[Congressional Record Volume 147, Number 65 (Monday, May 14, 2001)]
[Senate]
[Pages S4853-S4855]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                                 TAXES

  Mr. THOMAS. Mr. President, I rise to talk, again, about taxes.
  The legislation now before the Senate includes education, which we 
will be debating this afternoon and which we will be working on until 
the tax bill comes from the committee, and taxes--probably two of the 
most important issues the Senate will address this year. Certainly 
everyone is most interested in education, and there are a number of 
broad topics within education that are legitimate to discuss. One of 
them is the role of the Federal Government in financing education.
  Most would agree that the basic responsibility for elementary and 
secondary education lies with local government and State government. 
Traditionally, the Federal Government has provided about 7 percent of 
the total financing for education. It is an important contribution but 
certainly a relatively small one in terms of the total cost.
  One of the other issues will be that of deciding how much flexibility 
there will be in terms of expending Federal moneys made available, 
whether or not, as was the case in the last administration, where the 
dollars which were allocated to education were generally assigned to 
the purpose for which they were allocated, either for smaller 
classrooms or for building improvements, new buildings, in reality, the 
real decision as to how moneys are used by local districts ought to be 
what the way local leaders believe they should be.
  The needs are quite different in one place or another. I come from a 
State of small communities. The needs there are quite different often 
than they would in be in downtown Pittsburgh, PA. We need flexibility.
  There will also be and there have been, in fact, great discussions 
about the amount of money that ought to be

[[Page S4854]]

spent and, more importantly, how we are able to have accountability in 
terms of the dollars that are spent to see, in fact, if those dollars 
that are being spent are creating a better education opportunity for 
children. We will be back on that later. We should be.

  Of course, with any program we discuss comes the question of taxes. 
We find ourselves in an interesting position, a somewhat enviable 
position of having a projected surplus over time, a substantial surplus 
over the next 10 years, a surplus each year during that time. There is 
some question if that can be counted on. Whenever you project into the 
future, there is always an element of uncertainty. Nevertheless, we 
have to make decisions in the future. Whether one is in business, 
whether it is a family, whatever, we have to make decisions for the 
future. Sometimes they are not exactly the same, but I feel confident, 
as do the people who make the projections, that this is a fairly modest 
projection in terms of the surplus over time.
  There are broad issues involved, and great detail in taxes, 
obviously, but there are also some concepts that ought to be debated: 
What kind of taxing limits should be placed on people; should we have 
taxes that offset what we believe are the fundamental costs, the 
necessary activities of the Federal Government? To be sure, not 
everyone would agree on what those necessary activities are. 
Nevertheless, if you have a surplus in Washington, beyond the needs the 
Congress has adjudicated to these items, you can bet your life it will 
be spent. Then you ask: What should be the concept? Where do we want to 
be down the road? Do we want more and more Federal Government? Do we 
want to spend on all the programs? Do we want to be somewhat 
conservative and try to make a decision as to which programs are best 
done at the Federal level and which decisions are best left to local 
governments and people and taxpayers themselves?
  These are some of the philosophical issues that lie behind the 
debate. We argue all the time as to whether or not it will be $20 
million or $50 million or $1 billion for this. Before that, we ought to 
establish in our own minds what the role of taxation is at the Federal 
level. Are we there to support the needed programs? If not, there is no 
end to the amount of money that can be spent.
  Then there is the question of simplification, particularly around 
April 15. How can we make tax laws more simplified; how can we make it 
easier; how can we get away from all of the pages of activities 
taxpayers have to go through? But at the same time we talk about that, 
we will have 20 or 30 different ideas on this floor during the next 
couple of weeks as to how we ought to have a tax break for this or a 
tax incentive for that, to the point where we almost become more 
involved in using taxes as a method of impacting behavior and directing 
behavior than we do to using it as an income source to pay for basic 
services.
  Again, there is a difference of view about that. We will see a great 
deal of that.
  The other area, of course, is, as we look into tax reductions and 
surpluses, we have to ask: What are the things we really need to be 
careful about? One, obviously, is to have the money to fund those 
programs that are decided to be essential programs: defense, education, 
and all of those.
  Recall that almost two-thirds of the budget is nondiscretionary. 
Almost two-thirds of the budget is already predetermined. It is Social 
Security, health care; it is Medicare. It is those things for which 
there are not alternatives to be decided each year. Out of a $1.9 
trillion budget, we make determinations for about $661 billion. So 
there are some basic things we talk about.

