[Congressional Record (Bound Edition), Volume 145 (1999), Part 13]
[House]
[Pages 18771-18776]
[From the U.S. Government Publishing Office, www.gpo.gov]



 THE TAX BILL AND OUR TRADE RELATIONSHIP WITH THE PEOPLES' REPUBLIC OF 
                                 CHINA

  The SPEAKER pro tempore. Under the Speaker's announced policy of 
January 6, 1999, the gentleman from California (Mr. Sherman) is 
recognized for 60 minutes as the designee of the minority leader.


                   Thoughts for the People of Atlanta

  Mr. SHERMAN. Madam Speaker, our hearts go out to the people of 
Atlanta, especially the families of the dead and the wounded. For the 
next few weeks, our hearts will be troubled by the constant questions: 
Why? What could have been done? Frankly, I do not have any answers.
  For this reason, I will ask Members to indulge me, because I came to 
the House to speak about other subjects, even though, as much as we 
would like to concentrate on the fiscal subjects that I would like to 
address, our hearts will still be with the people of Atlanta.
  Madam Speaker, I have come to the House rather hurriedly. I became 
aware just a few minutes ago that I would be the designee of our side 
to speak for 1 hour, so I will go through my notes in an effort to 
comment on the tax bill that recently passed this House, and which I 
hope will be radically changed by the conference committee before it is 
resubmitted here.
  Then, time permitting, I would like to talk about our trade 
relationship with the People's Republic of China, because when the 
House returns after the August break, we may be confronted with a major 
decision to be made with regard to whether to grant permanent most-
favored-nation status or farm trade relations to the Peoples' Republic 
of China.
  Focusing first on the tax bill, I would like to focus on two things: 
First, the content of the bill. So many speeches have been given on 
this floor talking about the size of the bill, and I do want to address 
that.
  But there are many more differences between the Democratic position 
and the Republican position than their bill is three and one-half times 
the size of ours. Because when we look at the content of the Republican 
tax bill and to whom it grants relief, then we will see major 
differences in philosophy.

                              {time}  1515

  Madam Speaker, I spent over 20 years as a CPA, as a tax attorney, and 
as a tax court judge. I know tax fraud when I see it. The statements 
made in support of the Republican tax bill rise to the level of tax 
fraud.
  We are told that we are giving people their money back. Yet, we take 
money from working men and women and provide in this Republican tax 
bill huge tax breaks to the rich and the special interests.
  At least a dozen speakers have risen on this floor to claim that the 
Republican tax bill eliminates the marriage penalty; and, yet, it 
provides only minor relief. We are told that it provides tax cuts for 
working families, but it gives only a few crumbs to those in the bottom 
two-thirds of income in this country. It is a bill that we are told 
provides for school construction; and, yet, it provides very little. 
Likewise, with providing incentives for research.
  Madam Speaker, Winston Churchill once remarked in talking about the 
pilots who saved Britain from the Nazi bombers, ``never have so many 
owed so much to so few.'' If we enact the Republican tax bill, then it 
will be said of us as a people ``never have so many given so much to so 
few'', because we are asked, as a people of over a quarter billion in 
number, to give huge tax relief to the top 1 percent of our population.
  I see that I am joined by the gentleman from Texas (Mr. Turner) who 
would also like to talk about the tax bills that have recently passed 
this House.
  Madam Speaker, I yield to the gentleman from Texas (Mr. Turner).
  Mr. TURNER. Madam Speaker, I want to join with the gentleman from 
California (Mr. Sherman) on this hour of debate, this time that is set 
aside at

