[Congressional Record Volume 149, Number 68 (Thursday, May 8, 2003)]
[House]
[Pages H3838-H3845]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
THE REPUBLICANS' PROPOSED TAX CUT PACKAGE
The SPEAKER pro tempore. Under the Speaker's announced policy of
January 7, 2003, the gentleman from North Carolina (Mr. Price) is
recognized for 60 minutes as the designee of the minority leader.
Mr. PRICE of North Carolina. Mr. Speaker, I come to the floor tonight
with several of my colleagues to discuss our Republican friends'
proposed tax cut package and the way it will affect the Federal budget
and the American people.
Mr. Speaker, President Bush has presided over the Nation's worst
economic performance since the Great Depression and the worst fiscal
reversal in all of American history. Since President Bush took office,
we have lost more than 2.7 million private sector jobs, and real GDP
has inched at only 1.5 percent annually, the worst record for any
administration in over 50 years. The 10-year $5.6 trillion unified
budget surplus projected when President Bush
[[Page H3839]]
came into office is gone, totally gone. In its place the administration
has proposed a budget with over $2 trillion in deficits over that same
time period. That is a fiscal reversal approaching $8 trillion.
These charts tell the story. Here we have the fiscal reversal
illustrated going from a $5.6 trillion surplus 2 years ago projected
until now looking at a $2 trillion deficit over the next 10 years. And
this chart gives the picture on jobs. In the first 28 months of the
Clinton administration, 6.8 million private sector jobs gained, 1993
through April of 1995. In the first 28 months of the Bush
administration, 2.7 million private sector jobs lost as of April of
this year.
Unfortunately, in the face of all this, in the face of the worst
fiscal reversal in this Nation's history, the response of our
Republican friends is to propose more and more of the same failed
policies. Finding themselves in a hole, their message seems to be just
keep digging. Mr. Speaker, Democrats believe that a stimulus plan
should be based on three simple principles, principles that should be
self-evident but that our Republican friends incredibly seem unable to
grasp.
First, a stimulus plan should be fair. It should put money back in
the pockets of average Americans, boosting consumer demand and the
business investment needed to meet it.
Secondly, a stimulus plan should actually stimulate the economy. It
should be fast-acting with its impact concentrated to provide an
immediate jump-start to the economy. It should get the most bang for
the buck by targeting consumers likely to spend and businesses likely
to invest and hire new workers.
Finally, a stimulus plan should be fiscally sound. It should be paid
for. It should not pile up national debt. It should not contain
gimmicks which disguise its true cost.
Mr. Speaker, the Democratic plan that we will be debating tomorrow is
organized around these three principles. The Republican plan fails to
meet the standards by a country mile. It is not even close. Tomorrow
the House is scheduled to debate the Republicans' $550 billion tax cut,
every penny of it borrowed money, funded by increased government debt
that will be passed on to our children and grandchildren.
Tax cuts that actually stimulate the economy during a downturn make
good sense. However, the Republican plan only puts in place 9 percent
of its tax cuts this year, precisely when they are needed the most. The
House Republican plan centers on tax cuts, on stock dividends and
capital gains, both of which economists have rated as very ineffective
in stimulating the economy. These proposals would benefit mainly upper-
income individuals who are much more likely to save such windfalls than
would be low- and moderate-income families. Under the Republicans'
proposal millionaires would receive approximately $139 billion in tax
cuts through 2013. That is essentially the same amount of tax cuts that
would be received by the entire bottom 89 percent of households
combined.
Mr. Speaker, it is simply irresponsible to be considering large
upper-bracket tax cuts that will worsen the long-term deficit to the
tune of $1.2 trillion over the next 10 years, to be doing this at a
time when we should be paying down the national debt to prepare for the
retirement of the baby boom generation, which after all begins in only
5 years. Moreover the Republican plan is full of phony sunsets and
other gimmicks that actually understate its true cost.
By contrast House Democrats have proposed a stimulus package that is
fast, fair acting, fiscally responsible, and paid for. It uses a proven
approach to creating jobs and growing the economy, puts money directly
into the hands of average Americans, the very people most likely to
spend it, and it provides tax relief to businesses most likely to
invest. It focuses on jump-starting the economy now at a fraction of
the cost of the Republican tax cut proposal. It provides permanent tax
cuts for most American families, including an immediate increase in the
child tax credit, marriage penalty relief, the expansion of the 10
percent tax bracket. The House Democratic plan also extends
unemployment benefits for 26 weeks. It increases the level of benefits
and provides temporary aid to States to broaden coverage to low-wage
earners and part-time workers. These benefits would provide financial
help to 5 million out-of-work Americans, and economists have rated that
as one of the most effective stimuli that would we could apply.
In contrast the Republican plan would allow the Federal Unemployment
Benefits program to expire on May 31, leading to millions of families
being denied this unemployment insurance to help tide them over.
What about the States? As a result of a bad economy, States are
facing the worst fiscal crisis since World War II. States across the
country are cutting education and health programs and raising taxes,
undermining jobs, undermining economic recovery. The Democratic jobs
and growth plan in stark contrast to the Republican plan which has said
to the States go elsewhere, the Democratic plan would provide $44
billion in aid to States to minimize tax increases and service cuts and
to prevent the job losses that would otherwise occur.
The second chart compares the stimulative effect of the proposals I
have been discussing. If we extend Federal unemployment benefits for
every dollar we spend, the stimulative effect in the economy, the
amount of economic activity generated, comes to $1.73, one of the most
effective things we could do. If we support the States through Medicaid
and education and homeland security funding, for every dollar we invest
that way we get $1.24 in bang for the buck, also a good stimulative
effect.
