[Congressional Record Volume 146, Number 140 (Monday, October 30, 2000)]
[Senate]
[Pages S11359-S11360]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                TAX CUTS

  Ms. LANDRIEU. Mr. President, I associate myself with the remarks of 
the good Senator from Iowa and acknowledge his great work in the area 
of education. As he has pointed out--and the Senator from Illinois 
earlier this evening, and our leader from Nevada--we believe in 
bipartisanship. We believe in working together. But we do believe there 
are certain principles worth fighting for: The principle of fairness, 
the principle of equality, the principle that if we are going to help 
people, then let's try to help everyone, not just those in the upper-
income levels.
  In my State--I represent Louisiana--it is very important that we try 
to spread some of these tax benefits, health benefits, and education 
benefits to households that earn under $75,000. That is not to say that 
people above those income levels do not also need help. I am not saying 
that household incomes of $75,000 and greater or ``wealthy'' or 
``rich'' or ``well off'' or those who ``don't have difficulties'' don't 
also need help.
  But it is important, when we do tax cuts, to try to do it as much as 
we can for people at all income levels. That is why I am here today to 
note one provision in the underlying bill in relation to savings and 
pensions and 401(k)s and IRAs--a wonderful tool for people to save, if 
it could be designed properly and the rules drafted correctly.
  I rise today, however, to note a hard-to-miss opportunity for this 
Congress to make real tax cuts for America's working families. It is 
hard to miss, but it looks as if we missed it because the tax bill 
before us does not target help to middle-class families or give them 
additional savings tools.
  Let me take a few minutes to explain.
  Throughout this year, many of us have advocated meaningful, 
responsible, and targeted tax cuts. I had hoped we would come up with a 
tax reduction bill which distributed benefits equally among all income 
groups, recognizing that some families have had more help through our 
Tax Code than others. But all families, whether they are at $10,000, 
$20,000, $40,000, $60,000, $75,000, or $100,000, should be helped 
fairly. This bill fails to do that. We have before us a bill that fails 
to even meet this simple test of common sense.

  I had hoped this Congress would produce tax cuts designed to 
encourage family savings, not just additional consumption because while 
incomes have risen dramatically over the past several years, savings 
rates have actually declined. Savings should be made more attractive 
for all Americans, not just those who are already saving but those who 
need help or incentives to save. It not only helps them and their 
families but strengthens our whole economy.
  While the net worth of a typical American family has increased 
recently, the net worth of families under $25,000 has declined. 
According to the most recent numbers from the Commerce Department, the 
national savings rate in August of 2000 dropped to a negative 4 
percent, meaning people are spending more than they save. This is a 
dramatic drop from the mid-1970s, when Americans saved about 10 percent 
of their income, or even the 1980s, when it fluctuated between 5 and 7 
percent. I think we should do something about that.
  The bill before us, which expands IRAs and 401(k)s, doesn't hit the 
bull's-eye. It doesn't hit the target. It is helping families that are 
already saving to potentially save more--I argue it doesn't really 
accomplish that--and it doesn't help those families trying to get into 
the savings habit.
  I introduced a bill earlier that is called SAVE, Savings Accounts are 
Valuable for Everyone, which is to help middle- and moderate-income 
families build assets for themselves through IDAs, while also expanding 
IRA contributions.
  The Senator from Louisiana, Russell Long, former chairman of the 
Senate Finance Committee, once said: The problem with capitalism is 
there aren't enough capitalists. I agree with him.
  If we created and expanded IDAs, individual development accounts, and 
IRAs, and 401(k)s in the right way, we could, in fact, create more 
capitalists, create more pools of capital, help people to build assets 
and strengthen the economy for everyone. We need to expand economic 
opportunities for more families, not just help those already on the 
right track.
  According to another study, nearly one-third of all U.S. households 
hold traditional IRAs. The average income of these families is $62,500. 
Average assets are about $200,000. Just 10 percent hold Roth IRAs. That 
means 43 percent of households have chosen to use individual retirement 
accounts. But this is the point: Only 4 percent of those households 
save at the maximum rate. So by doubling an IRA from $2,000 to $5,000 
or from $2,500 to $5,000, one has to question are we trying to help the 
top 4 percent who are saving at the maximum rate? Couldn't we spread 
that money out in a better way to encourage more people to save?
  I know I only have a minute or two remaining. Let me address one 
other point.
  I support a 401(k) savings plan. I think it is very effective. Many 
employers are moving to that in addition to or in lieu of their 
traditional pension plans. But why increase the limit of 401(k)s when 
the idea would be to try to use our money to entice more employers and 
more workers to use the 401(k) model?
  This tax bill does nothing to help low- and moderate-income families 
save for the future.

  The PRESIDING OFFICER (Mr. Fitzgerald). The time of the Senator has 
expired.
  Ms. LANDRIEU. I ask unanimous consent for 30 more seconds to wrap up.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Ms. LANDRIEU. This tax bill does nothing to help low- and moderate-
income families save for their future. That is where IDAs would come 
in. If we took the opportunity to institute a new savings vehicle 
called IDAs, expanded IRAs in the right way, and gave additional 
benefits for 401(k)s, we could use our money more wisely, spread it out 
among many more families in America.
  My message is, there is a better way to do it. I hope when this bill 
is vetoed by the President, there will be ample consideration to make 
these modifications. It would not cost more--as this chart shows, $58 
billion to $44 billion. It would only require common sense, compassion, 
and the will to do so.

[[Page S11360]]

  I yield the floor.
  The PRESIDING OFFICER. Under the previous order, the time from 6:05 
until 7 p.m. shall be under the control of the Senator from New Mexico, 
Mr. Domenici, or his designee.
  Mr. DOMENICI. Mr. President, normally, I don't have the luxury of 
using as much time as I would like on subjects. I am very pleased 
tonight to have a considerable amount of time, which I am going to 
share with my good friend from Texas.
  I will start with a statement about one of my staff people and then 
proceed to a point where I think what Senator Gramm has to say will fit 
rather nicely with what I am talking about.

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