[[Page 18772]]

the end of the day, to talk about the issues facing us.
  I would like to spend just a moment addressing the tax cut proposal 
that was before the House in the last few days.
  The Republican tax message is one cannot trust the Congress to act 
responsibly with the surplus. They say get the money out of town before 
it even arrives here yet. It is a little bit ironic to think their 
theme is one cannot trust the Congress to manage the money wisely when, 
in fact, the last time I checked, they were in the majority in this 
House.
  Their bill spends a trillion dollars, giving a $794 billion tax cut 
that is based on a future guesstimate of a trillion dollar on-budget 
surplus that is so far in the future that, if one looks at the tax cut 
year by year over the next 10 years, the tax cut planned in that $794 
billion for next year is only $5 billion, six-tenths of 1 percent of 
the total tax cut.
  The Federal Government, as my colleagues know, ran annual deficits 
for 29 years straight and ran up a $5.6 trillion national debt. The 
annual interest on that debt exceeds the annual spending, if one can 
believe this, on all of national security.
  The interest on the national debt takes 25 percent of all individual 
income taxes collected by the Federal Government every year.
  Do my colleagues not think that we could be disciplined enough just 
to run one true budget surplus before we spend what we do not even have 
yet? If a business had borrowed money from a bank to operate for 29 
years straight and, for the first time in 29 years, it showed a small 
profit, would the business declare a dividend to the stockholders; or 
would it try to pay down that huge debt they had accumulated? I think 
the answer is obvious.
  Last week, the House had a historic opportunity to do what every 
businessman or woman, every family in America would do when faced with 
the choice of paying down debt or passing on that debt to our children, 
our grandchildren.
  By a margin of 9 votes, this House defeated a responsible Democratic 
alternative that was designed to ensure that we had a reasonable tax 
cut while preserving Social Security and Medicare. We even had on the 
floor of the House a motion to recommit that provided that 50 percent 
of the on-budget surplus would go to paying down the debt, 25 percent 
for tax cuts, and 25 percent for priority spending needs, such as 
Medicare and Social Security.
  Every Democrat on the floor of this House voted for that responsible 
alternative. Only one Republican joined us. All the remainder voted 
against that alternative.
  I ask, where have all the fiscal conservatives in the Republican 
Party gone? Fiscal conservatives do not spend money that we do not even 
have yet. Fiscal conservatives do not ignore the advice of the Federal 
Reserve Chairman, Alan Greenspan, who has said over and over again 
before committees in this House that the best use of the surplus is to 
pay down debt.
  Fiscal conservatives do not gamble with our economic security, our 
health security, or our retirement security. Fiscal conservatives 
understand that reducing the national debt lowers interest rates. For 
example, a 2 percentage point reduction in interest rates on the 
purchase of a $90,000 home means a savings of almost $1,500 a year in 
mortgage payments for American families. That is $1,200 more than a 
family with an income of $50,000 a year would get from the Republican 
tax cut plan. That family, under their plan, only gets $300 a year.
  Fiscal conservatives do not gamble with our economic security. They 
understand that our health security, our retirement security, our 
economic security is the important thing that must be preserved by the 
Congress.
  Finally, fiscal conservatives do not pass on debts to their children 
and their grandchildren.
  I believe we can have reasonable tax cuts over the next 10 years, 
given to people who really need the relief: working families and small 
business. These are the folks who have not yet fully participated in 
the booming new economy. These are the folks who live in rural America, 
the folks who live in the inner city.
  In today's economy, tax cuts should not be aimed at Wall Street, but 
they should be aimed at Main Street. But an equally important priority 
for this Congress is to pay down that $5.6 trillion national debt, to 
save Social Security, to save Medicare for our children.
  Let us adopt a fiscally responsible tax reduction plan that shares 
the on-budget surplus, 50 percent to debt reduction, 25 percent for tax 
relief, and 25 percent to save Social Security and Medicare.
  Mr. SHERMAN. Madam Speaker, the gentleman from Texas (Mr. Turner) 
says it well. Since he has focused on the fiscal irresponsibility of 
the Republican tax cut, I would like to echo some of the things he had 
to say.
  The most curious thing is that the Republican majority has come 
before us and agreed on what the best policy would be. They have agreed 
with Alan Greenspan that the best thing we could do is save the lion's 
share of the surplus, adopt only small tax cuts, and pay off the 
national debt. They admit that is the best economic policy. They admit 
that that is what is best for America. Why will they not do it?
  They come before us and say that America, the best Nation in the 
world, cannot have the best economic policy, that we are congenitally 
unable to use funds to pay down the debt; that if the money is not used 
for tax cuts, it will be squandered and wasted.
  Well, I think America is the best country, and it deserves a Congress 
that will adopt the best economic policies. If the Republicans feel 
that they are congenitally unable to be fiscally responsible, then the 
least they could do is get out of the way, retire, and endorse the 
Reform party candidate or the Independent candidate or even the 
Democratic candidate from their district who will come here and do what 
both sides of the aisle have agreed is the best policy for this 
Congress; and that is to use the vast majority of the surplus to pay 
down the national debt.
  The gentleman from Texas illustrates it well when he talks about the 
importance of fiscal responsibility. He talks about a $90,000 house. 
Out in extremely expensive Los Angeles and Ventura Counties, we can 
simply double those figures. Virtually every working family in my 
district that owns a home would save double or triple if they could 
reduce their interest rate by 1 or 2 percent as compared to the crumbs 
of tax relief found at the edges of this Republican tax bill.
  Yet, we are told by a Republican majority that they cannot stop 
themselves, that the Republican majority must be made up of self-
admitted spendaholics. Perhaps the undertow of their comment is the 
Republican majority will not be a majority very soon. One way or 
another, they are telling us that the Congress of next year and the 
year after somehow will not be able to pursue a fiscally responsible 
policy.
  I am confident that, with gentlemen like the gentleman from Texas and 
men and women on this side of the aisle exercising fiscal 
responsibility, that we will be able to do what is politically 
difficult but what we have shown ourselves capable of doing in the last 
2 years; and that is to confine spending, to avoid tax cuts we cannot 
afford, and to run a government surplus.
  Think back. I know the gentleman from Texas and I came to Congress in 
the same year, 1997. I served on the Committee on Budget, and we came 
out with a plan adopted by this House. We said, by 2002, the budget 
will be balanced. We could hear the laughter, the loud laughter from 
the press galleries behind me. They were occupied at the time, with 
people who giggled at the prospect that the 1997 budget agreement would 
lead to a balanced budget by the year 2002. In fact, it lead to a 
balanced budget in 1999, in fact, a significant surplus in 1999.
  So this Congress has, in the last 2 years, shown it can be fiscally 
responsible. Now we need a tax plan that is based on the best economic 
policy, not one that assumes the people of this country cannot have a 
Congress that is as good as they are. They know that

