[Congressional Record Volume 146, Number 32 (Tuesday, March 21, 2000)]
[House]
[Pages H1143-H1149]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PUTTING THE FEDERAL BUDGET IN PERSPECTIVE
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 6, 1999, the gentleman from Ohio (Mr. Kasich) is recognized for
60 minutes as the designee of the majority leader.
Mr. KASICH. Mr. Speaker, I thought that I would take a little bit of
time, uninterrupted time for a while, to kind of run through what we
will anticipate happening this week on the presentation of the budget
that will occur later in this week.
I think that it is very important that we try to put everything that
we are going to do here this week in some kind of a perspective. It is
very important that we take a look at where we were and where we are
today, because rarely in regard to this Federal Government do we
usually have a success story. It is very rare that we have success
stories as it relates to Washington or the actions of the Congress, but
I am a believer that whenever you have one, you ought to tell that
story, because there are a lot of people that become very cynical, a
lot of young people who have very little faith in this system; and it
is important to say that, while we as citizens ought to frankly be
critical of our government, that is a healthy thing, it limits the size
and the power of government, there are times when we ought to recognize
the good things we do, and we ought to celebrate some of them.
That is not to say that government does not have its role. It does.
But government's role ought to be limited. It ought to do things that
cannot be accomplished in the private sector; and whatever it does do,
it ought to do effectively, and we ought to have respect for it.
I think what has happened in our country over the period of the last
50 years is that government has tried to be all things to all people.
Whether you want to be all things to all people in government or
whether you want to be all things to all people as the manager of a
baseball team, you cannot do it. You have to figure out what you want
to concentrate on, because if you do not concentrate and have a few
priorities, you will not do anything well.
I think there is a growing perception in the country, and it is a
reality, that the Government does too many things and not enough things
well.
Back when I first came to Congress in 1983, I was sworn in shortly
after the beginning of 1983, if I were to have told you in those years
that we were going to actually have a balanced budget, I would either
have had to have been running for President making another promise that
would not be fulfilled, or you would laugh at me.
In fact, just a short period of time ago, all the way in 1997, we
were looking at deficits that were going to be in the hundreds of
billions of dollars, adding to an already very large national debt,
both a national debt comprised of money that we owe ourselves, our IOUs
to programs like Social Security, plus raising the publicly held debt,
which is the amount of money we owe to Americans who gave their money
in exchange for bonds, government bonds that they held. This national
debt was skyrocketing and our deficits were going up by hundreds of
billions of dollars every single year.
Well, in 1997, after a long and hard fight that actually started
before 1995, but when the Republicans finally took control of the House
of Representatives and the United States Senate, we made a commitment
that we were going to balance the budget by 2002. We said that we
needed to stop the flow of red ink, that we needed to do this because
our children really should not be saddled with these tremendous debts.
I think that most Americans said that is exactly right; it is about
time that we get ourselves in a situation where we are not going to
ring up more and more debt.
[[Page H1144]]
When we came to power in 1995, we said that we would do whatever it
took to balance this Federal budget, and we went through a lot of rocky
roads, as I think everyone here knows; and it was a difficult process.
We had to say as politicians that we were going to put our children and
the economic strength of the country first, and the business of vote
buying by using public funds, we were going to turn from that process.
There is a story, I do not really know if it is true, but there is a
story that John Kennedy when he was running for public office was
passing out silver dollars to the children, and somebody said, Well,
Mr. Kennedy, if you get elected, you will not have to pass your own
money out anymore; you will be able to use the public's money.
What politicians did was refuse to prioritize, just spend willy-
nilly, trying to make every constituent group happy, without exhibiting
proper leadership. Leadership is the ability of somebody to accept the
notion that they may not be popular, but that they will in fact do what
is in their heart and in their minds as the right thing and the moral
thing. That is leadership.
So in 1995 and 1996 we had a very tough fight around here with the
President of the United States, and in 1997 we sat down at the table
with the President and we said that we really wanted to balance this
budget. You remember how tough it was. It even involved a closing of
the Government, which was really a statement. It was not about closing
the Government; it was about the determination to try to change the
course of the Government and try to change the course of Washington.
Last year a number of my colleagues came to me, foremost the
gentleman from California (Mr. Herger), who made an argument that it
was just not good enough to balance the budget, because after that 1997
budget agreement, we, for the first time in a generation, actually were
able to balance our books, the number of dollars flowing into the
Government did not exceed the number of dollars flowing out.
So what the gentleman from California (Mr. Herger) said was that was
a great victory, but what we need to do is we need to stop borrowing
from the Social Security surplus to fund the other programs of the
Federal Government; that those surpluses of Social Security should
either be used to pay existing benefits, or to be held in a way in
which it would retire some of the national debt, not to be committed to
other spending programs. It seemed like almost an impossible task.
