[Congressional Record Volume 147, Number 20 (Tuesday, February 13, 2001)]
[Senate]
[Pages S1259-S1262]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                TAX CUTS

  Mrs. BOXER. Mr. President, we are faced with a tremendous choice in 
America, and that is whether we want to continue with policies that led 
to an 8-year recovery of our economy which was flat on its back and go 
with those policies of fiscal responsibility and fairness and 
investment or go back to the days of what was called trickle-down 
economics, where the very wealthy got the most, the rest of us got very 
little, the deficits soared, the debt soared, our country was in 
trouble.
  I represent, along with Senator Feinstein, the largest State in the 
Nation. We have 34 million people. We had a recession that was second 
to none. It was the worst recession since the Great Depression. It took 
us a long time to come out of that. We had double-digit unemployment. 
We had a terrible situation. But because we followed, in this 
Government, finally, a policy of fiscal restraint, we got back on our 
feet and people have done very well. That is why this discussion about 
the proposed tax cut by our new President, versus the tax cut that will 
be supported by the Democrats, is such an important conversation.
  Last week, President Bush submitted a tax cut plan to the Congress. 
It was not detailed, but it was a plan. It was like a brochure in which 
he laid out his vision of a tax cut. He outlined in it a $1.6 trillion 
tax cut plan. I have to say, and I hope people will listen, this tax 
cut is not compassionate and it is not conservative.
  We remember when President Bush ran he ran as a compassionate 
conservative. So we get his very first proposal--actually it wasn't his 
first. His first one was to interfere with family planning throughout 
the world and put a gag rule on international family planning groups 
that help poor women get birth control. But for this purpose, it is 
certainly his first fiscal policy. It is neither compassionate nor is 
it conservative. What do I mean by that?
  First, it is not compassionate because it benefits the very wealthy 
instead of the 99 percent, everyone else; that is, those in the middle 
class, either lower or upper. It helps the very wealthy.
  His plan is not conservative because it does not do the smart, 
conservative thing of being cautious with the projected surplus. I said 
``projected surplus.'' As Democratic leader Daschle has said, these 
projections are like the weather forecasts: Don't count on them because 
they change. They are not dependable. So the conservative thing to do 
is to have a rainy day fund, if you will.
  Let me go into detail on why I say this plan is not compassionate. I 
have told you it benefits the wealthy. Mr. President, 31 percent of all 
families with children would receive nothing. If you are among the 
bottom 20 percent of Americans in terms of income, you get an average 
cut of $42. This is the way the tax cut of President Bush breaks down, 
and you tell me if it is compassionate. If you are in the lowest 20 
percent of earners; that is, earning less than $13,600, you will get an 
average tax cut of $42. Let me make that even worse. The income range 
averages at $8,600, so at $8,600 a year, you get back $42 in your 
pocket on average.

  The next quintile is $13,600 to $24,400. That is an average of 
$18,800 a year. They get an average tax cut of $187.
  A person earning $31,000 gets $453 back. If you earn an average of 
$50,000, you get back an average of $876. Between $64,000 and $130,000, 
you get back $1,400. Then, if you earn an average of $163,000, you get 
$2,200, approximately. But hold on to your chairs. Hold on to your 
chairs. If you earn $319,000 or more--the average income is $915,000--
you get back $46,000 every year.
  So how can anyone say that is compassionate? A person earning $50,000

[[Page S1260]]

