[Congressional Record (Bound Edition), Volume 145 (1999), Part 10]
[Senate]
[Pages 14508-14514]
[From the U.S. Government Publishing Office, www.gpo.gov]



                    TAX RELIEF FOR AMERICAN FAMILIES

  Mr. GRAMS. Mr. President, we wanted to take a little time this 
morning to again talk about what I consider the overtaxation of the 
average working family in the United States. The tax burden is getting 
larger and larger every day and every year. In fact, under this 
administration it has grown by about 50 percent in just the last 6 
years. To sum up some of these things we do have a number of other 
speakers who will come down this morning and join us and lay out some 
of the facts and figures on the current tax status in the United 
States.
  Next Sunday our Nation will celebrate the Fourth of July. Millions of 
Americans and their families and friends will gather to raise the 
national flag, parade in their hometown, grill in their backyard, or 
drive to the beach for a relaxing vacation.
  The Fourth of July is always a truly great American holiday.
  As we observe this special occasion, I rise to remind the American 
people of why we celebrate the Fourth of July, Independence Day, and to 
call upon Congress and the President to take immediate action to 
provide meaningful tax relief for all overtaxed Americans.
  This great Nation was born out of a tax revolt. The revolt was not 
because of Founding Fathers were selfish but because they did not want 
to be shackled under more government regulations, bureaucracy, taxing 
powers, and unjust legislation of their homeland.

[[Page 14509]]

  They did not want to send their hard-earned money to the Parliament 
in England that furthered their own special interests in order to keep 
themselves in power.
  This tax revolt was about freedom and liberty, about a person being 
able to own himself, his labor, and the fruits of his labor. This is 
the simple moral origin of our Nation.
  Our Founding Fathers understood well that low taxes and freedom were 
directly related. They did their best to ensure that the American 
people continued to enjoy their freedom.
  Unfortunately, this freedom that our Founding Fathers treasured so 
much and that triggered our Nation's independence has been eroded.
  Today, Americans are overtaxed. The tax burden on working Americans 
is more crushing than ever. In 1913, less than 1 percent of all 
Americans paid income tax. Only 5 percent of Americans paid any income 
tax as late as 1939, before World War II.
  Today, the Federal tax burden is at a historic high. Federal taxes 
consume nearly 21 percent of national income. A typical American family 
pays $9,450 in Federal income tax per year.
  A median-income family can expect to pay nearly 40 percent of its 
income in Federal, State, and local taxes--more than it spends on food, 
clothing, and housing combined.
  But our Democratic colleagues and President Clinton do not believe 
this rapidly growing tax burden is excessive and have preferred new 
spending to tax cuts.
  One of the best indicators of how exhausting the tax burden has 
become is the annual arrival of Tax Freedom Day, the day on which 
Americans stop working just to pay their State, Federal, and local 
taxes and actually begin keeping their earnings for themselves.
  This year, Americans had to wait until May 11 before they marked Tax 
Freedom Day. At 132 days into the year, it's the latest arrival of Tax 
Freedom Day ever.
  As a sign of just how far and fast taxes have escalated, in 1950, 
Americans marked Tax Freedom Day on April 3.
  Cost of Government Day, a day calculated by Americans for Tax Reform, 
goes further by including taxes, regulations, and total government 
spending. This year Cost of Government Day arrived on June 22.
  The total cost of government in 1999 is estimated at $3.72 trillion, 
that is up from $3.56 trillion in 1998.
  This is a 4.5-percent increase overall, and that is almost double the 
rate of inflation. The cost of Government regulation alone will cost 
taxpayers over $1.06 trillion in 1999. Again, our Democratic colleagues 
and President Clinton do not believe this rapidly growing tax burden is 
excessive, and they have repeatedly denied tax cuts to Americans.
  Let's take a look at another indicator. Over the course of President 
Clinton's administration, Washington's income has grown faster than our 
economy and has grown twice as fast than the income of the average 
American. In fact, Federal taxes have grown by over 54 percent during 
this administration. That is nearly $4,000 per year more per person. 
The income tax rates also indicate Americans are overtaxed.
  The average tax rate for the 437,036 individual returns filed for 
1916 was 2.75 percent. Again, the average tax rate for nearly the half 
million Americans who filed returns in 1916 was just 2.75 percent of 
income. Under President Reagan, we had only two income tax rates: 15 
percent and 28 percent. But today, there are now five tax rates, and 
Americans can be taxed as high as 40 percent in Federal taxes.
  In the past few years, over 20 million American workers earning 
between $30,000 to $50,000 have been pushed from the 15-percent income 
tax bracket to the 28-percent income tax bracket due to the unfair tax 
systems we have. On top of that, they have to also pay a 15.3-percent 
payroll tax. Federal taxes alone account for the loss of 43 percent of 
the income for those middle-income Americans who have worked hard just 
to try to get ahead.
  The President and the Democrats always like to tell middle-income 
Americans that, of course, they are only out there taxing the rich 
while they stick their hands deeper and deeper into the pockets of 
average Americans. They use class warfare as a cover to tax all 
Americans at a higher and higher rate.
  The rapidly growing tax burdens hurt low-income and minimum wage 
workers as well. They may not pay income tax, but they still have to 
pay the payroll tax. As low-income and minimum wage workers work harder 
and earn more, their payroll tax increases, again taking a huge bite 
into hard-earned dollars that are most needed to keep those families 
above the poverty line. Once again, our Democratic colleagues and the 
President do not believe this rapidly growing tax burden is excessive 
and have repeatedly refused to support any tax cuts.
  Let's ask the American people if they are overtaxed and want a tax 
refund on their overpaid taxes. Let's ask a full-time mom and former 
schoolteacher, Susie Dutcher, about the overall tax burden. According 
to her:

       Taxes are far and away the biggest portion of our family 
     budget.