The centerpiece for our Republican friends' dividend tax reduction, 9
cents of impact for every dollar of revenue lost. If what we are
talking about is stimulating the economy, then this chart says it all.
Finally, the Democratic plan would provide companies with a tax
credit worth up to $2,400 for hiring somebody who has been out of work
at least 6 months and includes $29 billion in tax incentives to
generate investment and jobs now, such as allowing small businesses to
expense up to $75,000 of the cost of new investments through 2004,
triple the current limit. In other words, businesses would be
encouraged to invest sooner rather than later, again fueling economic
growth.
Mr. Speaker, the bottom line is that the Democratic plan would create
almost twice as many jobs as the Republican plan in the first year. Let
me be specific. The Democratic plan would create 1.1 million jobs
compared to the Republicans' 600,000 jobs. And the Democratic plan
would achieve this at a fraction of the cost.
Instead of saddling our children and grandchildren with a mounting
national debt, I urge my colleagues to support the Democratic plan that
will help revive the economy, promotes economic growth, offers tax
relief to those who need it most, uses honest accounting, and is paid
for.
A number of Members are going to be speaking over this hour about the
choices that we have tomorrow and about what we can do now, what we can
do effectively to turn this economy around and to do that in a fiscally
responsible way, and I yield to the gentleman from Virginia (Mr.
Moran), a valued colleague from Virginia, a member of the Committee on
the Budget who over the years has stood for fiscal integrity, fiscal
responsibility.
Mr. MORAN. Mr. Speaker, I thank the gentleman from North Carolina
(Mr. Price), my very good friend and colleague, for yielding. I thank
him for laying out the Democratic and the Republican plans tonight.
These are going to be the subjects of the debate tomorrow, and it
appears that we are going to have another party-line vote. My friend
recalls another party-line vote that we had in 1993 when President
Clinton proposed an economic growth strategy to get out of another Bush
recession. We were told by our colleagues on the Republican side of the
aisle that this was going to cause more unemployment, further
recession, that we would never recover, that it was unfair.
The fact is President Clinton did raise taxes. We are not talking
about raising any taxes. President Clinton went ahead, raised taxes on
the wealthiest people in this country. He balanced the budget. He made
sure everything was paid for, that we did not
[[Page H3840]]
have to borrow money from Social Security and Medicare to pay for tax
cuts as of course this tax cut plan does. It borrows every penny out of
Social Security and Medicare. But now that we look back on the effects
of that economic growth strategy that was very consistent with the
Democratic plan that the gentleman from North Carolina (Mr. Price) has
laid out and that the Democrats are going to present tomorrow, it
worked. It worked.
During the 8 years of the Clinton administration, this country
experienced the highest prosperity that any country in the history of
civilization has ever experienced. Certainly this was the best extended
economic boom that America could ever have realized. And, in fact, all
those people, those people at the highest tax bracket, that was 39.6
percent at that time, they took home more after-tax income than has
ever been achieved in any economy in the history of this United States
of America. The wealthiest made more wealth, more wealth than they have
ever experienced. So it was not a confiscatory rate. What we did was to
plow money back into investing in people and education and training,
balancing the budget so the financial markets had confidence that there
were not going to be high interest rates in the future, and it worked.
It worked. And of course those who own the means of production, they
benefitted the most.
So now what are we going to do? As the gentleman from North Carolina
(Mr. Price) has shared with us, we are doing just the opposite of the
Clinton plan. We are consistent with what President Bush has already
done, although so far the tax cuts that he has implemented have cost
this economy 2.7 million jobs, but now we have a tax cut that is going
to give the same amount of money to 1/10 of 1 percent of the American
people. The 1/10 of the 1 percent of the very wealthiest Americans are
going to get the same amount of money that the 90 percent of Americans
who are earning less than $95,000 a year, which is pretty good but
those are in the middle class. From $95,000 down, that is 90 percent of
the American people, they are going to get as much benefit as the top
1/10 of 1 percent of the very wealthiest. Can that possibly be fair? It
is not fair, and it is going to come back to haunt us. And this money
that has to be borrowed from Social Security and Medicare that is going
to come due, we are not going to have to pay it. Our kids are going to
have to pay it. We have estimates now that the public debt of a child
that is born today, by the time they are ready to enter high school, we
are going to have $12 trillion of debt.
{time} 1930
By the time they become a working adult, it is going to be much more
than that; and they are going to be spending half of their income
paying off debt that their parents' generation caused because of these
tax cuts that are unpaid for. It is almost criminal.
Also, in addition to being so unfair to subsequent generations of
Americans, it is so duplicitous. Now, I know it seems like nickel and
diming; but, gosh sakes, in order to get this plan that is going to be
offered by the majority through, we get a whole lot of magic tricks in
this.
For example, you raise the child tax credit to $1,000, but for 3
years; and then you bring it back down again so that it does not look
as though it is as costly as it really is. You do the same thing with
the marriage penalty.
The American people ought to ask the proponents of this tax plan, do
we get to keep these tax cuts? Are you going to give it on the one hand
and take it away from the other? The fact is it is the latter. It is
just like the last tax cut, to purport we could pay for it, they
sunsetted it all in 2011. Now they come back, of course, and want to
make all the tax cuts permanent.
Mr. PRICE of North Carolina. Why on Earth would our Republican
friends want to do such a thing? It clearly is something that they do
not intend to stick by. They do not really intend for these tax cuts to
expire. Why would they write such a bill?
