[Congressional Record Volume 149, Number 15 (Tuesday, January 28, 2003)]
[Senate]
[Pages S1654-S1656]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   IRAQ, THE ECONOMY, AND THE BUDGET

  Mr. NICKLES. Mr. President, I compliment my colleague, Senator 
Domenici, for his speech and also for many of the comments he made 
relating to the economy, the budget, and Iraq. I think the Senator from 
New Mexico is exactly right. The issue with Iraq is not whether the 
arms control inspectors can find a few weapons. It is whether or not 
Saddam Hussein is going to disarm and whether he is going to comply 
with the United Nations and whether the United Nations is going to 
enforce compliance.
  We can pass 17 resolutions, all of which say the international 
community says he must disarm, but if we do not compel him to disarm, 
it makes the United Nations somewhat irrelevant to the whole proposal. 
Do those resolutions mean anything besides rhetoric or are we going to 
enforce them?
  The previous administration did not enforce them. As a result, we did 
not even have arms control inspectors, much less enforcing the existing 
resolutions. Now we have a President who is going to lead the world, 
who says we should enforce these resolutions, and we should compel his 
disarmament.
  When we think of the dangerousness of these weapons, I mentioned 
earlier today that two envelopes with anthrax that unfortunately were 
destined to the Senate killed a few people. They were not even opened 
in the post office. Yet they still killed people. They are very deadly 
materials. He happens to have tons of similar-type weapons, some even 
more dangerous such as VX.
  I think the President is right in drawing a line in the sand and 
saying he must comply. The world community, the United Nations, agreed 
with the President last year. I hope they continue to support 
compelling Saddam Hussein to comply with existing U.N. resolutions.
  I will submit for the Record a table which summarizes the Senate's 
action on H.J. Res. 2, the fiscal year 2003 omnibus appropriations 
resolution. This table was prepared by my staff based upon estimates of 
the Congressional Budget Office. I also wish to congratulate the 
chairman of the Appropriations Committee, Senator Stevens, for working 
to limit the total fiscal year 2003 appropriations bills to amounts 
requested by the President.
  As adopted by the Senate, H.J. Res. 2 contains $386.864 billion in 
discretionary spending when added to the amounts in the defense and 
military construction appropriations bills already enacted, which total 
$752.193 billion in fiscal year 2003 discretionary spending. These 
totals include a 1.6 percent across-the-board reduction amounting to 
$6.4 billion from all accounts funded in the other 11 appropriations 
bills, plus amounts for classified defense programs, $3.9 billion in 
fire and management, $825 million for which the President submitted 
separate requests.

  Compared to fiscal year 2002, total discretionary spending under H.J. 
Res. 2 would grow by 2.4 percent, defense discretionary spending would 
grow by 6.9 percent, and domestic discretionary spending would decrease 
by 1.9 percent; compared to fiscal year 2002, less spending for one-
time nonrecurring projects. Total discretionary spending under H.J. 
Res. 2 would grow by 4.7 percent, defense discretionary spending would 
grow by 7.3 percent, and domestic discretionary spending would grow by 
2.1 percent. H.J. Res. 2 also includes several changes in mandatory 
programs not counted on the discretionary side of the budget.
  The increased spending, which would total $4.221 billion in 2003, 
includes changes in agriculture payments for drought, payments to 
physicians in rural hospitals, and TANF payments to States.
  I ask unanimous consent a table displaying the Budget Committee 
scoring of H.J. Res. 2 and enacted appropriations with comparison to 
2002 be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

   CBO ESTIMATES OF THE SENATE PASSED APPROPRIATIONS BILLS FOR FY 2003
                           COMPARED TO FY 2002
               [Budget authority, in billions of dollars]
------------------------------------------------------------------------
                                                 Senate        Percent
         Subcommittees              2002     appropriations  increase or
                                                  bills        decrease
------------------------------------------------------------------------
Divisions A-K, and Defense and
  Military Construction Bills
 
Agriculture...................       17.171         18.350           6.9
CJS...........................       42.995         41.505          -3.5
  Defense.....................        0.560          0.574           2.5
  Nondefense..................       42.435         40.931          -3.5
Defense.......................      334.113        354.830           6.2
DC............................        0.607          0.512         -15.7
Energy and Water..............       25.334         26.164           3.3
  Defense.....................       15.164         15.899           4.8
  Nondefense..................       10.170         10.265           0.9
Foreign Ops...................       16.433         16.429          -0.0
Interior......................       19.135         18.952          -1.0
Labor, HHS....................      127.659        136.519           6.9
Legislative...................        3.254          3.362           3.3
Mil Con.......................       10.604         10.499          -1.0
Transportation................       23.095         21.574          -6.6
  Defense.....................        0.440          0.340         -22.7
  Nondefense..................       22.655         21.234          -6.3
Treasury, Postal..............       18.515         18.220          -1.6
VA, HUD.......................       95.758         90.349          -5.6
  Defense.....................        0.153          0.144          -5.9
  Nondefense..................       95.605         90.205          -5.6
Deficiencies..................       -0.350          0.000   ...........
  Defense.....................       -0.196          0.000   ...........
  Nondefense..................       -0.154          0.000   ...........
Total, Divisions A-K..........      734.323        757.265           3.1
  Defense.....................      360.838        382.286           5.9
  Nondefense..................      373.485        374.979           0.4
 