  Susie would love to put more dollars into their retirement account, 
would love to buy more books for their three children, or put more 
money in their college fund or spend more money for other family 
priorities, but she cannot because much of the fruit of their labor is 
again taken by the Government.
  Ask John Batey of Tennessee about the death tax. John runs a 500-acre 
family farm that has been part of the Batey family for 192 years. John 
has spent all of his life on his family farm and, like most other 
farmers, he plans to be a good steward of the land, save and build his 
assets, and someday try to leave his farm to his children.
  After the death of his father 5 years ago and the death of his mother 
last June, John began to settle his parents' estate. As he was about to 
take over the family farm, the IRS sent a death tax bill for a quarter 
of a million dollars. The land value of the farm increased 
significantly, but the death tax has never been indexed. John had no 
choice but to sell some of his assets, dip into their lifelong savings, 
and even borrow some money to pay Uncle Sam.
  The Federal death tax was originally levied to pay for the war in 
1916 to help fund the efforts of World War I, and estates under $9 
million were not taxed at that time. But it later evolved into a 
mechanism, of course, with a redistribution of private income.
  Just like the Batey family, millions of American farmers and small 
businessowners are faced with paying high taxes or, in fact, losing 
their farms and businesses to pay the death tax. Unfortunately, again, 
my Democratic colleagues insist that a cut in the death tax is a tax 
cut for the rich, and they can hardly justify a costly tax cut that 
benefits some of the wealthiest taxpayers.
  Ask janitor Joe of Virginia about the capital gains tax. Over the 
last 30 years, Joe saved every penny of his income he could possibly 
save after paying Federal, State, and local taxes. He took the risk, 
and he invested his savings smartly in the market. He was excited as he 
watched his savings grow into $1/2 million in assets. That excitement 
soon turned into torment upon retirement when he began to withdraw the 
funds. The Government took nearly one-third of those hard-earned 
savings for capital gains taxes.
  Or you could ask newly wedded Alicia Jones of my home State of 
Minnesota about the marriage penalty. Alicia and her husband graduated 
from college and had just begun working full time 2 years ago. In 1998, 
Alicia and her husband worked full time in professional careers. They 
had no children and were renting an apartment and trying to save to buy 
their first house. They had to pay at least an additional $1,400 under 
the marriage penalty tax in our Tax Code for simply being married.
  As a result, on top of the over $10,000 they already had deducted 
from their checks to pay Federal taxes, they had to take an additional 
$700 out of their limited savings account to pay for Federal taxes, 
taxes that they would not have had to pay, by the way, if they had not 
been married.
  She wrote and said:

       I'm frustrated by this. I'm frustrated for the future. How 
     do we get ahead when each

[[Page 14510]]

     year we have to take money out of our savings to pay more and 
     more for our taxes? I hope that you will remember my concern.

