  Revenue estimates projected ten years into the future are notoriously

[[Page S10325]]

unreliable. As the Director of the Congressional Budget Office candidly 
acknowledged: ``Ten year budget projections are highly uncertain.'' 
Despite this warning, the Republicans tax cut leaves no margin for 
error. If we commit the entire surplus to tax cuts and the full surplus 
does not materialize, or if we have unbudgeted emergency expenses, 
Social Security revenues will be required to cover the shortfall.
  The vote which we cast today--the choices which we make--will say a 
great deal about our values. We should use the surplus as an 
opportunity to help those in need--senior citizens living on small 
fixed incomes, children who need educational opportunities, millions of 
men and women whose lives may well depend on medical research and 
access to quality health care. We should not use the surplus to further 
enrich those who are already the most affluent. The issue is a question 
of fundamental values and fundamental fairness.
  Unfortunately, Republicans returned from the Senate-House Conference 
with a substantially more regressive bill than the one the Senate 
passed last week. The current bill contains a costly reduction in 
capital gains tax rates which was not in the Senate bill. The current 
bill completely eliminates the estate tax, providing enormous new tax 
breaks to the richest few. It also provides more than twice as much in 
tax cuts for multinational corporations as the Senate bill did. Yet, 
the permanent extension of the research and development tax credit--the 
provision which would do the most to help many of those businesses 
whose innovations have created jobs and fueled our prosperity--was not 
included in this legislation. Instead, only a brief extension of the 
credit was provided. How extraordinarily shortsighted. In order to plan 
this research efficiently, the companies need to know what the rules 
will be in future years. The permanent extension of the research and 
development tax credit is the type of tax cut we should be passing. 
Unfortunately it is not before us.
  Democrats believes in tax cuts which are affordable and fairly 
distributed. The Democratic alternative, which I support, would provide 
$290 billion in tax relief over the next decade. That is an amount the 
nation can afford without endangering the economic progress we have 
made and without ignoring our responsibilities to Medicare, to Social 
Security, to education, and to other vital programs. We oppose the $792 
billion Republican tax bill because it would poison our prosperity and 
lead to a crippling rise in interest rates. We oppose the Republican 
bill because it would consume the entire surplus, and distribute the 
overwhelming majority of it to those who already have the most.
  That is not the way the American people want to spend their surplus. 
I urge my colleagues to reject the bill. The American people deserve 
better than this.
  Mr. MOYNIHAN. May I say to my friend from Massachusetts that the 
Office of Management and Budget has computed exactly what those 
sequesters would be, and they are horrendous.
  Mr. KENNEDY. I thank the Senator.
  Mr. MOYNIHAN. I yield the floor.
  Mr. ROTH. I yield 5 minutes to the Senator from Oregon.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. SMITH of Oregon. I thank the Chair, and I thank the chairman and 
his committee for the work they have done on this bill.
  I rise to encourage my colleagues to vote yes when this vote is 
taken. I have had the privilege of sitting in that Chair, Mr. 
President, for a good part of this debate and have seen, with very 
clear eyes, two different philosophies on the floor of the Senate. One 
is a philosophy that says that Government spends money better than 
people can. That philosophy would grow Government. The other philosophy 
says we trust people; we don't trust Government as much. That 
philosophy, which trusts people, says let's grow families. Let's trust 
them to spend it for their needs because they can do it better than we 
can imagine it here inside the beltway.
  As I look at this plan that has been produced by our Finance 
Committee, and through this conference process, my conditions for 
voting for this have been met. I see both sides allocating the same 
amount to Social Security. I see both sides allocating the same amount 
to Medicare, save that we do not expand Medicare, but we dedicate a 
great deal of money to Medicare.
  I see both sides making the same commitment to debt reduction. In 
fact, this Republican proposal conditions the tax cuts upon the actual 
realization of the surpluses. So people that say we are spending the 
surplus or spending it without it actually being realized, we will not 
do that. We will not spend it in the sense of tax cuts if, in fact, 
these surpluses are not realized.
  So the question really becomes, Who is going to spend the surplus? 
Our friends on the other side would do it to grow this Government. We, 
on this side, would spend it to grow families because we trust people 
more than we trust Government to spend it wisely.
  I tell you, as I look at the things that are provided in this tax 
package, I like what I see. When I look at reducing estate taxes, I say 
yes because, as a philosophical matter, I do not believe that it is the 
Government's business to tell you and me how we allocate our estates 
when we die. It is about redistribution of economics, which is what 
they are proposing, which is the law. I don't think that is the 
Government's role. I think we should trust people to distribute their 
money as they see fit.

  I look at the marriage penalty reduction. I don't think there should 
be a bias in our Tax Code against people marrying. I think it is 
terribly unfair when you have two working spouses, one has a high 
income, and the other may have a lower income; one is a corporate 
executive, the other is a schoolteacher; but the schoolteacher, the one 
with the lower income, gets taxed at the higher rate. What is fair 
about that? That is wrong. That is a bias against marriage that we 
should eradicate. If President Clinton wants to veto that, I will let 
him justify it.
  I look at the reduction of capital gains taxes, and I wonder, 
frankly, why we are taxing this capital twice. We should not be taxing 
it. We should be reinvesting it.
  That brings me to an important point. I am extremely frustrated every 
time I hear President Clinton or any other politician take credit for 
creating jobs. You and I, as politicians, as public servants, do not 
create jobs, unless we own the stock or unless we buy a bond, unless we 
invest in the free enterprise system that allows labor to go to work. 
When you hear President Clinton or any other politician claim they have 
created jobs, the predicate of that claim is that we are a centrally 
planned economy. And we are not. We are a free market republic.
  I think if my party has any contribution to make to this country, it 
is to make sure we do not become a socialistic, democratic welfare 
state, because if we become that, we will suffer the kinds of economic 
consequences that, frankly, our friends in Europe and Asia are 
suffering, which is little or no growth, high inflation, high interest 
rates, enormous unemployment rolls. That is the kind of system I don't 
want to be part of creating.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. SMITH of Oregon. If I may have 1 final minute.
  Mr. ROTH. I yield 1 more minute.
  Mr. SMITH of Oregon. I think that is what is at stake. What kind of 
an America do we want? Whom do we trust? Are we the party of government 
or are we the party of the people?
  It is a question of whom you trust. It is a question of how you spend 
the money. When it comes to the essential programs, our programs are 
the same. When it comes to spending, we spend it differently. One does 
it for government; the other does it for families.
  I urge my colleagues to vote yes on this important piece of 
legislation.
  Mr. ROTH. Mr. President, I yield 5 minutes to the Senator from 
Wyoming.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. THOMAS. I thank the Chair.
  Mr. President, I have been on and off the floor all day. We have been 
at this for about 6 hours. I suspect most everything has been said, but 
we all, of course, haven't said it.
  I rise in support of what we are attempting--for the idea that we can 
do the things that are essential for the Federal Government to do and 
at the same time return substantial amounts of money to the people who 
own money, the taxpayers.

[[Page S10326]]

  I have been amazed at all the discussion that has gone on. We are 
talking about a fairly simple thing--tax relief. Yet I hear from the 
other side of the aisle how damaging that is to the economy. That is 
hard to imagine, isn't it, that returning money to people who have paid 
it in is going to damage the economy.
  We have tax relief based on our best estimate, provided by those who 
do professional estimating, that we will have a $3 trillion surplus 
over the next 10 years. Will it happen? Who knows. No one can guarantee 
it. But that is the way you have to plan any enterprise, by the best 
estimates you can make. We find ourselves now, of course, paying the 
highest taxes as a percentage of gross national product of any time 
since World War II. Surprising, isn't it, in this large of an economy. 
It certainly means one thing; that is, that the Government continues to 
grow.
  I think it is interesting to see the polls. When they ask, what is 
your highest priority? Do you like Social Security? Do you like 
Medicare? Do you like tax reduction? Tax reduction generally is the 
third one. That is not the point. We are setting aside Social Security 
before we do tax reduction. We are sustaining enough money to take care 
of Medicare. So that is not the choice.

  The better poll would be: What do you do after you have taken care of 
Social Security? What do you do when you have taken care of Medicare? 
Should you return the money? I think so.
  I saw somebody use an example of the simplest way to look at it, 
suggesting that you have three dollar bills in your hands, each 
representing $1 trillion. You say: I am going to set aside two of these 
dollars to do something with Social Security because that is where the 
surplus comes from. I am going to spend part of the third one for 
Medicare and the other costs that will be there. And about two-thirds 
of the last one we are going to give back to the people who sent it in 
because it is an overpayment of taxes. It is a fairly simple thing.
  We have, of course, in this case, as we do in many, a pretty strong 
difference of philosophy. We have on that side of the aisle people who 
prefer more government, more spending, more taxes. That is the 
philosophy. I understand that. I don't happen to agree with it.
  Our party, on the other hand, is one that says we ought to slim down 
the Federal Government; we ought to move more and more government 
towards the States and the counties, leave more and more money in the 
hands of the people. That is the philosophy, a difference of 
philosophy. That is so often the basis of our disagreement on many 
things. I understand that. It is perfectly legitimate. But if you want 
more government, that is fine. If you want the Government to spend more 
money, that is fine. That is a philosophy, one that has, through the 
years, been on that side of the aisle. It is not really a surprise.
  People say, of course, how is it going to affect me? Well, it affects 
us in very real ways:
  Estate taxes: I have a lot of people who farm and ranch in Wyoming 
who are very concerned about that. Capital gains taxes: More and more 
people are investing their money. The capital gains tax needs to be 
changed. Insurance deductions for health insurance, that people pay 
their own premiums, to be deducted, that is a reasonable thing to do. 
The marriage penalty, we have talked about that--a very reasonable 
thing to do.
  So we often get lost in the details when we say, as taxpayers, what 
does this do for us? I think it does a great deal for us. I think we 
should move forward. I am sorry we don't have agreement with the 
gentleman at the other end of Pennsylvania Avenue, but that ought not 
to keep us from doing what we think is right, and that is the thing we 
ought to do.
  I urge that my associates do the right thing.
  Mr. ROTH. Mr. President, I yield 10 minutes to the distinguished 
Senator from Arizona.
  Mr. McCAIN. Mr. President, the American people want us to save Social 
Security. They want us to fix Medicare. They want us to give them more 
control over their children's education. They want us to cut back the 
size of the bloated Federal bureaucracy and pay down the debt. Those 
are the clearly stated priorities of the people we represent, those 
whose interests we are pledged to protect.
  The Congress has tried to do something about the impending insolvency 
of the Social Security system, but we have been blocked by the 
President's disingenuous statements about the kind of lockbox 
legislation he could support. The President rejected the 
recommendations of the bipartisan commission that was created to 
provide a basis for preventing the bankruptcy of Medicare. The 
President has put politics ahead of the needs of the people, but, 
unfortunately, so have we.
  The American people want, need, and deserve tax relief. They want us 
to reform and simplify our overly burdensome 44,000-page Tax Code that 
unfairly benefits special interests and overtaxes American families.
  Yet, here we are debating the merits, or not, of an $800 billion tax 
relief bill that we know for a fact the President will veto.
  Mr. President, let's be honest and acknowledge what's going on here. 
This bill is going nowhere. When it comes back to the Congress after 
the President's vetoes it, we should be prepared to set aside pure 
politics, and instead focus on producing results that benefit the 
American people.
  Mr. President, there are some very good provisions in this bill that 
help American taxpayers keep more of their hard-earned money. But most 
of these very important tax provisions for average Americans are put 
off for the future, while many of the perks for big business and 
special interests take effect immediately. This bill delays meaningful 
tax relief for the average taxpayer until 2001 or later, yet it 
complicates the tax system with a raft of new and renewed exemptions, 
exceptions, and carve-outs for special interests that go into effect 
immediately.
  Just under $6 billion of the entire $792 billion in tax relief in 
this bill is effective next year. Just 77 of the 180 provisions in this 
bill provide any tax relief at all in the year 2000. More than 80 
percent of the tax cuts are delayed until 2005 or later. And after 
phasing in the most important provisions over a 10-year period, the 
whole tax cut package sunsets after 2009, when we would presumably 
revert to the burdensome and overly complex tax system with which we 
are struggling today.
  I firmly believe we should repeal, once and for all, the disgraceful 
tax penalty that punishes couples who want to get married. This bill 
does provide relief from the onerous marriage penalty, but these 
important provisions do not even begin to take effect until 2001 and 
then they are phased in over a period of four or five years.
  Income tax rate reductions don't start to phase in until 2001, and 
then only the lowest bracket sees a half-percent rate cut, while other 
rate cuts are delayed until 2005. In fact, according to an informal 
estimate I was given, an American family making $65,000 per year would 
get just $47 in tax cuts based on the income tax rate reductions in 
this bill in 2002.
  We should also slash the death tax that prevents a father or a mother 
from leaving the hard-earned fruits of their labor to their children. 
There is absolutely no relief from the onerous death taxes in 2000. 
Estate tax reductions would be phased-in over a 9-year period until 
completely eliminated in 2009, but then this entire tax cut package 
would terminate and the death tax would be fully reinstated.
  At the same time, poultry farmers get an immediate tax break, 
totaling $30 million over 10 years, to convert chicken manure into 
electricity. Small seaplane operators don't have to collect tickets 
taxes, starting immediately, giving them a break of $11 million. 
Manufacturers of fishing tackle boxes get an immediate excise tax 
break, so that they can more competitively price their tackle boxes to 
compete with the tool box industry. And the people who make and sell 
arrows for hunting fish and game get an immediate cut in their taxes.
  Why are we giving a big break to chicken farmers when American 
families get not a dime in tax relief? Why don't people flying on 
seaplanes have to pay ticket taxes like people flying on other commuter 
planes? What compelling reason is there to give fishing tackle box 
manufacturers a tax break,