Well, in last year's budget we actually constructed a budget that,
for the first time in decades, in fact for the first time in perhaps
even my lifetime, if I went back and checked it, and I do not want to
be inaccurate on this, we did not borrow from Social Security to fund
the other operations of the Government, which is amazing.
In fact, we used these surplus Social Security revenues, rather than
committing them to other government programs that would have a life and
require funding, we actually used that surplus to pay down some of the
publicly held debt, for the first time, as one television commentator
told me last night, since Harry Truman. A pretty good accomplishment.
We are going to come with a budget this year that we will be
presenting this week on the House floor that will, for the second year,
not take one single dime of the Social Security surplus and use it to
fund any other programs of the Federal Government. In fact, what we
will do with the Social Security dollars that flow into our treasury is
we will use them first and foremost to pay the benefits of our Social
Security recipients. For those extra dollars that are there, that
surplus that is being collected at the present time, we will use that
surplus to pay down $1 trillion of the publicly held debt.
Now, I know there is this very popular show on television about
wanting to be a millionaire. Whenever they have that show on
television, they put a number up there about what the contestant is
playing for. It gets to be $50,000, $10,000, I have not really studied
the program. But people cheer. They cheer wildly when a person has an
opportunity to go for $250,000.
Mr. Speaker, we are going to take the bonds of the American people,
or all the bondholders, and we are going to pay those bondholders off,
and we are going to retire the publicly held debt by $1 trillion. To me
it is astounding. Had somebody told me just 5 years ago that not only
would we be in balance and not only would we stay out of Social
Security, but we would pay down the publicly held debt by $1 trillion,
I am an optimist, I would have said great; but I would not have
expected it to happen.
What we will do in this Congress is to lock this money up so that it
will either go for Social Security benefits or it will go to pay down
debt.
On a personal note in this area, that in and of itself is not going
to fix Social Security. What we are having happen in the country is the
number of baby boomers who are going to retire are going to greatly
exceed the number of people who get the benefits or the number of
people who work to support those retirees.
{time} 2015
See, right through, there are a zillion baby boomers supporting their
parents; but in a few years when the baby boomers retire, the baby
boomers did not have a lot of kids, so we are going to have a lot of
baby boomers retire with very few workers, and the numbers will not add
up, which is why it is essential that we ultimately come up with a
significant solution to Social Security; and the quicker that we
develop the solution and implement it, the better off we are.
Mr. Speaker, I have my own proposal that I would encourage my
colleagues to examine. It would create private accounts; it would say
that the Federal Government, along with a private board, would screen
investment options, just like Federal employees have, and one could put
one's money into approved programs of either stocks or stocks and bonds
or just bonds; and using that concept, we would be able to solve our
Social Security problems. It would require some sacrifice on the part
of baby boomers about my age, but the Social Security system would be
secured forever, and our children would be set free to be able to have
more control over their retirement.
But the bottom line is, regardless of what plan we implement, we are
going to have to deal with Social Security, and we are going to have to
deal with it soon, because if we do not, we are going to have a
meltdown. Before we actually implement that program, we want to protect
all of those Social Security dollars so that they do not get committed
to any other program and so that they be used just to fund Social
Security and to pay down the public debt.
Secondly in this budget proposal, we are going to preserve and
strengthen Medicare. Now, we do not know precisely what that program is
going to look like. As my colleagues know, there is great discussion
here about the issue of prescription drugs. I happen to believe that
our seniors must have access to prescription drugs. Many of our
seniors, God bless them, have the resources to purchase their own
prescription drugs. So we ought to have a program that, in fact, means
tests and offers this prescription drug benefit to the poorest of our
senior citizens. Why is it so important? Well, there probably is not
any other segment of our population that would respond as vibrantly to
the opportunity to have prescription drugs as our seniors.
There are modern medical miracles. My wife and I, Karen, have two
little children, two little baby girls, little Emma and little Reese.
We love them and they are special, and of course we would do everything
in our power to make sure that they can have the modern medical
miracles that are available to children. But in this case, with
Medicare and prescription drugs, we think that our seniors will be able
to greatly respond to prescription drugs, in fact maybe even saving
money, because they will be healthier. In fact, some surgeries can be
avoided if, in fact, prescription drugs are available.
We do not know precisely what this program will look like. We do not
know precisely what this program will cost. We do believe that any
prescription drug program should be accompanied by an additional reform
program for all of Medicare. Medicare is in final difficulty. We are
going to have to rescue it. But we believe that any reform program
ought to be coupled with a prescription drug program. We believe it
[[Page H1145]]
will strengthen Medicare and will help our seniors. That will also be
provided for in this budget agreement; and as I have already mentioned,
we will retire the public debt by 2013, but begin that by paying down
$1 trillion in the publicly held debt.
