[Congressional Record Volume 146, Number 136 (Thursday, October 26, 2000)]
[Senate]
[Pages S11078-S11080]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               EDUCATION

  Mr. BENNETT. Mr. President, I thank the senior Senator from Texas for 
that most enlightening presentation. I agree with him we probably 
should not be debating the Presidential race on the floor.
  I noticed the Senator from Massachusetts comes to the floor every day 
and talks about education, very often giving the same speech using the 
same set of charts. So I have decided I ought to respond to some of 
those charts to set the record straight.
  One of the charts which the Senator from Massachusetts uses shows the 
increased school enrollment in the Nation, and he uses it to justify 
the Democratic position that we ought to require spending for new 
school construction. He says: Where are these students going to be 
housed if we do not pass this bill in the Federal Government that will 
mandate school construction?
  We Republicans have always said we are willing to spend the money on 
education. Make no mistake, we are not talking about dollars here. 
Indeed, the bill that is working its way through the process and may 
come to the floor this week has more money for education than the 
President initially requested. Understand that. We are not talking 
about dollars, we are talking about control. Who is going to control 
the spending of those dollars? Will it be the Federal Government or 
will it be the people in the local areas?
  I came across this chart, which I have had reproduced. It 
demonstrates what is happening with the percentage changes in public 
elementary and secondary school enrollment. The Senator from 
Massachusetts has a chart showing enrollment going up, and I agree with 
that, but this is a different chart, and it comes from the U.S. 
Department of Education. This, obviously, is not Republican propaganda. 
This comes from the administration. It breaks down school enrollment by 
region.

[[Page S11079]]

  You will notice that there is an increase in school enrollment in the 
West, where I live. It shows an increase from 1988 to 1998 and a 
projected increase from 1998 to 2008. It is a tremendous increase.
  There is an increase in the South. This shows the increase from 1988 
to 1998 and the projected increase from 1998 to 2008.
  But when we go to the Northeast, we find that the projection is the 
other way.
  In the Northeast, the projected percentage change in public 
elementary and secondary school enrollment is going down, not up; and 
in the Midwest, it is going down, not up--down by an even greater 
amount. It has gone up less than any other region in the 10-year period 
prior to 1998, and will go down more than any other region in the years 
from 1998 to 2008.
  When you see the breakdown coming from the Department of Education, I 
think you see the flaw in the argument of the Senator from 
Massachusetts. And I think you see the reason to support the position 
the Republicans have taken. Yes, we need new school construction in 
this country, but we do not need it everywhere. We do not need it 
mandated from Washington. Washington, I have discovered, has a way of 
adopting formulas. Boy, have I learned about formulas since I have been 
in the Senate.
  We had a debate on this floor about funds to address class size, and 
everyone was saying: We must reduce class size if we are going to 
improve education. I am all for reducing class size. Then I looked at 
the formula, and I discovered a very interesting thing. Do you know the 
State that has the largest class size? It is a tossup. Sometimes it is 
California; sometimes it is Utah.
  When I looked at the formula for how Washington would allocate the 
money that we were supposedly adopting to reduce class size, I found 
that it had nothing whatever to do with class size. It was a formula 
based on poverty, and States that already had smaller class sizes would 
get most of the money for the purpose of reducing class sizes. And my 
State, which vies for having the largest class size, would get precious 
little of that money.
  So I opposed that proposal. And I got beaten up in my campaign: 
Senator Bennett, you are not in favor of reducing class size because 
you didn't vote for the proposal. I said to my opponent: Read the bill 
and you will find that it would not have done much for Utah. Once you 
got past the title, it had little to do with reducing class size where 
enrollments are highest.
  The same thing is true here. We are talking about the need for new 
construction, but are we going to have a Federal formula that will 
determine how the money is allocated per State? Every State, I 
guarantee you, will get money to increase school construction, 
including States in the Northeast, where enrollment is projected to go 
down, not up. The money would be allocated the way Washington 
allocates, and those of us in the West would get hurt.
  We need to understand that when we use these educational slogans 
about ``we must build new schools because our enrollment is going up,'' 
we are glossing over the issue, and we are not paying attention to what 
it really is. This is why I am proud to be supporting the Republican 
position that says: Federal spending for education, yes. Federal 
dominance of education, no. Increased money from the Federal Government 
for the districts that need it, absolutely. Federal dictating to the 
districts, no.
  So every time the Senator from Massachusetts shows us his charts and 
tells us about enrollments going up, let's remember that enrollments 
are not going up uniformly. Enrollments are going up differently. If we 
pass the bill that the Senator from Massachusetts daily demands that we 
pass, I'm afraid that those of us in the West would get shortchanged, 
those in the South would get shortchanged, and those in the area of the 
Senator from Massachusetts would get extra money at the expense of the 
rest of the country.
  Should we spend more money on education? Yes. Should we dictate it 
from Government? No. Ignoring local needs is not good for education. It 
is not good for our schoolchildren. It would not be the smart thing to 
do.
  Now, with regard to another education issue, I have listened to the 
Senator from Massachusetts attack Texas.
  Yesterday, I pointed out that the quoting of the Rand report as a 
vehicle for attacking Texas demonstrated that someone had not read the 
Rand report. I pointed out that the President of Rand himself said, as 
the second report was issued, that it did not negate the findings of 
the first report, which said that Texas was No. 1--that Texas had done 
the best job--in a number of areas.