[[Page S10327]]

while family-owned businesses get no relief from the confiscatory death 
taxes for quite some time?
  Many of the other provisions in this bill that provide tax relief for 
education, health care, and other issues important to American families 
are implemented gradually or simply delayed for several years. 
Likewise, some of the provisions that benefit small businesses and tax-
exempt organizations do not take effect for a number of years. Yet most 
of the provisions that give even more tax breaks to the oil and gas 
industry, financial services companies, high tech industry, insurance 
companies, and defense industry take effect early. The priorities in 
this bill are seriously skewed in the wrong direction.
  In addition, this bill does nothing to fundamentally reform our 
unfair and overly complex tax code. For years, and this bill is no 
exception, we have compounded the tax code's complexity and put tax 
loopholes for special interests ahead of tax relief for working 
families. The result is a tax code that is a bewildering 44,000 page 
catalogue of favors for a privileged few and a chamber of horrors for 
the rest of America--except perhaps the accountants and lawyers.
  The special interest set-asides and carve-outs in this bill merely 
exacerbate the complexity of the tax code. This bill adds new 
loopholes, new schemes, new ideas to keep lawyers and accountants busy.
  It is not right to pay back special interests ahead of American 
families. It is not fair to give more tax incentives and exemptions and 
cuts to big business, when individual taxpayers get no relief.
  If this bill had any chance of becoming law, perhaps it would have 
been prioritized somewhat differently.
  Mr. President, this tax bill is based on the premise that we will 
have nearly $3 trillion in the federal budget surplus over the next 10 
years. Let's look at the priorities for those surplus funds.
  Our first priority must be to lock up the Social Security Trust Funds 
to prevent Presidential or Congressional raids on workers' retirement 
funds to pay for so-called ``emergency'' spending or new big government 
programs. Most Americans don't share the view that dubious pork-barrel 
projects, such as millions of dollars in assistance to reindeer 
ranchers and maple sugar producers, should be treated as emergencies to 
be paid for with Social Security, but that is exactly what Congress did 
earlier this year.
  That leaves nearly $1 trillion in non-Social Security revenue 
surpluses. I believe a healthy portion of the projected non-Social 
Security surplus should be returned to the American people in the form 
of tax cuts. I also believe we have a responsibility to balance the 
need for tax relief with other pressing national priorities.
  After locking up the Social Security surpluses, I would dedicate 62 
percent of the remaining $1 trillion in non-Social Security surplus 
revenues, or about $620 billion, to shore up the Social Security Trust 
Funds, extending the solvency of the Social Security system until at 
least the middle of the next century. The President promised to save 
Social Security, but he failed to include this proposal anywhere in his 
budget submission. In fact, he has since proposed or supported spending 
billions of dollars from the surplus on other government programs, 
depleting the funds needed to ensure retirement benefits are paid as 
promised.
  I would also reserve 10 percent of the non-Social Security surplus to 
protect the Medicare system, and use 5 percent to begin paying down our 
$5.6 trillion national debt.
  With the remaining $230 billion in surplus revenues, plus about $300 
billion raised by closing inequitable corporate tax loopholes and 
ending unnecessary spending subsidies, I believe we could provide 
meaningful tax relief that benefits Americans and fuels the economy.
  The bill before the Senate includes provisions that are similar to 
some of the proposals I would include in such a plan, which are 
targeted toward lower- and middle-income Americans, family farmers, 
small businessmen and women, and families.
  I believe we should expand the 15% tax bracket to allow 17 million 
Americans to pay taxes at the lowest rate, and this bill reflects a 
similar focus. The bill also increases the income threshold for tax-
deferred contributions to IRAs, although delayed, and very gradually 
increases  the amount that employees can contribute each year to 
employer-sponsored retirement plans. We should make these increases 
effective immediately to encourage more Americans to save now for their 
retirement. And this bill takes several steps to provide meaningful tax 
relief for American families by at least starting to eliminate the 
onerous marriage penalty and provide relief from confiscatory estate 
taxes.

  What the bill before the Senate does not do is provide much-needed 
incentives for saving. Restoring to every American the tax exemption 
for the first $200 in interest and dividend income would go a long way 
toward reversing the abysmal savings rate in this country.
  Most important, the bill does not eliminate immediately the Social 
Security earnings test. This tax unfairly penalizes senior citizens who 
choose to, or in many cases, have to work by taking away $1 of their 
Social Security benefits for every $3 they earn. There is no 
justifiable reason to force seniors with decades of knowledge and 
expertise out of the workforce by imposing such a punitive tax. And in 
our modern society, when many seniors have to work to survive, we 
should not keep this Depression-era relic in law.
  This is the kind of package that I believe could form the basis of a 
tax cut bill that properly balances national priorities and provides 
fair tax relief to average Americans and their families without further 
complicating our tax code. It would be a better step in the right 
direction toward economically sound and equitable tax relief and 
provide incentives to undertake real reform of our tax system.
  Mr. President, I will vote for the Taxpayer Refund and Relief Act 
because I believe it reflects a commitment to provide relief from a 
system that taxes your salary, your investments, your property, your 
expenses, your marriage, and your death. We must send a message to the 
American people and to the President that we must repeal the onerous 
marriage penalty and estate taxes that burden America's families.
  This bill is not acceptable to me. Special interests get the biggest 
breaks, and they get them right away. All the American families get are 
the leftovers. My problem with this bill is not with the size of the 
tax cuts, but who benefits.
  However, its passage and subsequent veto represent our only hope for 
meaningful tax relief for those working families who need it most. If 
this bill were to die today, so would the possibility of achieving 
meaningful tax relief this year. By passing this bill and forcing the 
President to address tax issues, I believe we hold open the possibility 
of entering into negotiations between the Administration and the 
Congress to provide meaningful tax relief for the benefit of all 
Americans.
  The sad reality is that this bill will not give a single American 
family even one extra dollar in their pockets, because it will be 
vetoed as soon as it arrives at the White House. But after this bill is 
vetoed by the President, our responsibility to the people we represent 
must be to work to address their priorities. We must save Social 
Security, fix the Medicare system, and return to the people more 
control over their lives and the lives of their children and families.
  At the same time, we can start to work on crafting a meaningful tax 
relief bill that truly benefits the American people--a tax bill that 
even President Clinton could not refuse to sign into law. That is what 
the American people want and need.
  Mr. MOYNIHAN. Mr. President, I am happy to yield 5 minutes to my 
learned friend from Michigan.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. Mr. President, I thank the Chair, and my good friend from 
New York.
  This bill before us is unfair and it is unwise. It is unwise because 
the projected surplus that the bill uses for the tax cut is based on 
our abiding by spending limits that have already been breached and 
which would require huge cuts that we cannot make and should not make 
in veterans' programs, education programs, criminal law enforcement, 
and other important programs for the people of this Nation.

[[Page S10328]]

  If the surplus to this extent materializes, in fact we should then 
reduce the national debt that has been built up, particularly over the 
last 20 years. That would be the greatest gift of all that we could 
make for the American people, the reduction of that debt, because that 
would be a reduction in the interest rates which people pay on their 
mortgages and cars and credit cards, and that would truly be a 
contribution to the well-being of our constituents.
  The American people also sense that the tax program before us is 
unfair and not just unwise; they know--this has not apparently been 
contested--that 40 percent goes to the upper 1 percent of our people. 
The highest income 1 percent get over 40 percent of the tax benefits in 
this bill. More than 80 percent of the tax benefits in this bill go to 
the upper 20 percent of our people.
  It is, in fact, true that we are dealing with the people's money. It 
has frequently been said here that what we are talking about is whether 
or not to give back to at least some of the people their own money. It 
is true. This money--this surplus--belongs to the American people. But 
the economy belongs to the American people as well. The Social Security 
system belongs to the American people as well. The Medicare system 
belongs to the American people as well. The Head Start program belongs 
to the American people. Veteran hospitals belong to the American 
people.
  It is important that we consider what to do with a projected 
surplus--that we deal with this surplus as what it is, the people's 
money, but look at all of what we do here as hopefully carrying out the 
people's business.
  This bill takes us down the wrong road--the road back toward the 
deficit ditch that we are finally beginning to climb out of. It has 
taken us fewer years than expected. But, nonetheless, it has taken us 
about 6 years to get out of the ditch which we got ourselves into, 
particularly during the decade of the 1980s.
  Now that we are finally out of that ditch, we should stay out of that 
ditch. We should use any real surplus--not projected surplus but any 
real surplus--to protect Social Security and Medicare, and have a 
prescription program, and to do what is vitally necessary to invest in 
our people, particularly through their education, but then to pay down 
that national debt and to give back to the people what they truly want, 
which is a sound economy on a long-term basis and low interest rates on 
a long-term basis. That is what would be guaranteed if, in fact, we 
apply any real surplus beyond Social Security and Medicare prescription 
needs, beyond the investment in education, if we take that surplus, if 
it is real, and pay down the national debt.
  Instead, this bill takes us down a different road, a road which will 
deliver a huge tax cut mainly for those among us who need it the least 
and who are, for the most part, not even asking us for it. This bill 
represents an imprudent and unfair step, and we should not take it.

  I yield the floor.
  I thank the Chair.
  Mr. MOYNIHAN. Mr. President, may I say to my friend from Michigan 
that, as he well knows, we are in the second year of a budget surplus, 
the first such sequence since the 1950s. Let's not spoil it.
  Mr. President, I yield the floor.
  Mr. ROTH. Mr. President, I yield 10 minutes to the Senator from New 
Mexico.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. I thank my friend, the chairman.
  Mr. President, fellow Senators, I want to talk for 10 minutes about 
why this is a good deal for the American people and why it is high time 
we set in motion a series of tax cuts which will give them back the 
money they are paying into the Government that we don't need.
  First of all, everybody talks about the fact that tax reduction comes 
in over a decade, and it comes in 1 year at a time. Almost everybody 
who is critical of that says at the same time they want to save Social 
Security.
  The truth of the matter is there is $3.3 trillion in accumulated 
surpluses over the next decade. In order to make sure you are 
protecting Social Security, each and every year of that 10 years, a 
substantial portion of that money belongs to the Social Security trust 
fund. So you can't have tax cuts that use up the Social Security trust 
fund. Anybody who says we are is ignoring the facts.
  The reason we have to have a phased in tax cut is because we are 
saving every single penny that belongs to Social Security for Social 
Security. Then we come along and say, let's have a tax cut, and let's 
phase it in each and every year.
  People can come to the floor and be critical of how slow it is and 
how long it takes to get the marriage tax penalty totally eliminated. 
But the truth of the matter is when you pass this tax bill tonight, and 
if the President were to sign it, you have put into law a change in the 
Tax Code which will get rid of the marriage tax penalty and many of the 
other onerous provisions in this law. Still, after you have done that, 
even though some of our best money crunchers in America have it wrong, 
there is $505 billion--not zero, as some people have said, $505 
billion--off a freeze which you can spend where you want over the next 
decade, be it for defense, be it for discretionary programs such as 
education, or you can use $90 billion to $100 billion of it, or as much 
as you want, to make sure you fix Medicare, if that is your goal.
  So for starters, there are so many people out there with wrong 
numbers and attacks on this proposal, who have the wrong facts, that I 
merely want to answer that part. We take care of Social Security 
regardless of what the President of the United States says. There is 
money in this budget for Medicare reform, if you choose to do it. There 
is money in this budget plan to pay for defense and to pay for 
education, and other high priority items, and to take care of the needs 
of this country.
  What we set out to do was to say we shouldn't keep more than we need, 
and we shouldn't set billions of dollars around in places up here in 
the National Government assuming that one way or another it will be 
there when it is time to give a tax cut.
  I submit that if you believe that you really do believe in the tooth 
fairy because, as a matter of fact, if you set that much money around 
up here and it is not used, it will be spent.
  We ask the question: Do you want to use this surplus to grow the 
pocketbooks of Americans, or do you want to increase their savings 
accounts, or would you like to spend it? That is the issue before us 
today. It is a blessing that we have this surplus.
  First, we should set aside enough for Social Security. We have done 
that. The bill then provides for our taxpayers to get some relief. It 
preserves and expands the child care credit. It protects various 
education credits, foster care tax credit, the alternative minimum 
tax--a fancy name. But what it means is that the way the Tax Code is 
written today, we give average Americans, middle-income Americans, 
credits and the like in the Tax Code. Then we take it away under the 
alternative minimum tax--like we give you a benefit and we take it 
away. We call it an alternative minimum tax, as if you are so rich you 
shouldn't get these credits.
  Do you know that if we do not pass this tax bill, 7 out of 10 
American taxpayers will lose some of their credits to the AMT by the 
year 2008, just about the time that we wiped out the AMT?
  Please, Mr. President, sign this bill. The bill provides tax relief 
for health care, long-term care, and has small business incentives. It 
is a bill that is good for farmers, for working men and women, and 
families. Overall, it is a very good bill.
  I also say, Mr. President, please sign this bill. The final tax plan 
is an excellent tax plan that moves toward slower, flatter, and simpler 
tax and moves toward taxing income that is consumed, not income that is 
saved, earned, and invested.
  On the business side, it moves closer to allowing business to deduct 
the cost of investments in the year they are made, thereby making them 
more competitive.
  This bill overall moves toward tax equity so everyone will get a 
break for health care regardless of where they work--a big company, 
small company, or a ma-and-pa one-stop shop. People who need health 
coverage say: Mr. President, please sign this bill.