Now, that would be a pretty good budget in and of itself. Keep our
mitts off Social Security, protect it, strengthen Medicare, reform
Medicare, provide a prescription drug benefit to our poor seniors and
retire $1 trillion of the public debt. That would be a pretty good
budget in and of itself. But we are not done there. We have some other
things that we are doing in this budget, and one of the most
significant things that we are doing is that we are cutting taxes.
Now, who are we going to cut taxes for? Well, first of all, the
amount of tax cuts that are provided for in this budget proposal will,
we think by the end of this summer, be in the vicinity of $250 billion
in tax cuts for Americans. Who would it affect? Well, we do not know
who all the people are who are going to be affected, because all of the
tax-cutting measures have not been designed yet, but we do know who we
are starting with.
When a couple gets married today, many Americans experience a
marriage penalty. If they were not married, they would pay lower taxes
than when they get married. We think that that is really awfully silly,
and I think probably 99 percent of all Americans feel that way. The
fact is that this House has already acted to ease the penalty on
married couples. We believe it ultimately ought to be eliminated. This
budget bill that we bring up this week would provide the resources to
ease the penalty on marriage. After all, the family, the health of the
family, reflects the health of the society.
Secondly, we believe that family farmers, small business people,
anybody who works as many hours as many of our entrepreneurs work, that
these folks ought not to be penalized whenever they die. Today, when
one dies, one has to visit the undertaker and the IRS on the same day;
and they are going to take 55 percent of whatever it is that one owns.
Now, say one owns a family farm or, like my good friend out in
Columbus, Max Peoples at the local pharmacy. Max works like you would
not believe. You go in that store day or night, he is in there, he is
working hard. Why would we, if something were to happen to Max and he
wanted to pass this on to his family, why would we want to take 55
percent of his worth and give it to the Government. Are you kidding me?
Mr. Speaker, I would say this to my colleagues. Life on earth is
short. As one philosopher said, the minute we get to be good at playing
our instruments, it is time to put them down.
Well, I think it makes all the sense in the world to pass those
instruments on to our children so they can continue the symphony. And
the fact is, whether it is a small business, all small businesses, or
anybody who has worked hard for a living, at the end of their lives,
they ought to be able to pass what they have on to their children so
that their children can have a leg up, so that their children can be
the beneficiaries of their parents' hard work.
For seniors, we believe this budget ought to reflect the opportunity
of seniors to work longer and harder. Right now, if you are a senior
citizen, you want to be independent, you want to work, they punish you
by taking away your Social Security benefits. My opinion is that senior
citizens are the greatest untapped resource we have in America. Youth
brings energy and vitality; age brings wisdom. Frankly, I have seen a
lot of wonderful people who have wisdom coupled with energy and
vitality working even into their 80s. We want to reward our seniors. We
do not want to say that if you want to be independent, you want to work
a little bit, you want to have a job, we are going to punish you by
cutting your Social Security benefits. This budget would allow us to
fund the program that this House has already passed that would ease
this penalty, this earnings test that we have imposed on senior
citizens.
So for families, for small businesses, for any hard-working American,
for our senior citizens, this bill would provide the resources to
provide some tax fairness. But there will be other provisions as well
in this bill, provisions that may provide for the ability to collect
funds in an IRA account that can be used to help educate one's
children, either in primary or secondary, or in college.
It could provide for cuts across the board. The marginal rates in
this country are too high. We provide a significant amount of money for
tax relief; and in fact, there has been discussion about whether this
bill gets very close to being able to accomplish a lot of the ideas
that Governor Bush has laid out in his tax cut program, and I would
argue that this bill does. This is about $250 billion in tax cuts when
we add it all up, as compared to about $300 billion in the Bush tax cut
plan over the same period of time.
We are about $50 billion away from where George Bush is. And I must
tell my colleagues, $50 billion away from a pot of money that
represents, over 5 years, $10 trillion, with a reforming President
coupled with a reforming Congress, we will not only be able to provide
the tax relieve that Governor Bush talks about, but we may be able to
even do him one better. Mr. Speaker, we believe this is a very good
down payment.
Now, people say that the American people do not want tax cuts. Well,
I can tell my colleagues this: if you do not want to have a tax cut, I
am going to give you one. If you do not like it, just send it to me and
we will send it to Children's Hospital. How would that be. Or you take
your tax cut and give it to somebody who does not have much. That would
be a good idea as well. But I also believe that the reason the American
people are a little reluctant for tax cuts at this point is that they
are a little worried that somehow tax cuts would erode the solvency and
strength of Social Security or not provide for Medicare. As I have
shown my colleagues tonight, we cannot only have very, very significant
tax cuts, well over several hundred billions in tax cuts; but we can
also preserve and protect Social Security, and we can strengthen
Medicare and add a prescription drug benefit and even pay down the $1
trillion of the public debt.
I know what my colleagues are thinking. The only thing missing is a
chicken in every pot. Well, I am going to get to that chicken in every
pot, because there are a couple of other things that this budget does.