  The President has put forth a plan. He has, obviously, indicated the 
two areas of his highest priority: education and tax reductions, with 
the general concept that taxpayers ought not to send more of their 
money to Washington than is necessary to carry out the functions of the 
Government.
  His plan is to give a tax cut to every family that pays income taxes. 
He replaces the current tax brackets by reducing them to lower rates: 
39 to 33, 15 to 10, and so on, so everyone who pays taxes would have a 
tax reduction. He doubles the child credit to a $1,000 and reduces the 
marriage penalty. That is really a fairness issue.
  The idea that a man and a woman who are single have two jobs, earn X 
amount of dollars, pay X amount of taxes, they are married, they 
continue to make the same amount of money, but they pay more taxes, is 
a fairness issue and one that needs to be dealt with.
  Under his plan, one in five taxpaying families with children would no 
longer pay any income tax at all, completely removing 6 million 
Americans from the tax rolls. Remember that there is a large percentage 
of Americans who don't pay Federal income tax. Families of four making 
$35,000 would have a 100-percent tax reduction in what they pay, and on 
up. So, of course, the more taxes that are paid, logically the 
reduction would accommodate more reduction in dollars. That is the 
case.
  We need tax reductions, obviously, because our taxes are the highest 
we have paid as a percentage of gross national product since even in 
World War II--higher than that now. Obviously, we have asked taxpayers 
to send more of their money into Washington than is necessary to 
provide the essential functions. And therefore, a tax reduction is 
legitimate--not  only legitimate now, of course, but also even more 
needed because of the economy turndown, the economy stabilization, 
whichever it is, the lack of growth that we have had, and certainly 
having less taxes paid and more money available to be used by the 
taxpayers themselves--their money. It will help that economic turndown.

  It also deals with debt reduction. We have a very large debt, of 
course--about $2.5 trillion in publicly held debt as opposed to Social 
Security. It is debt that has been placed because of you, me, and all 
of us who are now adults. If we don't do something, it will have to be 
paid for by young people who are beginning to have their first pay 
checks; 12\1/2\ percent of their earnings will be withheld to pay for a 
debt we helped to create.
  Over this 10-year period, about $1.5 trillion of that would be 
reduced, leaving about $800 million. That is a tremendously large 
number. But, as a matter of fact, that is about all that is eligible to 
be removed over that time because it is held and secured. So we would 
have debt reduction in this plan. The debt reduction now held in 
private hands is $2.4 trillion, reduced to $800 billion. That is a 
pretty good reduction. We would have relief for every taxpayer--$1.35 
trillion over 11 years would be reduced in terms of taxpayers having to 
send their money to the Federal Government.
  In addition to that, there would be an immediate surplus this year of 
about $100 billion--for the next 2 years--that could be used to get it 
back to taxpayers more quickly so it could be put back into the private 
sector and help strengthen the economy. At the same time, we have 
commitments to protect seniors for today and tomorrow--the $2.5 
trillion of Social Security. That portion of Social Security that comes 
in during this time would be set aside for Social Security so that we 
would be able to meet our obligations there. And, of course, there are 
some discussions going on about some changes in Social Security, to 
increase the amount of moneys that would be there. The budget includes 
$300 billion for a reserve fund for reforming Medicare, which needs to 
be done, of course, and to have an opportunity to make Medicare more 
useful, make Medicare more easily useful and accessible. One of the 
issues would be to create a prescription drug benefit. Hopefully, that 
would be done, as well, at the same time some changes are made in 
Medicare so that it would fit together.
  At the same time, there would be sufficient spending increases. 
Discretionary spending in this year's budget would be 5 percent. 
Somebody on the news said today that was below inflation, which isn't 
the case. Five percent is inflationary growth--in fact, beyond that. It 
would boost the veterans fund over 10 years, veterans hospitals, for 
veterans retirement, for doing those kinds of things. It raises defense 
spending, which I think is needed. Certainly, if we are going to have a 
voluntary military, the payments to those folks, the payrolls need to 
be competitive somewhat to what you could do in the