[[Page S10329]]

  The bill focuses on generational equity. There are child care credits 
and long-term credits for the elderly. The President asks, be sure to 
take care of our senior citizens. We have taken care of them. Senior 
citizens, we are taking care of your children and your grandchildren 
who are interested in being helped because they pay more taxes than 
they should. On behalf of the seniors in the country, and their 
daughters, sons, and grandchildren, Mr. President, sign this bill.
  The bill takes the best part of the House and Senate bill and 
attempts to make it law. Broad-based tax reduction is fair. It cuts the 
tax rate in the lowest bracket first. Lowering of the 15-percent 
bracket happens before any other brackets are lowered. This sequencing 
recognizes that 98 million Americans are the people most urgently in 
need of a tax cut. Lowering the 15 percent to 14 percent is a 7-percent 
cut. Widening the lower bracket does two important things: It returns 
millions of Americans to the lowest brackets, fighting back ``bracket 
creep.'' In my own State of New Mexico, 151,000 New Mexicans will be 
returned to the lowest bracket; another 83,000 will see taxes cut.
  Talking about the marriage penalty for a minute, which everybody has 
spoken to--I won't be as eloquent as some--it is absolutely 
preposterous that the United States of America would punish by way of 
taxation a man and a woman who are married and both working, as opposed 
to a man and woman who are single. The marriage penalty is the wrong 
thing for America today. It was the wrong thing when we passed it. We 
ought to get rid of it.
  In behalf of millions of married couples who are begging Congress to 
be fair with them and get rid of this penalty on their marriage, please 
sign this tax bill.
  Because of the progressive rate structure in our tax code, Americans 
in the 28, 31, 36, and 39.6 tax brackets will all see their taxes cut.
  The marriage penalty relief in this bill is overdue and well done. 
There is roughly $117 billion in marriage penalty relief. Fully fifty 
percent of the bills resources go to a broad-based and marriage-penalty 
tax relief.
  The bill also phases in a doubling of the standard deduction to 
finally eliminate the marriage penalty. In addition to lowering federal 
income taxes by eliminating the marriage penalty for 567,170 New Mexico 
families, it will also save New Mexicans $72.4 million in New Mexico 
income taxes as well! Getting married would no longer be a taxable 
event.
  The bill increases the child care credit. It increases the credit for 
families with AGI incomes under $30,000. By 2006, the credit will be 40 
percent. This means that 29,042 New Mexican families will get more help 
with their child care expenses and this is a real helping hand because 
child care can cost as much as $3,133 to $5,200 a year per child. These 
29,042 families with child care expenses say, ``Mr. President, please 
sign this bill.''
  This bill improves tax treatment for education 7 ways. The 331,815 
public school students in New Mexico would be benefitted if this bill 
were to become law, so I say, ``Mr. President, please sign this bill.''
  This bill provides a deduction for prescription drug insurance, 
provides an extra exemption for the caretaker of elderly and infirm 
parents and grandparents, and provides a deduction for long term care 
insurance.
  43 percent of all Americans will need long term care at some point in 
their lives and 25 percent of all families are caring for an elderly 
relative today. It is an emotional and financial commitment. The long 
term care deduction can help make it less of a financial burden. For 
the 19 million Americans expected to need long term care, I say, ``Mr. 
President, please, please sign this bill.''
  This bill cuts taxes by $43.9 billion by providing tax relief to 
families facing health care costs.
  The bill expands the deduction for health insurance so that everyone 
is treated the same regardless of whether they work for a big 
corporation with a fancy health insurance benefit plan, or whether they 
work for a small business that does not provided health insurance. This 
provision could help 43 million uninsured plus the 10.2 million who 
have access to health insurance but decline to participate because of 
the cost and it should help the 1.4 million children of self-employed 
who lack health insurance.

  In New Mexico this provision could have a big impact and make a big 
difference. We have 340,000 uninsured New Mexicans who belong to 
families where some in the family works.
  On behalf of all these people with no health insurance or with 
unaffordable health insurance, I ask, ``Mr. President, please sign this 
bill.''
  I have talked about why this bill is good for the American family. 
But there are two provisions that are good for the economy.
  Lowering the capital gains rate is the best economic policy and I am 
pleased that this bill lowers the top rate to 18 percent. I am also 
pleased that the bill increases expensing from $19,000 to $30,000.
  This bill also phases in a reduction of rates and then repeals the 
estate tax. The estate tax is perceived as one of the most confiscatory 
taxes of all time and it is one that disrupts small business and farms. 
I am pleased that the bill gets rid of the death tax. Dying should not 
be a taxable event.
  For all of the constituents who have written me about the unfairness 
of the death tax I say, ``Mr. President, please sign this bill.''
  The bill increases the amount that can be contributed for all IRAs. 
It is phased in so that eventually $5,000 a year could be contributed. 
The bill also increases eligibility for those who can participate in 
Roth IRAs and includes ``catch-up'' contribution limits for people aged 
50 and over.
  For the 15 million people who would be helped by these retirement 
security provisions, I say, ``Mr. President, please sign this bill.''
  The bill also does some things that really need doing. First it 
extends the R&E credit for five years. It also includes some 
desperately needed tax relief for the oil and gas industry.
  I am very pleased with this bill. It is fair, it is the right thing 
to do and it should be done before the money get spent on more 
government.
  I close today by saying I have been working on budgets for a long 
time. I have heard criticisms of budgets that we produced, and we have 
criticized budgets that the opposite side produced.
  The criticism of this tax cut, phased in over 10 years, is beyond 
anything I could ever have imagined. With surpluses of this size, for 
the White House and those who oppose it to be inventing numbers and 
accusations that are totally unfounded is something I never expected. 
As a matter of fact, there is even concern about the moderate economic 
assumptions in this budget. We grew at 6 percent the year before last, 
4\1/2\ percent last year, over 2 percent this year, and we plan the 
next decade to grow at 2 to 2.3 percent, a very modest growth. We even 
plan two recessions in there, and we still get these surpluses.
  Frankly, I think they are fair projections. At least they are fair 
enough to make sure we don't risk them being spent. All we are saying 
is, over the next decade set this much aside, just don't collect it. We 
are not going to cut taxes. We are just not going to collect it. It 
will stay with the American people. It is going to be phased in.
  Fellow Americans, it will take a while for some of them, but maybe we 
should ask the question for the other side and the White House who are 
critical that it takes too long for them to come in, When will their 
taxes come in? When will their tax reductions come? Perhaps never.
  Mr. MOYNIHAN. On behalf of the distinguished Republican chairman and 
manager of the bill, I yield 10 minutes to the Senator from Florida.
  Mr. MACK. I thank my distinguished colleague for yielding me that 
time.
  Mr. President, the vote on our tax relief bill is nothing less than a 
vote of confidence, reaffirmation of our belief in the wisdom of the 
American people and of our faith in the capitalist system. It all boils 
down to one basic, fundamental question: who has first claim on the 
income of Americans--does it belong to the government or to the 
individual families who create the income through the sweat of their 
brows and the genius of their (brains?)
  The President and the vast majority of our friends on the other side 
of the aisle act like the money belongs to the

[[Page S10330]]

government. They reject our tax relief bill as ``too big,'' as if 
taxpayers earn income at the sufferance of the government. Under this 
view, Uncle Sam does not live under a budget he sets the budget for 
every American family, which must be content with the table scraps 
after the enormous appetite for spending in Washington has been 
satiated.
  Two and one-quarter centuries ago, the rejection of this arrogant, 
government-comes-first theory of taxation was the impetus for the 
founding of our Nation. Our political forefathers would not stand for 
the notion that Americans were mere pawns of a distant court, which 
could raid their purses and pocketbooks at any whim. America was 
founded not on concepts that divide peoples, such as race, or 
geography, but on the American Idea that brings us all together: the 
inalienable right to liberty.
  From our Nation's very conception, this idea has served as a beacon 
for people of all creeds and colors seeking refuge from he heavy hand 
of meddlesome government. In America, the government serves the people, 
and must necessarily trust the people to do what is right by and for 
themselves. The government should not try to do it all. We provide a 
safety net for the least fortunate, those who cannot help themselves, 
but everyone else is trusted with the responsibility of providing for 
their own financial security.
  And by all accounts, this combination of liberty for our citizens and 
restraint on the part of the public sector has, in fact, succeeded. By 
the end of the 19th Century, America was in the forefront of the 
Industrial Revolution. By the mid-20th Century, despite the MIRE of a 
worldwide depression, the United States was able to mobilize its 
industries and its men to rout one own of the twin evils of tyranny in 
the Second World War. And by the close of this Century, we succeeded in 
defeating the other Soviet Communism, by the force of our will, the 
commitment of a strong Commander-in-Chief, Ronald Reagan, and the power 
of our competing idea of liberty. Our Nation is President Reagan's 
shining city on a hill, the economic envy of the world and the 
destination of all who yearn for freedom.

  But this President and his supporters in the Congress just don't get 
it. The tax burden on our citizens is at an all time, peacetime high--
20.6 percent of the economy. Meanwhile, the federal government will be 
overcharging the taxpayers by more than $3 trillion over the next 10 
years. A Nation that trusted its people, that protected their liberty, 
would not flinch from the right thing to do: cut taxes so that our 
families can enjoy the fruits of their labors, instead of greedy 
Washington programs. This tax bill does just that, leaving $792 billion 
in the hands of the people to whom it belongs.
  This tax cut is a measured, balanced response to the surpluses that 
will be flowing into the capital. It leaves 75% of the surpluses to be 
used to retire debt, and finance important priorities like Medicare and 
national defense. Every penny in the Social Security trust fund is left 
in a lockbox to be used to shore up the retirement security of our 
citizens. And the tax cuts are phased in over time, so the bulk of the 
cuts are in the last 3 years of the coming decade, when surpluses would 
otherwise skyrocket and tempt a government spending spree.
  But voices are raised in opposition to the tax cut. It is said that 
the government cannot afford a tax cut of this size. But that is 
exactly backwards: our taxpayers cannot afford to continue to shoulder 
a record-high tax burden. Back in 1993, without the vote of a single 
Republican member of Congress, President Clinton pushed through a tax 
increase totaling $241 billion over 5 years. The rationale for this tax 
increase was the need to reduce our budget deficit. Well, the budget 
deficit is gone and we now have surpluses as far as the eye can see. 
The on-budget, non-Social Security surpluses will exceed $1 trillion 
over the next decade. We propose to let the American people keep $792 
billion of these overpayments. Is that too much?
  Not when you consider that the 5-year tax cut of $156 billion pales 
in comparison to the Clinton tax hike, imposed on what was then a much 
smaller economy. According to my Joint Economic Committee staff, the 
1993 Clinton tax increases will take some $900 billion from the 
American people over the next decade. Our tax cut of $792 billion does 
not even offset the lingering ill effects of that tax hike. Are we 
being too generous? Or have the taxpayers been too generous for too 
long?

  It is hard to find fault with the specifics of our tax cut package. 
Is it right that we should double-tax business investments, so our 
innovators lack the resources for research and development? Is it wrong 
to extend the R&D tax credit, to liberate our scientists and engineers? 
Is it right that people should pay higher taxes just because they are 
married? Do we want people to build their own nest eggs for retirement 
security, or do we want to force everyone to rely exclusively on the 
Social Security system?
  This tax relief package helps everyone. We make health and long-term 
care insurance fully deductible, and allow a dependent deduction for 
elderly family members. Education is more affordable through enhanced 
savings vehicles--IRAs and pre-paid tuition plans. Tax rates are 
lowered across-the-board. We eliminate the marriage penalty for 
taxpayers in the lowest tax bracket and repeal the Alternative Minimum 
Tax for individuals.
  Most significant is what this tax relief does for our future. As we 
enter the 21st Century, America needs a tax policy that will 
facilitate, not smother, innovation and new technology. Our tax relief 
bill improves the environment for pioneers in new products and 
services. The R&D tax credit is extended for 5 years--the longest 
extension ever, so business can count on it. The R&D credit will 
continue to fuel innovation in new technologies, leading to health and 
safety breakthroughs, and enriching our quality of life.
  Capital gains tax rates are also cut to their lowest levels in 58 
years. Lower taxes on capital gains will help our entrepreneurs find 
the seed capital they need to launch new businesses, create new jobs 
and provide new products and services. And capital gains are indexed, 
eliminating the tax on phantom gains due to inflation--ending the 
government raid on the savings of long-term investors, particularly 
retirees.
  We also eliminate the most unfair tax of all, the estate and gift 
tax. No longer will business owners be discouraged from reinvesting 
their hard-earned profits because the specter of the federal death tax 
is hovering, waiting to swoop down and scoop up 55 percent of the 
increased value of the business. By eliminating the death tax, cutting 
the capital gains tax, and expanding IRAs, some of the largest barriers 
to capital formation are pulled down, and the result should be a rising 
tide of investment that carries our economy through the coming Century 
of Knowledge.