We are going to work to restore the American military. I do not like to
say this, because I am not particularly keen on a partisan comment, and
it is not meant in a partisan way, but I think President Clinton has
not been able to pick and choose where we should be involved as a
Nation around the world. Too often he has used his heart and not his
head, and we have so many entanglements around the world that it is not
only eroding the fundamental fiber of our defense structure, but I
think over time will diminish our ability to be effective no matter
where we are.
At this point in time, we believe we have to put more money into
defense. We also believe that over time, with an opportunity for a new
President, that maybe we will be in a position of where we can begin to
define our national interests more effectively, to be able to husband
our resources, to be able to act out of the best self-interests of the
United States. In the meantime, we are going to put more money in
defense. It is the most important job of the Federal Government.
In addition to that, we are going to strengthen the programs for
education, focusing primarily new dollars on special education, a
mandate from the Federal Government; and we want to cover more of that
mandate. We ultimately want to pay for all of that mandate on special
education, but we believe that additional dollars for education ought
to go to the classroom. There ought to be maximum flexibility for
schools to be able to provide for the most effective education for
young people. We also strengthen basic science programs in 2001.
Basic science research and the National Institutes of Health are
gems. They are gems in this world as it reflects the operation of
government. The National Institutes of Health have been increased
significantly since the Republicans have had a majority in the United
States Congress. The amount of dollars spent for all of our major
diseases, from Alzheimer's to cancer to AIDS to heart research, has all
been
[[Page H1146]]
dramatically increased, as it should be, because the Federal Government
can provide a significant boost and a significant leverage. Coupled
with our universities and our hospitals, we know what the potential is
for discoveries that can ease the anxiety and salve the wounds of
people who experience these diseases. We think it is proper.
Mr. Speaker, concerning basic science research, I know we think
sometimes that there are politicians that invented the Internet, but
frankly the Internet was invented through the activities of the
Department of Defense; and the fact is, basic science research is very
important to our ultimate ability to develop meaningful science
projects that also improve our lives. That is not picking and choosing
winners or losers, it is really saying that there is some basic
fundamental research that can be done by the Government that can be
applicable by the private sector. We think that strengthening
education, strengthening the National Institutes of Health,
strengthening science and, I hope in the process, providing full
funding for residents and interns in our Children's Hospitals can be
accomplished in this budget; that we can work to restore America's
defense, that we will, in fact, have tax fairness and tax reform for
families and small business and senior citizens, and just everyday
people who go to work and that we can pay down a trillion dollars in
the publicly held debt so that Karen and my little girls, Emma and
Reese, will have a little less burden on their backs.
{time} 2030
By the way, they are only a little bit over 8 weeks old, and I get
the sense they worry about it once in a while. We work to preserve and
strengthen Medicare and provide, we hope at the end of the day, a
prescription drug benefit, and we will keep our hands off of Social
Security.
I think this is an outstanding blueprint for where we ought to head
with the very first budget of the new millennium. I look forward to
this House being able to debate and ultimately pass what I think is
something that Members of the Congress can feel good about, that we can
be good stewards about.
Is there too much spending? Without any question. I would like to
have a little less. I would like to have a lot less, actually. But I
think that, all in all, with the struggle that we have between
conservatives and liberals, people who want to be tight fisted and
those who want to be big spenders in a very small House that is
separated by very few numbers, I think we have put together a program
here that can work, that can pass, and that can be a real benefit to
the American people.
Mr. Speaker, I yield to the gentleman from Connecticut (Mr. Shays),
from the Committee on Budget who I have served with for about a dozen
years on that committee.
Mr. SHAYS. Mr. Speaker, I thank the gentleman from Ohio for yielding
to me.
As the gentleman from Ohio (Mr. Kasich) was talking, I could not help
but remember the first time he put forward a comprehensive amendment to
get our country's financial house in order in 1989. There were about 38
Members who joined him. But each year, more and more Members were
persuaded that, not only were his ideas good but that ultimately he was
going to succeed. So my colleagues can imagine the joy I felt in 1995
to see the gentleman from Ohio become the chairman of the Committee on
Budget.
Then to have people like the gentleman from Minnesota (Mr.
Gutknecht), who is here with us, a new Member, to start that effort
that resulted in our controlling the growth of spending, slowing the
growth of entitlements, and being able to move forward with tax cuts.
I was thinking when the gentleman from Ohio (Mr. Kasich) went through
this list, preserving and protecting the Social Security, and
preserving and strengthening Medicare with prescription drugs, and
retiring the public debt by the year 2013, and promoting tax fairness
for families, farmers and seniors, and restoring America's defenses,
and strengthening support for education, science and health care, I was
thinking we could not do that if it were not for the fact that we put
forward a balanced budget agreement.