Mr. MORAN of Virginia. I suspect, I know it is a very good question,
that they figure the American people are never going to catch on to
what they are doing, to what the real cost of these tax cuts are, to
the fact that the real cost of these tax cuts is $4.6 trillion over the
next decade, if you include the interest on the debt that has to be
borrowed and if you do what we know is going to have to be done, which
is to make all these tax cuts permanent.
No Congress is going to restore taxes, nor is it going to increase
taxes. We know everybody wants to cut taxes, so they are not going to
be reinstated. It is just like the ones passed in 2001. We know that,
the Republicans know that, but the Republicans are assuming the
American people are not going to catch on, and they can fit this in a
budget resolution and purport to suggest that this is some kind of
balanced budget. It is not. We have got deficits as far as the eye can
see. Who is going to pay for them? Not us. We are going to be retired.
It is our kids that are going to have to pay for them. Thousands of
dollars a year they are going to be paying because of what we are about
to do tomorrow.
This is wrong. This country cannot afford it. What this country can
afford is getting people back on their feet, getting money back to
States where they can generate $1.73 for every dollar invested, instead
of 9 cents generated by the President's proposal.
We need to believe in America. We need to recognize what has worked
in the past, what worked in the 90s, and what has not worked since
President Bush took office. We have turned a $5.6 trillion surplus into
trillions of dollars of debt, and it is mounting every year.
I know my colleagues are here, and they want to share their views as
well; but I appreciate the gentleman yielding.
Mr. PRICE of North Carolina. Before we yield to our colleague from
Washington State, let me just commend the gentleman for a powerful
statement and also for reminding us of a little bit of history, not too
ancient history, but history that goes back to 1993 and a night on this
House floor that many of us will never forget, where without a single
Republican vote we passed a far-reaching plan to move the budget toward
balance; and in fact from every year from then forward, until this
President took office, every year for 8 years the deficit came down.
Mr. MORAN of Virginia. We had the strongest economy.
Mr. PRICE of North Carolina. The strongest economy and the most
sustained recovery. We even reached the point where we were running a
surplus, not just a Social Security surplus, but a surplus in the
general fund of this government. We retired $400 billion worth of the
national debt. But our Republican friends might not be convinced by
that historical lesson. It does not reflect very well on them.
So let me just ask the gentleman, look back to some previous
Republican administrations. Is it not true that in 1982, when the
Nation went into a recession and President Reagan had pushed through
some tax cuts and the deficits were mounting, that with Senator Robert
Dole's leadership some of those tax cuts were rescinded and some
spending was cut? The Congress and the President found themselves in a
hole, and they quit digging. They at least quit digging. They did not
make the problem worse. To some extent they halted the deterioration of
our fiscal situation.
Then think about the first President Bush. I am sure you remember
that battle. President Bush said ``read my lips'' and had gotten
himself locked into a situation. But when the economy declined, when
the fiscal situation deteriorated, he had the courage and the
statesmanship to work with Democrats across the aisle and to put a 5-
year budget plan in place. So the first President Bush, when he found
himself in a hole, he quit digging.
So if our Republican friends do not find the 1993 episode
instructive, then maybe they will find those earlier episodes
instructive. Then the question comes back, why is it that this White
House seems to feel none of that restraint? Why is it that this
Republican leadership seems to feel none of that concern, but is
perfectly willing, finding themselves in a deep and dangerous fiscal
hole, to propose that we should just keep digging?
Mr. MORAN of Virginia. That is the operable phrase, my friend. If you
are in a hole, and we are in a very deep deficit hole, you ought to
stop digging. In 2001 we were told that the tax cuts of $1.3 trillion
were going to revive the economy. They did nothing like that. What they
did was to cause more unemployment and the financial markets
[[Page H3841]]
to lose confidence in the future, and it has hurt States and localities
terribly.
I suspect, though, that the answer to the gentleman's question, why
has this President Bush acted so differently than his father, is that
he recognizes that although his father did the right thing in 1990, set
this country on the course of a balanced budget, and really it was
President Clinton acting consistently with that 1990 legislation in
1993, but the first President Bush deserves a lot of credit. But I
suspect the people in the White House now feel that may have been why
he lost the presidency.
But that ought not be the criteria. The criteria ought to be whether
your years in service to this country have produced a better America,
not only for your family and my family and the whole American family,
but, most importantly, for future generations of America. That is what
we are looking for. We are looking for that long-sighted economic
policy that has worked in the past.
I thank the gentleman for his thoughtful, historical perspective; and
I yield back to the gentleman so he may call on other colleagues.
Mr. PRICE of North Carolina. I thank the gentleman.
I turn to our colleague, the gentleman from the State of Washington
(Mr. McDermott), a member of the Committee on Ways and Means and a long
time member of the Committee on the Budget.
Mr. McDERMOTT. Mr. Speaker, I was coming downstairs from the
Committee on Rules where I was up there making a presentation as they
prepare for our consideration of this bill tomorrow. It was never so
clear to me as it was sitting there that we are in a one-party
government here, where the President and the House and the Senate are
all from one party, and they are going to have a discussion down here
tomorrow on their proposal. But what I really am fearful of is that the
proposal the gentleman is putting out here tonight will not be allowed
into the discussion tomorrow, except in a very abbreviated form. I
think that is unfortunate, because I think the American people ought to
have a chance to choose between alternatives. That is what this
government is about.
Will Rogers one time said people would rather have fair taxes than
lower taxes. The fact is we do not have fair taxes. The proposal that
is coming down here tomorrow is one that 80 percent of the benefit goes
to people above $90,000 a year in income. Now, I do not think they need
a tax break. The effect of this bill tomorrow would be to give a
$105,000 tax break to people making $1 million, while people who are
making $40,000 will get $325.