  I want to commend Chairman Roth, and all of the conferees, for 
producing a balanced, thorough, and fair tax cut that benefits all 
taxpayers. High taxes are an infringement on the liberty of our 
families, who should not be struggling to make ends meet while their 
Federal servants hoard the wealth our families have created. When the 
question comes down to whether we trust the Federal Government or the 
family to use money wisely, I choose the family every time. I urge my 
colleagues to do the same, to side with the people, not the 
bureaucracy, and vote for the conference report.
  I yield the floor.
  Mr. STEVENS. Mr. President, I am pleased that the Conference Report 
of the Taxpayer Refund Act of 1999 contains tow amendments I authored 
to extend the same tax benefits that farmers have to fishermen. The 
original version of the Taxpayers Refund Act of 1999 included 
provisions to create farm and ranch risk management (FARRM) accounts to 
help farmers and ranchers through down times and to coordinate income 
averaging with the alternative minimum tax. The FARRM accounts would be 
used to let farmers and ranchers set aside up to 20 percent of their 
income on a tax deferred basis. The money could be held for up to five 
years, then it would have to be withdrawn and taxed at that time. 
Interest would be taxed in the year that it is earned.
  Encouraging farmers and ranchers to set some money aside for 
downturns in

[[Page S10331]]

their markets makes sense. However, I felt this provision should have 
been expanded to include fishermen and I offered an amendment that 
would do just that.
  I also authored an amendment to expand income averaging to include 
fishermen and to coordinate averaged income with the AMT I am proud to 
say that both measures had broad bi-partisan support, and I want to 
thank those who cosponsored my amendments.
  Allowing fishermen to elect income averaging and coordinating that 
election with the AMT is important to the overall issue of tax fairness 
under the tax code. Under my amendment, a fishermen electing to average 
his or her income would owe AMT only to the extent he or she would have 
owed alternative minimum tax had averaging not been elected.
  In previous years Congress has responded to fishing disasters with 
Federal assistance under the Magnuson-Stevens Act. We do the same for 
farmers when crop disasters occur. Allowing fishermen, like farmers, to 
establish risk management accounts, is a responsible way to let them 
help themselves and preserve the proud self-reliance that marks their 
industry.
  Fishermen are the farmers of the sea. Fishermen and farmers share 
seasonal cyclical harvest levels and fishermen should not be left 
behind in the tax code because of this. While these amendments are 
modest steps toward equal treatment for our fishermen, they are an 
important part of ensuring the long-term sustainability of our fishing 
industry.
  In addition to the provisions in this bill for America's fishermen, 
I, along with my colleague, Senator Murkowski, included a measure to 
allow Eskimo whaling captains to deduct up to $7,500 dollars of their 
expenses incurred during whaling hunts. This provision allows whaling 
captains to continue the tradition of sharing whale meat with Alaska 
villages.
  It is the custom that the captain of a whale hunt make all provisions 
for the meals, wages and equipment costs associated with the hunt. In 
return, the captain is repaid in whale meat and muktuk, a consumable 
part of a whale. The captain is then required, by tradition, to donate 
a substantial portion of the whale to his village. This provision will 
allow the captains to deduct for the costs involved since they do not 
recoup the actual costs from their share of the whale meat. This 
provision is important to the heritage and traditions of the Alaskan 
Eskimos, and I am pleased that it was included in this bill.

  This tax refund plan is just that--a tax refund for every tax paying 
American. Every American would see a reduction in their Federal income 
taxes in the form of a refund. When you are overcharged for an item in 
a store, you march back in and demand the difference between the actual 
price and the amount you were charged. The American taxpayers cannot 
march up the front steps of the Treasury demanding a refund of their 
overpayments to Uncle Sam. We in Congress must do that for them.
  Some would not like to see this measure pass because they feel it 
does not reduce our national debt. However, this bill contains 
provisions to ensure that the goal of debt reduction is met. The debt 
triggers included in this package would halt any future refund measures 
under this bill until our debt reduction goals are achieved. This is a 
good balance because it allows us to send money back to the American 
people while reducing our debt load. Under this bill, one cannot happen 
without the other.
  I urge my colleagues to support this meausre and I thank the 
leadership of chairman Roth and the members of the Finance Committee in 
organizing and authoring this sweeping tax refund bill.
  Mr. GORTON. Mr. President, I rise to express disappointment in the 
way this tax legislation takes a piecemeal approach toward electricity 
issues. It deals with only one of the three major provisions that need 
revision if this industry is going to meet the requirements of all 
citizens and ratepayers in an era of emerging competition.
  The electricity industry is in transition. Wholesale competition 
between utilities and suppliers is becoming a vibrant and competitive 
market, although there is still work to be done to make this market 
work more effectively. Consumers have benefited from lower prices and 
increased supply although the benefits have been invisible to many 
retail consumers. And nearly half of the states have moved to develop 
their retail electricity markets to give more consumers the chance to 
shop for their power provider.
  But the federal tax provisions that affect this industry were written 
for a monopoly era. This has the real effect of keeping many utilities 
from participating in competitive markets due to the penalties they 
would incur solely because of outdated tax provisions. If these 
utilities are somehow forced to respond to competition without the 
needed changes, rates would rise only because of laws written for a 
time before competition was imagined.
  This bill addresses only one of these tax problems, the taxation of 
nuclear plant decommissioning funds. This benefits the investor-owned 
utilities interested in buying or selling nuclear plants. Two other 
areas need to be addressed to prevent other consumers from being 
penalized: the private use restrictions on municipal and public power 
systems, and the restrictions on electric cooperatives when costs or 
revenues are incurred during the transition to more extensive 
competition.
  In my state we have a healthy mix of suppliers of electricity: 
investor-owned utilities, cooperatives, municipalities and public 
utility districts. These three major sectors of the industry should 
have their tax problems addressed at the same time.
  I hope Chairman Roth and Chairman Murkowski will keep their 
commitment to hold a hearing in the tax-writing committee in September, 
with an eye toward resolving these tax issues as expeditiously as 
possible.
  Mr. DASCHLE. Mr. President, as we approach final passage of the 
reconciliation conference report, I would like to put what we are about 
to do in proper perspective. Although some have characterized this 
process as politics as usual or political posturing, I do not see it 
that way. What the House has done, and the Senate is about to do, is 
serious business, not a political game.
  We are about to vote on legislation that affects this nation's 
economic and fiscal health and well-being. It will affect the live of 
millions of Americans for decades to come. The stakes could not be 
higher.
  And when you boil away all the rhetoric heard during this debate, 
what you really have is a tale of two paradigms. The Republican plan is 
an old and familiar one. Republicans would take us back to 1981 and the 
failed economic policies of that era. These policies can best be 
characterized as wishful thinking that led to a fiscal disaster.
  The Democratic position is that we should follow the model Democrats 
put in place in 1993 and continue to pursue to this day. Our plan 
turned record deficits into record surpluses and halted the 
skyrocketing growth of federal debt. At the same time, we have 
experienced the longest peacetime economic expansion in our history. 
The Democratic plan is one of fiscal responsibility and economic 
prosperity.
  In addition to giving us the strongest economy in a generation, the 
politically difficult vote cast by Democrats nearly 9 years ago 
provided something else. It provided this Congress with an historic 
opportunity--sustained economic health and the possibility of actual 
budget surpluses.
  The question facing this Congress at this time is, which road will we 
take--the fiscally responsible path or the fiscally dangerous one? Will 
we opt to build on our success or put our nation's fiscal health at 
risk yet again?
  As I have listened to many of my colleagues on the other side of the 
aisle, I am struck by how familiar many of their arguments sound. I am 
hearing some of the same dangerous rhetoric and false rosy scenarios 
that I heard last decade.
  And as I look at their bill, I see many of the same special interests 
disproportionately benefitting from their actions. Make no mistake 
about it. When it comes to irresponsible tax cuts tilted to the 
wealthy, the Senate bill was bad, and the conference bill is much 
worse. Let me cite a few examples.
  Under the terms of the bill before us, the bottom 60 percent of 
taxpayers would receive an average tax cut of just $138. That's about 
25 cents a day, not even enough for a cup of coffee. At the same time, 
Republicans feel it is appropriate to provide the top 1 percent of 
taxpayers, people with incomes over $300,000, an average tax cut of 
over

[[Page S10332]]

$46,000. A cup of coffee for most, $46,000 for a few.
  To further highlight the skewed nature of this cut, people earning 
over $300,000 would receive more than 40 percent of the $792 billion in 
tax relief provided by this bill. Meanwhile, people making between 
$38,000 and $62,000, the heart of this country's middle class, would 
receive 10 percent of the tax cuts in this bill. Once again, much for a 
few, and little for many. It's hard to see how anyone could 
characterize this as fair.
  While providing these huge tax cuts for a few, the Republicans opt to 
set aside nothing for prescription drugs for Medicare beneficiaries.
  In order to generate the surpluses necessary to pay for their 
monstrous tax breaks, Republicans require drastic cuts in education, 
veterans' health, defense and agriculture. If our military were funded 
at the level requested by the President, the Republican budget would 
force across-the-board domestic discretionary cuts of 38 percent below 
their level today. If defense were fully funded and Republicans 
followed the plan laid out by Chairman Domenici, these cuts would grow 
to 50 percent.
  A final consequence of Republican recklessness is that they would 
force $90 billion in cuts to Medicare, student loans, veterans' 
benefits and many other programs on top of cuts I just described. The 
budget rules are clear on this. If tax cuts are not budget-neutral, the 
law requires across-the-board cuts in many mandatory programs. The 
Republican plan would require $32 billion in Medicare cuts over the 
next 5 years. And starting in 2002, the Republican plan would eliminate 
the Commodity Credit Corporation, crop insurance, child support 
enforcement, and veterans' education benefits.
  As I said earlier, we have this historic opportunity, and this is how 
the majority responds. They fail on at least three counts. First, 
Republicans would set out on an irresponsible fiscal policy. As history 
has painfully proven, their tax cuts would inevitably lead to bigger 
deficits and more debt.
  Second, they are pursuing an irresponsible national policy. Their tax 
cuts would explode just as baby boomers retire, eating up scarce 
resources that will be needed if the government is to keep its 
commitments on Medicare and Social Security.
  Third, as Republicans have known from the outset, engaging in this 
reckless and risky course will only produce one outcome--a Presidential 
veto. The President has been clear: he will veto this bill. And I am 
confident that the vote on final passage will show equally clearly that 
this veto will be sustained.
  Instead of wasting Congress's and the American people's time with 
this vainglorious pursuit, we should be working together on a fiscally 
responsible plan that protects the entire Social Security surplus, 
strengthens and modernizes Medicare by extending its solvency and 
providing a prescription drug benefit, pays down the debt, provides 
targeted tax relief for working Americans, and invests some of the non-
Social Security surplus in critical priorities such as defense, 
education, veterans' health, and agriculture.
  The size of the projected surpluses are sufficient to permit all of 
this. Yet, the Republicans insist on pursuing a course that neglects 
all but the tax cuts and is certain to produce a veto.
  We have seen this course before. On juvenile justice, on the 
Patients' Bill of Rights, on gun control, on their overall budget plan, 
and on this bill. Time and again the Republican Congress has opted to 
follow a path outlined by ideological extremists. A path that focuses 
attention on special interests instead of the nation's interests. A 
path that wastes precious time and fails the American people when it 
comes to truly addressing their concerns.
  When we return from the August recess, this Congress will have about 
30 working days until our target adjournment date in October. I hope 
that when we come back in September, we can focus our limited time on 
the people's business. I ask that my colleagues reject this bill today, 
and begin that process immediately.
  Mr. CHAFEE. Mr. President, the Taxpayer Refund and Relief Act 
contains many provisions which I support, as well as some which I would 
not vote for if considered on their own merits.
  Let me just highlight some of the more commendable provisions in the 
bill which I hope will be included in any final tax legislation the 
President may sign:
  I am pleased the bill includes reforms to the Alternative Minimum Tax 
(AMT). This tax was never intended to apply to families, nor to be 
triggered by the number of exemptions they might claim.
  In the health care area, this bill includes some important changes. 
First, it provides a health insurance deduction to individuals whose 
employers provide no subsidy, regardless of whether or not the 
individual itemizes. In addition to this deduction, the bill includes a 
similar deduction for the purchase of long-term care insurance that 
will help aging Americans pay for the care they need.
  This bill includes a number of provisions which would strengthen 
retirement security, both by encouraging more private savings and by 
reforming and simplifying our pension laws. These reforms would 
eliminate many of the administrative burdens which discourage 
businesses from offering their employees pensions, and would also 
provide for higher contribution limits.
  The bill includes a repeal of the 4.3 cent per gallon diesel fuel 
excise tax which railroads (including Amtrak) and inland barge 
operators have been required to pay toward deficit reduction. This 
change would enable these modes of transportation to compete more 
effectively by reducing their costs.
  By making the Dependent Care Tax Credit available to more families, 
this bill would help to make child care affordable for more families. 
In addition, the bill includes a provision to extend the adoption tax 
credit and to strengthen the credit for the adoption of special needs 
children.
  The bill proposes to extend the Work Opportunity Tax Credit, a 
program I have long championed, which encourages employers to hire and 
train disadvantaged and unskilled workers.
  The marriage penalty relief provisions in the bill are aimed at 
moderate income families and those eligible for the Earned Income Tax 
Credit.
  The bill also includes provisions which will improve the 
deductibility of student loan interest, and which will help families 
save for college.
  The bill includes an expansion in the conservation easement rules to 
encourage more Americans to donate land for the preservation of open 
spaces.
  The bill also contains a deduction to encourage the restoration of 
historic residential properties. I would have preferred that the 
credit, as included in the Senate bill, had prevailed rather than the 
deduction, but this is a good start.
  Importantly, some of the income tax rate reductions contained in the 
bill are made contingent upon progress toward debt retirement. Failing 
such progress, up to $200 billion of tax cuts would not take place.
  While I will vote for this measure to keep the process moving toward 
an expected presidential veto and final budget negotiations with the 
White House, I would much prefer a smaller bill, such as the $500 
billion bipartisan compromise plan which I--along with Senators Breaux, 
Jeffords and Kerrey--pressed during Finance Committee and floor 
deliberations on the tax bill.
  Because of the uncertainty of projecting budget surpluses over a ten-
year period, and given all of the other priorities we face, I am simply 
not comfortable with an $800 billion tax cut. In my judgment, cutting 
taxes is only one of several important priorities toward which our 
budget surplus should be directed. Others include reducing the national 
debt; modernizing Medicare and adding a prescription drug benefit; 
strengthening Social Security for the long-term; and, ensuring adequate 
funding on an annual basis for important discretionary programs.
  Clearly, there are provisions I had trouble with.
  The bill includes a provision to encourage the establishment of 
Individual Education Savings Accounts to subsidize the cost of private 
school tuition for children in grades K-12.
  This bill would redirect revenues from the Leaking Underground 
Storage Tank Fund to the Superfund program. As Chairman of the 
Environment and Public Works Committee, I strongly opposed inclusion of 
this provision.

