[Congressional Record (Bound Edition), Volume 145 (1999), Part 14]
[Senate]
[Pages 19776-19826]
[From the U.S. Government Publishing Office, www.gpo.gov]



       TAXPAYER REFUND AND RELIEF ACT OF 1999--CONFERENCE REPORT

  Mr. ROTH. Mr. President, I submit a report of the committee of 
conference on the bill (H.R. 2488) to provide for reconciliation 
pursuant to sections 105 and 211 of the concurrent resolution on the 
budget for fiscal year 2000, and ask for its immediate consideration.
  The PRESIDING OFFICER. The report will be stated.
  The Legislative clerk read as follows:

       The committee on conference on the disagreeing votes of the 
     two Houses on the amendment of the Senate to the bill (H.R. 
     2488), have agreed to recommend and do recommend to their 
     respective Houses this report, signed by a majority of the 
     conferees.

  The PRESIDING OFFICER. Without objection, the Senate will proceed to 
the consideration of the conference report. (The conference report is 
printed in the House proceedings of the Record of August 4, 1999.)
  Mr. ROTH. Mr. President, the fundamental question before Congress 
these past few weeks, as we have debated the Taxpayer Refund Act of 
1999, is quite simple: Is it right for Washington to take from the 
taxpayer more money than is necessary to run the Government?
  The issue of tax relief is not any more complicated than that, and 
the outcome of the conference between the Senate and House makes it 
clear that we believe Government is not automatically entitled to the 
surplus that is, in large part, due to the hard work, thrift, and risk-
taking of the American people.
  Individuals and families are due a refund, and that is exactly what 
we do with this legislation. We give the people a refund. We do it in a 
way that is fair, broad based, and empowering. We do it in a way that 
will benefit nearly every working American, a way that will help 
restore equity to the Tax Code, and provide American families with the 
relief and resources they need to meet pressing concerns.
  This tax refund legislation will help individuals and families save 
for self-reliance in retirement. It will help parents prepare for 
educational costs. It will give the self-employed and underinsured the 
boost they need to pay for health insurance, and it will begin to 
restore fairness to the Tax Code by addressing the marriage tax 
penalty.
  How do we accomplish all of this? We begin by reducing our marginal 
income tax rates by a point. In other words, the 15-percent tax bracket 
will drop to 14 percent, and the 39.6-percent top rate will drop to 
38.6 percent. The new 14-percent bracket will be extended upward to 
include millions of Americans who are now paying taxes in the 28-
percent bracket.
  These changes will benefit individuals and families across the 
economic spectrum. For example, an individual with $40,000 of income 
will save over $700. An individual earning $50,000 will save over $800. 
Under this bill, a taxpayer with $70,000 of income will save over 
$1,000.
  This is significant tax relief. When fully phased in, a middle-class 
family

[[Page 19777]]