  When the second report came out, which dealt with Rand's analysis of 
the Texas test procedures, the President of Rand said, this is not in 
conflict with our earlier findings that said that Texas leads the 
Nation in increases in improvements in education. But those who use the 
Rand report to bash Texas did not bother to quote the President of 
Rand, did not bother to look at the earlier Rand report; they just 
picked out those things that they thought would be good for them.
  So it has been injected into the Presidential campaign, whether we 
like it or not. And in that spirit, I went to the web site of Gore-
Lieberman, Inc. to find out some of the things that we could expect 
from Vice President Gore if he were elected. I found some very 
interesting things.
  I now refer to the Gore-Lieberman web site. It states that Gore would 
test students with real tests for real accountability. He would require 
testing to measure achievement and attach real consequences to the 
results of those tests.
  I find that very interesting. Is the Federal Government going to 
write the tests? And is the Federal Government going to mandate the 
test and come down on schools that do not meet the achievements of the 
tests? And what are the real consequences that he is talking about?
  In the campaign, sometimes the rhetoric can get fuzzy. But this is 
the one I find most interesting: Gore would offer choice of high-
caliber preschool. He would make high-quality voluntary preschool 
available to all 4-year-olds so that every family can have a choice in 
preschool.
  Dare I use the hated word, Mr. President? Are we talking about 
``vouchers''? Are we saying that money would go to families for a 
choice in preschool that would be funded by the Federal Government? Are 
we talking about the Department of Education mandating preschool 
availability to every 4-year-old in the country, and then following 
that 4-year-old with some money? Are we talking about the GI bill for 
4-year-olds?
  Congress passed the GI bill after the end of the Second World War, 
and established the precedent that the money goes with the student, not 
to the school. That is a precedent I applaud. All of those who talk 
about vouchers in elementary and secondary schools say it is terrible 
that you might spend money on a religious school, that it violates the 
separation of church and state. I did not notice that with the GI bill.
  With the GI bill, if a veteran wants to take the money and go to 
Notre Dame and study to be a Catholic priest, the Federal Government 
says: It's none of our business. We are giving you the money. You go 
where you want.
  So I ask the question: When the Vice President says that he would 
make available high-quality voluntary preschool to all 4-year-olds, 
would he object if a 4-year-old decided to go to a Montessori school, a 
Montessori school where he might learn a little bit of Catholic 
history? Would we have that happen under the program that is touted on 
the Gore-Lieberman, Inc. web site? What do they mean when they say 
preschool for all 4-year-olds? We have not had any indication of how 
much that is going to cost or how that would be administered in the 
Department of Education.
  Based on past experience, I am afraid how it would be administered, 
that it would take us back into the same morass I was referring to with 
respect to this chart. We would see a Federal program that does not 
address real needs. That would be the case with school construction. 
That would be the case, by the way, in the proposal for 100,000 new 
teachers. We looked at the proposal of 100,000 new teachers in the 
State of Utah. We can use new teachers in the State of Utah.
  Everyone can use new teachers. We found out that the program for 
100,000

[[Page S11080]]