[[Page S10333]]

  Reducing the capital gains tax rate from 20 to 18 percent for 
individuals, as this bill proposes, seems unnecessary because this rate 
reduction was scheduled to happen in the near future.
  In sum, Mr. President, I am hopeful that negotiations between 
Congress and the Administration will begin in earnest after the 
President vetoes this bill in September. In my judgment, in addition to 
providing needed tax relief, those negotiations should also produce 
other critical benefits, including provisions to reduce our national 
debt, strengthen Medicare, and to fund discretionary programs.
  Mr. DODD. Mr. President, I rise this afternoon to regrettably oppose 
the conference report to the Year 2000 Budget Reconciliation 
legislation.
  With this conference report, the majority has succeeded in making a 
bad bill worse. Rather than using this conference to come together and 
attempt to develop a reasonable package, all of the objectionable 
features of the Senate-passed bill have been exaggerated, rather than 
moderated.
  First, the conference report further skews the benefits of its tax 
cuts towards those who need them least, and away from working families. 
We now have before us a conference report that includes a 1 percent 
across-the-board tax cut for all income tax brackets. We are led to 
believe that this provision is the center-piece of a package that 
constitutes broad-based tax relief. However, upon closer inspection, 
this clearly is not the case. Under this proposal, the bottom 60 
percent of taxpayers receive only 7.5 percent of the total tax cut 
benefits, while the top 10 percent of income earners receive nearly 70 
percent of the bill's tax cut benefits. Mr. President, I would not 
consider this broad-based tax relief.
  Perhaps the clearest example of how this conference report heaps its 
tax cut largesse on those who least need it is that it spends nearly 60 
billion dollars for the complete repeal of the estate tax. Again, the 
inclusion of full repeal of the estate tax within this conference 
report is a clear indication that its proponents do not wish to direct 
their tax cuts toward hard-working families who need and deserve a 
break. I believe in estate tax relief for farmers and small businesses 
of modest means where it is necessary and appropriate. However, the 
beneficiaries of this provision are overwhelmingly not of modest means. 
They are the very, very affluent leaving estates worth millions of 
dollars. Mr. President, I fail to see how this specific tax cut helps 
the average family struggling to find affordable child care or to meet 
rising college tuition costs.
  Secondly, this conference report fails to meet critical domestic and 
military priorities upon which our nation's long-range prosperity and 
security depend. In order to accommodate the costs of a $792 tax cut, 
extensive cuts of nearly $511 billion will be necessary in domestic 
spending. If defense is funded at the President's request, cuts to 
domestic spending would reach almost 38 percent. As a result, over 
430,000 children would lose Head Start services, 1.4 million veterans 
would be denied much needed medical services from VA hospitals, and 
almost 1.5 million low-income people would lose HUD rental subsidies, 
forcing many into homelessness.
  Perhaps the clearest example of the conference report's failure in 
this regard is what the conferees have done to child care. Senator 
Jeffords and I offered an amendment to provide an additional $10 
billion over the next 10 years to the existing Child Care and 
Development Block Grant--almost doubling the children that would be 
served. It passed the Senate by voice vote. So it was surprising, not 
to mention disappointing, that this provision was summarily eliminated 
in conference. I intend to continue to work to see that Congress honors 
the commitment it made in the Budget Resolution to significantly expand 
funding for quality child care this year and in the years to come.
  Third, the conference report, like the Senate-passed bill, continues 
to pose an increased risk to our current economic prosperity. Federal 
Reserve Chairman Alan Greenspan testified before the House and Senate 
Banking Committees just days ago, urging caution about implementing a 
$792 billion tax cut at a time when the economy is performing so well. 
Chairman Greenspan stated that it would be better to hold off on an 
immediate tax cut because it is apparent that the current surpluses are 
doing a great deal of good to the economy. Moreover, he warned that 
Congress must also be prepared to cut spending significantly should the 
surpluses, upon which the tax cuts are based, not materialize. It is 
ironic to me that so many of our colleagues, who otherwise have had 
high and vocal praise for Chairman Greenspan's economic leadership, can 
so readily ignore his clear and repeated warnings about the 
consequences of their unrealistic and irresponsible tax plan.
  I have also noted with particular interest the comments of the 
esteemed Majority Leader in this week's newspapers where he has stated 
that an acceptable alternative to the Republican tax plan would be to 
``put the money in place so that the debt can be retired.'' This 
sentiment has also been echoed by the House Majority Leader. These are 
stunning admissions of the flawed nature of the conference agreement 
before the Senate today.
  Their ``all-or-nothing'' statements reasonably raise the question of 
how committed the majority is to this tax cut plan. Perhaps they are 
more committed to having a political issue than to giving working 
families a reasonable tax cut while also meeting our responsibilities 
to preserve and strengthen Medicare, Social Security, defense, and 
education. I fear that the Senate has been engaged in a fruitless 
political exercise.
  Mr. President, I worry that the majority has again squandered a 
unique opportunity to first maintain our current economic prosperity 
and then to address the legitimate needs of working families in this 
country. This legislation neglects to make much-needed investments in 
Social Security and Medicare, debt reduction, and critical defense and 
domestic priorities. The President has promised repeatedly to veto this 
legislation. We should have no doubt about his resolve to do so. Then I 
hope that congressional leaders will get serious about working in a 
bipartisan fashion to craft a reconciliation bill that is sensible and 
responsible. We have worked too hard in this decade to rectify the 
wretched budgetary excess of the last decade. Now is the time for 
prudence and caution.
  Mr. REED. Mr. President, here we are again, debating a conference 
report on a ten year, $800 billion tax cut.
  This tax cut works on the assumption of a budget surplus that has not 
been realized yet--a surplus that is generated in no small part by 
already unattainable budget caps which will lead to a significant, 23% 
to 38% reduction in essential programs, including Pell Grants, special 
education, community policing, and drug enforcement.
  In my home state of Rhode Island, my constituents stand to lose $15.9 
million in Title I education funding and $11 million in Special 
Education funding. In addition, more than 17,000 Rhode Island students 
would be denied Pell Grants, and more than 2,000 children would be cut 
from Head Start programs. At a time when one in five children lives in 
poverty, can we really bear cuts of this magnitude?
  At a time when we are asking the government to respond quicker and 
perform better, particularly with respect to domestic and international 
crises, we are considering legislation that trades away the essential 
services that the American people count on in exchange for speculative 
tax cuts whose benefit will be fleeting.
  This legislation is also a threat to the future of Medicare. Indeed, 
at the point that Medicare teeters at the brink of insolvency in the 
next ten to twenty years, the cost of this tax cut could balloon to $2 
trillion.
  We know that we must take steps as soon as possible to shore up 
Medicare and Social Security. A responsible use of the surplus would be 
to make a reasonable allowance for essential programs, address the 
long-term solvency of Social Security and Medicare, and pay down the 
federal debt. Then, we should consider a targeted reductions for 
America's working families.
  Of course, everyone realizes that we cannot continue to live under 
the spending caps. In May, a group of eight House Republicans wrote the 
President, stating, ``A rational compromise is needed to adjust the 
caps and maintain them for future years at achievable levels.'' If the 
most ardent architects of the caps are now having second

[[Page S10334]]

thoughts, there is little reason to expect they can be observed in the 
future.
  But, we are already breaking the caps with ``emergency'' 
appropriations--appropriations that do not count against the caps.
  What is an ``emergency'' appropriation exactly? Apparently, it is 
anything the Majority wants it to be. Just the other day, the House 
passed legislation designating part of the funding for the 2000 Census 
an ``emergency''. As conservative columnist George Will noted, we have 
known about next year's Census since 1790. How could it be an 
``emergency''? Mr. President, since the end of fiscal year 1998, 
Congress has approved approximately $35 billion in ``emergency'' 
spending. One wonders how many other ``emergencies'' like the decennial 
census are looming.
  Beyond the massive cuts to essential domestic initiatives, this tax 
bill depends on the performance of the economy. But, Mr. President, 
after the longest peacetime economic expansion in history, can we 
continue to count on a robust economy for another year, for another 
five years, for another ten years? The bill before us depends on this 
sort of gamble.
  Ironically, this tax cut could be just the thing that stalls our 
economic growth. Recently, fifty economists, including 6 Nobel 
Laureates, wrote that this tax bill will stimulate the economy at 
precisely the wrong time.
  Even Federal Reserve Chairman Alan Greenspan, usually a strong 
supporter of tax cuts, has taken a cautionary view toward these tax 
reductions. The New York Times reported of his testimony on the Hill 
last week.

       The subject [of tax cuts] came up several times, and Mr. 
     Greenspan's message was stern: Don't do it. ``I'm saying hold 
     off for a while,'' Mr. Greenspan said . . . ``And I'm saying 
     that because the timing is not right.''
       Mr. Greenspan urged Congress to pay down the debt and delay 
     any tax cut until the economy begins to turn down. ``The 
     business cycle is not dead,'' he warned, telling lawmakers 
     that whenever an economic slowdown hits, ``a significant tax 
     cut'' may be needed to ward off recession.

  In all respects, this legislation lacks proportionality. Fortunately, 
this bill, even if it passes the Senate and is sent on to the 
President, will be vetoed. It is regrettable that we have wasted so 
much time on this bill, when, instead, we could have focused on truly 
important issues like preserving Social Security and Medicare. Now that 
the political play has been made, I hope that we can return to 
substantive work on issues that really matter to the American people.
  Mr. HATCH. Mr. President, today we are considering a bill to return a 
portion of the surplus that is projected to be $2.9 trillion over the 
next ten years. This bill represents a balanced package that takes into 
account the problems as well as sharing in the good times. The bill 
will provide fiscally responsible tax relief over the next ten years 
while reducing the public debt and still save the $1.9 trillion Social 
Security surplus.
  Many of my colleagues have argued that $792 billion in tax cuts is 
too much--that we should save this money for Medicare and other 
spending. I strongly disagree. It is important that we not forget those 
who are responsible for the surplus--hard-working, over-paying 
taxpayers. After all, what is a surplus--it is excess revenues over the 
amount needed to fund government operations.
  The $2.9 trillion surplus is large enough to balance our priorities. 
This Conference Report shows that we can provide meaningful tax cuts, 
provide for Medicare reform, and reserve the Social Security surplus.
  I also marvel at how much we have recently heard from my colleagues 
on the other side of the aisle about debt reduction. I never knew the 
depth of their convictions on this, particularly since they fought the 
balanced budget amendment so hard. The balanced budget amendment would 
have once and for all imposed spending restraints on Congress. The 
majority of my colleagues on the other side of the aisle argued 
vigorously against such constitutional restraints, implying that they 
wanted unlimited access to the government checkbook.
  In my view, if we have a surplus, and we do not have a tax cut, the 
temptation of Congress to spend that surplus will be too great. I made 
this point many times during debate on the constitutional amendment to 
balance the budget, and I will make it again. If we have a surplus, 
this money will burn a hole in Congress' pocket.
  This conference report provides tax cuts for everyone by cutting tax 
rates 1% across-the-board. This may not sound like much, but it 
represents real tax cuts for each and every taxpayer. In addition, 
couples filing married returns will see their marriage penalty 
eliminated. It is sending the wrong signal to American taxpayers when a 
couple in Utah faces a higher tax bill when they marry than they do as 
singles. The bill also helps our families struggling to finance a 
quality education for themselves and their children.
  The bill also addresses the need for enhanced retirement security. It 
makes IRAs more widely available and improves retirement systems to 
increase access, simplify the rules, increase portability and provide 
small business incentives.
  We have all heard about the challenge that providing adequate health 
care that is facing American families. This bill provides meaningful 
help for those who are struggling with the costs of insurance.
  This bill also contains provisions that would help keep economic 
growth strong. There is a package of international tax relief that 
provides simplification and helps American companies which have 
operations overseas remain competitive and continue to grow. The 
expiring tax credits are extended.
  I am disappointed that the research and experimentation tax credit 
was not made permanent. I still believe that our American research 
engine would be helped significantly by relieving the uncertainty that 
a sunsetted credit imposes. Nevertheless, the 5-year extension in this 
bill is a step in the right direction. I hope that we can revisit this 
issue in the future and provide for a permanent tax credit for research 
and experimentation.
  This conference report contains some important improvements over the 
Senate bill. I am particularly heartened to see the full repeal of the 
estate tax and capital gains tax relief as part of this bill.
  The ``death tax'' is unfair and inefficient. For every dollar that we 
collect, roughly 65 cents is spent complying and collecting this tax. 
This is the wrong way to use up our resources.
  This bill also accelerates the capital gains tax rate cuts we passed 
in 1997. In addition, it will shorten the required holding period of 
assets from 5 years to 1. This will provide significant simplification 
for those taxpayers struggling to determine which capital gains rate 
applies and how long they have held their assets. This is true 
simplification and real relief. And, let's make no mistake: these tax 
changes will benefit more Americans than just the wealthy. These estate 
tax and capital gains tax provisions will benefit every American who 
owns a home, business, or family farm. It will benefit the increasing 
number of Americans who are investors in mutual funds and other 
securities.
  It is easy for us to get lost in the debate over numbers and how we 
should spend the surplus. However, we must keep in mind who sent us the 
revenue that created the surplus. We are talking about families 
struggling to make ends meet, provide an educations for their children, 
or save for their retirement. They are the family funning the corner 
grocery store or landscaping business. They are bus drivers, day care 
providers, carpenters, and students.
  This conference report is a balanced tax cut package that provides 
relief for middle class taxpayers. It gives American families a well-
deserved tax break, simplifies the tax code, and provides pro-growth 
incentives to help keep the economy strong and growing. This $792 
billion bill is the biggest tax cut since the Ronald Reagan presidency. 
Yet, it still represents a rebate of only one-quarter of the surplus 
dollars that the federal government has collected. I hope that the 
President can agree that we owe the American taxpayers that much and 
sign this legislation.
  Mr. MURKOWSKI. Mr. President, I rise to speak in strong favor of the 
Conference agreement that will provide every single American a well 
deserved refund of the taxes they are now overpaying as the government 
runs a surplus.
  I especially want to commend Chairman Roth for the extraordinary work