Now, that is not a fair tax structure, and it basically says the only
people who know what to do with their money are people who are rich. If
you give it to the people down there making $40,000, they will not know
what to do with it. They will squander it away on something, I do not
know what; but if we give it to the rich people, suddenly things will
be stimulated.
The problem with that theory is that the Commerce Department, Mr.
Bush's Commerce Department, has come out and said that industry in this
country is operating at 75 percent of capacity. There is plenty of
capacity right now. There is no need for further investment in
capacity. What you need is people with money in their hands to buy
things.
Now, the bill that I proposed, the amendment I proposed upstairs, is
a proposal that would give a tax holiday on the first $20,000 of your
payroll taxes. Everybody pays payroll taxes. Not everybody pays income
tax, because if you are down low enough, you do not. But if you are
down low or high up, you pay payroll taxes for Social Security and for
Medicare.
If you gave a tax holiday on $20,000 of income, everybody in this
country, every working person in this country, would get somewhere
between $1,400 or $1,500 in rebates. That means that 94 percent of the
money would go to people below $75,000 in income, and it goes all the
way to the bottom. Everybody gets it. In my view, that is a fair tax
cut, if you are going to have one.
I really think the idea of a tax cut in the first place is a bad one.
Sitting on the Committee on Ways and Means, I have watched these tax
cuts go whistling through there one after another, and we go deeper in
debt.
I was looking at what is going on in the States. California is $34
billion in the hole; New York is $12 billion; Texas is $10 billion;
Washington State, my State, is $2.4 billion. The National Conference of
State Legislatures reports that 41 States have accumulated almost $84
billion worth of deficit in this year, and what we are doing at the
national level is looking out on those States and all the mess that is
out there and saying, tough luck, you are on your own.
Now, that is a major philosophical debate that goes on in this House,
what responsibility does the Federal Government have and what
responsibility does the State have, and this administration has been
pushing off on to the States all the responsibility for education,
health care, the environment, whatever; and the States are being
destroyed.
The Missouri Governor, the new Governor, is going around turning off
every third light bulb. He put out a memo for the State of Missouri.
Connecticut is laying off prosecutors in the court system. In Kentucky
they are laying off prison guards. Nebraska just put 25,000 women and
children off the Medicaid program. In Michigan they are considering a
proposal to put advertising on the sides of police cars so they can
make money, making them rolling billboards. That is where these States
are. Ohio has taken 50,000 off of health coverage and Colorado is
cutting out the senior citizen benefits on property taxes for 120,000
seniors in Colorado.
Now, I could go on with that list, and it does not make any
difference what State you are talking about. And we at this level are
saying what we are going to do with the money we have is we are going
to give it to those people at the top. They are the only ones who know
what to do. They are going to save us. And we are not giving money out
to the States and the counties, with all the problems at the State
level or dealing with the problems in our own system, or preparing for
all the people who are going to come on to Medicare and Social Security
in 2008 or 2009 or 2010. We are not preparing for that at all.
{time} 1945
Today, we are giving it all away. And then we are saying, gee, Social
Security does not work anymore, Medicare does not work anymore. We have
to put that responsibility on people.
Next Friday, a week from today, we will be dismantling the Medicare
system in the same way. That is the system that this party has put in
order and they are going to keep doing it one week at a time, and we
are seeing it, and we will not have any money to respond to that
because we have given it all away.
Now, we have a choice tomorrow. We could say no to the President's
way and the Committee on Ways and Means chairman's way. The chairman
said upstairs that the Congress is kind of like a poker game where
everybody sits down at the table and at the end of the night the same
amount of money is there, but different people have it. And what I am
saying, my answer to that is yes, that is true, and I think that
ordinary working people ought to get it and the Democratic proposal is
an attempt to do that. But the leadership of this House is going to
bring in a bill tomorrow that will make it increasingly unfair in this
country.
I congratulate my colleagues from North Carolina and Virginia and
Connecticut for coming down here and letting the people know that the
Democrats do have a proposal, because they will control the rule
tomorrow in such a way it will look like we did not even have any
ideas. We do have ideas, but they are not consistent with giving it all
to the people on the top.
Mr. Speaker, the American people are sitting there, after dinner, at
the dinner table and you think to yourself, does somebody who makes $1
million really need a $105,000 tax break? I mean just ask yourself. And
then you think about the people in your neighborhood who are scraping
to pay their drug benefits and do the things that they have to do for
themselves. My mother just bought a hearing aid. She is 93. Hearing
aids cost $800 if you can get a cheap one. They are not covered by
Medicare. So if you do not have kids who can help you, you do not get a
hearing aid.
I mean, do we really need to give all of this money to the people on
the top? Where is the fairness in that?
[[Page H3842]]
I think the gentleman from North Carolina (Mr. Price) should be
congratulated for his effort tonight to give the people an
understanding of what is going on. It is unfair.
Mr. PRICE of North Carolina. Mr. Speaker, I thank the gentleman and I
particularly appreciate his focus on the plight of the States. My
colleagues may recall that the governors were in town a few weeks ago,
Democratic and Republican governors who went to the White House, I
understand, and talked about the ways that in a temporary way there
could be some help for the States and, as we said earlier, help for the
States is one of the best ways to stimulate the economy. It gives good
bang for the buck. They suggested such obvious ideas as a little better
cost-sharing on Medicare temporarily to tide them over. What kind of
reception did they get down there, Republican and Democratic governors
alike?
Mr. McDERMOTT. They basically were stiffed.