          Division M
 
Classified Defense Programs...        0.000          3.895   ...........
 
          Division N
 
Election Reform--Title I......        0.000          1.500   ...........
Wildland Fire Management--            0.000          0.825   ...........
 Title III....................
Fisheries Disasters--Title V..        0.000          0.100   ...........
2.85 percent across the board         0.000        -11.392   ...........
 rescission on accounts
 (except Head Start) in 11
 bills--Title VI..............
    Subtotal..................        0.000         -8.967   ...........
Total, Discretionary..........      734.323        752.193           2.4
  Defense.....................      360.838        385.680           6.9
  Nondefense..................      373.485        366.513          -1.9
One-time, non-recurring              15.946          0.000   ...........
 projects.....................
  Defense.....................        1.338          0.000   ...........
  Nondefense..................       14.608          0.000   ...........
Total, Discretionary less one-      718.377        752.193           4.7
 time.........................
  Defense.....................      359.500        385.680           7.3
  Nondefense..................      358.877        366.513           2.1
Total, without enacted Defense  ...........        386.864   ...........
 and Mil Con..................
  Defense.....................  ...........         20.351   ...........
  Nondefense..................  ...........        366.513   ...........
 

[[Page S1655]]

 
             Memo
 
Mandatory Items in Division N
  Title II--Agriculture         ...........          3.100   ...........
   Drought Relief, as amended.
  Title IV--Medicare            ...........          0.630   ...........
   Physicians.................
  Title IV--Rural Hospitals...  ...........          0.250   ...........
  Title IV--Welfare Payments    ...........          0.173   ...........
   to States..................
  Collins Amendment--Home       ...........          0.040   ...........
   Health.....................
  Bingaman Amendment--QI-1      ...........          0.028   ...........
   Program....................
    Total.....................  ...........          4.221   ...........
Total, with Mandatories.......  ...........        756.414   ...........
Total, without enacted Defense  ...........        391.085   ...........
 and Mil Con..................
------------------------------------------------------------------------
Source: Congressional Budget Office; Senate Budget Committee Republican
  Staff.