[[Page S10335]]

he did in what must be record time to produce this Conference report. 
My colleagues should recollect that barely 6 days ago today that the 
tax bill was adopted on the floor of Senate.
  And now we are here with a completed conference report. The work of 
the Chairman, Finance Committee staff and the Joint Tax Committee staff 
is to be applauded. They all labored long hours and the result is a 
bill that I am proud to support.
  The Congressional Budget Office (CBO) projects that the total budget 
surplus over the next 10 years will be $2.9 trillion. Nearly a trillion 
dollars ($996 billion) of that surplus ($996 billion) comes from 
overpayments of income and estate taxes.
  What this tax bill does is return barely 25 percent of the surplus 
tax payments and return that money to the American taxpayer. All of the 
$1.9 trillion Social Security surplus will be used solely for 
preserving Social Security. And, as a result of this bill, we have more 
than $200 billion available for saving Medicare and paying down part of 
the debt.
  Mr. President, yesterday, President Clinton reiterated that he will 
veto this bill because he believes the tax refund is too large.
  The fact is that what the President wants to do is not provide a tax 
refund to the American public, but instead he wants to use the surplus 
to finance $1 trillion in new federal spending. And despite his claim 
that he wants to cut taxes by $300 billion, CBO scored the President's 
budget as actually raising taxes by $100 billion over the next 10 
years.
  In other words, at a time when we are running real surpluses in the 
hundreds of billions, the President comes along and wants to impose 
even higher taxes on the American people so he can finance more big 
government.
  The bill before us should not be vetoed because it provides a tax 
refund to every single American who pays taxes. The lion's share of the 
tax cut--nearly $400 billion--results from cutting the 15 percent rate 
to 14 percent and the near elimination of the marriage penalty.
  Is that what President Clinton objects to--reducing the tax rate paid 
by the lowest income taxpayers? Or does the President object to 
elimination of the marriage penalty? That must be the case Mr. 
President, because if the President had his way and we cut taxes by 
$300 billion, we could not eliminate the marriage penalty; we could not 
cut the rate paid by the lowest income earners.
  The bill also provides rate relief for all bracket taxpayers over the 
next 10 years. A modest 1 percent reduction in all tax rates is surely 
something we can afford with a trillion dollar surplus. I find it hard 
to believe that the President would object to such a modest change.
  The conference report also contains the Senate provisions that up the 
limit on contributions to Individual Retirement Accounts (IRAs) to 
$5,000. Moreover, it retains the provision in our bill that allows 
increased contributions by people over 50.
  In recent months, we have seen that the American savings rate is 
actually a negative number. These incentives could well serve to 
increase our savings rate. Is that what President Clinton objects to--
enhancing retirement savings incentives?
  Or does the President object to the health care provisions in this 
bill. Health care changes that bring a much needed level of equity to 
the tax code?
  Allowing the self employed to deduct 100 percent of the cost of 
health insurance finally brings small business to parity with large 
corporations.
  And for the first time in our history, employees who pay for more 
than half of their own health insurance will be able to take an above-
the-line deduction for those costs.
  I thought the President was so concerned about the uninsured? Why 
would he veto a tax bill that finally provides health equity to 
employees and small business owners?
  The conference report will also serve to continue the flow of money 
into equity markets by cutting the capital gains rate to 18 percent for 
all transactions that took place after January 1, 1999. I believe the 
capital gains rates should be even lower, but with the resources at 
hand this is an appropriate change.
  One of the most important changes in the conference report is the 
phase out and ultimately, in 2009 the elimination of the estate tax. 
This onerous tax punishes the hard work of many Americans and the death 
of this tax is long overdue. Confiscatory estate tax rates of 55 
percent should, if this bill becomes law, finally be a relic of 
history.
  This conference report will be sent to the President when we return 
in September. He has one month to reconsider his reckless veto threat. 
The American people deserve a tax refund. This conference report 
provides very modest and long overdue relief. I urge my colleagues to 
support this bill and I ask the President to reconsider his veto 
threat.
  Mr. LEAHY. Mr. President, Congress went on a tax cut binge in the 
1980s and left the bill for our children. Now that we have surpluses, 
we have a chance and an obligation to pay off that debt. The last thing 
Congress should be doing right now is to put our strong economy at risk 
by passing a tax scheme as risky as the Republican plan.
  Some of my fellow colleagues in Congress have gone off again on a 
binge of irresponsible tax cutting that puts our strong economy in 
jeopardy. Projections of budget surpluses in the future have gone 
straight to their heads--as if projected budget surpluses were like 
hard cider. It is time for my colleagues in the House and Senate to 
splash some cold budget reality on their faces and return to their 
economic senses.
  A sound economy rests on a solid foundation of balanced revenue and 
spending policies. For the past seven years, the President and Congress 
have build this solid foundation by reducing the deficit and 
restraining spending. Just as we Vermonters restrained spending and put 
Vermont's state budget in the black, Yankee thrift was alive and well 
in Washington, as it is in Vermont.
  President Clinton inherited a deficit of $290 billion in 1992 and his 
administration and Congress have steadily cut it down. For the first 
time since 1969, we now have a balanced budget.
  I am proud to have voted for the 1993 deficit reduction package, 
which was a tough vote around here, and has brought the deficit down. I 
am also proud to have voted for the 1997 balanced budget and tax cut 
package--tax cuts that were fully paid for by offsetting spending cuts. 
These balanced policies have kept interest rates down and employment 
up. In fact, over the past seven years, this deficit reduction has 
produced $189 billion in interest savings on the national debt, or 
roughly $2,700 in savings for every American family.
  Republicans and Democrats can rightfully claim their shares of the 
credit for getting the nation's fiscal house in order. The important 
thing is to keep our budget in balance well into the 21st century and 
keep our economy growing.
  That dose of Yankee fiscal discipline has paid off for Vermonters. 
Since 1993: Vermont's unemployment rate has been cut in half, from 5.8% 
to 2.9%; 20,000 new jobs have been created; Vermonter's average income 
has increased 25 percent; crime in Vermont has dropped by 15 percent; 
and the stock market has soared by 300 percent.
  Instead of keeping on this path of prosperity, the huge tax cut bill 
that Congress just passed veers from our successful fiscal discipline. 
It cuts taxes by $792 billion and pays for these sweeping cuts out of 
projected budget surpluses over the next 10 years. These surpluses are 
not real. They are just projections. What happens if we suffer a 
recession in three years or a depression seven years from now? These 
tax cuts are paid for by Monopoly money.
  But fooling with our strong economy is not a game. Passing risky tax 
cuts based on wishful thinking will have real consequences for 
Vermonters. It is estimated that paying for these huge tax cuts would: 
force more than 13,000 Vermont veterans to lose health care benefits; 
prevent any Medicare reform and new prescription drug coverage for 
senior Vermonters; drop 3,699 Vermonters from the WIC program; close 
off 2,116 Vermont students from Pell grants to help make college more 
affordable; and serve 11,127 fewer school lunches to Vermont children.
  Instead of this fiscal folly, I believe Congress should follow three 
basic principles to continue our strong economy and provide targeted 
tax relief.

[[Page S10336]]

First, we must continue to keep our fiscal house in order and pay down 
the national debt. The national public debt stands at $3.6 trillion--
that is a lot of zeros. Like someone who had finally paid off his or 
her credit card balance but still has a home mortgage, the federal 
government has finally balanced its annual budget, but we still have a 
national debt to pay down. Indeed, the Federal government pays almost 
$1 billion in interest every working day on this national debt.
  It makes a lot more sense to pay off the national debt as our first 
priority, because nothing would do more to keep the economy strong. 
Paying down our national debt will keep interest rates low. Consumers 
gain ground with lower mortgage costs, car payments, credit card 
charges with low interest rates. And small business owners can invest, 
expand and create jobs with low interest rates.
  Alan Greenspan, head of the Federal Reserve, recently testified 
before Congress that: ``I would prefer that we keep the surplus in 
place and reduce the public debt.'' I agree with Mr. Greenspan and I 
believe most Vermonters do too.
  Second, we should put aside some of the surplus in a rainy day fund 
for Medicare and Social Security reforms. Just as we set aside extra 
revenue in a rainy day fund in Vermont, Congress should do the same on 
a national level. We all know that Congress must reform Social Security 
and Medicare for the future costs of the baby boom generation. This 
rainy day fund should also permit Medicare to cover prescription drug 
coverage for our seniors.
  One of the toughest and most important challenges that we face--right 
now--is to make sure that Social Security and Medicare will continue to 
be there for those who retire decades from now. The number of Social 
Security beneficiaries will rise by 37 percent from now until 2015, and 
Medicare runs into problems even earlier than that. Protecting Social 
Security and Medicare will not be easy, but these projected surpluses 
make it easier to keep both programs strong for future generations.
  Third, tax cuts should be fair and targeted to help all Vermonters, 
not just the wealthy. According to a Treasury Department analysis, the 
Senate-passed tax plan provides 67 percent of its tax breaks to the 
wealthiest 20 percent of Americans--those making more than $81,000 a 
year--while the poorest 60 percent of families would reap only 12 
percent of the Senate-passed tax cuts. That is not fair.
  This conference report is even more tilted in favor of the wealthy. 
According to an analysis by the Citizens for Tax Justice, the top 10 
percent of taxpayers would receive 69 percent of the benefits under 
this bill while the bottom 60 percent would receive only 7.5 percent of 
the benefits from the conference agreement. That means the average tax 
cut would be $138 for the bottom 60 percent of taxpayers while the top 
one percent of taxpayers would receive a tax break of $46,389. Again, 
that is not fair.
  Tax cuts that are targeted-- such as eliminating the marriage tax 
penalty, permitting the self-employed a full tax deduction for their 
health insurance and estate tax relief for family farmers and small 
business owners--also don't break the bank. I supported a more 
responsible alternative package of $290 billion in targeted tax cuts 
that would still leave room in the budget for Congress to make key 
investments in veterans, education and crime-fighting programs. I 
believe this targeted approach is far more prudent than the Republican 
tax cut plan.
  The enormous budget surplus that the Senate leadership claims is 
available to pay for nearly $800 billion in tax cuts is achieved only 
by unrealistic economic assumptions and deep cuts in programs that will 
never be attained. That is why I cosponsored an amendment filed by 
Senator Rockefeller that assumes there will only be a $100 billion 
surplus over the next ten years. This projected surplus is consistent 
with estimates by the Concord Coalition, Center for Budget and Policy 
Priorities, former CBO director Robert Reischauer and the Citizens for 
Tax Justice. The Rockefeller-Reed-Leahy amendment is a prudent and 
fiscally responsible approach that balances tax relief with reducing 
our debt and maintaining obligations to existing programs such as NIH 
research, veterans health, Head Start and the environment.
  I call upon President Clinton to follow through on his pledge to veto 
this irresponsible tax scheme. He should send Congress back to the 
drawing board to do it right. And the next time, Congress should apply 
a stout measure of Yankee thrift.