In the year 1998, literally 30 years after the last time, we had more
money coming into the Federal Government than going out; and then 1999,
more money coming in than going out; in the year 2000, more money
coming in than going out.
Then last year is the first time since 1960 that we, in fact, are not
spending the Social Security Trust Fund. We did not spend any of the
Social Security Trust Fund last year, and we are not going to spend any
this year. We are not going to spend any in the budget that we are
going to be voting on.
So I am just extraordinarily grateful that the gentleman from Ohio
persevered in this effort and that we are seeing the result. Now we are
looking at a possibility of $4 trillion of surplus in the next 10
years. We are debating $4 trillion. In some cases, it presents a
wonderful opportunity, obviously, but a scary one as well because so
many Members want to spend it.
Of that $4 trillion, $2 trillion of that money, $2 trillion of that
money is Social Security reserves; and the fact is that $2 trillion is
protected. We are not going to spend Social Security reserves.
We are going to take that $2 trillion in the next 10 years, and we
are going to set it aside and pay down debt. Public debt is going to be
reduced by $2 trillion. It is not going to grow at the rate it was
growing. We are cutting down $2 trillion in public debt, but not
spending Social Security reserves on more programs.
But it leaves, of that $4 trillion, we still have $2 trillion left.
The President wants to spend $1.3 trillion of it, kind of an automatic
pilot, we just let all the budget keep going up, not making choices,
just let them all go up.
What we want to do is we want to pay down more debt. We want a
sensible tax cut in the next 5 years. We are going to see $200 billion
set aside for tax cuts. We started that process already. We started
that process with deciding that we simply could not justify that one
could live together as a couple, not be married, but the moment one
becomes married, one paid $1,400 more in taxes.
So instead of having a tax cut that included a lot of items, we are
isolating those particular issues, and this is an issue of fairness. We
have set aside a tax cut opportunity of $200 billion in the next 5
years, and some of that will help us eliminate the marriage penalty
tax, which passed the House overwhelmingly with even support on both
sides of the aisle.
Then we dealt with the issue of the incredible circumstance that, if
one is on Social Security and one works and one makes more than
$17,000, one actually pays a penalty. If one now makes, say, 3,000
more, for every $3 more above $17,000, one loses $1 in Social Security.
So if one makes $20,000 trying to make ends meet and not have one's
children support one or the government, one is paying taxes on that
money. But, in addition, if one made $20,000, one would be losing
Social Security. If one made $23,000, one would lose $2,000 in Social
Security. We passed a bill that eliminates that penalty because we want
our seniors to work. We have a need to have people out in the
workforce. We want them to be a happy and vibrant part of the community
and not punished if they work.
So we are going to pay down more debt with the $2 trillion that is
not Social Security money, and we are going to have tax cuts. Then we
will have some necessary spending.
The gentleman from Ohio (Chairman Kasich) pointed out defense is the
primary responsibility of the Federal Government. We are not going to
ignore that. But he is also pointing out we are going to take a harder
look at how we save money and spend it better in defense.
We are going to have some educational need, not Federal educational.
We are not federalizing education. We are going to provide assistance
to communities and the States to do a better job in education with
local decision making. We are going to deal more with health care and
sciences.
So it is an exciting time for us in Congress. Really, what we want on
Thursday are for common sense Members of Congress to vote for this
budget agreement, this budget resolution. It should include Republicans
and Democrats.
There is no reason why common sense Members on both sides of the
[[Page H1147]]
aisle would not want to preserve and protect the Social Security
surplus, would not want to preserve and strengthen Medicare with
prescription drugs, would not want to retire the public debt by the
year 2013, would not want to promote tax fairness for families,
farmers, and seniors, and businessmen in general, and would not want to
restore America's defenses, and would not want to strengthen support
for education and science.
I just would conclude this part by saying that we saw this difference
when a whole number of new Members came in. The gentleman from
Minnesota (Mr. Gutknecht) is a prime example of that and said we are
not going to continue what happened in the past. They have made all the
difference.
Announcement By The Speaker Pro Tempore
The SPEAKER pro tempore (Mr. Pease). Under the Speaker's announced
policy, the balance of the hour reserved for the majority leader has
been reallocated to the gentleman from Connecticut (Mr. Shays).
Mr. SHAYS. Mr. Speaker, I yield to the gentleman from Minnesota (Mr.
Gutknecht).
Mr. GUTKNECHT. Mr. Speaker, I thank the gentleman from Connecticut
for yielding to me.
As the gentleman from Connecticut was speaking, I remember the first
time that I spoke on the House floor in January of 1995. We were
standing at these tables, and we had the very first bill in the
Contract with America, the Shays Act. The gentleman from Connecticut
humbly does not like to call it the Shays Act, but I remember what
things were like when I came here.
The first thing we did is we said Congress is going to have to live
by the same laws as everybody else, now back in Minnesota, and I am
certain even in Connecticut.
