[Congressional Record Volume 147, Number 34 (Wednesday, March 14, 2001)]
[Extensions of Remarks]
[Pages E358-E359]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




               ECONOMIC GROWTH AND TAX RELIEF ACT OF 2001

                                 ______
                                 

                               speech of

                           HON. PATSY T. MINK

                               of hawaii

                    in the house of representatives

                        Thursday, March 8, 2001

  Mrs. MINK of Hawaii. Mr. Speaker, I rise in opposition to H.R. 3. It 
is based on unreal assumptions and fuzzy scenarios.
  H.R. 3 income tax rate reductions for single taxpayers are as 
follows:
  For taxable income up to $6,000 the current rate of 15 percent would 
be reduced under H.R. 3 and the Bush plan to 10 percent.
  For taxable income between $6,000 and 27,050 the rate of 15 percent 
is unchanged.
  For taxable income between $27,050 and $65,550 the current rate of 28 
percent is reduced to 25 percent.
  For taxable income between $65,550 and $136,750 the current rate of 
31 percent is reduced to 25 percent.
  For taxable income between $136,750 and $297,350 the current rate of 
36 percent is reduced to 33 percent.
  For taxable income above $297,350 the current rate of 39.6 percent is 
reduced to 33 percent.
  These income tax rate changes take effect gradually over a 10-year 
period:
  For single taxpayers with income under $6,000 the 15 percent rate is 
reduced to 12 percent in 2001 and 2002, to 11 percent in 2003 and 2004 
and to 10 percent beginning in 2005.
  The 15 percent tax rate on taxable income between $6,000 and $27,050 
is unchanged.
  For taxable income between $27,050-$65,550 the 28 percent rate is 
reduced to 27 percent in 2002 and 2003, to 26 percent in 2004 and 2005 
and to 25 percent beginning in 2006.
  For taxable income between $65,660-$136,750 the 31 percent rate is 
reduced to 30 percent in 2002, to 29 percent in 2003, to 28 percent in 
2004, to 27 percent in 2005 and to 25 percent beginning in 2006.
  For taxable income between $136,750-$297,350 the current 36 percent 
rate is reduced to 35 percent in 2002 and 2003, 34 percent in 2004 and 
2005 and declines to 33 percent beginning in 2006.
  For taxable income above $297,350, the current 39.6 percent rate is 
reduced to 38 percent in 2002, to 37 percent in 2003, to 36 percent in 
2004, to 35 percent in 2005 and to 33 percent beginning in 2006.
  This tax reduction plan has three fundamental flaws.
  First, the tax cuts are premised upon there being a $5.6 trillion 
surplus over the next 10 years. But the actual surplus is much less, 
and the cost of the tax cuts are much larger than claimed.
  The $5.6 trillion ``surplus'' includes $2.5 trillion from the Social 
Security Trust fund and $400 billion in the Medicare Trust funds. It 
also includes another $111 billion in the Military Retirement Trust 
Fund that is needed for the retirement benefits of our military 
personnel. That leaves only $2.6 trillion in real surpluses.
  From that the Bush tax plan would cost $1.6 trillion in tax cuts 
leaving a surplus of $1 trillion. But the tax cuts would increase the 
Federal government's interest costs by $400 billion, leaving only a 
$600 billion surplus.
  Making the tax cuts retroactive to January 1, 2001 adds another $100 
billion in costs. Other Bush proposals, including adjustments to the 
alternative minimum tax, extending expiring tax credits, and promised 
spending add another $500 billion. Added together, the Bush proposal 
uses up all the non-Social Security surplus.
  It is unconscionable to pass a tax cut based on Social Security and 
Medicare surpluses after you have promised not to touch this surplus.
  In fact Congress has voted many times on legislation not to touch 
these surpluses (lock box.) Congress even took Social Security ``off 
budget'' to make sure Congress did not forecast ``surpluses'' based on 
surpluses currently accumulated in Social Security and Medicare Trust 
Funds.
  These tax cuts endanger the Social Security-Medicare Trust Funds.
  Second, President Bush states that he wants to pay down this debt. 
But his tax cuts mean that we will not be able to pay down the national 
debt.
  Of the $5.7 trillion in current federal debt, the public holds $3.4 
trillion. The remaining $2.3 trillion is held by the Social Security 
and Medicare trust funds. The interest on the Federal debt in fiscal 
year 2000 was $362 billion.
  But in fact the Bush plan does not pay down the debt, and threatens 
any possibility of paying it.
  The Clinton 1993 Balanced Budget plan cut spending by $250 billion 
and raised revenues by $250 billion. Not a single Republican in the 
House or Senate voted for this in 1993. This courageous action by the 
Congress eliminated the annual budget deficits. It cost the Democrats 
plenty. In 1994 we lost 50 seats and the Republicans became the 
majority party.
  In 1993 the annual deficit was $255.1 billion. The total national 
debt in 1993 had already reached $3.248 trillion. This debt was caused 
by faulty revenue projections under Reagan-Bush tax cuts. George W. 
Bush is repeating the same mistakes.
  In FY 1998, under the Democrats budget plan, we achieved the first 
budget surplus since 1969 in the amount of $69.2 billion. The Social 
Security surplus was $99 billion and the Medicare surplus was $9 
billion. In FY 1999 the budget surplus was $124.4 billion, the Social 
Security surplus was $124.7 billion and the Medicare surplus was $21.5 
billion. In FY 2000 the surplus was $236.2 billion, the Social Security 
surplus was $151.8 billion and the Medicare surplus $30 billion. For 
the current FY 2001, the total surplus is estimated to be $281 billion, 
the Social Security surplus is estimated at $156 billion and the 
Medicare surplus at $29 billion.
  If we don't pay down substantial portions of our debt with these 
surpluses the interest on our debt could increase by over $400 billion 
in 10 years.
  Lastly, no one can make accurate economic forecasts covering ten 
years into the future.
  Having served on the U.S. House of Representatives Budget Committee 
for 6 years, I can attest to the fact that none of the experts or 
agencies assigned the task of forecasting either the ``deficit'' or the 
``surplus'' ever forecast it accurately nor did they even come close.
  Any tax cut plan based on a ``10 year'' forecast of surpluses is 
totally unrealistic.

[[Page E359]]

  Even Federal Reserve Chairman Alan Greenspan has problems deciding 
whether the economy is going up or down in the next 3 months. How can 
we plan 10 years ahead? It is a course guaranteed to lead us to 
terrible consequences.
  Then-Governor Bush led Texas, based on a ``rosy scenario,'' to enact 
massive tax cuts which today has Texas reeling over a $700 million 
annual deficit.
  Once you cut federal revenues by $1.6 trillion and if the surpluses 
melt away to deficits, we will repeat the 10 years of agony we all 
suffered under the Reagan-Bush deficits of 1982-1992 federal budgets.
  For these reasons, I shall vote ``no'' on H.R. 3 and urge my 
colleagues to do the same.

                          ____________________