[Congressional Record (Bound Edition), Volume 145 (1999), Part 12]
[House]
[Page 16890]
[From the U.S. Government Publishing Office, www.gpo.gov]



             DEMOCRATIC COALITION UNVEILS ITS TAX CUT PLAN

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from California (Mr. Sherman) is recognized for 5 minutes.
  Mr. SHERMAN. Mr. Speaker, today the new Democratic coalition, a group 
of Democrats who have brought our party into line with the real needs 
of the business community, unveiled our own tax cut plan, and I rise to 
compare that plan with the Republican plan that was floated over the 
last 2 to 3 weeks and which the House is likely to address in the next 
several days.
  In doing so, Mr. Speaker, I think that we will discover that this 
should not be a bidding war to see who can offer the American people or 
who can offer the business community the largest tax cut, but rather 
that the business and investment community should embrace the tax cut 
package which keeps our economy strong and, at the same time, provides 
essential tax relief.

                              {time}  1930

  I have been down this road before, but from a long way away. As a CPA 
and tax attorney in California, I watched the floor of this House as 
the ERTA bill, the Economic Recovery Tax Act of 1981, was passed. And 
there was celebration in the business community. Lower taxes on capital 
gains; huge depreciation write-offs. No thought of fiscal 
responsibility. And I had to tell my clients, this was not the tax 
policy they should want. Because what we saw was an explosion of 
deficits, a stock market that performed not near as well as the stock 
market has performed of late. What we saw was a tax bill that needed to 
be corrected in 1986 and then again in the early 1990s and again in 
1994. What we saw was a tax bill that undermined the economy. The 
lowest taxes that Ronald Reagan could possibly promise the business and 
investment community did not lead to the highest after-tax return. 
Instead, it led to deficits, inflation, high interest rates and 
unemployment.
  But, Mr. Speaker, the Republican tax plan that has been floated 
recently is ERTA on steroids. It gives us a plan to undermine the 
economic vitality that we have built over the last several years at 
great difficulty. $900 billion in tax cuts over the next 10 years, 
nearly $3 trillion in tax cuts over the following 10 years, exploding 
tax cuts. What does that mean? It means that everything that we have 
done in building this economy is under attack.
  Yes, they say that these are tax cuts we can afford. But just barely, 
and just if you believe the most rosy of economic projections. What 
makes more sense is a fiscally responsible tax cut, for two reasons: 
First, because by paying down and paying off the debt, we will put 
ourselves in a position where we can assure the solvency of Social 
Security and Medicare through the retirement of those of us who are 
baby boomers. We can turn to today's seniors and tomorrow's seniors and 
say, ``We have done the fiscally responsible thing in the 1990s and you 
can be sure Social Security and Medicare will be there.'' Just as 
importantly, in terms of dealing with the economy for the next 5 and 10 
years, we can assure the markets that low interest rates are called 
for, that the high Dow is justified because we here in Washington 
continue to have our fiscal house in order.
  The tax bill that the New Democrats have put forward is a reasonable 
one. It is news today that the President has announced that he would be 
willing to go along with a $290 billion tax cut, $50 billion more than 
his own proposal. Well, our tax cut comes in at just a little over 
that, a little over $310 billion. It provides a permanent R&D tax 
credit. It encompasses the President's plan for aid for school 
construction. It goes a long way toward eliminating the marriage 
penalty. It provides for credits for those families that have to deal 
with the responsibilities of long-term care for those who are elderly 
and infirm. Finally, it provides for estate tax relief so that only the 
top 1 percent of Americans will ever have to worry about the estate 
tax. Finally, the people in my district will not have to prepare long 
estate planning documents.
  Mr. Speaker, we should stand for reasonable and fiscally responsible 
tax cuts, and that is why I think we should adopt the tax cut plan of 
the New Democratic Coalition.

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