gets $876 back. A person earning $319,000, average $915,000, gets back 
$46,000. I don't know how anybody could say that is compassionate.
  We are going to show you another way to look at what people get back 
because I think it is a startling thing to see. If you are in that 
wealthiest bracket, here is a beautiful new kitchen. It really is quite 
nice. You can get this kitchen for $50,000. That is about what you 
would get back if you earned that $900,000. It is beautiful. It has a 
granite top, wood; it is quite lovely--a new kitchen. But what happens 
if you don't earn that? You could afford a pan. It is a nice pan. What 
do we figure this costs? This is a $200 pan. It is a very nice pan. But 
this person can get a kitchen; you can get a pan. This is not 
compassion, and it is not fair and it is not right.
  Let's show some other examples. We had the Lexus and the muffler, and 
I thought that was good, but I thought we needed some more. Here is a 
beautiful swimming pool. We are told a swimming pool such as this costs 
about $46,000.
  With the Bush tax cut, when it phases in, if you are in that million-
dollar range, you could put one of these babies in your house every 
year, by the way. But if you are at that bottom level, the bottom 60 
percent, average that out and that is under $39,000, you could get an 
inflatable bath tub.
  How is that compassionate? How is that fair?
  We have some more to show you. This looks pretty good. This is a 
yacht. According to our figures, $45,000 gets you this yacht. It looks 
very good.
  If you get $1 million a year, you are going to get that kind of tax 
cut. But if you are in the bottom 60 percent, you can get this little 
rowboat. I don't even know if you get the oars with it. This costs 
$195.
  Do we have any more of those? I think you get the idea. But we are 
going to show it to you in a different way.
  If you are in that top bracket of 1 percent, which is the one that 
gets 43 percent of the benefits of Bush's tax cut, you get 43 percent 
of the benefit. Every single day when this tax cut is phased in, you 
get $126. That is pretty good. If you are in the bottom percent with an 
average of $30,000, you get 62 cents every day. This is another way to 
show how compassionate this tax cut is.
  I figure we will make it even a little more stark for you. If you get 
back $126 a day in a tax cut, you and your significant other can go to 
a beautiful restaurant, have a little candlelight, order the best in 
the house and a good bottle of California wine, I hope. It is pretty 
neat. If you are in that bottom 60 percent, it is tomato soup. There is 
nothing wrong with tomato soup. But it is not fair. This is not fair.
  You say: Well, wait a minute. Didn't the President say the people at 
the very top pay most of the taxes? Yes. They are getting back 43 
percent in the tax cut of George Bush. But don't they pay most of the 
taxes? Wrong. It is 21 percent of the taxes. The wealthy top 1 percent 
pay 21 percent of taxes. They are getting 43 percent of the benefit of 
the Bush tax plan.
  I just cannot imagine how someone who runs as a compassionate person 
can come up with a situation where you can get a can of tomato soup if 
you earn $30,000, and take your significant other to the restaurant 
every single night and eat out, not to mention the kitchen versus the 
pan, and all of the rest. No. This is not compassionate, nor is it 
conservative.
  We see that this is done for a reason. The stated reason is we are 
going to stimulate this economy.
  As I understand it, there was a hearing today on that. There is a lot 
of dispute about whether or not a tax break to the wealthiest people 
actually stimulates the economy. It was tried back in the eighties. Do 
you know what it stimulated? Deficits as far as the eye could see.
  The next time I come out on the floor I will have some charts that 
show what happened to the deficit when trickle-down economics was the 
centerpiece in the 1980s. It was a failure, an abject failure. Do you 
know what trickled down? Misery, recession, and we had terrible 
unemployment. We were paying so much interest on the debt that we 
didn't have any money to invest in our people.
  Yet we have a plan from someone who says he is compassionate and 
conservative that just will, in fact, set us up for failure. If I have 
anything to say about it in this Chamber, I want to talk about it. And 
the Democrats are going to talk about it.
  Do we want a tax cut? Yes. As Charlie Rangel on the other side said, 
we want the biggest tax cut we can afford. Do we want to make sure the 
people who need that tax cut the most get it? Yes. That is the kind of 
proposal we are going to have.

  In this particular proposal, the compassionate President Bush does 
not make the child care credit refundable. If you really are at the 
bottom of the barrel, you are earning maybe $20,000, or even less, you 
don't pay any income taxes. You don't get any help with your child 
care. If we are going to give a child care credit, which a lot of us 
want to do, let's make it refundable so people can have that effect and 
ease the burden.
  I have an interesting commentary I would like to read.
  Mr. President, this is a Republican named Kevin Phillips. He is very 
respected. As far as I know, he has been a Republican all of his life. 
He is the editor and publisher of the American Political Report. He is 
a best selling author who worked for the Nixon administration. I want 
to stress that what I am about to read to you did not come from Barbara 
Boxer, a Democrat from California, but it is coming from Kevin 
Phillips, a Republican who worked for the Nixon administration. I think 
he has some good credentials to criticize or comment on their Bush tax 
cut. Let's see if he thinks it is compassionate and conservative.
  I am quoting every word directly from his editorial:

       Although president less than a month, George W. Bush has 
     already achieved a historic first. He has become the first 
     president elected without carrying the popular vote, to 
     propose a far-reaching giant tax-cut bill on behalf of his 
     supporters and his big campaign contributors.

  Parenthetically, let me note that Kevin Phillips is calling this Bush 
tax cut ``a far-reaching giant tax-cut bill on behalf of his supporters 
and his big campaign contributors.''

       None of the three previous presidents elected without a 
     popular margin, John Quincy Adams, Rutherford Hayes and 
     Benjamin Harrison, had the temerity to try anything like this 
     kind of revenue reduction. It hasn't bothered Bush, though. 
     It hasn't stopped him that a majority of Americans cast their 
     vote for the two candidates, Al Gore and Ralph Nader, who 
     mocked his tax package. Indeed, both did more than oppose it. 
     They argued rightly that it was a massive giveaway, and that 
     30 to 40 percent of the dollar benefits went to the top 1 
     percent of US taxpayers, to just one million families.