[[Page S4855]]

private sector. This is needed so that people don't get trained in the 
military for a specialized job and then leave for more pay in the 
private sector. So defense spending would be increased.
  It provides for $80 billion over 10 years for assistance to farmers 
and ranchers. We are in the process, during the next year, of coming up 
with a new farm bill before the one now in place runs out. There will 
be something to replace that. Hopefully, an effort will continue to 
move toward a marketplace in agriculture but also to provide some kind 
of a safety net so we don't go through the sort of trauma that we have 
over the last several years.

  It also expands child tax credits and earned income tax credits--an 
$18 billion increase over that time. So there are a lot of great 
details that could be talked about, obviously, and will be talked 
about, and indeed should be talked about.
  The real question is, If you have a surplus, what should you do with 
it? You should certainly accommodate those things that are high 
necessities and priorities in the budget, and then you ought to return 
that money to the taxpayers, the people who paid it in. That is the way 
it ought to be. We ought to be able to understand that it is really the 
responsibility of the Federal Government to provide these programs but 
not to excessively spend the money that could very well be either spent 
by the taxpayer or, indeed, if there are special programs that need to 
be done, we would make an opportunity for the States and local 
governments to make the taxation they need so the things could be done 
there.
  Mr. President, we are going to enter into a very lively debate. I 
suppose taxes and budgets probably personify as well as any other thing 
the differences in view about how people would approach governance. 
That is perfectly legitimate. That is what this place is for, to talk 
about differences in view. There are those who think that we ought to 
be spending much more on the Federal Government; the Federal Government 
ought to be funding every need that exists; and the Federal Government 
ought to grow and have more expansion into people's lives.
  I am one of the others who believe there ought to be a limitation on 
the role of the Federal Government, that governance closer to the 
people is the kind of governance that is best, and we ought to tax to 
the extent necessary to pay for those functions. But when it is beyond 
that, we ought to do something about leaving taxpayers' money in the 
taxpayers' pockets.
  Those are the decisions that are before us. Those are the decisions 
that we will be dealing with, hopefully this week, certainly next week, 
and they are tough. I just hope that we have an opportunity. We have a 
50/50 Senate now, which is an unusual division of parties, and somewhat 
of an unusual division philosophically. Yet our challenge is to come 
together with something that is good for the country. Nobody would 
argue with that. But everybody has a different view of what is good.
  I hear people say you need to do it ``the right way.'' I don't know 
of anybody who wants to do it the wrong way.
  There are differing views and there should be. The President has laid 
out a program that is quite good. There are those who would like to 
discredit the President's program, of course, in order to create their 
political ideas. But that is not why we are here. We are here to 
resolve problems that exist. We are here to govern. That is our job. We 
need to move forward. We have been a little slow. I think we have to 
really come to grips with the fact that we are here to make decisions, 
to move forward, to do something with education, to do something with 
taxes, and we are here to take on many of the other issues. That is our 
task.
  Mr. President, I think there will be others joining me in a few 
moments. In the meantime, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. CRAIG. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CRAIG. Mr. President, it is my understanding we are in a period 
for morning business.
  The PRESIDING OFFICER. The Senator is correct.

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