  Alicia's story is not uncommon. There are 21 million American 
families in this same situation. If these individual stories are not 
convincing, let's take another look at the polls.
  A recent Gallup-CNN-USA Today poll shows that over 65 percent of 
Americans believe taxes are too high. Half of the American population 
think the tax system itself is not fair. A Fox News poll indicates that 
65 percent of Americans believe that no more than 20 percent of their 
income should go to Federal, State, and local taxes. As I said, about 
an average of 40 percent today is collected from Americans across the 
country.
  An Associated Press poll also shows that the majority of Americans 
want to use the non-Social Security surplus that we are hearing so much 
about this week for tax relief, not for more pet spending programs by 
this administration.
  The list goes on. There are a lot of people around Congress, and 
especially in the White House, who talk about tax relief, but I believe 
it is all show.
  The message from the American people is loud and clear: We are 
overtaxed, we want meaningful tax relief, and we want and need tax 
reform.
  I ask my fellow colleagues and the President to ponder a very 
fundamental question about taxation over this holiday: Should our 
Government tax working Americans' income when they first earn it? 
Should the Government be able to tax it again when they save it, tax it 
again when they spend it, tax it again when they invest it, and tax it 
yet again when they die?
  They talk about redoing taxes for low income people because it takes 
a larger portion of disposable income. I agree, but there is no excuse 
to tax others even more to support larger and larger spending plans.
  To my fellow Americans, I invite you to think about our country's 
origin over this Independence Day holiday. Take a closer look at your 
payroll stubs to see how much in taxes is taken from your income, or 
just take a few moments to examine the hidden taxes on your holiday 
spending. You will be shocked to find out how much tax you are actually 
paying.
  Let me give a few examples. If you drive the family car on vacation 
on the holiday, remember that 45 percent of the cost of your car goes 
to taxes. Over half of what you pay for a gallon of gasoline ends up 
going for taxes. Thirty-six percent of the cost of the tires on your 
car goes to taxes. And if you choose to fly, 40 percent of that cost 
also will go to the Government.
  Staying at a hotel is not cheap either, but did you know about 40 
percent of your bill goes to the Government in the form of taxes?
  If you decide to stay at home and have a simple barbecue to celebrate 
Independence Day, the Government will stay there as an uninvited guest, 
and 43 percent of the cost of beer and 35 percent of the cost of soda 
will go to taxes. The Government's slice of your pizza is about 38 
percent, and taxes account for 72 percent if you want to have a drink. 
Even 31 percent of what you pay for a loaf of bread is taxed.
  I think you get the idea of how much of the price of the average 
products you will buy over this holiday weekend is going to go to the 
Government in taxes.
  So in closing, I am encouraged by President Clinton's announcement 
that the budget surplus will grow by an estimated $1 trillion over the 
next 15 years. This additional budget surplus, I believe, makes tax 
relief even more necessary and even more feasible.
  Even President Clinton is talking about new possible tax relief for 
the American people this year. I welcome the opportunity to work with 
the President to try to provide tax relief for all Americans--not to 
talk about it, not to be all show, but to make sure that some tax 
reform is passed in tax relief.
  Saving Social Security, reducing the national debt, cutting taxes are 
imperative for our economic security and our economic growth. Our 
strong economy has offered us a historic opportunity to achieve this 
three-pronged goal.
  Republicans are committed to returning the non-Social Security 
surplus to overtaxed Americans who are out there working hard and 
generating it in the first place. We have reserved nearly $800 billion 
of the non-Social Security money for tax relief in our budget, and we 
will provide meaningful tax relief for all Americans this year.
  Thank you very much, Mr. President.
  I now yield the floor to my colleague from Georgia, Senator 
Coverdell, for up to 10 minutes.
  The PRESIDING OFFICER. The Chair recognizes the Senator from Georgia.
  Mr. COVERDELL. Mr. President, first, I compliment the Senator from 
Minnesota for organizing and bringing this meeting together on the 
question of tax relief and for the powerful statement he just made in 
support of giving relief to American workers so they can keep more of 
what they earn in their checking accounts rather than sending it off to 
bureaucrats--locally, in the State, and federally.
  In the last few days, President Clinton has joined in calling for a 
strong lockbox to protect Social Security. I am pleased to see this. 
For the last month, we have been fighting a filibuster from the other 
side of the aisle on this concept of setting a procedure in place that 
would make sure Social Security receipts have a new protection device. 
Hopefully, because the President has now said he supports it, the other 
side of the aisle will drop their filibuster and we can get on with our 
proposal to be more protective of Social Security receipts.
  Second, the President has said he will now support tax relief. That 
is important. But tax relief can have a lot of definitions.
  Our view of tax relief is that it should be across the board, that 
everybody should participate, and that the savings which families keep 
in their checking accounts be used for the decisions those families 
want to make: Do they need more health insurance? Do they need to pay 
school tuition? Do they have a leak in the roof? Do they need a new 
car?
  The President's definition of tax relief is that you get it if you do 
something he wants, for instances if you put a solar panel on your roof 
or if you buy an electric car, if you can find one. That is behavioral 
relief. In other words, if you begin to live your life the way we in 
Washington think you should live it, you will get a break, but we are 
not going to let you decide what you ought to do.
  I would suggest that the tax relief proposal, which is growing in 
size, ought to be looked at very seriously. I will come to that in just 
a minute. But let's just talk for a second or two about why tax relief 
is so important to American families.
  First, as was said by the Senator from Minnesota, they are paying the 
highest taxes they have paid since World War II, which, given the 
extended periods of general peace, is unconscionable.
  This year, American families will have a negative savings rate. That 
has not happened since the Depression. If you read what several pundits 
in the country have written, they say it is because American families 
are greedy. Hogwash. What it is, the Government has been taking more 
and more of what they earn, and the disposable income, the income they 
have left to use, is barely enough. In fact, in many cases it is not 
enough to manage their families so there is nothing left to save, and 
they are not saving.
  That means those families cannot face off an emergency. If somebody 
loses a job or there is some loss of income, the rent cannot get paid. 
If there is an unexpected illness, an unexpected educational cost, an 
emergency, there are no savings in America to deal with that. So you 
put a whole arena of anxiety across the breadth of the land.
  I am not going to overdetail this because of the time we have, but I, 
Senator Torricelli--it is bipartisan, bipartisan in the House, 
Republican and Democrat with leadership--Senator Lott, Senator Gramm of 
Texas, the chairman of the Banking Committee, are all coauthors of a 
concept that takes the first tax bracket, which is 15

