[Congressional Record Volume 147, Number 74 (Friday, May 25, 2001)]
[Senate]
[Pages S5674-S5675]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   TAX RELIEF FOR THE AMERICAN PEOPLE

  Mr. INHOFE. Madam President, while I was presiding, something 
occurred to me. I felt compelled to share it.
  Right now, something very significant is taking place. There is a 
conference committee that is looking at the bill that we passed and the 
bill that was passed in the House of Representatives. They are going to 
come out with a product and decide just how to change it because the 
bills are not exactly the same.
  It is a piece of legislation that will do something very significant. 
It is going to provide tax relief for the American people. It occurred 
to me--I will use the words ``liberal'' and ``conservative'' in a very 
friendly way, but all too often, people do not know what you are 
talking about when you call someone a liberal or a moderate or a 
conservative.
  A liberal believes that Government should have a greater involvement 
in his or her life and really believes that there are more things in 
which the Government should be involved. I suggest to you that the more 
things Government gets involved in, the more individual freedoms we 
lose.
  I happen to be a conservative. I agree that Government is involved in 
too many things. I think that other than national defense, which we 
need to be more involved in right now, there are many activities taking 
place in this country that our Founding Fathers really did not think 
were the role of the Federal Government.
  We are in a very strange time right now. We are in a time when we 
have surpluses. We are all very gratified for that. But the whole idea 
of tax relief is offensive to people who fall into the definition I 
just referred to of a liberal. They want to use that money. They want 
to start new programs.
  Now we have this time of surplus. I want to applaud the President of 
the United States, George W. Bush, because what he said he wanted to do 
was, first of all, take everything that could be used to spend down the 
deficit for the next 10 years and use it.
  I have a lot of town meetings in my State of Oklahoma with very wise 
people, but they are too busy going out to make a living and paying for 
all this fun we are having in Washington, that they do not really 
understand that when you have such surpluses that once you use those 
surpluses to start new Government programs, then the Government 
programs might work, and the problems that they are addressing might go 
away but the Government program goes on.
  I can remember that one of the greatest speeches made during my 
career was one that was made many years ago by Ronald Reagan before he 
even ran for Governor of California. The speech was called ``Rendezvous 
With Destiny.'' He said: There's nothing closer to immortality on the 
face of this Earth than a Government agency, once formed.
  So if you don't want to increase the size and scope of Government, 
then you need to address what the President is addressing now. 
President Bush said: Let's start off by taking all the money to pay 
down the debt. Most people think, if you had $5 billion, you go up 
there and drop it someplace and the debt would be gone. That is not 
true because you can't pay off something until it comes due. So what 
this President has suggested to us is, let's pay off everything for the 
next 10 years that can be paid off on the national debt.
  Then let's look at Social Security. Let's make sure the fund is 
actuarially sound and the money is going to be there for the people 
when they reach the age that they can draw it out.
  Incidentally, Social Security reform doesn't mean that is going to 
change. That program would continue; the money will be there; but it 
will give some of the new people who come into the program an option as 
to what they do with the money they pay into the system.
  Then the President said: Let's take Medicare and do the same thing 
with that. So he proposed actually increasing it by $153 billion over a 
period of 6 years--that would take care of that problem--and after 
that, to put some money in so we can take care of a very serious 
problem, the most serious problem the Nation is facing right now, and 
that is the demise of the military over

[[Page S5675]]

the last 8 years. Let's build that back up.
  After that has been done, all of that is behind us, then let's take 
this surplus that remains and return it to the American people as an 
overpayment because they paid too much. It is like buying a car and you 
find out when you get back home, you read the sticker price and think, 
wait a minute, I paid too much. You go back to the dealer and you 
expect to get the money back. He would say: I gave it to my mother-in-
law. That is kind of what happens in this case.
  So we have the opportunity to return to those who paid it an amount 
of money. We should be looking at a much larger tax reduction than they 
are negotiating right now. What they are negotiating right now, if you 
put it in as a percentage of GDP, would be about 1 percent. Yet our 
other two major reductions in this century were far greater than that.
  The liberals are missing a bet. If they really want to get more money 
into the system, they should be supporting larger tax cuts because 
history has shown us, when you reduce the marginal rates, it has the 
effect of increasing revenues.
  Going back to World War I, the President, after World War I, said: 
The war effort is behind us now so we will go ahead and reduce these 
marginal income tax rates. And they did. To their shock, they found out 
that it didn't reduce revenues. It massively increased revenues.
  I am a conservative Republican. I look back wistfully at the days 
when we had a President, a Democrat, who realized that this concept 
works every time. It was President Kennedy in the 1960s who said, we 
need to expand the role of Government and get into a lot of programs--
perhaps such as the dental program the Presiding Officer discussed--and 
the best way to do this--this is a direct quote from President 
Kennedy--to increase revenues, is ``to reduce the marginal rates so 
that the economy will expand.'' For each 1-percent expansion in the 
economy, that produces about $46 billion in new revenue.
  Sure enough, it happened. In fact, it almost doubled the revenue in 
the 6 years after that massive cut. Remember how big that cut was? It 
went from 91 percent down to 78 percent. It was a huge cut, much 
greater than we are talking about doing today. So that worked and some 
of these programs were funded.

  Then along came Ronald Reagan. The decade of the 1980s, from 1980 to 
1990, saw the largest tax reduction in the history of this Nation. 
President Reagan was elected and the first thing he did was sign the 
tax reduction. He took that 78-percent rate and brought it all the way 
down to, I think, 28 percent. The result was great increases, massive 
increases in revenues.
  To document that, the total amount of revenue that came in from all 
marginal rates in 1980 was $244 billion. In 1990, it was $466 billion 
after all the reductions that had taken place, the largest reductions 
in any 10-year period in the Nation's history.
  You hear the liberals saying: Look at all the deficits that came 
about during that 10-year period. That wasn't a result of the 
President. That was a result of a very liberal, big-spending, Democrat-
controlled House and Senate that increased the spending.
  You cannot blame that on the President because he was the one who 
reduced the taxes and was responsible for doubling the revenues at that 
time.
  We should stand back and look at this. We had one of the financial 
advisers to President Clinton, when he was President when he first came 
in, who made the statement that there was no relationship between the 
level of taxes the Nation pays and its productivity. Theoretically, 
that means if you pay 100-percent taxes, you will be just as motivated 
to work hard and to expand the economy as if you were paying no taxes. 
Obviously, that doesn't make sense.
  It is time the American people realize what we are trying to do and 
what this President is trying to do and that we get the best conference 
report out and that this can be a very historic time because sometime, 
maybe today, that conference report will come out. It will incorporate 
some tax reduction, not great tax reduction--the top rate may be going 
down from 39 to 35 percent--and actually eliminating some taxes down at 
the lower income level. I think we have an opportunity to pass this 
thing out today. This will go down as probably a great legacy, not just 
for the President of the United States but for the House and the Senate 
which are working on this.
  I yield the floor and suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The bill clerk proceeded to call the roll.
  Mrs. HUTCHISON. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Inhofe). Without objection, it is so 
ordered.

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