Mr. PRICE of North Carolina. Stiff-armed, I understand.
Mr. McDERMOTT. Mr. Speaker, I do not think the American people
understand, and the gentleman is down in Chapel Hill and he knows the
pressure that is on the hospitals; it is the same in Chicago or
Richmond or Seattle or New York or anywhere. What we are saying to
those counties, to those cities, to those States, we are not going to
help you. You are on your own. The President made no provision.
Mr. PRICE of North Carolina. What about our Republican colleagues in
the House? They are supposedly in closer touch with these local
communities. Does their bill contain one dime of help for the States?
Mr. McDERMOTT. No, not a single dime.
Mr. PRICE of North Carolina. And the Democratic plan, $44 billion, it
is temporary, it stimulates the economy, it helps bail the States out.
It will help avoid counterproductive things at the State level, cutting
back services, raising taxes. What good is it going to do to cut taxes
here if they have to be reimposed at the State level?
Mr. McDERMOTT. Mr. Speaker, I think the long-term effects of not
dealing with the social problems in this society are more costly in the
end than if you put the money up front. If you do not feed people and
take care of them and give them preventive health care, you pay much
more at the far end when they are seriously ill and then you spend
thousands and thousands of dollars that would not have been necessary
if you had dealt with it in the early stages. It is so cost
ineffective.
We talk about history. I do not know where the people went who were
here on the other side when I came here. They used to talk about
deficits being terrible and bad, and they have all disappeared. I mean
I sat on the Committee on Ways and Means and the Treasury Secretary,
Mr. Snow, came before us and said, deficits are not bad. I could not
believe what is going on. We are going to spend so much money financing
that debt. And the gentleman and I, we will not do it. It will be our
kids. That is not fair.
Mr. PRICE of North Carolina. Mr. Speaker, there is nobody within our
hearing tonight who could not think of better public and private uses
for that than throwing it down the rat hole of $300 billion, $400
billion of interest on the debt each year. I thank the gentleman for
his contribution.
Mr. Speaker, I am pleased now to recognize our colleague from
Virginia, another colleague from Virginia (Mr. Scott), a member of the
Committee on the Budget and a much respected Member of this body who
has made himself an expert on budget affairs, and we appreciate him
having his usual array of charts tonight to illustrate the situation we
are facing.
Mr. SCOTT of Virginia. Mr. Speaker, I thank the gentleman from North
Carolina for his distinguished leadership on this budget issue. It is a
very difficult issue and the gentleman has provided excellent
leadership, and we thank him for that service.
The gentleman is right, I like to use charts, because we have heard a
lot of descriptions, we have heard a lot of adjectives and projections.
Let us just look at the numbers. This chart shows the numbers over the
past few years of what the deficit has been, starting with Presidents
Johnson, Nixon, Ford, Carter, great deficits under Presidents Reagan
and the first Bush. And we have heard comments about the 1993 vote when
President Clinton came in, without a Republican vote in the entire
House or Senate, very close votes, 218 to 216 in the House, 50-50 with
Vice president Gore breaking the tie in the Senate. And, as a direct
result of that, along with economic growth, every year was better than
the one before until we went into a surplus. Social Security and the
lockbox, Medicare in a lockbox and a $100 billion surplus after that.
The Republicans will say that after 2 years of the Clinton
administration, they took over. That is true, and they offered the same
kind of tax cuts that President Bush has signed, but President Clinton
vetoed that bill. They threatened to close down the government. He
vetoed it again. They closed down the government. He vetoed the bill
again, and continued vetoing their irresponsible tax cuts year after
year as the budget situation got better and better each year. Under his
leadership, he had enough Democrats in the House and the Senate to
sustain those vetoes and control the budget situation year after year,
each year being better than the last.
When President Bush came in, he signed those irresponsible tax cuts
and we see what happens. Actually, this chart, as bad as it looks,
needs to be updated. We have not gotten the more recent numbers; it may
in fact be off the chart.
People ask, well, if things are this bad, where is the Democratic
plan? Well, the Democratic plan is in green. That is our plan; this is
their plan.
Now, how did we get in this mess? We got in this mess with tax cuts
and we have asked, well, who got the tax cuts? And you have heard the
adjectives. Let us look at the graph. The bottom 20 percent, the next
20 percent, the middle 20 percent, the fourth 20 percent, and the top
20 percent, blue is the 2001 tax cut, green is the proposed 2003 tax
cut. The same pattern.
Now, there is a line that is hard to see right at about the 50
percent mark. The top 1 percent get 50 percent of the tax cut that we
enacted in 2001. So we have a budget mess. We got there with tax cuts
to the wealthy, and we were told that the reason we needed to do that,
the reason we needed to mess up the budget to give tax cuts to the
wealthy was to create jobs.
Let us look at the jobs per administration, the second Truman
administration, the Eisenhower administration, first and second,
Kennedy, Johnson, Johnson, all of the administrations over the years,
the job creation record, George W. Bush, President Bush, the worst job
creation record since the Truman administration, a loss of over 2.5
million jobs.
Now, we are told that, well, what do you expect after September 11?
Let us point out that this chart includes the Korean War. It includes
the Vietnam War. It includes the whole Cold War, the first Persian Gulf
War, hostages taken in Iran, it includes all of that, and still the
worst in over 50 years.
So how bad does it have to get before we acknowledge that it did not
work?
What did we get? We got debt. If we left the budget alone, we would
have paid off the national debt by 2008. The projection in May of 2001,
right after this administration came in, virtually no debt held by the
public. Instead, in 2008 we are going to have almost $5 trillion in
debt.
