[Congressional Record Volume 145, Number 117 (Friday, September 10, 1999)]
[Senate]
[Pages S10723-S10725]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      THE TAX ISSUE IN PERSPECTIVE

  Mr. GRAMM. Mr. President, turning to the whole tax issue, I would 
like to try to set it in perspective. Our President is a master of 
defining an issue in such a way as to induce the public to support his 
position. One of his secrets is, he doesn't always tell the truth. So I 
will try to set this in perspective by trying to define why we believe 
there should be a tax cut and then outlining the two options that we 
actually face.
  I have several charts that I think will speed the process along. The 
first chart shows the 7 years in American history where the tax burden 
on the American people has been highest. Interestingly enough, the 
highest tax burden in American history, as one might expect, was under 
President Truman in 1945. National defense was taking 38 cents out of 
every dollar earned by every American as we were winning World War II.
  The second highest tax burden in American history is the tax burden 
we'll have on Oct. 1. That tax burden is occurring, by the way, when 
national defense is taking only about 3 cents out of every dollar 
earned by every American.
  The third highest tax burden we have ever had in American history is 
right now under President Clinton. The fourth highest tax burden 
occurred last year under President Clinton. The fifth highest occurred 
in 1944 under President Roosevelt. National defense spending was 38 
percent of the national economy.
  The sixth highest tax level was in 1997, under President Clinton, and 
the seventh highest tax level was the day President Reagan became 
President. As we all know, soon after his inauguration, we set about an 
effort, a successful effort, to cut taxes 25 percent across the board.
  If you look at these 7 years, you will see that we are facing the 
second highest tax burden on working Americans in the history of the 
United States and we have never, except during World War II and under 
President Clinton, faced tax burdens that approached this level, the 
only one that was close was the year that we initiated the 1981 tax 
cut.
  As to my second point, while the President continues to talk about 
how risky and dangerous it is to let working Americans keep  more of 
what they earn and why we shouldn't repeal the marriage tax penalty and 
the death tax, the reality is as shown in this chart, which shows three 
circumstances.

  First, it shows the tax burden the day President Clinton came into 
office. The day President Clinton became President, the Federal 
Government was taking 17.8 cents out of every dollar earned by every 
American. Today, the Federal Government is taking 20.6 cents out of 
every dollar earned by every American.
  If we adopted a tax cut that took the entire non-Social Security 
surplus,--and our tax cut is significantly less than the entire non-
Social Security surplus because we have finally reached an agreement, 
which the President initially opposed but finally was shamed into 
accepting, that we will not spend the Social Security surplus. But if 
you took the whole non-Social Security surplus and gave it back in tax 
cuts, the tax burden, when that tax cut was fully implemented, would be 
18.8 cents out of every dollar earned by every American, which is still 
substantially above the tax burden that existed the day Bill Clinton 
became President. So the adoption of our

[[Page S10724]]

