[Congressional Record Volume 149, Number 159 (Wednesday, November 5, 2003)]
[Extensions of Remarks]
[Page E2236]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          THE ``DEBT TAX'' THREATENS AMERICA'S ECONOMIC FUTURE

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                           HON. DENNIS MOORE

                               of kansas

                    in the house of representatives

                      Wednesday, November 5, 2003

  Mr. MOORE. Mr. Speaker, as a member of the House Budget Committee and 
as a member of the Blue Dog Coalition, I have grown increasingly 
concerned over the impact that rapidly increasing federal government 
payments on our national debt have had upon our country's economy and 
upon the economic condition of individual citizens. A recent column in 
the Boston Globe discusses these concerns in a thoughtful and focused 
way; I commend to you and to my colleagues the analysis of Byron 
Auguste, a partner at a global management consulting firm, and Mark 
Strama, a technology executive and the former director of programs at 
Rock the Vote. They are directors of the Hope Street Group, a nonprofit 
organization of young business professionals.

                 [From the Boston Globe, Nov. 3, 2003]

                      The Biggest ``Tax'' is Debt

                   (By Byron Auguste and Mark Strama)

       In recent years, much has been made over the repeal of the 
     estate tax--or ``death tax.'' Much less attention has been 
     paid to a far more pernicious tax--the ``debt tax''--which is 
     bigger than the estate tax, capital gains tax, and so-called 
     ``marriage tax'' combined.
       When the Democratic presidential candidates convene here on 
     Tuesday to engage a skeptical generation of younger voters at 
     the Rock the Vote debate, we ask them to address the debt tax 
     as the most important issue affecting young Americans today. 
     American taxpayers paid $332.5 billion in interest last year 
     on the national debt. This huge payment, equal to 11 percent 
     of the total federal budget, does not improve education, 
     enhance homeland security, or rebuild Iraq. It merely 
     services the $6.6 trillion (and growing) national debt. These 
     interest payments are a ``debt tax''--a tax that drains 
     income without producing any material benefits for taxpayers.
       Today's average American household pays an astounding 
     $3,153 in taxes annually just to service the debt--about 
     enough to lease a car for a year. These debt tax payments are 
     required because of the fiscal irresponsibility of previous 
     federal budgets.
       A government running a large national debt is like an 
     individual running a big balance on a credit card. Most 
     American households use credit cards, and more than half of 
     cardholders carry over credit card debt from one month to the 
     next. But few would go as far as the federal government 
     currently does; today's national debt is the equivalent of a 
     whopping $62,000 on each family's credit card. And each 
     month, the debt is rolled over, with no plans to pay down the 
     principal.
       The debt tax is likely to grow in the coming years, placing 
     an enormous burden on tomorrow's taxpayers. Even if the 
     national debt does not increase, projected increases in 
     interest rates will increase the cost of borrowing money--
     increasing the debt tax.
       But the national debt is increasing, because the government 
     is spending beyond its means. In the past three years, 
     federal spending has increased by 13.5 percent. Only half of 
     this increase is attributable to the war on terrorism. And 
     this figure does not even include the $87 billion recently 
     requested for our efforts in Iraq and Afghanistan.
       Meanwhile, the tax cuts of 2001 and 2003 are projected to 
     reduce revenues by $1.35 trillion. Even if interest rates 
     remain constant, this year's budget alone will add 
     approximately $22 billion to annual interest payments--$22 
     billion in debt taxes. ``Tax relief'' for today's taxpayers 
     is, plain and simple, a tax increase for tomorrow's 
     taxpayers.
       As a result these factors--rising interest rates, growing 
     spending, and massive tax cuts--the debt tax burden will 
     continue to mushroom. The administration's own projections 
     show the debt growing by half through 2008. This means that 
     in five years, the average family could be paying between 
     $4,500 and $6,000 or more each year in debt tax alone.
       The problem is compounded by the impending retirement of 
     the baby boomers, whose tax contributions will decline at 
     precisely the same time entitlement spending to support them 
     will explode. For younger voters, this is like watching a 
     train wreck in slow motion. We see the impact that is about 
     to occur, and we are the ones who are going to get crushed.
       It's not too late to avoid disaster, but doing so will 
     require sustained, rigorous focus by our leaders. While many 
     Democrats and Republicans have criticized current fiscal 
     policies, none has introduced a plan that will solve the debt 
     tax. The time has come for our leaders to step up to the 
     plate.
       Americans understand this problem and are willing to help 
     solve it. A recent Gallup poll revealed that by a 53 to 41 
     percent margin, Americans say they would rather hold down the 
     federal deficit than lower their taxes.
       Each generation of Americans has had the opportunity to 
     determine our nation's priorities. In the middle of the 20th 
     century, our grandparents expanded higher education and 
     homeownership. Over the past 35 years, our parents invested 
     in fighting communism abroad and poverty at home. Will our 
     generation have similar opportunities, or will our only 
     choice be to service the debts of our predecessors?
       The debt tax is a problem with grave consequences for our 
     future. It is a problem that won't be solved until we start 
     talking about it. For the sake of our generation of voters, 
     we hope the presidential candidates will start the discussion 
     this week.

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