With debt, we get interest on the national debt. Let us look at the
interest. The interest on the national debt, because the debt was going
to zero, was going to zero, interest on the national debt. Instead,
this red line is the interest on the national debt that we have to pay.
And the difference as we go, the billions of dollars in additional debt
by 2010, $1.6 trillion wasted in additional interest on the national
debt that we would not have had to pay.
Now, let us put these numbers in perspective. The green is the
interest on the national debt that we were going to pay going down to
zero. Red is the interest on the national debt that we are going to
pay. Blue is the defense budget. To show how much interest on the
national debt we are going to end up paying and put it in perspective,
instead of zero we are going to be spending almost as much interest on
the national debt as we are spending on national defense.
[[Page H3843]]
Now, let us make it personal. Take the interest on the national debt,
divided by the population, multiplied by 4, what is a family of four's
portion of the national debt? Right now it is about $4,500 every year,
interest on the national debt going to zero. By 2013, because we have
messed up the budget, interest on the national debt, a family of four's
portion of interest on the national debt, $8,500 and growing. That
means the first $8,500, you get nothing, except pay for what has
already been spent.
Now, the next chart shows how challenging a situation we have gotten
ourselves into because this is the Social Security chart. Right now, we
are not even balancing the budget, spending the Social Security
surplus. We are not balancing the budget. But in 2017, because the baby
boomers are retiring, we are having a deficit, almost $1 trillion,
running up to about $1 trillion over the next 30 years. If we cannot
balance the budget with a Social Security surplus and we are spending
the surplus, what are we going to be doing out here when we have a $300
billion deficit, divided by 300 million people in America, $1,000 a
piece, will be $300 billion, that is $1,000 for every man, woman, and
child, for Social Security deficit, you end up with the interest on the
national debt deficit. How bad does it have to get?
There is one more thing I want to mention. That is, I told my
colleagues about the chart where 1 percent gets half of the tax cut.
Instead of the tax cut for the upper 1 percent, if we had allocated
that into a trust fund for Social Security, we could pay Social
Security for the next 75 years without any diminution in benefits.
Seventy-five years for the tax cut that the top 1 percent got.
Mr. Speaker, we cannot afford another tax cut. We need to go back to
the green, the Democratic plan. What we are doing, what we have done to
the budget is obscene. What we are doing to the budget is just
unconscionable.
Mr. PRICE of North Carolina. Mr. Speaker, if I could just ask the
gentleman to underscore what he just said. Are you saying that the
amount that it would take to make Social Security whole for the next 75
years is less than the amount of this Republican tax cut?
Mr. SCOTT of Virginia. Mr. Speaker, it is less than what the top 1
percent got in 2001.
Mr. LARSON of Connecticut. Mr. Speaker, will the gentleman yield?
Mr. PRICE of North Carolina. Yes.
Mr. LARSON of Connecticut. Mr. Speaker, I am very intrigued by the
gentleman's charts, and it seems to me, based on the number of speakers
that we have had in this hour that we have been given; my question is,
Mr. Stockton used to say that what we have to do in order to get rid of
these social programs that the Democrats have put forward like Social
Security, Medicare, and Medicaid, is starve the beast.
{time} 2000
Is this not the method that is now being used? We have just heard the
gentleman from Washington State talk about what is going to happen next
week with respect to Medicare. We saw a budget atrocity last week. And
now we are talking about taxes, a tax cut tomorrow that basically
leaves us, as your charts amplify, with no money to provide for these
much-needed and highly successful and highly valued programs that have
helped all of our citizens.
Mr. SCOTT of Virginia. You cannot get to balance through spending
cuts. As I indicated, the entire defense budget is about $400 billion.
We are 500 billion and counting, slightly offset because we are
spending $150 billion on Medicare and Social Security surplus that is
coming in. But this is out of budget. The onbudget part of the budget,
what is coming in and going out outside of Social Security and Medicare
is $500 billion. The entire defense budget. Everything we spend outside
of Social Security, Medicare, and defense and pensions, everything is
about $800 billion. Everything. Foreign aid, FBI, prisons, NASA,
everything, education, roads, everything. It is about 800. If you cut
the government in half, you could not balance it as bad as it has
gotten.
Mr. LARSON of Connecticut. So this is incredible when you think that
this seems to be all part of a design, a design that is geared to in
fact deny people over time the ability to respond to needs that we
know, as your charts illustrate, with the baby boomers retiring, that
are funds that are going to be necessitated, less the programs per the
design of starving the beast, the beast in this case being social
programs.
Mr. SCOTT of Virginia. You cannot create a chart like this by
accident. Eight consecutive years, each year better than the last;
under the present administration, each year worse than the last and no
help in sight. You do not do that by accident.
Mr. PRICE of North Carolina. I wonder if the gentleman from Virginia
(Mr. Scott) would put the chart back up giving the distribution of who
benefits from these tax cuts, because on the talk shows these days you
sometimes hear it said, well, of course, the tax cuts are mainly going
to benefit the wealthy because they are the ones that pay the taxes. As
a matter of fact, is it not true that this tax cut compounds the
advantage of the wealthy? It does not just mirror their advantage.
For example, if you look just at millionaires, millionaires in this
country pay 19 percent of the income taxes, but what percent of this
tax cut do you think they get? Twenty-seven percent. They get 27
percent of the tax cut; they pay 19 percent of the taxes. So it just
does not wash to say, well, they are paying more taxes, so naturally
they get a better tax cut.
The fact is this is a grossly unfair tax cut, and it targets those in
the upper brackets. That is not fair, but it also does not do what
needs to be done in terms of turning this economy around.