[[Page 18773]]

the best use of these funds is to pay down the debt.
  Now, among the reasons it is the best use of funds is that it allows 
us to stop paying interest on the debt. The Republican tax cut of over 
$800 billion over the first 10 years, $3 trillion in the second 10 
years, those figures just reflect the cost of the tax cut. We have to 
add in the interest on the national debt that we will have to keep 
paying because, under the Republican plan, we cannot pay down the debt. 
That interest over the next 10 years will be on the order of another 
$150 billion.
  Imagine what we could do if we could pay off the debt, stop paying 
interest on the debt, and have interest rates that reflect the fact 
that Wall Street and Main Street know there is fiscally responsible 
government here in Washington.

                              {time}  1530

  Instead, we are asked to adopt a tax plan which will quickly erode 
the tenuous faith Americans have that we have our fiscal house, in 
order in this House.
  I should point out both to those on our side of the aisle that have 
thought of a number of government programs they think should be funded, 
and to all of the little tax incentives and giveaways built into the 
Republican plan and those people who voted for it, that fiscal 
responsibility will do more for the poor than 50 great society 
programs, and fiscal responsibility will do more for business than 50 
special tax breaks. Because if we can take the Federal Government out 
of the capital markets, then all of the money that is available for 
investment, instead of being used to buy T-bills and T-bonds to finance 
Federal spending, can be available for private investment. That means a 
continuation of the economic expansion. It means people will find that 
when they go to borrow money for a new car or a new home those funds 
are available.
  I can understand the desire to pass out tax breaks to wealthy 
interests. I can certainly understand the desire to provide special 
programs for those in need, but first and foremost we need to pay down 
the national debt.
  At this point, I would yield to the gentleman from Texas (Mr. 
Turner).
  Mr. TURNER. I thank the gentleman for yielding, and I would like to 
engage the gentleman in a discussion regarding an issue that is often 
overlooked in the discussion on what we should do with the projected 
10-year estimated, or guesstimated, surplus.
  I am told by sources that know a lot more about how the economy works 
than I do that the current surplus estimate of $2.9 trillion over the 
next 10 years, $1.9 of which is in Social Security, which I think we 
have all agreed on both sides of the aisle we should not touch, but 
that other $1 trillion that we are arguing over as to what is the best 
use of it, is really a figure that is quite tenuous.
  In fact, I am told that if we take four of the assumptions that were 
used by the Congressional Budget Office to come up with that estimate 
of $2.9 trillion and we adjust those four assumptions only very 
slightly, the surplus would change from $2.9 billion over 10 years to a 
deficit once again.
  Those four factors that were mentioned are: if, instead of assuming 
the employment rate that the CBO assumed, if employment simply ends up 
being 1 percent less than they estimate, in other words, if the 
unemployment rate is 1 percent greater than the CBO estimates, it has a 
significant impact on the surplus.
  If spending goes up over the next 10 years, Federal spending, with 
inflation, rather than being down at the levels that we are struggling 
to maintain that were set in the balanced budget act of 1997, then part 
of that surplus will disappear.
  Mr. SHERMAN. The gentleman is talking about a budget plan to try to 
keep all Federal expenditures at the same nominal levels without 
increasing them for inflation. I think we should note that the Speaker 
has said again and again that we would pass all the appropriations 
bills before the August break. But the Republican majority has shown 
that they cannot meet those limited spending objectives. That is why 
they are sending us home without passing the appropriations bills and 