Mr. SHAYS. Mr. Speaker, the gentleman from Minnesota did not have to
say ``even.'' Especially in Connecticut.
Mr. GUTKNECHT. Mr. Speaker, especially Connecticut, all over the
country, outside of the Beltway, that made perfect sense. But here in
Washington, that was a revolutionary idea because Congress for many
years had exempted itself. They put a line at the end of many of the
bills that nothing in this statute will apply to the Congress and, in
many cases, sometimes even the entire Federal Government.
So I was thinking about what things were like when I came here in
November of 1994 after that election and then as we were sworn in in
January of 1995 and how much different things are today. I think to the
average Member of Congress, and certainly to the average American, it
is easy to forget where we were then and where we were going then.
I remember that, shortly after we came, the Congressional Budget
Office gave us a study and a report. They said, if Congress does not
get serious about balancing this Federal budget, that by the time
children being born today reach middle age, and I hate to say it, I am
getting painfully close to that, where some people might call me middle
age, but by the time the children today grow to middle age, the
Congressional Budget Office told us that they will be paying a Federal
income tax of over 80 percent just to pay the interest on the national
debt. That was worse than disgraceful. I mean, there was something
fundamentally immoral about this idea that we could continue to borrow
and, in effect, tax the next generation.
Many of us said in the original election in 1994, we had one
priority. It was to balance the Federal budget, to put the Federal
budget in order, and leave our kids with a legacy and a future that
would not be saddled with enormous Federal taxes just to pay the debt.
That is where we were in 1995.
We laid out a plan. Thanks to the gentleman from Minnesota (Mr.
Gutknecht) and the gentleman from Ohio (Mr. Kasich) and so many other
courageous leaders in the Congress at that time, many people, and again
we tend to forget a lot of people said, well, it cannot be done. You
cannot balance the budget in 7 years.
In fact, sometimes even some people down at the other end of
Pennsylvania Avenue were out there saying, well, no one really believes
you are going to balance the budget. But the interesting thing about
the power of a thought, of an idea, of a belief is that, is how quickly
it begins to take root, and other people start to come along.
There was a small band originally. It started back with the gentleman
from Connecticut (Mr. Shays) and the gentleman from Ohio (Chairman
Kasich) many years ago with this idea that, yes, we can balance the
budget; yes, we can apply fiscal restraint to Federal spending.
I was also reminded, though, the other day, and my kids are all
grown, but the gentleman from Ohio (Mr. Kasich) was talking about his
youngsters, and I remember reading to my kids when they were smaller.
One of their favorite stories, one of my favorite stories was a story
of the Little Red Hen. I just want to repeat just how that story works,
because I think it is apropos for what we are doing today.
First of all, the Little Red Hen asked all the other animals in the
barn yard, who will help me grow the wheat? The dog said, I cannot. The
cat said, I will not. The cow said, I cannot. The pig said, I will not.
So she went ahead and grew the wheat herself.
Then she asked, when the wheat was grown, who will help me grind the
wheat? Of course the cat said, I will not. The dog said, I will not.
The cow said, I will not. The pig said, I will not.
Then it was time to bake the bread. She asked, who would help her
bake the bread. Same thing. All the other animals said either they
could not or they would not.
But it was interesting, once they finally had the bread, once the
Little Red Hen had the bread, then they all wanted to help eat the
bread.
Do my colleagues remember that story? I was thinking about that story
the other day.
Now, we are going to hear a lot of debate when this resolution hits
the floor about what are we going to do with the budget surplus. A lot
of the same people who were not very eager to help us create the budget
surplus, in fact, I was thinking, parenthetically, about all those
negative ads we saw particularly in 1996 about these draconian cuts to
Medicare, and we were going to no longer have any student loans, and
school lunches will be a thing of the past, and children will grow
hungry, and old people will be thrown out in the street. What we really
did, we did eliminate 600 Federal programs. That was an amazing
accomplishment in and of itself. But some of the biggest complaints
were that we actually slowed the rate of growth of Federal spending.
I want to just share this with other Members of the House and anyone
else who may be listening, because I think this is really an amazing
accomplishment. In the budget, we are proposing for next fiscal year
the rate of increase in Federal spending will slow to 2.2 percent. Let
me put that in real numbers. Last year or the fiscal year we are in
right now, we are spending $1,780 billion dollars. Now, that is a lot
of money. What we are proposing to spend next year, total, is $1,820
billion dollars. That works out to a 2.2 percent increase in total
Federal spending.
Now, put that in context to where we were a few years ago when the
Federal budget was growing up at a rate of 6, 8, 10, 12 percent per
year. It was not that many years ago when Federal spending was going up
double, triple, and even quadruple the rate of inflation.
Today to take that 2.2 increase in Federal spending in next year and
put it in real context, according to the Bureau of Labor Statistics,
the average family budget this year will increase at 4.9 percent.