  I am worried about the other 279 millions of families.
  To quote Mr. Phillips further:

       This is an illegitimate tax bill for two reasons. The first 
     is that a president selected in Bush's manner has no mandate 
     or standing to undertake such far-reaching legislation. The 
     second illegitimacy, which would tar this legislation even if 
     it was offered by a president with a full claim to office, is 
     the extent of revenue that it gives away--not at first, but 
     as its $1.6 trillion worth of provisions unfold over the next 
     decade. That's more than a trillion dollars that future 
     Congresses could spend on debt reduction, on payroll tax 
     reductions, Social Security, education or prescription drug 
     coverage.
       Instead, these dollars will be spent by recipients in 
     considerable measure on $100,000 cars, $5 million homes and 
     $10 million financial speculations. Indeed, one of the 
     biggest individual tax giveaways is particularly ironic. Here 
     I'm talking about the Bush proposal to phase out the federal 
     inheritance tax, which in earlier days owed much of its 
     introduction to a pair of Republican presidents picked by 
     voters, not by a 5-to-4 Supreme Court decision, whose names 
     were Abraham Lincoln and Theodore Roosevelt. To now end the 
     inheritance tax, as opposed to increasing its exemption to 
     $2 million or $3 million, threatens a cost not only in 
     billions of dollars but in the weakening of American 
     democracy.
       In the wake of the American Revolution, George Washington, 
     Thomas Jefferson and many others agreed that U.S. law would 
     and did end the British legal provisions that allowed the 
     great landed estates to descend intact from generation to 
     generation. The new United States would not, they say, have 
     an aristocracy of inheritance.
       The Bush tax bill raises exactly that prospect. It 
     threatens to perpetuate the $8-trillion wealth buildup of the 
     1990s through a new aristocracy of inheritance on a scale 
     that Washington and Jefferson could never have imagined. For 
     such a proposal to come from a President who owes his own 
     office to inheritance rather than popular election is the 
     crowning illegitimacy of them all.

[[Page S1261]]

  This is tough stuff. This is tough language. This is tough criticism. 
It is given by a Republican who cares about a number of things, being 
conservative and being fair.
  The PRESIDING OFFICER. The Senator has 5 minutes remaining.
  Mrs. BOXER. I thank the Chair.
  I hope everyone will look at that Kevin Phillips commentary I just 
read into the Record. It is very instructive.
  I have told my colleagues why this is not a compassionate tax cut. It 
ignores 99 percent of the taxpayers, essentially, and gives almost 
everything, or way too much, to the very few of the wealthiest people 
in this country, the biggest break going to those who earn close to $1 
million a year.
  Let me tell my colleagues why it also is not compassionate. It is so 
large, it is so big, it is so huge, there will not be enough left over 
for the things we need to do to protect Social Security so that these 
kids who are Senate pages now will have a Social Security system, to 
add a prescription drug benefit to Medicare that everyone seems to 
want. We don't have the money for that. To really invest in education, 
in early education, in after school, in school construction, and in 
smaller class sizes, we are not going to have money for that, nor to 
clean up our environment, to fix up our parklands--we could go on--to 
have a decent air traffic control system that is safe. It is not 
compassionate because it takes from that.
  What about it not being conservative? That is something we have to 
talk about. The fact is, not only will we not have money for the 
priorities the American people want, but the plan leaves nothing to pay 
down the debt over the long run. That is not conservative. Show me one 
family who does not think about a rainy day: Gee, honey, what if 
something goes wrong next year? Maybe we should save a few dollars. 
Gee, I am a little worried, Tommy doesn't look so great. Maybe we need 
to spend a little of our savings on a second opinion and take him to a 
doctor outside the HMO. Thank goodness we saved a little bit.
  What about the families now across this country who are looking at 
their natural gas bills--the natural gas that heats their home? They 
are in shock at seeing a twofold increase, a threefold increase. Those 
families are going to have to save from somewhere to pay those bills. 
We have a 10-year boondoggle tax cut that leaves nothing for 
emergencies, that counts on forecasts that are going to be as crazy as 
the weather forecasts.
  I am hopeful that we can get some bipartisanship here. I find it 
amazing that only a couple of my Republican friends have said this tax 
cut is too big. I am happy they have. But where is the chorus from 
people on that side who say they are conservative? How can a true 
conservative go back to deficits as far as the eye can see? How can a 
true conservative go back to debt as far as the eye can see, to force 
our children to inherit a debt and have to pay a billion dollars a day 
or more to finance that debt? That is not conservative.