that they have now had to define the census as an unforeseen emergency 
and fund it outside of the budget caps.
  Under those circumstances, does the gentleman think there is a 
significant risk the expenditures that will be voted over the next 10 
years will exceed the no-increase-for-inflation straight line that the 
Republicans have used in their budget estimates?
  Mr. TURNER. Well, it would seem to me very likely that that would be 
the result. And I, too, share the gentleman's concern with the double 
set of books that the Republican majority has begun to keep over the 
last couple of weeks just to try to show that they can stay within the 
budget caps of the 1997 Balanced Budget Act.
  As we all know, if we declare something around here as an emergency, 
we do not have to count it against the caps. But one thing to keep in 
mind: every time somebody stands up and says, I want to declare this 
spending an emergency, they are taking it right out of the Social 
Security Trust Fund.
  And the truth of the matter is, if we have things like the census 
declared an emergency, I think we are committing fraud with regard to 
the way we keep the Federal books. I mean the census is required in the 
United States Constitution. We do it every 10 years. And to stand up 
and say, well, we have to appropriate the money to do the census and 
call it emergency spending so it will not be counted against the budget 
caps is disingenuous, in my opinion.
  As I mentioned, if we alter four factors in the Congressional Budget 
Office assumptions about the $2.9 trillion surplus, it disappears. I 
mentioned two of them a minute ago.
  If unemployment is simply 1 percent higher than they estimated over 
the next 10 years; if spending goes up with inflation rather than at 
the artificially low estimates that we have under the current estimate; 
if the gross domestic product, a fancy word that I am not sure I 
completely understand, simply grows at seven-tenths of 1 percent less 
than the Congressional Budget Office estimates; and, finally, if 
Medicare spending simply goes up at the same average annual rate that 
it has gone up since 1972; if all four of those things happen to turn 
out to be true, there is once again a deficit. There is no $2.9 billion 
surplus; there is a deficit over the next 10 years.
  I think it is often overlooked in this debate, as we argue about what 
to do with the surplus, that the threshold question should be will 
there really be a surplus. I hope there is, and I hope the economy 
stays strong; but to gamble our economic security, our health care 
security, the security of Social Security, all on an estimate that may 
turn out to be completely wrong is the height of fiscal 
irresponsibility.
  Mr. SHERMAN. I would echo what the gentleman has to say.
  If we are in a position where perhaps we will have an extra trillion 
dollars in general funds, not to mention the necessary buildup in 
Social Security, as the gentleman pointed out, this $2.9 trillion 
surplus, $1.9 trillion of the surplus, is just building up funds that 
we are going to need when people the gentleman's age and my age are 
going to retire, so that only $1 trillion of the estimated surplus is 
in the general fund, the one funded by regular taxes for regular 
expenditures.
  If we are in a situation where we do not know whether that surplus is 
going to come in as projected, then we have two choices: we can adopt a 
plan where we say we hope it will come in and if it does, we will pay 
down the debt; or we can say, we hope it will come in, but we are going 
to spend it before it comes in. But the method that is most likely to 
lead to higher unemployment, the method that is most likely to lead to 
a decline in the growth of our gross domestic product is to adopt a 
fiscally irresponsible plan and then watch the markets respond, watch 
interest rates creep up, watch investment decline, watch unemployment 
go up.
  So to act as if the surplus is certain is the best way to put it at 
risk. And that is another reason why the Republican plan is so fiscally 
irresponsible.
  Let me now focus on the content of the tax cut, because even if we 
did not