So as the gentleman from Ohio (Chairman Kasich) was talking about, in
terms of historical terms, next year, the Federal budget will grow at
less than half the rate of the average family budget. What is the real
benefit of that? Well, the biggest benefit, and my colleagues have
talked about it, is that over the next 5 years we are going to pay down
a trillion dollars' worth of debt held by the public.
{time} 2045
And what does that mean? It means lower interest rates.
Now, Chairman Greenspan my continue to sort of tweak the interest
rates a little to slow the economy, but the beauty is that interest
rates are much lower than they would have been. And as we go forward,
there is no driving force coming from the Federal Government because we
are going to the treasury markets and borrowing an extra trillion or $2
or $3 trillion. And as
[[Page H1148]]
long as that happens, real interest rates will be lower. And that means
that more families can afford homes, more families can afford cars,
more families can afford refrigerators, and it means that we are going
to have a stronger economy, relatively speaking, than we would have
had.
Finally, let me say, at the end of the day, when we talk about the
budget, and I know people's eyes start to glaze over when we talk about
the budget, because we talk in terms of billions and percentages and it
is numbers and it is all of that, but at the end of the day what it
really is all about is generational fairness. In fact, coming from the
Midwest, where most of my relatives were farmers and most of my friends
and neighbors are no more than one or two generations removed from the
farm, it has almost been historic.
Everybody coming from a farm area understands this. This was really
part and parcel of the American Dream. It was the American Dream to one
day pay off the mortgage and leave the kids the farm. What we had been
doing, or what previous Congresses had been doing is selling the farm
and leaving the kids with the mortgage. That was just fundamentally
immoral, and it really flew in the face of generational fairness.
The great thing about this budget is that it guarantees that we are
going to take care of my parents, who are both on Social Security and
Medicare. We are going to make certain they can have the quality of
life they are entitled to. And it is also going to be fair to people
our age, people who are working, people who have kids in college.
Because we are going to let them keep a little more of their money. And
particularly in couples where there are husbands and wives both
working. But, finally, by beginning to pay down some of that debt, we
are going to leave our kids a much brighter economic future.
So this is not about dollars and cents as much as it is about people,
as much as it is about fundamental fairness and, I might even say,
fundamental morality. So I congratulate the gentleman from Ohio (Mr.
Kasich) and the gentleman from Connecticut (Mr. Shays) for all that
they have done over the last several years to dramatically slow the
rate of growth in spending, because it is going to mean a brighter
future for all Americans.
Mr. SHAYS. Mr. Speaker, I thank the gentleman, and I would just say
that this has been a wonderful team effort. We had new players come on
the scene and they have made all the difference. Now, I cannot call the
gentleman from Minnesota a new player, because the gentleman is in his
6th year. But just think, 6 years ago we saw massive deficits as far as
the eye could see and now we are seeing significant surpluses, and our
challenge now is to convince our colleagues not to spend all the
surplus and make government bigger.
It is not to say we are not spending more money, we are simply
targeting it. We are going to spend $2.2 billion more in elementary and
secondary education, a phenomenal increase. We are going to be spending
$6 billion more for farmers, who truly need it. And even someone like
myself, coming from an area where we do not have a lot of farmers in
the traditional sense, we have some dairy farmers, but we know that is
necessary not just for them but for us.
As my colleague was talking about selling the farm, I was thinking
that we are also going right after that death tax. And the most
compelling reason for our leaving $200 billion for tax cuts over the
next 5 years is to go squarely at the death tax that forces people to
sell their businesses in Bridgeport, Connecticut, or in Norwalk or
Stanford, Connecticut, when their parents die, to pay the inheritance
tax. The businesses then, in a lot of cases, disappear. And it was a
viable business. They cannot keep it because they have to pay a 55
percent inheritance tax. Now, we did increase the exemption to $1
million for farmers and businesses, but most businesses are far in
excess of that.
I was at a community meeting just recently and I had someone, after I
talked about it, come up with a real life example. He literally had a
property that his parents had that he was still living in with his two
other siblings. It was sold for $3 million. A lot of money. And his
parents had equity in the market of about another million. So they had
$4 million. And he said by the time they paid the inheritance tax and
the lawyers, and the probate court got done, he and his two siblings
will get $400,000 each. They will get 30 percent of the total value of
their property. It was property that was earned; it was property where
taxes were paid. They owned this property, and basically the government
took over 55 percent of that.
So it just tells me that when we talk in kind of a theoretical way
about taxes, we have to be mindful that we are really talking about
that young individual, and we are talking about what his parents were
able to leave and keep in the family. They had to sell the house and
they will get a minimal amount. They will get 30 percent out of the
total of the value of their property.