  Let's go back to the drawing boards, I say to the President. Let's 
come up with a compassionate and a conservative budget, one that rests 
on a few foundations that I will talk about.
  I ask unanimous consent to proceed for 10 more minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mrs. BOXER. When we talk about our budget and the tax cuts that are 
part of it, we should have a foundation to that budget, a foundation to 
that tax cut. I think it should show three pillars. One is fairness. 
Let us be fair to the people. Let's make sure that as we look at the 
size of the tax cuts, where they go, what we spend, what we invest in, 
that we are fair.
  The greatest thing we have in our country is a very strong middle 
class. If we lose that middle class, we will be weak. Yet if we look at 
some of the numbers, it appears that the gap between the rich and poor 
is in fact growing. That is not healthy for anyone. That is not good 
for a society, if it gets too big. What we find out is we have people 
who have lost hope, who may turn to drugs, alcohol. We know what 
happens when things turn bad and they are not as productive as they can 
be. They are not living up to their potential because maybe they cannot 
even afford college tuition. Fairness has to be what we are about.
  Values: What do we value in this country? Do we not value a balanced 
approach, fairness to our people and investing in our people, making 
sure that our children are healthy; that they have a good, free, public 
education system that is strong; that we create jobs; that we have job 
training; that we don't turn our backs on our senior citizens; that we 
have safe streets? That is a value.
  Right now we have senior citizens who are under a lot of stress. Not 
only do they have to meet their bills for their prescription drugs--and 
the good news here is, there are so many good prescription drugs today 
that keep people moving and feeling good, but they are expensive. We 
need a prescription drug benefit. That should be one of our values. 
Strengthening Social Security should be one of our values.
  So it is fairness, as we look at a tax cut and spending. It is 
values, about our families and what they need and how we can help them 
and make life better for them. It is responsibility to the next 
generation of youngsters.
  Yes, we can have a tax cut. It could be a large tax cut. It will fit 
into the budget. It will be fair. It will have values. It will be 
responsible. And we could be proud that we are keeping this country on 
the right track and not turning off on some detour that says: Deficits 
again, debt again, no money for our seniors, no more safe streets. That 
is not the right path to take.
  A lot of people have said to the Democrats: Show us your plan. What 
is your plan? We are going to have a plan. It is going to be a good 
plan. It is going to be based on these values: Fairness, a sense of 
values, and responsibility--three pillars. It is going to be specific 
as soon as we see President Bush's budget numbers so we know what he is 
cutting to pay for this tax cut. We have to take a look at that. And we 
will respond.
  I am reaching my hand across to the other side of the aisle at this 
point. I say to my colleagues, I heard you so many times on this floor: 
We need a balanced budget amendment to the Constitution. We need to pay 
down the debt. These deficits are killing us.
  We know, if we take a look at this projected surplus and we are 
conservative about it, we will do just fine. If we look at our values 
as a society and we are compassionate, we will be just fine.
  I will close with a quote from Alan Greenspan who testified today. He 
said:

       Given the euphoria surrounding the surpluses, it is not 
     difficult to imagine the hard-earned fiscal restraint 
     developed in recent years rapidly dissipating. We need to 
     resist those policies that could readily resurrect the 
     deficits of the past and the fiscal imbalances that 
     followed in their wake.

  So today I have quoted two Republicans I admire--Alan Greenspan, 
telling us to watch out, then be conservative on this tax cut; and 
Kevin Phillips, who is warning us the Bush tax plan could lead to a 
country that isn't one we will be that proud of because it will 
transfer so much of what we have to the very top of the income scale, 
forgetting about the great middle class.
  So I am very hopeful we can come together as the Senate, as 
compassionate people, as fiscally responsible people, and that we can 
fashion a budget that includes a tax cut we can afford, that includes 
spending priorities our families need, that thinks about our kids, that 
takes the burden of debt off their shoulders. I think if we can do 
that, we can add a tremendous amount to this debate.
  I think President Bush has said he is interested in working with the 
Senate. I think he has reached out to us and said let's work together. 
Well, I am ready to do that. I tell him, if he would come up with a 
budget that is compassionate and conservative, I will be there right at 
his side. If he does not, I will work to make it so.
  I yield the floor. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. DURBIN. Mr. President, I ask unanimous consent the order for the 
quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Illinois is recognized.
  Mr. DURBIN. Mr. President, could you tell me, is there a unanimous 
consent pending concerning speaking order?

[[Page S1262]]

  The PRESIDING OFFICER. There is not.
  Mr. DURBIN. Mr. President, I ask unanimous consent to be recognized 
in morning business.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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