[[Page 18774]]

believe in fiscal responsibility, even if we thought we should have an 
$800 billion tax cut exploding up to $3 trillion in the second 10 
years, is this the right kind of cut to have?
  Let us look at the content. First, the Republicans promised to deal 
with the marriage penalty; and yet, and this is an interesting quote, 
the Family Research Council expressed its disappointment at the paltry 
marriage penalty relief found in the Republican tax bill. James Dobson, 
a man who has not ever offered to give me an award, I doubt he has 
offered to give the gentleman from Texas an award, went on radio to 
express his profound disappointment at the paltry marriage penalty 
relief in the Republican tax bill.
  That being the case, we should look at the Democratic bill, the bill 
that costs less than a third of the Republican bill's cost. But 
somehow, with less than one-third the tax cut, the Democrats provide 
more marriage penalty relief than the Republican bill.
  Let us look at the issue of school construction. We have seen the 
need to reduce class size around this country. We need our kids to get 
the best possible education. Well, if we are going to have smaller 
class sizes, then we need more classrooms. Both sides of the aisle have 
recognized that the Federal Government, through the tax code, should 
try to make it easier for local school districts to finance school 
construction. But in their bill, that is three times as expensive as 
the Democratic bill the Republicans provide only one-third of the help 
to local school districts. Three times as expensive but only one-third 
the help.
  And what kind of help do they provide local school districts? What 
they do is change the arbitrage rules. Well, what does that mean? It 
means that this is the only help they provide schools. This is the 
help. They tell every school district in the country, look, go issue 
tax-free bonds. Borrow the money at a low interest rate, and then for 4 
years take that borrowed money, borrowed at a low interest rate, do not 
use it to build schools yet, but go play the market. Go invest it the 
way Orange County did right before Orange County went bankrupt.
  The only help they provide local school districts is to give them a 
free plane ticket to Las Vegas and to invite them to put the school 
bond money on the crap table. And they say they will allow school 
districts to do this and that is how we will help school construction.
  How do the Democrats help school construction? We simply provide 
three times more the Federal help, and we do it by saying the Federal 
Government will pay the interest on the school bonds. No risks, no 
arbitrage, no invitation to local schools to sell bonds today and to go 
into the stock market and the bond market and buy derivatives and hope 
they can make a profit. Just real help by paying the interest on the 
bonds.