of four with an adjusted gross income of $80,000 will save almost 
$3,000 a year. This is real savings, money that can be used by 
individuals and families to meet their pressing needs and objectives.
  To restore equity to the Tax Code, this legislation also meets a 
bipartisan objective by providing relief for the marriage tax penalty, 
and it does this by doubling the standard deduction and the 15-percent 
tax bracket for married couples filing jointly.
  We can all agree on how important this is. For too long, husbands and 
wives who have worked and paid taxes have been penalized by their dual 
incomes. This plan will address that inequity by giving working 
American couples greater relief.
  Let me give an example. Two individuals, each making $35,000 a year, 
face a penalty of almost $1,500 when they marry. Under this 
legislation, that penalty will be addressed in two ways: first, by 
doubling the standard deduction and, second, by doubling the 15-percent 
tax bracket to include their combined income.
  The marriage penalty relief offered in this bill retains the Senate 
position on the amount of relief received, and it even provides relief 
for people receiving the earned income tax credit.
  To help families with their education expenses, the legislation 
before us allows taxpayers to increase their contributions to education 
IRAs, or what will--under the provisions of this bill--be called 
education savings accounts. Allowable contributions will rise from $500 
to $2,000 annually.
  And these funds will be available to meet expenses for all students, 
from kindergarten through college. Beyond increasing the level a family 
can save for education, this Tax Relief Act also makes interest earned 
on qualified State and private school higher education tuition plans 
tax free--a most important development, in my judgment. It also extends 
employer-provided educational assistance for undergraduate studies, and 
it repeals the 60-month rule on student loan interest deductions. This 
will allow individuals to claim tax deductions on interest that they 
pay on their student loan, without the imposition of a time limit.
  To help families meet health care and long-term care needs, this 
legislation provides a 100 percent above-the-line deduction for those 
who pay more than 50 percent of their health insurance premiums. This, 
of course, includes the self-employed. The plan also provides an 
additional personal exemption for those who care for an elderly 
relative in their home.
  As you can see, this legislation is, indeed, empowering; it addresses 
concerns that are vitally important in the lives of our families, coast 
to coast. It provides across-the-board tax relief. It addresses the 
marriage tax penalty.
  It makes education more affordable for all students--kindergarten 
through college. And it helps our families meet their health care and 
long-term care needs. But it doesn't stop here; it does much more.
  The legislation before us phases out the alternative minimum tax. It 
provides capital gains tax relief, simplifying the rate structure, and 
reducing the individual capital gains tax rate from 20 percent to 18 
percent, beginning with the current 1999 tax year. For those 
individuals taxed at the lowest individual rate, their capital gains 
tax rate is reduced from 10 percent to 8 percent.
  In addition, the tax basis of certain assets may be increased by an 
``inflation adjustment,'' so that any capital gain attributable to 
inflation is not subjected to tax. Also, we have maintained the 2 
percent capital gains rate differential that is imposed on long-term 
capital gains from depreciable real estate, by reducing that rate from 
25 percent to 23 percent.
  Another very important measure is the treatment of estate taxes. This 
legislation completely phases out and ultimately repeals the Federal 
estate, gift, and generation skipping taxes. It also corrects technical 
problems in the House provision.
  Each of these will be a powerful tool in the hands of taxpayers and 
families who will use these changes--their relief--to meet the needs 
that are unique to their situation. However, a couple of major 
provisions in this bill that I would like to outline in some detail 
will--like the across-the-board tax rate cut--benefit everyone, 
enabling individuals and families to prepare for self-reliance and 
success in retirement. These, of course, include the expansion of 
individual retirement accounts and pension programs.
  Under the bill, IRA contribution limits will be increased over the 
next 7 years until they reach $5,000. And taxpayers who are close to 
retiring will be allowed to make catchup payments in their plans. These 
changes will in my judgment, be incredibly beneficial. For example, an 
individual without an employer-provided pension plan, who contributes 
the maximum amount allowable, as it increases over the next 7 years--
with the magic of compounding interest--will be able to put away over 
$31,000 for retirement. In year 7 and beyond, he or she will be able to 
put away the full $5,000 annually.
  With the catchup provision--applicable for people over the age of 
50--if those 7 years pass just prior to the taxpayer's retirement, the 
amount, for example, he or she could save in those 7 years under this 
bill would be over $44,000. This bill also increases the income 
threshold for those who can take full advantage of Roth IRA accounts up 
to $200,000 for a couple filing jointly.
  For employer-provided plans, this bill increases the maximum amount 
an individual can contribute to a 401(k) plan, a 403(b) plan or a 457 
plan. Starting next year, an employee may contribute up to $11,000 to 
his employer's 401(k) plan In each year thereafter, he could contribute 
increasing amounts to his 401(k), and in 2005, he will be able to 
contribute a full $15,000. To show you how empowering this is, if John, 
a 35-year-old, contributes the maximum amount allowable over the next 
30 years, his 401(k) plan benefit at retirement would increase by over 
$1.2 million.
  In addition, if John's employer established a newly added Plus 
Account program under its 401(k) plan, that amount would be nontaxable 
when John receives it at retirement. The Plus Account program--as 
addressed in this bill--lets an employer establish an account which has 
the same tax treatment as a Roth IRA. That means that John would have 
over $1.2 million in nontaxable income.
  Finally, this bill gives small businesses a new incentive to 
establish a retirement plan for their employees. The contribution 
limits for a SIMPLE plan--a defined contribution plan only for small 
businesses--have been increased in this bill to encourage small 
business owners to establish such plans. The incentive to establish a 
SIMPLE plan is easy to understand. Small business owners who offer 
SIMPLE plans will be able to save up to $10,000 in the plans they 
establish.
  This will be a great benefit to them, but in order to save their own 
money--as part of the SIMPLE plan--they will have to provide their 
employees with a contribution to their own plans of up to 2 percent of 
their salary.
  At the same time, under this plan the employees could also receive a 
matching contribution from their employer of up to 3 percent of 
compensation if they decide to contribute to the SIMPLE plan.
  Now, I believe this is good policy. It will encourage Americans to 
take advantage of these opportunities and provide for their retirement 
future. As with almost every provision in this Taxpayer Refund Act, the 
catalyst is the individual and the family, using tax relief to meet 
their needs. Every measure I have outlined as part of the Taxpayer 
Refund Act of 1999 is important, as each rightfully returns resources 
that Americans can use to meet their current needs, and the refund 
being offered comes from surplus funds. In other words, this broad-
based tax relief package can be passed, signed into law, and, indeed, 
still leave sufficient resources in Washington to take care of Social 
Security, Medicare reform, and other necessary Government obligations.
  Let me repeat that: This broad-based tax relief package can be 
passed, signed into law, and still leave sufficient non-Social Security 
funds available to address comprehensive Medicare reform,