[[Page 14511]]

 percent, and increases dramatically the number of people who are in 
that minimum tax bracket.
  So everybody would share equally. But the effect is that about 7 
million people would be pushed down into that lowest tax bracket. Then 
the first $500 of interest that family earns from the savings account 
would not be taxed. That means about $100 billion over the next 10 
years would be saved by those families, and 30 million of those 
families would have no tax on their savings accounts.
  So what we have is a plan that benefits 110 million taxpayers, 30 
million of which would be saving tax free, 10 million of which would no 
longer pay capital gains tax, and 7 million middle-income taxpayers 
would be returned to the lowest tax bracket.
  But we do not tell them what to do with their savings; they can 
figure that out. It isn't designed to cause them to live in a loft or 
to use a solar panel or a windmill. It is designed to let them keep 
more of their income so they can more effectively manage their families 
and their lives.
  Incidentally, this is the only tax plan that has been endorsed by the 
New York Stock Exchange. It is right on target, because pushing people 
into the lowest tax bracket is helping them save, and it is simplifying 
the Tax Code.
  I hope that every succeeding year we can take another million-plus 
taxpayers and push them down into this 15-percent tax bracket. One day 
we might even get to the point that almost all Americans are there.
  So this is a time for tax relief. Americans are paying the highest 
taxes they have paid since World War II. They have no savings, and 
therefore they do not run their families as effectively as they could. 
We all know the results of that. So this is broad public policy that 
needs the attention of the President and the Congress. It is the right 
thing to do, and this is the right time to do it.
  I yield back to the floor manager.
  Mr. GRAMS addressed the Chair.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. GRAMS. I thank the Senator from Georgia for his remarks this 
morning. Also, I thank him for all his hard work during this and 
previous Congresses to make sure that American families will be allowed 
to keep a little bit more of their hard-earned money, that less of it 
will come to Washington, and that they will have a little bit more 
control over how they spend it and what they spend it on. I appreciate 
it and thank him for all his efforts and work.
  I also recognize this morning the Senator from Missouri, Mr. 
Ashcroft, who also has been a leader in the fight against higher taxes 
and is working very hard for tax relief.
  I yield 7 minutes to Senator Ashcroft.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. ASHCROFT. Thank you, Mr. President.
  I am delighted to commend the Senator from Georgia for his 
outstanding remarks. He is right about giving people a chance to spend 
their own money in the way they choose to spend it.
  So much of our so-called tax relief from time to time is given in 
ways that try to coach people that they should have it the way we want 
it done. Freedom is the ability to spend one's own resources the way 
one particularly wants to spend them. So I am delighted with his 
remarks.
  I rise today in support of Congress' plan to provide over $778 
billion in tax cuts over the next 10 years. The President has already 
announced that the budget surplus will be larger than expected. This 
onbudget surplus is another name for a tax overpayment. Talk about a 
budget surplus. It means we are collecting more than we need.
  Having collected more than we need from the people who worked hard, 
the least we could do would be to give it back to them. When you go 
into a business and hand a $10 bill to the clerk for a $7 item, they 
don't say: Well, we are going to increase your spending level. We are 
going to throw in four extra pairs of shoelaces and a can of polish, if 
you are in a shoe store. They say: No, here is your change. This is 
your money. You have overpaid.
  That is where we are. In the days ahead, Congress will be deciding 
what to do. Are we going to try to find more ways to spend the money 
the people have earned or are we going to say our faith is in families; 
we are going to focus the resources of this country where we have our 
faith, and that is in the private sector and in families? That is what 
has made America great.
  Or are we going to say our real faith is in bureaucracy; we are going 
to take more of this money and fund bureaucracy?
  I think it is time for us to think about funding families, not 
funding bureaucracies; funding Main Street, not funding Washington, DC. 
When we have challenges in this country, I think all of us know they 
aren't going to be solved by government. As terrible as Littleton, CO, 
was and is, the real challenge is a cultural challenge.
  We need strong families with the right values. We don't need stronger 
government bureaucracies. If bureaucracies could have solved the 
Littleton situation and many other challenges, we would have expected 
to have no challenges by now because we have great bureaucracies. We 
have more bureaucracy in America than ever before, but we have greater 
problems.
  Instead of the high tax load that really almost forces the second 
parent to be in the workforce, maybe we ought to think about allowing 
people to keep some of the money they earn so they don't have to have 
both parents working and competing with the needs children have for the 
shaping, the nurturing, the developing, the teaching, and the parenting 
that is so necessary.
  This year, the average American will have to work 173 days just to 
pay for government. This includes the burdens of Federal taxes, State 
taxes, and local taxes. We pay more in taxes than at any other time in 
history.
  Some people say: Well, there was a year or two in the Second World 
War. I dispute that. I don't think they are counting local taxes as 
well. Some people say: What does the Congress have to do with local 
taxes? Very frankly, a good bit of the load of taxes at the State and 
local level is a result of Federal mandates, the Federal Government 
wanting to force things to be done by government and the bureaucracy, 
not having the courage to charge for it but just saying to the States: 
You must get this done.
  It is sort of similar to going in to order something without paying 
for it. We have done that at the Federal level. It is a shame, but it 
has happened.
  It is time for us to say that we need to allow some of the 
individuals who have built this great Nation to enjoy the fruits of 
their own labors. When we have overcollected, we have taken more than 
we need. We have a surplus. Let us give the folks the change back 
instead of trying to force them to buy more bureaucracy, which they 
didn't want, didn't order, and don't need. They do need the capacity in 
families.
  According to a Congressional Research Service study, the surplus 
means that the average household will be paying $5,000 more in taxes 
over the next 10 years than the government needs. Well, let's just let 
the American people have some of that money back.
  I want to go quickly to one of the most important things we can do to 
correct a serious error of our Tax Code. For a long time, Members of 
this body have understood that our Tax Code penalizes people for being 
married. The way the Tax Code is administered, there is what is called 
a marriage penalty for people who enter the durable, lasting 
relationship of marriage, which is the place where children learn and 
where society and the social order, our culture, renews itself--in 
durable, lasting, committed marriages. They get taxed more heavily, 
very frequently, than if they were not married. That is called the 
marriage penalty.
  I may not be one for lots of little nuances in the Tax Code, but it 
is time for us to take this massive prejudice out of the Tax Code that 
charges people elevated rates because they are doing the thing 
government most needs. If government is to promote safety and the 
stability of the community so people can reach the potential