Mr. SCOTT of Virginia. Mr. Speaker, this chart shows that the top one
percent get half the tax cut that we enacted in 2001. The people in the
lower brackets who are more likely to spend the money and stimulate the
economy, you can hardly see the lines that they get. The top 20 percent
get the lion's share of the tax cut and virtually nothing on down. All
of the studies show if you give money to those who are most likely to
spend it, you will stimulate the economy.
Mr. PRICE of North Carolina. I thank the gentleman for a very fine
presentation.
I yield to the gentleman from Connecticut (Mr. Larson).
Mr. LARSON of Connecticut. Mr. Speaker, again noting the chart there,
I just want to point out that certainly it is true that most
individuals are happy to get any form of a tax cut from their
government. That is an indisputable truth. People like to receive a tax
cut. When I go home to my district and talk to people about a tax cut,
they are generally enthused, even if it is a modest amount. But when
you explain to them the ramification of this tax cut, the enormity of
the tax cut, the extended amount of time, and then what will have to be
sacrificed in order to achieve that goal, it is an entirely different
story.
People back in my district in Connecticut have a lot of common sense.
They understand that you cannot have it all. We cannot possibly
prosecute the war in Afghanistan, the war against terror, the war
against Iraq and not sacrifice. And yet seemingly with both our budget
proposals and now our tax cuts we are asking people to sacrifice. The
people we are asking to sacrifice are the veterans, the elderly in need
of prescription drugs, the towns and States as have been enumerated
here today that desperately need town aid so they will not have to
raise local taxes or cut programs and close schools, the communities
that need school construction funds, the amount of money that will not
be available for special education, that we will continue to underfund
that program, a Federal commitment. We have enough money to provide a
tax cut for the wealthiest 1 percent, but not enough to take care of
those in the shadows of life, those in the dawn of life, and those in
the twilight of life as Hubert Humphrey would so eloquently talk about.
So tomorrow we are seeing a philosophical debate on the direction and
focus of this Nation. And what the Nation stands for in a time of
sacrifice when men and women are truly sacrificing their lives overseas
to defend our vital freedoms for what? When they come home and face the
devastating deficits and the problematic concerns that that will raise
for each and every one of their children as we project these deficits
out into the future.
[[Page H3844]]
This is an outrage. We do not have the megaphone here. We cannot even
get a small voice because of how our Committee on Rules allocates time
for people to come to the floor. I commend the gentleman from North
Carolina (Mr. Price), always able to articulate in a very intelligent
manner the disparity that exists here and providing the intellectual
underpinnings hopefully so the other voices in America besides the
right wing and talk radio get the message out here to the American
public what is absolutely happening to them.
People understand you cannot have it all. What the Democratic
proposal demonstrates is that knowing that and knowing that we are
going to have to sacrifice, should we not make sure that there is money
there for prescription drugs, for school construction, for Social
Security, for Medicare, Medicaid. Our hospitals are crying to us
because of the needs that they have to take care of the population that
comes to our urban and rural hospitals on a daily basis. I thank the
gentleman for his strong voice here on the floor.
Mr. PRICE of North Carolina. Mr. Speaker, the gentleman is absolutely
right. As to the pressing nature of these needs, many of them carry out
of the State level at the time that our States are flat on their back
fiscally, and our Republican friends are offering no help in that
regard whatsoever.
The gentleman talks about tax cuts. And we know people would rather
pay less taxes than more. We are all pleased when we can offer tax
cuts; but it does matter what kind of tax cuts.
Mr. LARSON of Connecticut. Ask them if they would like to see a
veteran get his benefits. Would they forego a tax cut to see veterans
get their benefits? These are the questions the American public needs
to ask themselves. Would you forego the tax cut so your parents could
have prescription drugs? Would you forego a tax cut so you did not have
to raise local property taxes and actually provide school construction
or lessen the burden that school districts have to pay because of
special education? Would you be willing to forego that tax cut if we
were reinvesting in our infrastructure and providing jobs for people?
That is what the Democratic proposal is all about.
Mr. PRICE of North Carolina. Sure and that is what we need to face.
If you are going to have tax cuts then, for goodness sake, have the
honesty and the integrity to pay for those tax cuts so it is not coming
out of the hide of the most vulnerable among us.
There are some tax cuts in the Democratic proposal, but they are
aimed at the broad middle class in this country. They were designed to
stimulate the economy and they are paid for. And in all three of those
respects they contrast with these upper-bracket tax cuts which our
Republican friends are trying to peddle as an economic stimulus when I
do not know any economist who is going to tell you you get much bang
for the buck from cutting the tax on dividends for goodness sake. The
estimate I have heard is 9 cents on the dollar. That is not a very good
return.
Mr. LARSON of Connecticut. The gentleman is absolutely right. I could
not agree more with him. To quote our leader as she often says, ``These
are both fair and fast-acting and fiscally responsible.''
That is the alternative that is being presented tomorrow. It is up to
us to get back to our districts and talk to people. I have held town
hearings on these issues which I think are vitally important so that
average citizens get to speak up.
They get it when they see the choice. Tomorrow is going to be an
orchestrated event whereby a proposal will be jammed down the
minority's throat with maybe an hour of debate on an issue that is this
important to the American citizens.
We owe it, Democrat and Republican alike, to go back to our districts
and say during this time of national crisis as we are fighting
terrorism, ask them plainly and clearly, would you forego a tax cut so
that you get prescription drugs for the people that need them? So that
the veterans can get their benefits? So that school buildings could be
paid for and technologically upgraded? So that the special education
students would get their fair share of money, lessening the burdens on
our local communities and States?