                         explanation of absence

  Mr. CRAPO. Mr. President, due to the wedding of my oldest 
daughter, Michelle Crapo, I will be unable to participate in the debate 
and vote on the Conference Report for H.R. 2488, the Taxpayer Refund 
and Relief Act of 1999. Had I been present, I would have cast my vote 
in favor of the measure.
  The Taxpayer Refund and Relief Act of 1999 is good news for America 
and will give individual income taxpayers the long-overdue tax relief 
they deserve. I am most pleased by the one percent across-the-board 
income tax cut for all individual tax rates and the marriage penalty 
relief provisions contained in the report. These provisions alone will 
go a long way towards reducing the tax burdens of the average Idaho 
family.
  I am also encouraged to see that the Conference Report eliminates the 
estate tax, provides alternative minimum tax relief, increases the 
annual contribution limits for individual retirement accounts and 
education savings accounts, and reduces individual capital gains tax 
rates.
  The Conference Report for the Taxpayer Refund and Relief Act of 1999 
is good for income taxpayers, the economy, and the nation. I urge my 
colleagues to support the report.


                              section 1317

  Mr. BREAUX. Mr. President, will the distinguished chairman of the 
Finance Committee yield for a question?
  Mr. ROTH. Mr. President, I will be glad to answer the distinguished 
Senator's question.
  Mr. BREAUX. Mr. President, the conference report for The Taxpayer 
Refund and Relief Act of 1999 states that section 1317 of the Senate 
amendment regarding prohibited allocation of stock in an S corporation 
ESOP was not included in the conference agreement. Is that report 
language correct?
  Mr. ROTH. Mr. President, that report language is not correct. The 
conference agreement adopted section 1317 of the Senate amendment 
without modification.
  Mr. BREAUX. Mr. President, I thank the distinguished Chairman for 
this clarification.


    Tax Treatment of Commissions Paid to Enroll Cellular Telephone 
                               Customers

  Mr. MURKOWSKI. Mr. President, the Senator from Louisiana, Mr. Breaux, 
the assistant majority leader, Senator Nickles, and I would like to 
engage Chairman Roth in a brief colloquy on an issue that several 
members of the Finance Committee have become involved in over the past 
several months.
  I refer to the fact that in some cases the IRS has taken what I 
believe is an unreasonable and unrealistic position regarding the tax 
accounting of sales commissions paid by providers of commercial mobile 
telephone service for enrolling customers. In the cases I refer to, IRS 
has contended that these costs should be capitalized and amortized over 
the average customer life, rather than deducted.
  Mr. BREAUX. I have been very concerned about this issue, as well. It 
seems to me that commissions paid by cellular telephone companies are 
like any other marketing expenses incurred by telephone companies--or 
any other companies--and are deductible under current tax law.
  Mr. NICKLES. I want to lend by voice to the positions expressed by 
both Senator Murkowski and Senator Breaux. It does not make sense to me 
that sales commission/costs can be anything but deductible.
  Mr. MURKOWSKI. This issue is not addressed in the pending tax bill 
because the Treasury Department has indicated to the Finance Committee 
that it is in the process of reviewing the IRS's position. We have been 
assured by Treasury officials that they plan to resolve the issue this 
year.
  The Treasury apparently agrees that the IRS may have gone too far.
  Mr. BREAUX. The IRS position would be difficult or impossible to 
administer. The position will lead to years of litigation, as companies 
and the IRS battle out whether commissions should be capitalized or 
deducted.

[[Page S10337]]

That will drain resources from both sides for no productive reason.
  Mr. MURKOWSKI. We would like to ask Chairman Roth for his views on 
how this issue can be resolved expeditiously and efficiently.
  Mr. ROTH. I agree that this is an issue of concern to Finance 
Committee members. The cellular telephone industry is a high-growth, 
job-creating, industry. It is clear to any observer that the industry 
is frenetically competitive. Companies incur substantial marketing 
expenses, including sales commission, to attempt to sign up new 
customers and to entice customers to move from other carriers.
  I have little doubt that the IRS's position requiring companies to 
capitalize the sales commissions may lead to years of litigation. The 
Treasury Department has made the decision to review the IRS's position. 
The agency included the issue in its 1999 Priority Guidance Plan and 
has advised the Committee that they plan to deal with the issue this 
year.
  I strongly support the quick resolution of this issue by the Treasury 
Department. Sales commissions are a basic cost of doing business for 
cellular telephone companies, and I believe that the Treasury should be 
able to reach a sensible resolution of this issue.
  Mr. MURKOWSKI. I very much appreciate the chairman's thoughts and 
look forward to working with him and the Treasury to see this issue 
dealt with.
  Mr. BREAUX. I also appreciate the chairman's views on this. We are 
confident that the Treasury can resolve this issue satisfactorily, and 
we will be following events at the Treasury closely.
  Mr. NICKLES: I thank the chairman for sharing his views on this 
important issue. I hope it can be expeditiously resolved.
  Mrs. BOXER. Mr. President, this bill is a reckless tax plan. As a way 
to summarize my opposition, the following are my top ten reasons I 
oppose this bill.
  One, it is unfair to the middle class and the working poor. The 
average tax cut for a person who makes $30,000 per year is $311, 
compared to a tax cut of almost $46,000 for someone who makes more than 
$800,000 per year.
  Two, it threatens low interest rates. Alan Greenspan testified before 
the Senate Banking Committee last week--and I quote--``It's precisely 
that imprecision and the uncertainty that is involved which has led me 
to conclude that we probably would be better off holding off on a tax 
cut immediately, largely because of the fact that it is apparent that 
the surpluses are doing a great deal of positive good to the economy in 
terms of long-term interest rates.'' If interest rates go up just one 
percentage point on a $100,000 mortgage, the increased monthly cost is 
$70--in essence a tax increase on every homeowner.
  Three, there is not a dime in it for Medicare. As the Baby Boom 
generation begins retiring in 10 years, the Medicare situation will get 
larger, not smaller. This plan, by ignoring the issue, just compounds 
the problem we all know is coming.
  Four, there is nothing in it for debt reduction. Because the 
Democratic plan saves Medicare, it has the added benefit of reducing 
the debt. We have a historic opportunity to ensure that our children 
will not be saddled with huge interest costs, which currently total 
over $600 million a day.
  Five, it contains special-interest goodies, such as repealing an 
excise tax for a few companies that make tackle boxes and providing a 
$4 billion tax break on foreign oil and gas income.
  Six, it will require huge and unsustainable cuts in discretionary 
spending. Because the Republicans are assuming a freeze on 
discretionary spending at fiscal year 1999 levels--something they will 
violate in the next few months--the reality is that this plan would 
force cuts of an enormous size in education, law enforcement, 
environmental protection, and the military. This is completely 
unrealistic given inflation and the needs we have as a country.
  Seven, it relies on long-term surplus projections, which is very 
risky. Any businessman will tell you that even projecting out five 
years is unreliable at best. This bill tries to predict the economy 
over the next 10 years.
  Eight, it ties our hands in the event of a recession. The country is 
in a tremendous economic rebound, and we do not need a broad-based 
economic stimulus. But if we go into a recessionary period, that is 
when a tax cut would be needed--to help us get out of the recession. 
This plan precludes that option.
  Nine, it risks going back to the dark days of dramatic deficits. We 
have finally balanced the annual budget after 30 long years of red ink, 
and this plan turns right around and goes back to those times.
  Ten, it is totally partisan. The Republican leadership rejected 
compromising with Democrats--and no Democrats were even in the room 
when this plan was put together. That is no way to write important 
legislation that affects every American.
  I urge the President to fulfill his promise to veto this dangerous 
legislation, which jeopardizes the most remarkable economic recovery in 
history.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, I now yield 5 minutes to the Senator 
from New Jersey, who will be our last speaker.
  Mr. TORRICELLI. Mr. President, I ask at the end of 4\1/2\ minutes I 
be notified the time has expired.
  The PRESIDING OFFICER. The Senator will be notified.
  Mr. TORRICELLI. Mr. President, in life you can extend your hand, but 
to make any real progress someone has to grasp it. For these several 
weeks, many of us have worked to try to find some reasonable middle 
ground in the cause of reducing taxes on the American people. It was a 
worthwhile effort. I believe, indeed, taxes on middle-income Americans 
are too high and it is the American people who worked hard and paid 
their taxes who have produced this extraordinary American surplus. They 
deserve a dividend for the American economic performance.
  But a tax reduction is not all the American people deserve. They also 
deserve to know their children are getting educated in quality schools 
with good teachers. I am for tax reduction, but I want a tax reduction 
that allows teachers to reduce class size and the rebuilding of 
crumbling American schools. I am firmly committed that tax reductions 
for the middle class are required and should be enacted by this 
Congress. But I also believe the American people must have a health 
care system that provides for prescription drugs through Medicare for 
elderly Americans.
  My point is simply we are at a time when the Nation can both afford 
and requires multiple objectives. In the bipartisan tax reduction plan 
of $500 billion, Senator Breaux, Senator Kerrey, and I, working with 
our Republican colleagues, fashioned a plan where we believed we could 
reduce taxes on savings to encourage the American people to invest in 
the new economy by reducing or eliminating capital gains taxes on 
modest investments and by eliminating taxes on interest on modest 
savings accounts so all Americans save for their own future 
for security for their own families.

  In our plan we expanded by 4 million families the number of people 
from the 28-percent tax bracket to the 15-percent tax bracket because 
this Government has no right to tax at 28 percent the modest incomes of 
families who earn $50,000, $60,000, and $70,000, raising one and two 
children. Indeed, at this point in our history it is something we can 
afford--to allow people to keep that money for their own needs.
  Perhaps it was always going to be so, but that bipartisan tax plan 
was not enacted. But I am not a man who is discouraged easily. When the 
bipartisan plan was introduced, we described it as the October plan 
because there are tax plans that are presented because they have 
political value and communicate a political message, and there are tax 
plans enacted because they can be attained and they change the law. 
This was never going to be a brief process and perhaps it was never 
going to consist of a single phase. Tonight, the first phase is 
concluded. A message is being sent to the President and to the American 
people by both political parties. The Democratic Party is committing 
itself to middle-class tax relief after protecting Social Security and 
allowing for national objectives of Medicare and education.

[[Page S10338]]

  The PRESIDING OFFICER. The Senator has consumed 4\1/2\ minutes.
  Mr. TORRICELLI. Thank you, Mr. President.
  I believe that is still a worthwhile objective and I join with my 
party in doing so. It is, however, my hope that we can accelerate this 
process. This bill can be passed tonight, the President can exercise 
his judgment, and we can return.
  Therefore, I ask unanimous consent if the conference agreement 
passes, the bill be enrolled within 5 days and sent the following day 
to the President.
  The PRESIDING OFFICER. Is there objection?
  Mr. ROTH. I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. TORRICELLI. Mr. President, I regret that will mean the process 
will have to continue longer than otherwise required. I hope we can 
return in the fall and pass a reasonable tax cut that accommodates 
other national objectives on a bipartisan basis.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, I ask there be printed in the Record a 
statement ``Sequester Impact of Tax Bill,'' prepared today by the 
Office of Management and Budget. I will read two sentences:

       Beginning in 2002, Medicare would be cut by 4 percent each 
     year. * * *
       In 2002, the $28 billion cut in mandatory savings resulting 
     from a sequester would still be $6 billion less than the cost 
     of the tax bill.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                      Sequester Impact of Tax Bill

       If the Conference Agreement on the Republican Tax bill were 
     to be enacted in its present form, it would result in a 
     sequester of mandatory programs in each year beginning in 
     2000. Mandatory spending would be cut by $2.4 billion in 
     2000. Beginning in 2002, Medicare would be cut by 4% each 
     year. Mandatory programs subject to a full sequester would be 
     eliminated, including CCC, child support enforcement, social 
     services block grants, immigration support, crop insurance, 
     mineral leasing payments and veterans education and 
     readjustment benefits.
       The costs of the tax bill in 2002 and subsequent years 
     exceed the savings that could be achieved by a sequester of 
     mandatory programs. In 2002, the $28 billion cut in mandatory 
     savings resulting from a sequester would still be $6 billion 
     less than the costs of the tax bill.


                                medicare

       Medicare spending would be cut by $2 billion in FY 2000 and 
     by $9.2 billion or 4% in FY 2002. Medicare payments to all 
     providers (e.g., hospitals, physicians, home health agencies, 
     skilled nursing facilities) would be reduced proportionally 
     by the sequester.
       Any reduction in current Medicare spending will increase 
     the pressure to ``undo'' the BBA and increase Medicare 
     spending. It also will make it difficult to garner support 
     for the reforms included in the President's Medicare reform 
     plan, which includes important new initiatives (e.g., the 
     prescription drug benefit) as well as justifiable reductions 
     in spending.


                     veterans readjustment benefits

       The Readjustment Benefits account provides education 
     benefits and training to more than 450,000 veterans, 
     reservists, and dependents through the Montgomery GI Bill and 
     the Vocational Rehabilitation and Counseling Programs.
       The elimination of Readjustment Benefits in FY 2002 would 
     mean that these veterans, reservists, and dependents would 
     lose entitlement to the education and training programs many 
     were promised (and paid into) when they enlisted. Programs 
     like the GI Bill are the most potent recruitment and 
     retention tools the military services have. Further, service 
     members transitioning to civilian life would no longer be 
     afforded re-training through college programs, work-study, or 
     on-the-job training.
       If eliminated, the Vocational Rehabilitation and Counseling 
     program, which helps 50,000 disabled veterans overcome 
     employment handicaps sustained on active duty, would no 
     longer assist veterans in finding jobs and becoming 
     productive members of society again.


                  ccc farm programs and crop insurance

       The Senate has just passed a bill that provides over $7 
     billion in FY 2000 emergency assistance to the Nation's 
     farmers and ranchers, to help them through these times of 
     nationwide low commodity prices and regional droughts that 
     are withering crops and livestock. Simultaneously, this bill 
     would cut assistance to farmers funded through the Commodity 
     Credit Corporation, through a small FY 2000 sequester, at a 
     time when many farmers are hurting.
       The effect on farm programs in the outyears starting in FY 
     2002 would be catastrophic, and cause thousands of farmers 
     and ranchers to go out of business. Farm income and price 
     support programs would be devastated, and if today's 
     commodity prices were to continue into the outyears, the 
     ``family farm'' would become a historic relic. In addition, 
     with U.S. agriculture heavily dependent on exports, such an 
     outyear sequester would end USDA's export credit programs 
     that guarantee billions of dollars of farm exports a year.
       Starting in FY 2002, the Agriculture Department's crop 
     insurance program would shut down, and without insurance most 
     farmers and ranchers could not secure the financing from 
     banks needed to operate their farms and ranches.