[[Page 14512]]

that God has placed within them--and that is what I think government is 
for--the family does that more effectively and in concert with 
government better than anybody else. If anything, marriage ought to be 
the subject of a subsidy, not the pernicious recipient of a penalty 
that punishes people for being married.
  I know Kay Bailey Hutchison, the Senator from Texas, has focused for 
years on this idea. I have been one who has stood up to say that we 
ought to focus on this idea. If we have an opportunity to let people 
keep some of what they earn, let us stop punishing people for the 
persistent, durable commitment of dedicated marriage that is 
fundamental to the success of this society in the next century. That 
would be a tremendous first step.
  We all know that we are paying more in taxes than ever before. We 
have watched, as the tax burden has gone up, families struggle to meet 
their responsibilities, moms and dads trying to juggle how they can 
accommodate their schedules and still raise a family. Finally, the 
second parent goes into the workforce to make ends meet because 
government demands so substantially.
  Let us give the American family the kind of tax relief that allows 
families to make America great again and to make their own decisions. 
It is with that in mind that I think one of the tremendous 
opportunities we have is the opportunity to abolish the marriage 
penalty in the tax law.
  I urge my colleagues, as we consider our responsibilities, to relieve 
American marriages of this pernicious penalty which punishes people for 
doing that which we all need.
  I thank the Senator from Minnesota and the Presiding Officer.
  Mr. GRAMS. I thank the Senator from Missouri for those words and, 
again, thank him for all his efforts on tax relief.
  I now recognize the Senator from Alabama, Mr. Sessions, who also 
wanted to talk about it, for up to 10 minutes.
  The PRESIDING OFFICER. The Senator from Alabama.
  Mr. SESSIONS. I express my appreciation for the excellent remarks 
delivered by the Senator from Missouri. He and the Senator from 
Minnesota have been champions of lowering the burden of government on 
American people since they have been in this body. They are known for 
that. They have given time and effort and passion to it. I really was 
inspired by the remarks of the Senator from Missouri. I appreciate them 
very much.
  We are in a time of surplus. We have time to make some decisions 
about what we are going to do with that surplus. The President's own 
Office of Management and Budget midyear review now indicates that we 
will have, over 10 years, a $1 trillion surplus outside of Social 
Security available to us.
  I suggest we have to consider allowing working Americans to keep more 
of what they earn. That is clearly a policy that will nurture freedom. 
The more money we take from individuals, the more we take from 
families, the more we shift it to a burdensome bureaucracy in 
Washington, the more we diminish their freedom, their power vis-a-vis 
the government. The government is strengthened. The individual and 
family is weakened. It is just that simple. The power to tax is the 
power to destroy. A tax diminishes freedom. It penalizes certain 
behavior, and it encourages other behavior.
  I think we have to be honest with ourselves. This great economy has 
done some wonderful things for America. We are also finding that people 
are moving up in the tax brackets, higher and higher tax brackets, 
meaning they are paying a higher percentage of their income to the 
government each year. And the sad fact is that the total percentage of 
the gross domestic product; that is, of all goods and services produced 
in America, is increasing. According to the Federal Government's own 
statistics, in 1992, when this administration took office, before the 
big tax increase, we were sending 17.6 percent of the gross domestic 
product to the Government. It will reach 20.7 this year or next year--a 
steady increase.
  To say that tax decreases are going to destroy the Government and 
somehow result in a massive reduction in funds to the Government is 
silly. The year before last we rolled back one-third of the 1993 huge 
tax increase that the administration pushed for. We rolled that back 
and included within it a $500 per child tax credit. I know the Senator 
from Wyoming, the Presiding Officer, was a supporter of that, and the 
Senator from Minnesota, was a big supporter of that $500 per child tax 
credit. I made it one of my highest priorities and worked extremely 
hard to see that that became a reality.
  They say: Well, you can't afford a tax cut. If you have a tax cut, we 
will increase our deficit. That has not happened. In fact, we are 
continuing to see surpluses accrue.
  But what I want to ask the American people to do is think about this: 
A family with three children making $35,000 a year, or $45,000 a year, 
will now receive a tax credit--not a tax deduction but a $500 reduction 
in the amount of money they have to pay in taxes to the Government for 
each of those children--$1,500. They will be getting those refunds this 
spring. Many have already received those refunds--$1,500 for a family. 
That is $120 per month tax free for a family to use for things.
  If there is somebody struggling today, as the Senator from Missouri 
noted, it is working families. It is expensive. They will have $120 a 
month to buy shoes with, or maybe a new set of tires for the car, or 
maybe money so the child can go on a school trip that they would like 
for them to go on but are wondering how they are going to pay for it. 
They will get it every month, because this Congress said, no, we are 
not going to keep taking this money from the families; we are going to 
allow you to keep it and use it as you see fit.
  Who cares more about children than a mother who cares about her 
children? Who can best decide what they need than the family?
  It is a myth that if you do not vote for more and more and bigger 
programs, you love your children less. That is an incorrect statement. 
It really offends me, because what we are doing is taking that money 
from families who love their children and who know their children's 
names. Nobody in Washington knows my children's names or the names of 
children in Alabama. They can't possibly utilize resources as 
effectively as the people who love them and who are raising them.
  I really believe that was a nice step forward. But it was just one 
step. I am proud that we accomplished that. It took some effort. It 
looked as if it wasn't going to happen, until finally the American 
people understood what was being talked about. They realized that it 
was in fact possible to achieve it, and the people started speaking. 
The Congress--some of those who objected--got the message, and the 
President got the message. He signed that bill. So we are looking at a 
continual possibility of a surplus in the future.
  I am concerned that we are showing an unhealthy increase in the 
amount taken by Government. I think it is time to send some of that 
back to our people. We can make reform of Social Security, we can 
secure Medicare, and I am absolutely strongly committed to the Social 
Security lockbox--to setting aside our Social Security surplus so we 
don't spend it, and making sure it is there to allow us to strengthen 
and improve Social Security.
  That is the first step. If we spend the Social Security surplus by 
new and bigger programs--there is always some new program that somebody 
has--we are not going to have it to save Social Security.
  Likewise, we have an opportunity with a non-Social Security surplus--
this $1 trillion, this $1,000 billion, that will be ours in the next 
decade--to make a decision: Are we going to allow the Government to 
grow and become more and more a dominating force in our lives, or are 
we going to encourage families and freedom and prosperity?
  Just for example, I support and am working very hard on a program I 
call ``The Class Act.'' Most States--42 States now--have a plan called 
a prepaid college tuition plan where you can buy into college tuition, 
invest your