new teachers would give us a few additional teachers per school 
district--not per school, per school district. We have school districts 
in Utah that have 100,000 students in them. We would get a few 
additional teachers for each school district in the State of Utah.
  The thing I am afraid of is that with even one additional teacher 
would come a whole host of Federal controls, a whole host of Federal 
requirements. As I have said on the floor before, I was lured back into 
public life, away from my business career, when I was asked to serve as 
chairman of the Strategic Planning Commission for the Utah State school 
board. I found out the degree to which the Federal Government controls 
local decisions. The Federal Government puts up 6 percent of the money, 
but controls 60 percent of the decisions. I didn't like that when I had 
nothing to do with elective politics, when I was just serving a public 
service responsibility trying to improve education. I don't like it 
now, when I am in a policy position. I don't think it is sound policy.
  I think you are going to see the same kind of thing apply to this 
suggestion from ``Gore-Lieberman, Inc.'' that says there will be 
preschool available to all 4-year-olds. I think the process would be 
that the Federal Government might put up 6 percent of the money and 
make 60 percent or more of the decisions. I am guessing because we 
don't have any of the specifics.
  Let me leave the education issue and make one final observation in 
response to the comments of the senior Senator from Texas. He talked 
about tax cuts and how, in fact, they benefited people other than the 
rich.
  Let me give, if I may, briefly, my own experience. This is not 
theoretical. This is not out of some think tank. This is not some group 
of academics. This is a real experience of a real person in real life.
  It was in 1984 that I received a phone call from a friend of mine in 
Salt Lake City. At the time I was living in California. I was asked: 
Would you come to Salt Lake and consult with us as we try to start a 
little business?
  At the time I flew to Salt Lake to sit down with those people to talk 
about that business, they had four full-time employees. They were 
literally operating out of the basement of the man who had the business 
card that said he was the president of that company--a grandiose title, 
a lot of dreams, and four people. Mr. President, 1984 is smack in the 
middle of what we have heard some people call ``the decade of greed,'' 
because that was the period of time when the top marginal tax rate was 
28 percent. And that is terrible, some people said, because the rich 
are getting by only having to pay 28 percent on their income.
  Well, I moved to Utah. I became the president of that company. We 
grew that company through the decade of greed with internally generated 
funds. The reason we were able to grow that company with internally 
generated funds is because we filed as an S corporation under the tax 
law, which meant our top tax rate was 28 percent. That meant for every 
dollar we earned trying to get that company going, we could keep 72 
cents to fund its growth.
  The company today has over 4,000 employees, 1,000 times what it had 
when it was founded. The company pays millions of dollars today in 
corporate income tax. The suppliers that supply goods to that company 
pay millions of dollars in corporate income taxes. Those 4,000 
employees of the company pay millions of dollars in income tax. If you 
will, that company is making its significant contribution to today's 
surpluses as those millions and millions of dollars come into the 
Federal Treasury.
  If the top corporate tax rate, top effective tax rate, had been 39.6 
percent, as it is today, instead of 28 percent, I can tell you from 
firsthand knowledge that we could not have grown that company in that 
atmosphere. Instead of keeping 72 cents out of every dollar we made in 
order to grow the company, if we had only been able to keep 60, that 
extra 12-cent difference would have sunk us. I know. I sweat over the 
books. I worried about meeting payroll. I worried about cash-flow.

  It is the harvest of the seeds that were planted in the decade of 
greed that are now producing the tremendous income that is coming into 
this economy. Look at the companies that have built over time and ask 
how many of them were started in the period when the tax rate was lower 
and paid S chapter funds.
  When I first came to the Senate, I tried to explain how all this 
worked. I asked the question on the Senate floor: Is there anybody here 
who understands what a K-1 is? I asked the question when the chairman 
of the Budget Committee at the time was on the floor. He was debating 
the tax structure. He had no idea what a K-1 was. I asked others in my 
own party: Does anybody know what a K-1 is? They had no idea. They knew 
what a W-2 was. That is the form that indicates your wages. But they 
didn't know what a K-1 was.
  A K-1 is the tax form that is filed that tells you what percentage of 
your income has to be paid on your individual income tax because it is 
a flowthrough in an S corporation structure.
  Most entrepreneurs all start out in that structure, and most 
Americans have no understanding of how it works. That is the area where 
the high marginal tax rates bite, and that is the area where the 
entrepreneur feels it. Just because there is a tiny percentage of the 
population who understands, it doesn't mean that it is a tiny 
percentage of the population who pays those taxes.
  The argument being made by the Senator from Texas is a correct one. 
We should recognize that in America the economy and our place in the 
economy is not static. We are fluid, all of us. We move up and down. 
There have been times when I have been in the top 1 percent and I have 
paid millions of dollars in taxes. There have been times in my life in 
my entrepreneurial cycle when I have been in the bottom 1 percent and 
paid no taxes. It is the opportunity to move from the bottom 1 percent 
to the top 1 percent that motivates all Americans. It is the tax burden 
the Senator from Texas was talking about that de-motivates the 
Americans who want to make that move.
  Ultimately, it is the revenue that comes from Americans who take 
those risks and make those moves that gives us the budget surplus.
  I close with an observation. It came from another politician who made 
it very clear. He said: We must remember, money does not come from the 
budget. Money comes from the people. Money comes from the economy.
  If we assume that money comes from the budget and is therefore ours 
to spend, we make a serious mistake. As long as we remember that money 
comes from the people, we will make intelligent decisions as to how we 
treat the people's money.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from California.
  Mrs. BOXER. Mr. President, I ask my assistant leader if I might have 
10 minutes.
  Mr. REID. Ten minutes will be fine.

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