                             student loans

       Guaranteed and Direct Student Loan Program borrowers would 
     have their origination fees increased by one-half of a 
     percentage point beginning in 2000.
       The average student loan borrower would pay an additional 
     $28 in origination fees. A graduate student taking out the 
     maximum $18,500 loan would pay an additional $93 in fees. A 
     college junior or senior taking out the maximum $10,500 loan 
     would pay an additional $53 in fees.
       Over 5.5 million beneficiaries would be affected.


                       child support enforcement

       New Federal funding for Child Support Enforcement would be 
     eliminated beginning in 2002 and many States would no longer 
     be able to continue this critical program. In FY 1998 this 
     program collected $14.3 billion on behalf of children and 
     families, and helped many low-income families move from 
     welfare to work.


                  social services block grants (ssbg)

       Beginning in FY 2002, SSBO would be eliminated. SSBG 
     provides funding to States to support a wide range of 
     programs including child protection and child welfare, child 
     care, as well as services focused on the needs of the elderly 
     and handicapped. The inherent flexibility of this grant 
     permits States to best target funds to meet the specific 
     needs in their communities.


                          immigration support

       Mandatory funding for immigration programs pays for the 
     costs administering laws related to admission, exclusion, 
     deportation and naturalization of aliens. These costs are 
     funded principally from fees paid by aliens. Sequestering 
     this entire amount in FY 2002 and subsequent years would 
     bring the immigration services program to a halt, leaving 
     millions of legal aliens stranded in the immigration process 
     and stopping all new immigration actions. This untenable 
     situation would have the further effect of stopping all new 
     fee revenue collections, thereby increasing overall mandatory 
     spending.


                      mineral leasing act payments

       The impact of a 100-percent outyear sequester starting in 
     FY 2002 on Mineral Act Leasing payments would be devastating 
     to many States. Under current law, these payments are made by 
     the Interior Department to States as a percentage of Federal 
     receipts received from the leasing and development of mineral 
     resources (oil, gas, coal,) on Federal lands in those States. 
     Most of the payments are made to the western States and to 
     Alaska. The States, in turn, generally use these payments to 
     help finance local elementary and secondary schools. Some of 
     the lowest-income States would have outyear funding to 
     schools substantially reduced as a result of such a large 
     sequester.

                                           PAYGO SEQUESTER CALCULATION
                                          [Dollar amounts in millions]
----------------------------------------------------------------------------------------------------------------
                                                              2000       2001       2002       2003       2004
----------------------------------------------------------------------------------------------------------------
PAYGO Net Deficit Increase...............................      2,388        245     34,531     51,935     61,700
Excess above total PAYGO sequester baseline..............          0          0      6,332     23,410     32,193
                                                          ------------------------------------------------------
      Sequester amount (constrained to baseline).........      2,388        245     28,199     28,525     29,507
                                                          ======================================================
Programmatic Sequester Amounts:
    Special rules:
        ASI..............................................         24         38         39         40         41
        GSL and Foster Care..............................        180        191        203        215        228
    Medicare.............................................      1,981         15      9,247      9,993     10,567
    All other (across-the-board sequester):
        CCC..............................................         76          0      5,047      4,309      4,327
        Child Support Enforcement........................         12          0      3,148      3,381      3,649
        Social Services Block Grants.....................         22          0      1,441      1,435      1,435
        Immigration Support..............................         14          0      1,319      1,319      1,319

[[Page S10339]]

 
        Crop Insurance...................................         14          0      1,642      1,708      1,786
        Mineral leasing Act payments.....................          6          0        630        644        656
        Veterans Educ & Readj. Benefits..................          8          0      1,041      1,039      1,057
        All other........................................         50          0      4,443      4,443      4,443
                                                          ------------------------------------------------------
          Total, across-the-board seq. amounts...........        203          1     18,711     18,278     18,671
                                                          ======================================================
          Sequester total................................      2,388        245     28,199     28,525     29,507
----------------------------------------------------------------------------------------------------------------

  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, I yield back such time as remains.
  Mr. President, would you believe there is one more Republican 
speaker?
  The PRESIDING OFFICER. The Chair would believe that statement.


     the taxpayer refund & relief act of 1999--thanks to the staff

  Mr. LOTT. Mr. President, tonight we are passing a fantastic piece of 
legislation. The Taxpayer Refund and Relief Act of 1999 will return 
$792 billion of tax overpayments to American taxpayers over the next 10 
years. It will cut income tax rates for all Americans. It contains 
dramatic cuts in the marriage penalty. It cuts capital gains tax rates 
and indexes capital gains for inflation. It eliminates death taxes. It 
expands retirement opportunities, educational opportunities, and health 
care choices. This, Mr. President, is a superb bill, and I am proud to 
have been a part of the process that developed it.
  I want to thank the following staff for their dedication, 
intelligence, long hours, and commitment to Republican principles. The 
most important of these are Chairman Bill Roth's staff. Chairman Roth 
provided the leadership, and these people did all the hard work to back 
them up. From Senator Roth's Committee on Finance, I want to thank 
Frank Polk, Joan Woodward, Mark Prater, Brig Pari, Tom Roesser, Bill 
Sweetnam, Jeff Kupfer, Ed McClellan, Tara Bradshaw, Ginny Flynn, Connie 
Foster, and Myrtle Agent. They are the tax counsels and policy experts 
who help us understand the intricacies of tax policy and legislation. 
We rely upon them every day for advice, and we have leaned on them for 
support during the past month. They are professional, patient, 
intelligent, and dedicated. I also want to thank John Duncan and Bill 
Nixon from Senator Roth's staff for their leadership.
  One person in particular deserves special mention. Mark Prater, 
Chairman Bill Roth's chief tax counsel, was the principal Senate staff 
architect of this bill. Mark is an enormously valuable resource to the 
entire U.S. Senate. Mark's knowledge of tax policy and the tax code are 
unsurpassed. His dedication to good tax policy is unmatched. While we 
all worked hard to craft this legislation, Mark has given his days, 
nights, and weekends to this bill for several months. And his patience, 
professionalism, and easygoing demeanor make it a pleasure to work with 
him. I know that I speak for all of my colleagues, and for their staff, 
when I say thank you to Mark Prater for his work on this bill.
  I want to thank all of the Joint Tax Committee staff for their 
excellent, professional staff work. Under the leadership of Lindy 
Paull, and two of her deputies, Rick Grafmeyer and Mary Schmitt, the 
Joint Tax staff did an incredible job turning around legislative 
language and scoring faster than we thought possible. They said we 
couldn't conference two $792 billion bills in less than a week. Thanks 
to the leadership of Bill Roth and Bill Archer, and to the lightning 
speed of the Joint Tax staff, we proved them wrong.
  The staff for the Republican members of the Finance Committee also 
deserve special recognition: Kathleen Black from Senator Chafee's 
staff, Kolan Davis from Senator Grassley's staff, Judy Hill from 
Senator Hatch's staff, Alexander Polinsky from Senator Murkowski's 
staff, Hazen Marshall from Senator Nickles' staff, Ginger Gregory and 
Keith Hennessey from my staff, Dick Ribbentrop, Steve McMillin, and 
Mike Solon from Senator Gramm's staff, Jeff Fox and Ken Connolly from 
Senator Jeffords' staff, Vic Wolski and Shelly Hymes from Senator 
Mack's staff, and Rachel Jones and Libby Wood from Senator Thompson's 
staff.
  Much of this debate centered on questions that are normally 
considered in a budget resolution, rather than a reconciliation bill. 
So I also want to thank Senator Domenici's excellent Budget Committee 
staff, who, as always, did top-notch work. In particular, I want to 
highlight the efforts of Bill Hoagland, Cheri Reidy, Beth Felder, Jim 
Capretta, Amy Smith, Sandra Wiseman, and Andrew Siracuse. And we can't 
forget the Budget Committee ``masters of spin,'' Bob Stevenson and Amy 
Call.
  I offer my profound thanks to all of these dedicated Senate staff. 
Without their hard work, we would not be enjoying today's success.
  I believe then Senator Specter will be the final speaker.
  Mr. ROTH. I yield 3 minutes to the distinguished Senator from 
Pennsylvania.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, in my view, the underlying issues on the 
conference report on the tax cut bill present a close question. There 
is much to be said for the basic proposition of returning a portion of 
the surplus to the taxpayers so that they, instead of Congress, can 
decide where to spend the money.
  The competing view is that the projected surplus over a 10-year 
period is highly speculative and that great care must be exercised to 
be sure Social Security and Medicare are solvent. The projected surplus 
also requires adherence to caps or limitations on spending which both 
the Congress and the President now admit to be unrealistic. The 
projected surplus also does not take into consideration emergencies, 
such as the multibillion-dollar Agriculture appropriations bill which 
passed the Senate last night.
  In addition, there is substantial merit to using any surplus to pay 
down the national debt, thus reducing the $293 billion in annual 
interest charges on the $5.6 trillion debt. On balance, on a close 
question, I believe the Nation's interest will be best served by 
rejecting the $792 billion tax cut, leaving open the possibility at a 
later time of a more modest $500 billion tax cut as proposed by a group 
of centrists.
  In reality, the vote on the conference report may well be meaningless 
in light of the President's repeated statements that he will veto the 
bill. This bill is probably just another step in the complex 
negotiations involving pending appropriations bills, including mine as 
my capacity as chairman of the Subcommittee on Labor, Health and Human 
Services, and Education.
  I voted against the tax bill when it was before the Senate last week, 
and I am opposed to the tax bill tonight. At the urging of the majority 
leader, Senator Lott, I have agreed to consider a live pair with my 
colleague, Senator Mike Crapo, who is in Idaho for his daughter's 
wedding. As of early this morning when I talked to Senator Crapo, there 
were no commercial flights which would return him to Washington in time 
to vote. If he returned by charter aircraft, he would miss his 
daughter's wedding ceremony and disrupt the family's wedding 
celebration.
  I have decided to agree to that live pair, which means that during 
the rollcall, if it is necessary, if it turns out Senator Crapo's vote 
is indispensable, I will say that if Senator Crapo were here, he would 
vote aye for the bill and I would vote nay against the bill. His absent 
aye vote would be paired then with my nay vote which would not be cast.
  I am concerned, candidly, that this live pair being inside the 
beltway would be widely misunderstood, but I believe it is preferable 
to compelling Senator Crapo's return to Washington

[[Page S10340]]

or to have the will of the Senate exclude the vote of Senator Crapo who 
could not be here unless he returned by charter jet and missed his 
daughter's wedding.
  As I say, I voted against this bill last week, and I am opposed to it 
today. I intend to vote no unless the live pair with Senator Crapo is 
indispensable for the reasons I have just outlined.
  I thank the Chairman and yield the floor.
  The PRESIDING OFFICER (Mr. Sessions). The Senator from Delaware.
  Mr. ROTH. Mr. President, I yield myself such time as remains. I think 
it is 2 minutes.
  As I said this morning, the fundamental question before Congress 
these past few weeks, as we have debated the Taxpayer Refund Act of 
1999, is quite simple: Is it right for Washington to take from the 
taxpayer more money than is necessary to run Government?
  The issue of tax relief isn't anymore complicated than that, and the 
outcome of the conference between the Senate and the House makes it 
clear that Government is not automatically entitled to the surplus that 
is, in large part, due to the hard work, thrift, and risk taking of the 
American people. Individuals and families are due a refund. That is 
exactly what we do with this legislation. We give the people a refund, 
and we do it in a way that is fair, broad based, and empowering.
  Mr. President, I am ready to yield back the remainder of time.
  Mr. MOYNIHAN. Mr. President, I believe we have yielded back the 
remainder of our time.
  Mr. ROTH. I yield back the remainder of my time, and I ask for the 
yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the conference 
report. The yeas and nays have been ordered. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Idaho (Mr. Crapo) is 
necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 50, nays 49, as follows:

                      [Rollcall Vote No. 261 Leg.]

                                YEAS--50

     Abraham
     Allard
     Ashcroft
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Chafee
     Cochran
     Coverdell
     Craig
     DeWine
     Domenici
     Enzi
     Fitzgerald
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Jeffords
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--49

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Bryan
     Byrd
     Cleland
     Collins
     Conrad
     Daschle
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham
     Harkin
     Hollings
     Inouye
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Sarbanes
     Schumer
     Snowe
     Specter
     Torricelli
     Voinovich
     Wellstone
     Wyden

                             NOT VOTING--1

       
     Crapo
       
  The conference report was agreed to.
  Mr. MOYNIHAN. I move to reconsider the vote.
  Mr. NICKLES. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

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