[[Page 14513]]

money into it as your children grow, so much a month, how you choose, 
and when your child gets to the age to go to college, it can be paid 
for.
  We found that the Federal Government taxes all the interest that 
accrues on that money. The Federal Government is taxing and penalizing 
families who are doing the right thing by saving for their children's 
college education at the same time that we are providing tax breaks, 
interest rate breaks, and interest deferred payments to people who 
borrow for college. As a result, we have found that borrowing in the 
last decade has tripled--three times what it was in the previous 
decade. And savings are down.
  Good government policy calls on us and demands of us that we 
encourage the highest and best qualities in people. Taxing and 
penalizing people who save, and at the same time subsidizing people who 
borrow, which we need to do--people need to be helped in borrowing to 
go to college; we are not eliminating any of those programs--is 
wrongheaded. It is not encouraging our highest and best instinct as a 
people.
  We are different from the rest of the world. This was never a 
government-dominated country. It has never been run by a king. It has 
never been run by a totalitarian Communist dictator. It is made up of 
millions of independent, free Americans who respect themselves and 
their communities and care about themselves and their communities.
  We don't believe the Government ought to do everything for us. People 
are prepared in this country, as a part of our very character as a 
people, to take care of themselves whenever they can. But if the 
Government continues to take more of their wealth and take more of the 
money they earn every month, making it more and more difficult for them 
to meet their responsibilities, then they tend to look to Government to 
fund them.
  That is not a good trend for us. This is basic. This represents a 
basic divide in this Senate and right down the hall in the Congress 
between people whose visions differ about the nature of our country.
  I say let's celebrate our character of individualism, personal 
responsibility, personal integrity, good financial management, and 
frugality. Let's encourage savings and not tax people's money who save.
  I think it is time for us as a nation to think about this. We dare 
not get into a big spending program. We do not dare start taxing and 
spending again. We have an opportunity for a historic time for America. 
I am proud to join with the Senator from Minnesota in promoting it.
  Mr. GRAMS. Mr. President, I thank the Senator very much. I appreciate 
the words and all of the efforts of the Senator from Alabama. He is 
talking about the President announcing that a tax cut is possible. He 
is agreeing with us that tax cuts are important.
  I think we have to be very careful because I think it would be a bad 
deal for the American people if we got a little bit of a tax cut but it 
came at the cost of huge increases in spending. We don't want that type 
of a tradeoff. We want to make sure that tax relief means tax relief 
and not just some token tax relief while we increase spending over in 
the other side.
  I recognize for up to 5 minutes this morning the Senator from Kansas, 
Mr. Brownback, and I also want to compliment him for all of his hard 
work and efforts in the area of taxes.
  The PRESIDING OFFICER. The Senator from Kansas.
  Mr. BROWNBACK. Thank you very much, Mr. President. I thank our 
distinguished colleague from Minnesota for all his work in this field.
  As long as I have been in this body--I have not been in it that long; 
I am in my third year--I have known that Senator Grams has been really 
working on the issue of tax cuts. He has pushed forward. He has prodded 
people on it. He has done a beautiful job of getting us to the point of 
people saying let's have a tax cut, a serious tax cut, not one where we 
just issue a bunch of press releases and the press releases cost more 
than the tax cut but a real tax cut that stimulates the economy and 
helps people.
  I am delighted the President is now apparently willing to work with 
the Congress in order to provide the American people with the tax cut 
they need and deserve. Part of the reason the President is now willing 
to consider a tax cut is the strength of the American economy, which is 
precisely one of the reasons we should consider a tax cut at this time. 
We are at this point of a budget surplus because of some fiscal 
discipline in Washington but mostly because of the strength of our 
economy. We need to keep that economy going and growing strong. That is 
the key to having budget surpluses in the future--a strong economy. We 
can help with tax cuts.
  The bottom line, as has been mentioned before, is that growth works. 
When we have growth, we have more resources to pay down the debt, to do 
the programs needed for the American public, and now to cut taxes.
  If we are going to continue to experience a growing economy, we need 
to take steps to enhance and sustain our current record of economic 
expansion in order to pave the way for the next century. We need 
another ``American century.'' Providing the American people with broad-
based progrowth tax relief is one of the ways to help achieve it.
  In America there is an emerging class of investors who are more aware 
of what tax policy means for individuals and for the ability of our 
economy to perform. This class of investors is citizens who have been 
able to take part in the American dream through 401(k) programs and 
expanded IRAs that have been offered as part of a retirement package or 
encouraged through our Tax Code. They are not wealthy--- not yet 
anyway--but they are increasingly concerned about our Tax Code and what 
it means to them.
  We need to work with the family farmers, cab drivers, construction 
workers, and small businessmen to allow them to participate in this 
free market system and have it continue its expansion. They know the 
best thing Congress can do in order to spur growth is to cut taxes.
  There are a variety of options for cutting America's taxes. We can 
use a budget surplus after accounting for Social Security. We need the 
Social Security surplus for Social Security, and we need to lock it 
down, lock it out--create a lockbox for it.
  With the budget surplus over and above Social Security, we could 
widen the 15-percent tax bracket in order to help ``flatten" the tax 
structure and provide the American people with tax relief. An expansion 
of the 15-percent tax bracket has another desirous effect of 
alleviating the impact of the marriage penalty. Currently, nearly 21 
million families are forced to carry an average of $1,400 more a year 
in taxes simply for being married. We must bring this institutionalized 
discrimination against the family to an end. Now is the time to do 
that.
  We could also take steps to encourage savings and investment by 
cutting the capital gains tax rate, which could stimulate the economy 
and give back further revenues to the Federal Government. Americans 
need a higher rate of national savings to continue to grow into the 
next century. Cutting capital gains tax rates will help. We can look at 
the possibility of further reductions in the death tax area. I think we 
need to do this, particularly for small businesses and family farmers 
who frequently spend a lot of time reorganizing their business, 
creating trusts and other corporations to get around paying death taxes 
that would have the impact of killing their business, or of killing 
their farm, and not allowing them to pass it on to the next generation. 
We need to do those things.
  I congratulate the Senator from Minnesota for his work on this tax-
cutting agenda and getting the President to agree that we can and 
should do a tax cut. For the President to say he isn't opposed to a tax 
cut is a positive step. Now it is time for the President to deal with 
the Congress in providing real tax relief to the American public. It 
stimulates the economy, it keeps us growing, and it supports the 
American public.
  I yield the floor.
  Mr. GRAMS. Mr. President, I thank the Senator from Kansas for his 
efforts

[[Page 14514]]