smaller tax cut and its full implementation would still mean that 
during the Clinton Presidency, the tax burden on the American people 
rose dramatically.
  A final chart has to do with the part of the story that President 
Clinton is not telling the American people. President Clinton, 
interestingly, has it both ways. He says: Don't cut taxes; let's pay 
down the debt. Then he says: But if you cut taxes--Senator Domenici has 
heard this; Senator Nickles has heard this--if you do cut taxes, it 
will jeopardize all these spending programs.
  I ask my colleagues: If the President's plan is to use the revenues 
that we are not using to cut taxes and instead pay down debt, why does 
that jeopardize spending programs? How is that possible? What the 
President is doing, interestingly enough, is he is getting credit with 
some Americans for saying let's pay down the debt. He is getting credit 
with other Americans for saying let me spend it, and in an incredible 
paradox, he can have it both ways.
  But facts are stubborn things, and they don't lie. It is hard to 
cover up facts. I want to remind my colleagues, using the final chart 
here, that earlier this year, in fact on July 21, the Congressional 
Budget Office, which is the nonpartisan budgeting arm of Congress, 
looked at the President's budget and asked the question: How much does 
it propose to spend and how much would it pay down debt?
  What the Congressional Budget Office found is that over the next 10 
years, the President is proposing spending a net new $1 trillion 33 
billion. The President, according to the Congressional Budget Office, 
is proposing to spend every penny of the non-Social Security surplus, 
plus spend part of the Social Security surplus.
  So when the President says: Don't give this money back to working 
Americans in tax cuts, let's pay down the debt, he is saying something 
that does not comport with his own budget because the reality is, the 
President's own budget calls for spending every penny of this surplus 
on some 81 Government programs.
  The reality we face is that the President, as he outlined in the 
State of the Union, has set out some 81 Government programs on which he 
wants to spend this non-Social Security surplus and part of the Social 
Security surplus.
  The real choice is not do you want to buy down debt or do you want to 
give a tax cut to working Americans. The real choice is, do you want to 
spend this surplus on 81 Government programs, or do you want to give 
the money back to the American taxpayers.
  If I could run the Government by myself, or if the Presiding Officer 
and I could run the Federal Government, I know exactly what we would 
do. We would take every penny of the surplus and we would pay down the 
debt. We would wait until after the election--I am no longer speaking 
for the Presiding Officer but for myself; I believe my Governor is 
going to be elected President--and then we would set about doing a real 
tax cut.
  The only reason I supported cutting taxes now is we are spending this 
surplus as fast as we can spend it, and I am worried that it will be 
gone on 81 new Government programs before we can have an election and 
elect a new President and address this issue again.
  So if it were up to me, I would do what President Clinton claims he 
is doing but something he is not doing; that is, I would stay with the 
spending caps which have already been broken. I would draw the absolute 
line and not let a penny of Social Security money be plundered. The 
President is already proposing to plunder it and is going to veto 
appropriation bills this year because we don't plunder Social Security 
money. Remember I made that prediction. I will remind you when it 
happens.
  So basically the proof of what I am saying is the following: When the 
President talks about his budget paying down debt and says our plan 
does not pay down as much debt, the truth is, when the nonpartisan 
Congressional Budget Office looked at our tax cut, our budget, and 
looked at the President's budget, CBO found that the President's 
budget, for the next 10 years, actually pays down $219 billion less in 
the debt that we owe as a nation than the Republican budget does even 
with our tax cut.
  Now, how is that possible? It is possible because the President 
proposes to spend $1.33 trillion on new spending programs, which is the 
entire non-Social Security surplus, plus part of Social Security money. 
So that is the real choice. I think what the American people need to 
think about next week when the President vetoes the tax bill is they 
need to look at those 81 Government programs, and they need to look at 
our tax cut. Look at the 81 Government programs the President wants to 
expand, or create and then look at our tax cut and decide which would 
benefit their family more. I think if they benefit more from the 
Government spending, they ought to support the President and they ought 
to vote for a Democrat for President and Democrats to control Congress. 
But if they believe they can spend their money better than the 
Government can spend it for them, I think they ought to vote for a 
Republican President and for Republican Members of Congress.
  Lest anybody has forgotten, let me conclude by simply going over what 
our tax cut does. Our tax cut repeals the marriage tax penalty. As many 
Americans are aware, because a married couple has a lower standard 
deduction than two single individuals, and since a married couple gets 
into the 28-percent tax bracket quicker than two single individuals, 
the average American couple actually pays the Federal Government $1,400 
a year for the privilege of being married.
  Now, as I like to point out, I want to make it clear that my wife is 
worth $1,400 a year--a bargain at the price. But I think she ought to 
get the money and not the Government.
  So that is the first thing our tax change does. It eliminates the 
marriage tax penalty. Now, marriage may not be for everybody, but it is 
the most powerful institution for human happiness and progress in 
history. I think having a Tax Code that discriminates against people 
who get married is a bad mistake and ought to be corrected.
  The second thing we do is lower tax rates. We lower each individual 
bracket by 1 percent, so that every person in that bracket is taxed 1 
percentage point less. If you are being taxed at 15 percent, we lower 
it to 14. If it is 28 percent, we lower it to 27. If it is 31 percent, 
we lower it to 30.
  We repeal the death tax. We believe when Americans work a lifetime to 
build up a business, to build up a farm, and they pay taxes on every 
penny they earn, and then they invest their aftertax money in building 
up a family business or family farm, it is wrong for the Government to 
force their children to sell that business or that farm in order to 
give Government up to 55 cents out of every dollar that they built up 
in that farm or business in their working life.
  I know we have Democrat colleagues who say, well, some rich people 
will benefit. That may be true. But this tax is wrong. It is not right. 
It is double taxation, and it is very harmful to force children to sell 
off farms and businesses to give the Government taxes when somebody 
dies. It is not right when your parents die that the first official 
contact you get from the Government is from the Internal Revenue 
Service, in essence, telling you that the lifetime work of your parents 
has to be sold off to give the Government up to 55 cents out of every 
dollar that they have earned and set aside in their lives. It is not 
right.
  Another provision of our bill is that we make health insurance tax 
deductible for the self-employed and for those people who work for 
companies that don't provide health insurance. Why should health 
insurance be tax deductible for General Motors but not for Joe Brown? 
We think that is discrimination. We think everybody ought to be treated 
the same.
  Now, my final point. You have heard our Democrat colleagues and our 
President say that the Republican tax cut is unfair. Normally, what 
they mean in saying it is unfair is something like: Do you realize that 
about 30 percent of Americans will get no tax cut from the Republican 
tax cut? You hear that and you say that doesn't sound right. But what 
they never point out is, roughly 30 percent of American families pay no 
taxes. We are talking about cutting income taxes, and about a third of 
American families pay no income tax.
  Let me tell you how I feel about this. Taxes are for taxpayers. Tax 
cuts are