                              {time}  1545

  The Democratic bill, about 30 percent the size of the Republican 
bill, makes the R&D tax credit permanent. But the Republican bill turns 
its back on high-tech industry and says we will give them the R&D 
credit for a few more years and then we will turn it off.
  The Democratic bill provides for education, saying that employers can 
provide for education for their employees without the employees being 
taxed, whether it is graduate school education or whether it is 
undergraduate education or technical education.
  Yet, in a bill that costs more than three times as much, the 
Republicans cannot find room to allow for employee education.
  Well, what do they spend their money on, $800 billion in the first 10 
years, $3 trillion in the next 10 years? How is it all spent? Not for 
married families. Not for school construction. And not for ordinary 
working families in this country.
  Because, in fact, they provide over 50 percent of the tax relief to 
the top one percent of Americans' income and to giant corporations.
  Now, in many of the speeches on this floor, the numbers stated are 
not quite as sharp as the ones I related. And that is because the other 
speakers on this floor have tended to ignore the corporate tax 
provisions.
  But if we look at how much goes to the top one percent in income, 45 
percent of the benefits plus roughly 10 percent of the benefits going 
to giant corporations, we will see why there is so little room in the 
Republican tax bill to help education or to help marriage or to help 
working families.
  Let us talk a little bit about the breaks that they give giant 
corporations. They provide a special provision dealing with the 
interest allocation rules for multinational corporations.
  Well, what does that all mean? What it means is they provide $24.8 
billion in tax relief to those corporations that take their shareholder 
money and invest it in factories overseas, shut down their domestic 
production, invest equity capital overseas, and share in a $25 billion 
tax reduction.
  That provision will not create jobs in America. It may create a few 
extremely poorly paid jobs overseas. But it is not just $25 billion in 
the first 10 years. It is one of those exploding tax cuts that grows to 
nearly $50 billion in the second 10 years.
  Furthermore, the new Democratic coalition put forward the idea that 
we eliminate the estate tax for all but the one percent of the richest 
families in America and that we do it in a way so that the families do 
not have to prepare long estate planning documents, none of the bypass 
trusts, none of the trust tax returns, none of the complication of the 
lives of widows and widowers that has become standard among upper 
middle-class seniors. Just complete relief on the first $2 million.
  But that is not good enough for the Republican majority. They forget 
the derivation of the word ``millionaire,'' someone who inherits a 
million dollars.
  So they come here and they say, well, if they inherit a million 
dollars, there should be no tax. I agree. Inherit $2 million there 
should be no tax. I agree. And then they say if they inherit a billion 
dollars, if they happen to be the lucky unborn son or daughter of Bill 
Gates and they inherit $10 billion, they want no tax.
  That is why their package is so expensive but they cannot provide 
relief to married families and they cannot help school construction.
  Not only is the size of the Republican tax bill fiscally 
irresponsible, but the content is the most extremely regressive that I 
have ever seen.
  I notice that one of my other colleagues has come to the floor and 
requested that I yield to her.
  Mr. Speaker, I yield to the gentlewoman from North Carolina (Mrs. 
Clayton).
  Mrs. CLAYTON. Mr. Speaker, I thank the gentleman very much for 
yielding. I appreciate that so much.
  I had the pleasure of observing the discussion of the gentleman from 
California (Mr. Sherman) and the same topic he was talking about was 
very much on my mind and in my heart.
  I appreciate the gentleman taking the leadership and getting this 
time and explaining so vividly not only the unreasonableness but the 
contradiction of this big, huge tax bill provision that we just passed 
in the House last week and how that is in contradiction of the 
principle that both sides say that they want to do.
  They say, and we agree, the Democrats and Republicans agree, that we 
want to protect Social Security, we want to reform Medicare, and we 
also agree we want to pay down the debt.
  Well, we cannot spend the monies twice. The great surplus that we are 
so blessed to have in this country is not there to be spent time and 
over and over again. So they either do these things that they say they 
want to do or they indeed give this big tax bill.
  I just want to thank my colleague for explaining this. With his 
background as a CPA, he can put these details in such a vivid way that 
people begin to understand the reasonableness.
  I, too, want to reduce taxes. I think it needs to be targeted. It 
needs to be targeted for those families that are having health care 
problems long-term, those who are having problems in terms of needs of 
educating their kids and day-care.