in discussing the importance of continued work in reducing the tax 
burden for average Americans.
  The bottom line is that we are overtaxed today. The average family 
today spends about 40 percent of everything they make on taxes. Compare 
that to 1916 when the taxes began; it was less than a 3-percent tax 
burden on those paying taxes at that time, which was only about 5 
percent of the American people. Today over 40 percent of a family's 
income goes into taxes.
  When we talk about tax relief, we are talking about giving back money 
that has been overcharged--in other words, the excess money, the 
surplus. We are not talking about cutting any Government spending. We 
are not talking about reducing even the size and scope of the 
Government under these plans. That we need to do. If we were going to 
actually cut taxes, we would be giving back the surplus and then 
looking for ways to reduce the amount of money the Federal Government 
spends.
  A couple of brief facts on the tax burden and how it has grown. Under 
the Clinton administration, individual income tax relief for income tax 
receipts has far outstripped our economic output. The tax collections 
have more than doubled this country's gross domestic product growth in 
the last 6 years. It is almost double what personal income growth has 
been. In other words, Washington spending is growing twice as fast as 
the growth in the entire economy and twice as fast as a person's 
personal income. I think that is what we are talking about today.
  We all need to pay taxes. We need to support Government. There are 
many good things the Government does. We need to review the excessive 
spending and Washington's belief that it can do everything for 
everybody.
  In a bipartisan effort and mood, I yield the reminder of my time to 
the Senator from South Carolina to sneak in some remarks this morning.
  I yield the remainder of my time to the Senator.
  Mr. HOLLINGS. I thank my distinguished colleague.
  Mr. President, so the distinguished Senator from Pennsylvania has 
time for the independent counsel, I ask unanimous consent to extend his 
time from 12:05 to 12:35 so his half hour can be preserved.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. SPECTER. I thank the Senator.
  Mr. HOLLINGS. I thank both of my colleagues on the other side of the 
aisle.
  I awoke with a shock when I saw we had $1 trillion more money to 
spend. I go right back to 1995, just 4 years ago, when I said I will 
jump off the Capitol dome if this budget is balanced by the year 2002. 
I said to myself, it looks as if I am going to have to jump off the 
dome, because they found another $1 trillion. We just have surpluses 
everywhere.
  I felt that way until I picked up the President's document--the 
budget of the U.S. Government that they gave us today, hot off the 
press. Turn to page 42 and Members will see the actual deficit in 1998 
at the end of September was $5,478.7 trillion.
  The distinguished Presiding Officer, who is a certified public 
accountant, knows how to add and subtract. For the 5 years, on page 42, 
the total gross Federal debt goes to $6,298 trillion. The Federal debt 
by the year 2002 that I was worried about has already increased some 
$400 billion. By the year 2004, it has increased from the 1999 deficit 
$551.1 billion.
  The debt is going up half a trillion, and everybody is talking 
surplus. That is totally dismaying to this particular Senator. It is a 
shabby game and a fraud that we play on the American public. The only 
entity to keep us honest is the free press. They join in the fraud. 
They had a debate some years ago, between Mr. Walter Lippmann and John 
Dewey. This is back before the war. Lippmann's contention was that the 
way to really build and strengthen a democracy is to get the best of 
minds in the various disciplines--whether it is in medicine or whether 
it is in law or whether it is in finance or whether it is foreign 
policy--get the best of the best minds around a table, determine the 
needs of the country, and give it to the Congressmen and Senators and 
let them enact it into law.