It is great to pat yourself on the back here and say you gave a tax
cut, but our tax cuts here become their tax increases back home with a
suffering burden that none of our States and municipalities can afford
at this time.
Mr. PRICE of North Carolina. Mr. Speaker, I thank the gentleman.
Before we run out of time, I want to turn to one of our most
passionate and effective advocates in the House, the gentlewoman from
Ohio (Ms. Kaptur).
Ms. KAPTUR. Mr. Speaker, I would like to thank the gentleman from
North Carolina (Mr. Price) for organizing this stellar Special Order
this evening on the important question of economic stimulus and
recovery for our people and join with all of my able colleagues, the
gentleman from Virginia (Mr. Scott), the gentleman from Connecticut
(Mr. Larson), and others this evening.
I just wanted to mention jobs, J-O-B-S; and the Republican tax cut
bill is a job killer. There is plenty of evidence that this plan is
merely a repeat of what happened in 2001 in this Congress, in the first
Bush tax bill that came before us where now we have lost 3 million more
jobs across this country.
It is also a debt-accumulator bill. This tax bill is not going to
balance the budget. It is going to increase the deficit. I always
thought Republicans were budget balancers. That is what Republicans
used to be. They are not that anymore. And I just wanted to point out
back in 1981 when Congressman Dick Cheney was a Member of this House, I
came here 2 years later in the midst of the worst recession America had
faced since the Great Depression. July 29, 1981, when Mr. Cheney
chaired the Republican Policy Committee here, a bill was passed that
they called the 1981 tax cut bill. And in the following 2 years,
millions of Americans were thrown on to unemployment lines; and I
became part of a class to try to restore economic integrity to this
country. It took us almost 20 years until Bill Clinton became President
of the United States. And in 1993, 1996, we began to restore those
surpluses that the gentleman from Virginia (Mr. Scott) referenced.
In 2001 under the first Bush plan, the gentleman from California (Mr.
Thomas) said here, ``By moving quickly our hope is to have both
monetary and fiscal policy pull this economy out of its nose dive.''
And again, now, we have another job-killer bill. We had a job-killer
bill in 1981. We had a job-killer bill in 2001, and now we will have
another job-killer bill brought up on this floor tomorrow. It seems to
me that one thing Democrats stand for is full employment and good jobs.
We should reject this bill tomorrow. It is a repeat of the same old
hash they gave us back in 1981 and they gave us in 2001. We should not
be snookered for the third time.
Mr. PRICE of North Carolina. Mr. Speaker, I thank the gentlewoman,
and I want to thank all of my colleagues who were part of this Special
Order tonight.
Often we have very heated debates in this House and we have a good
bit of rhetoric filling the air; sometimes there may even be an
exaggeration or two. But I must say with respect to this bill tomorrow
and with respect to our fiscal situation, we are not exaggerating. We
are not exaggerating the danger we face. We are not exaggerating the
unprecedented character of the risks that are being taken with our
fiscal future by this administration and by the leadership of this
House.
{time} 2015
We are not exaggerating the differences between the parties.
There is a simple three-point test that any proposal ought to be able
to pass: Is it effective? Does it stimulate the economy? Is it broad
based and fair? Is it fiscally responsible? The two plans before us
tomorrow could not be more opposed or more different in the way those
basic questions are answered.
So I thank all of my colleagues for helping us line this out tonight
and address our colleagues about this critical debate. It is not an
exaggeration to say that our fiscal future is on the line, and I
appreciate all those who have helped point that out so forcefully this
evening.
Mr. HINOJOSA. Mr. Speaker, I rise today to discuss the tax proposal
the House Ways and Means Committee approved on a party-line vote of 24-
15 last Tuesday. I believe that
[[Page H3845]]
what the committee reported to the House floor is flawed, misguided and
will harm our American economy now and for generations to come.
I agree with Ways and Means Committee Chairman Thomas's assertion
during the committee's consideration of the tax bill that, ``Congress
must take bold steps to spur economic expansion, create more jobs for
workers, better opportunities for families and bigger paychecks for all
Americans.'' I agree with that. But, I strongly disagree with the ways
and means by which he intends to accomplish these goals.
Mr. Thomas's bill focuses tax relief on the wealthiest 1 percent of
the population by providing tax cuts mainly on stock dividends and
capital gains. Many economists have rated this proposal as very
ineffective in stimulating the economy. It would be more appropriate to
provide an immediate increase in the child tax credit, marriage penalty
relief and the expansion of the 10-percent tax bracket.
With deficits soaring, the last thing our government should be doing
is proposing major tax cuts that do not spur economic growth. Our
government would be borrowing to finance the revenue losses associated
with the tax cuts for years to come. Furthermore, Chairman Thomas's
proposal fails to include support for state and local governments. It
crowds out Federal investment in education, training, infrastructure,
and research and development to pay for their tax cuts for the wealthy.
Next year, the GOP tax plan gives tax cuts totaling approximately $44
billion to those making over $374,000 a year, while their budget
provides $9.7 billion less than the amount promised in the No Child
Left Behind Act for educating our children.
The Thomas plan also allows the extended unemployment benefits
program to expire May 31, 2003, leading to millions of families being
denied needed unemployment insurance.
Not only would extending benefits help the families of nearly 5
million out-of-work Americans pay their bills, it would also
efficiently jumpstart the economy by putting money into the pockets of
consumers who will spend it.
I urge my colleagues to defeat this plan when it comes to the floor
of the House.
Mr. PRICE of North Carolina. Mr. Speaker, I yield back the balance of
my time.
____________________