[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

[[Page H1149]]

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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