Mr. GUTKNECHT. If the gentleman will continue to yield, it is, again,
the story of the little red hen. Here we have people who did not help
bake that bread who are saying, well, we are entitled to over half of
the loaf of bread. And again this is not just about tax policy, it is
about fundamental morality.
Clearly, we need tax revenue. We have legitimate things that are
needed as a society, whether it is the common national defense, for
highways, lots of other needed projects, but any time we see a tax rate
that gets above 50 percent, and the gentleman is absolutely correct,
very quickly the estate tax gets to 55 percent, that is confiscatory.
That is wrong. That is part of the reason people started shooting up at
Lexington and Concord. And Americans still have that basic feeling
about fairness, and it really transcends things.
Mr. SHAYS. And if we are talking about the concept of fairness, why
should a married couple pay more than a couple that is not married in
taxes? Why should someone who has earned Social Security and if they go
back to working and paying taxes pay an additional penalty due to the
Social Security earnings limitation? For every $3 above that $17,000,
$1 is taken out of Social Security. That was a matter of fairness. And
the third tax cut that we move forward with, why should a corporation
be able to deduct health care and a private individual working, self-
employed individual, not have that same deduction? In fact, the tax cut
that the President vetoed just 2 years ago allowed all Americans to
deduct for health care.
So I am just struck by the fact that we have made tremendous
progress, we are talking about fairness in taxes, but we are also
talking about something else. We are talking about what taxes will help
the economy grow.
In 1990, I voted for a tax increase. The one tax increase I voted
for, and I learned a big lesson. I voted to increase the luxury tax.
And it was interesting, I voted to increase the luxury tax and the
government got less money. They got less money because people, who can
all make rational decisions, they decided that if the tax was higher,
they would buy less, and we got less revenue. Conversely, when we dealt
with capital gains, we cut taxes and we got so much more revenue.
So what two better examples. We can raise some taxes and get less
revenue; we can cut some taxes and get more, and we can have the
economic engine, that balanced budget agreement of 1997, which has made
a world of difference. It has balanced our budget. We are in surpluses.
We are no longer spending Social Security. We are able to cut taxes,
and we are seeing the economy grow and grow and grow.
Mr. GUTKNECHT. If the gentleman will continue to yield, and going
back to the luxury tax, I remember the argument at the time that
somehow this would punish people who had made lots of money who were
buying expensive boats. Well, it did not punish them at all. It
punished the poor people working in the boat yards that built the
boats.
Mr. SHAYS. Well, this hits home pretty hard, because they were not
poor people. They were middle-income and upper-middle income people who
were making boats, having great jobs. It was one of the true indigenous
industries in the United States; where we did not have many exports. We
were making the product and selling it in the United States. And it,
unfortunately, did a lot of damage. A lot of companies went out of
business.
Mr. GUTKNECHT. The other analogy about the boats is the story
President
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Kennedy used, that a rising tide lifts all boats. And if we have some
fiscal responsibility, as we have seen in the last 5 years, that by
properly managing the budget and by controlling the growth in Federal
spending and by allowing families and investors to keep more of what
they earned, we have had a much stronger economy. And we have been able
to lift a lot of boats out there. And it is not just the people making
a million dollars a year, it is an awful lot of those people making
$30,000 and $35,000 and $40,000 a year. I see our chairman is back.
Mr. KASICH. I appreciate the gentleman yielding. I just wanted to
make the point by saying we are going to pay down a trillion dollars in
the publicly-held debt. That is a breathtaking number.
Mr. SHAYS. In the next 5 years.
Mr. KASICH. Over the next 5 years. A trillion dollars in paying down
part of this publicly-held debt. Secondly, though, we have got this tax
relief, and it does not threaten Medicare or Social Security. Social
Security is protected in this bill. Medicare is not only protected but
it can be enhanced with the prescription drug program.
So I think what every American ought to know, when somebody says we
want to have a tax cut and some politician says, oh no, it is going to
threaten Social Security and Medicare, that that simply is not true. We
provide for the strengthening of Social Security and Medicare right up
front. And once we have done that, we then feel that we should have tax
relief.
And we also provide in this budget that if we pass this tax relief
but it does not get signed by the President, that that tax relief, that
money does not get used for more spending. That money does not get used
for more spending. That money goes to pay down additional debt.
So I think what every American ought to know is to be able to have
this kind of a proposal before us this week is something that I think
they ought to think about. Do not get caught by a car salesman, a used
car--no, I do not want to say that. I was going to say used car
salesman. I know more good used car salesmen. Let me say this, do not
get trapped by some smooth talking person moving peas under a shell who
says we cannot have tax relief because the politicians want to spend
it, because they want to spend it, and that we are going to hurt Social
Security. We protect Social Security, protect Medicare, pay down debt
and have tax relief for all Americans.
I think it is a pretty significant accomplishment. I appreciate the
gentlemen taking the time and presenting their arguments. They were
outstanding.
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