  Mr. NICKLES. Mr. President, this is more fiscally responsible than 
any appropriations bills we have passed in the last many years. I 
compliment the chairman of the Appropriations Committee, Chairman 
Stevens, as well as Senator Frist and all of our colleagues who worked 
aggressively to contain the growth of these bills. That was not easy. 
We had a lot of votes. We voted down over half a trillion in additional 
spending amendments. I compliment my colleagues for showing some fiscal 
discipline.
  In order to show fiscal discipline in the future, we have to pass a 
budget. Last year we did not pass a budget and we did not pass 11 of 13 
appropriations bills. I hope this year we will be able to pass a 
budget; that we will be able to pass it on time; and that it will also 
allow for us to pass a growth package in addition to a package that 
would improve and enhance Medicare. Passing a budget makes it possible 
to do all those things. Without passing a budget we may not do any. We 
may not get appropriations done; we may not do a growth package; we may 
not do a prescription drug proposal or a Medicare enhancement proposal.
  I speak just for a moment now on the President's proposal for 
economic growth and job creation. I have heard some colleagues coming 
to the floor criticizing it. I am also bewildered by statements they 
are making. Many have criticized the President's effort to eliminate 
double taxation on dividends, saying it benefits one group or another. 
I have not heard anyone say this is really good tax policy. Let's tax 
dividends twice. Let's tax it on the corporate level and tax it on the 
individual level so the net effective rate of taxation is anywhere from 
65 percent to 73 percent, maybe 73.6 percent.
  Now, with tax rates as high as two thirds or more, we more than 
discourage dividends. Dividends are basically rewarding the owners of 
the company with the fruits or profits of the company. With the double 
taxation, we are telling companies not to do this. I used to run a 
company. It makes no sense to do it. For corporations, particularly 
privately held corporations--I used to run one--why pay dividends if 
the Government is going to take, at least in present law, 35 percent 
automatically; and then individuals who may be paying rates of 28 
percent or 27 percent, or maybe they are paying rates of 32 percent or 
35 percent or 38 percent. If you add 35 percent and 35 percent, that is 
70 percent. If a corporation makes $1,000 in earnings and they want to 
distribute it to their employees, the government gets $700 and the 
stock owner gets 30 percent.
  That is absurd. It makes no sense.
  Corporations are greatly discouraged from distributing their earnings 
to their owners. That is bad tax policy. And the present Tax Code 
encourages corporations to go into debt. We encourage corporations to 
pile up the debt because they get to expense it, but we do not tell 
them if they go the equity route, to build financing, to obtain 
financing, they can expense dividends. I hope we would do it. I would 
think expensing dividends from a corporate side would be the better way 
to eliminate double taxation. There are two or three different ways it 
can be done. I mention that to my colleagues.
  The President has good tax policy--one that will help grow the 
economy, one that will encourage investment, one that would eliminate 
some of the gross distortions we have in the present Tax Code.
  I make a couple of other comments concerning the President's tax 
proposal. I have heard a few people allude to the fact that it only 
benefits the wealthy. They have not read the President's proposal. The 
President's proposal is that we would have a $1,000 tax credit per 
child. Part of that was passed in 2001 and earlier where he said we 
will increase it. Right now the Tax Code has a $600 tax credit per 
child. He wants to make it $1,000. I have four kids. They are grown now 
so they will not qualify unless we include grandkids and maybe we 
should do that, too. One thousand dollars per child is $4,000 for four 
kids, $1,600 more than present law. One does not have to be wealthy to 
get it. If you have four kids, you get $1,600 more, a tax credit, where 
you do not have to pay taxes. That will take a lot of taxpayers to a 
zero tax bracket.
  The President says, let's eliminate the marriage penalties by 
doubling the 15 percent tax bracket for an individual or a couple. The 
net impact of that, if a couple has a combined income of $55,000, they 
get to save about $1,000 per couple. If you want to do something to 
help middle income taxpayers, married couples, families, the President 
has it. He has a child tax credit, and he also has elimination of the 
marriage penalties. That is in his proposal. He also says individuals 
should not pay taxes at rates higher than corporations. I agree. Let's 
accelerate the tax cuts now for 2004 and 2006. And when you finish with 
that, the maximum income tax bracket, personal income taxes, is 35 
percent. It just so happens 70 or 80 percent of the people who are 
paying that highest tax bracket are sole proprietorships, 
entrepreneurs, self-employed. Why should they pay a tax rate higher 
than General Motors? Presently, they do. General Motors pays a tax rate 
of 35 percent right now. Those individuals pay a tax rate of 38.6 
percent. I don't think they should have to pay a tax rate higher than 
General Motors. They have a smaller business. Let's have a little 
equity.
  Some say this is not doing enough for low-income. We have helped 
individuals and families. We have reduced tax rates for taxpayers in 
income tax brackets. The President expands the 10 percent tax bracket 
which he created 2 years ago. There was 15 percent tax brackets and the 
President made it retroactive on lowest income people. He took a lot of 
individuals in the 15 percent tax bracket and made their rate 10 
percent. That was a 33 percent reduction in their tax bracket. We made 
it retroactive. That was equal to a benefit of about $600 for a couple. 
Now the President says let's expand the 10 percent bracket further. I 
compliment him for that, as well.
  There is a lot of benefit in here for all income groups. A lot of 
people are throwing rocks at this without looking at the substance of 
it. I hope maybe they would look a little closer and maybe we should 
work a little more together and have a little bipartisan cooperation 
and see if we cannot do something to help grow the economy. It is 
vitally important we grow the economy. The President has a good 
proposal, a good package, one that will be, I am sure, thoroughly 
scrutinized by the Ways and Means Committee, by the Finance Committee.
  We have a tradition in the Finance Committee reporting out bipartisan 
packages, whether in taxes or whether it be in the health care. I hope 
we will do both this year. We can. The President has given us a good 
proposal to do so. I look forward to working with my colleagues, 
Democrats and Republicans, to pass a budget and to pass a growth 
package that will help grow the economy. It is important that Congress 
enact both this year.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Utah.
  Mr. BENNETT. Mr. President, I understand that under the previous 
order, at 4:15 we start going back and forth. I ask the Senator from 
New York, who is prepared under that order, if I might proceed for 5 to 
7 minutes prior to his taking it? I do not wish to be discourteous to 
my colleague because I know he came over for the 4:15 slot.
  Mr. SCHUMER. I have no objection. The Senator is always a gentleman, 
and it is a pleasure to let him speak for his time first.
  Mr. BENNETT. I thank the Senator and appreciate the opportunity.
  The PRESIDING OFFICER. The Senator from Utah.

[[Page S1656]]



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