[[Page 18775]]

  Also, I think we do need some relief on inheritance tax. We raised it 
last time, and we need to raise it again. And raising it to $2 million 
is reasonable and moving in the right direction. But the tax cut needs 
to be targeted and it certainly needs to be affordable and we need to 
balance that.
  So I have come to the floor to participate in this discussion to say 
that there are priorities for spending and there are priorities for tax 
reduction that should be consistent with us giving everybody an 
opportunity in America.
  We just should not give a tax break for the one-third or the richest 
one-fifth or give tax breaks to the one-third all over. We should make 
sure those are well-crafted, targeted tax relief.
  More importantly, we should be able to afford it. Mr. Greenspan said 
over and over again, yes, he does not object to a tax cut. But it 
should be not in this environment when it is being proposed in an 
environment where we do not even have the surplus realized yet. The 
surplus that they are talking about is based on a projection for it to 
happen.
  Actually, my colleague and I served on the Committee on the Budget 
and he and I know that the surplus that we are talking about for this 
year, by and large, is as a result of people paying their payroll 
taxes, going into the Social Security. So if we give this big tax 
break, guess what happens? We cannot spend it twice.
  When we go on those great emergencies, guess what happens when we 
take things off of budget? It indeed comes from the surplus.
  So I just want to commend the gentleman for bringing a very factual, 
reasonable discussion. This is not a rhetorical discussion. This is a 
factual, reasonable discussion how insane this tax cut is, how 
unreasonable it is, how in contradiction we put these principles, 
saying on the one side, Americans, we want to protect Social Security, 
we want to reform Medicare, we want to pay down the debt but, at the 
same time and in the same breath, we are going to give almost $800 
billion.
  Yes, we need a tax cut. But we need it to be targeted and we need it 
to be affordable. We also have spending priorities. Our education of 
our kids. Our senior citizens are without drug prescription 
opportunity. There are millions of senior citizens having to debate 
whether they can afford to pay for their prescription or whether they 
can pay for the rent or buy food. These are the basic problems they 
have.
  For those of us who now have the opportunity to be looking at the 
surplus, we ought to be balancing our priorities to make sure that all 
Americans are prosperous in this economy.
  Again, I want to thank my colleague for yielding to me. I appreciate 
it so very much.
  Mr. SHERMAN. Mr. Speaker, reclaiming my time, I thank the gentlewoman 
from North Carolina (Mrs. Clayton) for coming to the floor and for 
joining with us here.
  I share her belief that we need tax cuts. But if we can keep this 
economic expansion going for another 5 years, first that will do far 
more for everybody's pocketbook than any tax cut. But second, we will 
then be able to talk about more tax cuts.
  If we screw it up, if we adopt tax cuts that force interest rates up 
because we are fiscally irresponsible, then, first, people will suffer 
far more from an economic downturn and, second, we will be back here 
dealing with deficits.
  Mrs. CLAYTON. Mr. Speaker, if the gentleman would yield further, I 
just want to share with my colleague, I am from rural America; and we 
in America are very blessed that we are having a sustained economy. But 
there are many of us in rural America and in the inner cities that are 
not prospering as much as anybody else.
  That is not to say we should not celebrate our prosperity. We do. But 
I want my colleagues to know, as we celebrate this, all of us are not 
eating from the same plate and the same meal and all the nutrition. 
Some of us are having difficulty in finding money for our schools and 
rural areas. Farmers are suffering.
  So my colleague makes the right point. We would take this kind of in 
the wrong direction if we give too much of a tax break and then require 
us to raise taxes even greater. That certainly would be a travesty, and 
we should not do that.
  Mr. SHERMAN. Mr. Speaker, it will take a few more years of this 
economic expansion for it to be felt in those places that it has not 
yet been felt.
  My largest county, I represent a part of Los Angeles County, was 
lagging behind the rest of California; and only in the last couple of 
years has the economic expansion really has been felt in Los Angeles 
county. I hope very much that it is beginning to be felt in your part 
of North Carolina.
  There is nothing more important than keeping this economy growing.
  Mr. TURNER. Mr. Speaker, will the gentleman yield?
  Mr. SHERMAN. I yield to the gentleman from Texas.
  Mr. TURNER. Mr. Speaker, I want to join with the gentlewoman from 
North Carolina (Mrs. Clayton).
  I come from east Texas. The area that I represent is still operating 
off the old economy. The new economy had not made it there yet. And the 
old economy is not doing so well in rural America and inner city 
America.
  That is why I feel so strongly, as my colleague does, about Congress 
making the right choices with regard to how we handle our Federal 
spending, our tax cuts.
  As Democrats, we believe in tax cuts and we believe in tax cuts that 
are aimed at the people that really need them. I think it is important 
for us in trying to engage in this dialogue with the American people 
for them to understand that we want to see taxes go down just as much 
as anyone else in this body. But we want it to happen in a way that is 
good for the sustained, long-term growth of this country; and paying 
down the debt is a part of that, and we need to make that a priority.
  I want to thank the gentleman from California (Mr. Sherman) for 
leading in this hour. It has been very informative to hear an 
individual with his background in accounting and finance talk about the 
details of the tax proposals that have been before this House in the 
last 10 days. I commend him for his leadership on these issues.
  I know the gentlewoman from North Carolina (Mrs. Clayton) joins me as 
we all try to move forward together and try to accomplish things that 
will bring us a better future for all of our children and our 
grandchildren.
  Mr. SHERMAN. Mr. Speaker, I have a few more examples and facts I want 
to quickly get into the Record. I promised I would wrap up just a few 
minutes after 4. We could, obviously, continue for another hour.
  But let me first just make sure this Record reflects the analysis of 
citizens for tax justice. I mentioned it earlier that 45 percent of the 
benefits in the Republican package go to the top one percent of 
American families.
  These families, on average, will save $54,000. These families 
typically have incomes of over three-quarters of a million dollars a 
year already.
  So the decision on who should benefit from this tax bill is as 
severely mistaken as the analysis that led to the unreasonable and 
fiscally irresponsible size of the tax bill.