  John Dewey countered that. He said: No, the better way is to give the 
American people the truth, and the American people, in a consummate 
way, through their Representatives in the Congress, the House and 
Senate, would reflect those truths, and we would have a strong 
democracy. That is the way since Jefferson's time, when he said:

       [. . . as between] a government without newspapers, or 
     newspapers without a government, I should not hesitate a 
     moment to prefer the latter.

  That was because he was depending, over many years--now over the 200 
years we have had--on that media expounding and telling us the truth.
  The truth is, there is nothing in the lockbox that everybody is 
talking about. We have been spending it--$857 billion that we owe 
Social Security this very minute. So there is nothing in the lockbox. 
You can see from this document, when they say, pay down the public 
debt, there is no such thing as paying down any kind of special debt. 
You either have a debt that increases or a debt that decreases and 
comes into balance. They play that shabby game called ``paying down.'' 
The President even said, as quoted in the New York Times this morning, 
that he was going to tear up the credit card.
  What they do is transfer the debt from the general indebtedness of 
Government, namely for defense and spending and everything else, 
foreign policy and otherwise, and transfer it over to Social Security, 
over to the military retirees, civilian retirement, over to Medicare, 
because there is a surplus. So they transfer that debt into these trust 
funds and say that is paying down the debt. It is like having a Visa 
and a MasterCard and you pay off your Visa card with the MasterCard. 
You are still the Government. If you are still the individual, you have 
your individual debt; if you are still the Government, you have the 
Government debt.
  One more word and I will yield with gratitude to my distinguished 
friend from Pennsylvania. Just turn to page 43, the next page. You can 
see the 15-year; they have the debt held by the Government, accounts 
held at the end of the period, which has to be added up with the debt 
held by the public at the end of the period, and you will see the debt 
goes up to $7.587 trillion. The debt goes up almost $2 trillion over 
that 15 years.
  Fortuitously, back 4 years ago I was saying that when President 
Reagan came to town we had an annual budget deficit from year to year 
and President Reagan said: I am going to balance it the first year. 
Then he said: Whoops, this is worse than I ever thought; I'll do it in 
3 years. Then, with Gramm-Rudman-Hollings, we did it in 5 years. I 
said, before long we are going up to 10 or 15 years. And sure enough, 
this morning they have gone up with all kinds of estimates of revenues.
  Really, the way to play, if you want to play this game, is let's have 
a 25-year budget. We will have enough money for everything. Send the 
money to the U.N., double the amounts to the United Nations, double the 
tax cut. Let's double all these things, give it all to investment 
accounts, health care, whatever you want. Let's have a 25-year budget 
and really go to spending up here.
  It is a wonderful charade. It is a lord-awful fraud. It is only up to 
the media to cut out this nonsense about surplus when we are spending, 
this year, $100 billion more than we are taking in. It shows from the 
President's own figures we will continue to spend more than we take in, 
increasing the debt, which brings us to the $350 to $365 billion 
interest costs on the national debt. Before long, I am going to put in 
a tax allocated to really getting rid of that debt, whereby we will 
give a $3.5-trillion tax cut, namely, get rid of that interest cost 
over the 10-year period. That is the kind of tax cut the Senator from 
South Carolina would like.
  I thank my distinguished colleague from Pennsylvania.
  The PRESIDING OFFICER. Under the previous order and agreement, the 
time until the recess shall be under the control of the Senator from 
Pennsylvania.


  The Senator from Pennsylvania.

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