[Congressional Record Volume 147, Number 17 (Wednesday, February 7, 2001)]
[Senate]
[Pages S1118-S1119]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TAX CUT DEBATE
Mr. DASCHLE. Mr. President, as the tax cut debate begins in earnest
this week, I would like to commend to my colleagues' attention two
editorials that appeared in separate South Dakota newspapers this week,
the Pierre Capital Journal and the Madison Daily Leader. Both of these
opinion pieces give an excellent explication of this year's budget and
tax cut debate and responsibly advocate a tax cut while paying down the
national debt. In so doing, each reminds us that beyond the Beltway and
across the country the American public can see through the often
overheated rhetoric of political debate and focus on the bottom line
priority of maintaining the fiscal responsibility that forms the
foundation of the economic recovery of the 1990's.
As these editorials underscore, balance between tax cutting and debt
reduction should be a central principle of the tax and budget debate.
While Congress should and will pass a significant tax cut this year, it
must also make sure that we pay down the national debt and address
budget priorities like education, defense and healthcare. And so I
commend Dana Hess of the Pierre Capital Journal and Jon Hunter of the
Madison Daily Leader for their exceptional pieces advocating a tax cut
within the parameters of sound fiscal policy. Their words should give
us all pause for thought.
I ask consent that these editorials be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:
[From the Madison Daily Leader]
Paying Off National Debt Will Yield Great Results
(By Jon Hunter)
Federal budget surpluses are now reducing the massive
federal debt after two decades of rapid growth. The benefits
of such debt reduction will be broad and long-lasting.
The surpluses are so strong that the United States Treasury
announced it will stop issuing one-year Treasury notes at the
end of February. Why borrow money for one year when cash
receipts outweigh expenses every day?
The change will permit the government to eliminate roughly
$20 billion in debt issuance in the current fiscal year.
Treasury had already eliminated sales of three-year and
seven-year notes.
The changes mean lower interest payments on the national
debt but also pose a challenge for investors because there is
a dwindling supply of Treasury securities, considered the
world's safest investment.
Even this potential challenge will be good for the U.S., in
our opinion. Investors who now own maturing one-year bills
will have to find other places to invest, and the most
logical place is short-term, high-quality corporate notes.
The demand will drive down
[[Page S1119]]
borrowing costs for corporations, which would be similar to
an interest-rate cut by the federal reserve.
It makes sense to pay down the debt in an orderly fashion.
If Treasury tried to pay off the existing longer-term bonds,
it would have to buy them back at a high premium. That's why
Fed Chairman Alan Greenspan said last week that since surplus
estimates are growing, he would support both debt reduction
and a tax cut.
On Tuesday, the Congressional Budget Office (headed by
former Madison resident Dan Crippen) projected that the
overall budget surplus would be $5.6 trillion over the
decade, up from the $5 trillion bounty projected by the
Office of Management and Budget near the end of the Clinton
administration.
In the early 1990s, the combination of a huge budget
deficit and higher interest rates were a drain on our
economy. Just the interest on the federal debt was consuming
about one-seventh the entire federal budget.
We will soon experience the opposite effect: lower interest
payments will free up money for tax cuts or funding for
programs. Provided Congress makes good decisions about the
tax cuts or spending, both will provide excellent long-term
benefits for America.
____
[From the Pierre Capital Journal, Feb. 1, 2001]
Paying Debt Should Have Highest Priority
(By Dana Hess)
Maybe it's his Texas roots that cause President George W.
Bush to think big. Or maybe he's just generous. Whatever the
reason, the president is pushing for a $1.6 trillion tax cut
over 10 years.
Bush pushed the tax cut idea throughout his campaign for
office, even though polls showed that it was getting a
lukewarm reception from the public. Give him marks for
consistency because Bush still insists that the tax cut needs
to happen.
We generally support the idea of the federal government
getting less of our money. After making such a mess of the
budget for so many years, it stands to reason that the less
money our representatives have to work with, the less likely
they'll be to get into trouble with it.
Bigger and bigger budget surplus projections are giving
Bush and everyone else in Washington, D.C., big ideas about
what to do with the money. It's a politician's dream come
true--enough money to offer tax cuts and promote new
spending.
We would hope that the years of deficit spending in
Washington would have taught lawmakers to be cautious when it
comes to spending our money. No one seems to have learned
that lesson.
As much as we'd like to see taxes cuts, there are a couple
of good reasons why Bush and our lawmakers should slow down.
The surplus exists, in a large part, because of the booming
economy our country has enjoyed. If that economy goes sour--
and indications are that it may be ripening a little more
every day--then the projections of a big surplus will turn
out to have as much truth as the fears about the millennium
bug.
With all the talk of surpluses and tax cuts, it's easy to
forget that there's still a debt to pay. Taking care of that
obligation should have a higher priority than trying to win
the favor of voters with tax cuts and new programs.
We know they're famous for doing things in a big way in
Texas. But this nation has a Texas-sized debt. The president
should make sure his plan places just as high a priority on
paying down the debt as it does on tax cuts and spending
plans.
____________________