[[Page S10725]]

for taxpayers. Everybody doesn't get Medicaid. Everybody doesn't get 
Medicare. Everybody doesn't get food stamps. Everybody doesn't get 
welfare. You have to qualify for those programs by either paying money 
in, in the case of Medicare, or being poor, in the case of Medicaid, 
food stamps, and welfare.
  Republicans feel very strongly that tax cuts are for taxpayers. If 
you don't pay taxes, you don't qualify for a tax cut. That brings me to 
the final point I want to make. Some people say, well, maybe there 
could be a compromise between Congress and the President. Let me tell 
you why there can't and why there is not going to be. It looks as if 
the President has proposed a $300 billion tax cut, we have proposed 
almost $800 billion, and there is $500 billion between us. So it 
doesn't take a genius to figure out you could end up somewhere in the 
middle.
  Let me tell you why it is not going to happen. When the Congressional 
Budget Office looked at the President's tax plan, they found $245 
billion for USA accounts and concluded that it actually increases 
spending by $95 billion, net, over 10 years. Basically the President's 
tax cut is a set of subsidies that are given to people who by and large 
do not pay taxes, so that it is really an expenditure instead of a tax 
cut.

  Instead of being $500 billion apart, the plain truth is, we are 
closer to $1 trillion apart. I think in this case, rather than fool 
around in trying to find some midpoint between minus $95 billion, which 
is a tax increase of $95 billion, and an $800 billion tax cut, the best 
thing to do when the President vetoes the tax cut is to let the veto 
stand. We don't have the votes to override the veto. The best thing to 
do is to take it to the American voters and let the voters decide in 
November of next year what they want.
  I don't think at this point that a compromise can be worked out. I 
think basically we are going to have to make a decision as to what we 
want. That is how democracy works. You make a decision when the 
American people go to the polls. I think on this tax cut we are not 
going to find a middle ground. I think we are going to have to let the 
American people move the middle ground in the election.
  But I think there is something we have to do. I want to stay with the 
spending caps. It is clear now, when you count all the emergency 
spending, much of which is not emergency, when you get into all of the 
bookkeeping gimmicks that ultimately will be used, that we are not 
going to stay within the spending caps, that we are going to spend 
beyond those caps. I am sorry about that. I think it is a mistake.
  But there is one barrier we have not yet broken. It is a barrier 
where I believe, when the President vetoes the tax bill, we have to 
draw the line. We have to draw the line in saying, Mr. President, we 
can't make you give this money back to the American people but we can 
stop you from spending the Social Security surplus.
  I hope Republicans will have courage enough to stand up and say no to 
any proposal that takes the Social Security surplus, plunders it, and 
spends it on general government. I can tell you that I intend to stand 
by that position. I am hopeful that Republicans in the Senate and the 
House will stand by it. It is not going to be easy.
  Our appropriators in both the House and the Senate and the President 
tell us that unless we spend vast amounts of additional money, the 
world is going to come to an end in one of a variety of ways.
  I think the time has basically come to say to the President that we 
can't make you cut taxes but we can stop you from spending this money.
  That is what we want to do.
  I thank my colleagues for their indulgence. I yield the floor.
  The PRESIDING OFFICER (Mr. Voinovich). The Senator from North Dakota 
is recognized.

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