                              {time}  1600

  Finally, for those who listened to the debates just before the tax 
bill was adopted, from time to time a Member of the majority would 
stand up and say, after a Democrat had spoken, do you realize the 
family in your State on average will save $3,000 or $3,500 under the 
tax bill?
  It sounded like a big number. Let me make sure that that is 
corrected. Yes, indeed, the, quote, average person in my State would 
save $3,500. That is over a 10-year period. So that is $350 a year. But 
that is the average person. Not the median but the mean.
  Let me just explain the difference. If you have got Al Checci, the 
gentleman, you may remember, who owns about half of Northwest Airlines, 
spent a lot of money in my State running for governor. If Al saves $10 
million on his taxes and then we have got 1,000 families in another 
part of my district saving $10 on their taxes, well, that all

[[Page 18776]]

averages up to a much higher number. The average simply looks at the 
huge amount of the tax break and divides it by the number of families. 
But the mean is when you look at the typical average family, what do 
they get. And typically under this tax bill, they get about 30 cents a 
day.
  For God's sake, let us not risk America's current and tenuous 
prosperity, let us not risk this economic expansion on the joy that a 
few will get in giving tax breaks to a very few Americans, and 
certainly let us not risk this economic recovery and economic expansion 
on 30 cents a day of tax cuts for the average American family.

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