[Congressional Record Volume 149, Number 63 (Wednesday, April 30, 2003)]
[Senate]
[Pages S5515-S5516]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]



                          Growing The Economy

  I will take a minute or two to address some of the topics that came 
up about the economy. We need to get this economy growing and going. I 
will make a couple of brief observations.
  At the Federal level, we have two major tools to grow the economy. We 
have monetary policy and we have fiscal policy. Monetary policy is set 
by the Fed, not by the Congress but by the Fed. The Fed can set 
interest rates high or low, control the supply of money. The Fed is 
doing the exact right thing to grow the economy today with low interest 
rates. That is as it should be.
  On the other side of that is fiscal policy, and that is what the 
Congress does. We have tools at our disposal to try to grow the 
economy. One of the major tools is tax policy. Do we increase taxes, do 
we decrease taxes, in a way to stimulate the economy?

[[Page S5516]]

  The most stimulative tool that is available to us is to lower tax 
rates. That grows the economy. It grew the economy when President 
Reagan cut taxes. It grew the economy when President Kennedy cut taxes. 
That is the way the economy grows.
  Some people would say, look at the deficit we are in now; we cannot 
afford to reduce the taxes at this point in time. I would answer, we 
cannot afford not to reduce taxes to stimulate the economy. In the last 
2 years, we have seen a reduction in Federal receipts of 9 percent, and 
an increase of Federal expenditures of around 12 percent. Quick math 
tells us we are going to be in a real problem when we have those two 
trend lines.
  The Federal receipts have gone down 9 percent. That is not as a 
result of changes of tax policy. That is a result of the economy being 
soft and not producing the economic lift and push we need. And, 
frankly, the rest of the world needs a strong and robust U.S. economy 
as well.
  How do we get the economy going again? We need to stimulate growth 
with tax cuts. I will give one quick fact. Last year we saw a reduction 
in capital gains tax receipts of about $80 billion. There has been $80 
billion in loss in capital gains tax receipts. That is not the result 
of a tax policy shift. That is primarily the result of the stock market 
falling dramatically the last couple of years, the tech boom going 
bust, problems and fears of what has taken place around the world, 9/
11, a series of things where people pulled funds out of the market; 
instead of having capital gains, they had capital losses.
  Some say the stock market does not affect most people. Yet half of 
Americans have some investment or retirement tied into the stock 
market. What can we do there? We can do away with that double taxation 
of corporate dividends as a way to stimulate investment and stimulate 
growth in the stock market. Plus, it is just good tax policy to not tax 
something twice.
  What about balancing the budget? I have been a part of a Congress 
that has balanced the budget. I came to the House of Representatives in 
1994. One of our major pushes was to balance the budget, which had not 
been done since 1969, and then it was actually an accounting move that 
allowed us to balance the budget in 1969. It had not been done for 20 
years prior to that, but from 1969 until we balanced it about 5 years 
ago, the budget had not been balanced.
  One of our key pushes was to balance the budget. So I have been a 
part of a Congress that has actually balanced the budget. It is the 
Congress that balances the budget. We are the ones who write the 
checks. The administration, the Presidency, spends the money. They can 
spend less if they choose in some situations, but we are the ones who 
actually authorize and appropriate.
  How do we balance the budget? I think we have found the formula for 
doing it. We grow the economy and we restrain your growth in Federal 
spending until the lines intersect and you get the economy growing 
strong, and then you restrain your growth in Federal spending until 
those intersect. That is how we balance the budget. We had a growing 
economy, but instead of spending this increase in Federal receipts, we 
restrained the growth of Federal spending and those intersected and we 
got 3 years of significantly balanced budgets, done by a Republican 
Congress. That is how you get it done.

  What is our key now? Our key now is to get the economy growing, cut 
taxes to stimulate the growth, and restrain the growth of Federal 
spending. I put forward a bill with several people as one way of 
restraining Federal spending, to create a domestic program equivalent 
to the Base Closure Commission. We have a Base Closure Commission that 
has been very successful saying we have too many military bases; we 
need to eliminate some of those, consolidate them in fewer areas. To 
remove one or two at a time is an impossible task. So we have a 
commission that recommends 50 closures taking place and gives Congress 
one vote up or down whether to eliminate the bases altogether. It has 
been very successful in consolidating resources.
  What about doing that in domestic discretionary programs where we 
have thousands of domestic discretionary programs? Have a commission to 
say these 100 were good when they started, but the reason for their 
creation has gone. They are effective but not yielding as much as they 
should. These 100 should be eliminated. The commission reports to 
Congress and requires Congress to vote up or down whether they agree or 
disagree, eliminate all 100 or keep all 100. It is a domestic Base 
Closure Commission equivalent type of program, so we can try to 
restrain some of the growth in Federal spending, consolidate it in 
fewer areas. Those are the sorts of things we need to do to balance the 
budget and get our spending under control.
  We also need trade agreements to take place. I point out that 
Presidents of both parties have requested trade promotion authority and 
trade agreements. You cannot negotiate with another country and say, 
OK, give us your best offer and then do that; and then say, OK, we have 
to take it to the Congress, which may agree or disagree, and they will 
amend it and we will come back to you again. That sort of trade 
agreement does not work. The other country says: We want to wait and 
see your final offer. That is why the trade promotion authority is in 
place.
  Trade has been good for this country and has expanded jobs and 
economic opportunities in the United States. It has been the right 
thing for us to do.