[[Page 19778]]

including a prescription drug benefit. We can offer this relief and 
still pay down the debt and keep the budget balanced. We can do all of 
this for one very simple reason: The work, the investment in job 
creation achieved by Americans everywhere, has succeeded in creating 
long-term economic growth. As I have said before, it is not right that 
the reward for this success is that today our taxes are the highest 
percent of our gross national product of any time in postwar history.
  After paying for the Government programs for which Congress has 
planned and budgeted, a refund from the surplus must now be returned to 
the American taxpayer.
  I know there is wide agreement that Americans deserve relief. This is 
the bill that will give them relief. We must and should support it.
  We must keep in mind that major tax cuts must be done through the 
reconciliation process. This is, indeed, a lengthy, time-intensive 
process. We have successfully completed it. I am proud to say that this 
conference report, as it stands today, carries no provision that was 
not in either the House or Senate bill. In other words, nothing 
extraneous was added in conference. It is clean and representative of 
the direction received by those who crafted the Senate and House bills.
  Frankly, this is a first in tax history. It represents a tremendous 
amount of work by our colleagues, Members of the House, and the staff 
in both Chambers. Those who believe we may be coming back to do this 
again in September are mistaken. This is the tax bill for this year. We 
won't have a second chance on this. When we come back after recess, our 
time and attention will be focused on Medicare reform, a vital issue 
that concerns us all.
  For those who are concerned that this major relief package may be too 
big, please be reminded that there are important trigger mechanisms 
included in this bill. If we don't continue to reduce the payment on 
the interest on the national debt--let me repeat that--if we don't 
continue to reduce the payment on the interest on the national debt, 
then the tax relief included here will be reduced to compensate 
accordingly.
  Well, the bottom line is that this is tax relief in which we can have 
confidence. It meets the criteria we established before we began. It is 
fair. It restores equity to the Tax Code and makes education more 
affordable. It helps taxpayers prepare for self-reliance and 
retirement. This legislation will help families keep their homes, their 
farms, and businesses safe from death taxes. It makes health care more 
affordable.
  I believe these are objectives that are shared by everyone. They are 
objectives that can be embraced by Senators and Congressmen on both 
sides of the political aisle.
  Mr. President, I encourage my colleagues to vote for passage, and I 
yield the floor.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, might I begin on a general point with 
which our revered chairman has just concluded, which is the reservation 
of the Social Security surpluses of the next decade for purposes of 
retiring the debt. This is a fact easily unobserved because we are not 
arguing about it. There is agreement here. What we will do, we will cut 
the national debt by more than half, the publicly held debt, and the 
interest costs accordingly.
  Just a few years ago interest costs had become the third highest item 
in our budget. It is not noticed because we don't debate it. We don't 
decide how much we will pay in interest costs; it is automatic. But 
this has now happened. There has been a great recovery of American 
Government finances from a grim moment in 1992 when we had a fiscal 
year with a $290 billion deficit.
  I will point simply to this morning's New York Times and the lead 
story, sir. I will just read the headline, ``Government Plans to Buy 
Back Bonds and Save Interest: Would retire some debt using the surplus 
to replace high-interest securities at lower rates''--a complex 
proposal being worked out in Treasury under Secretary Summers. Also, in 
the business section of this morning's New York Times, there is another 
story, ``The Dwindling Market in U.S. Treasury Bonds,'' discussing how 
the market is going to respond to the bond buy back. And there is this:

       ``This is a sea change,'' said James M. Keller, senior vice 
     president and portfolio manager for Treasury securities at 
     Pimco Advisors, an asset management firm. ``I was struck by 
     the Treasury's observation that the last time there were two 
     back-to-back years of budget surpluses was in 1956 and 1957. 
     I wasn't alive then, so this is a new thing for me.''

  Indeed, it is a new thing and hugely to be welcomed.
  I might also say that the chairman stated that this bill, which we 
will vote on at 7:06 this evening, is a clean bill; there is no 
provision in it that was not in either the House or the Senate 
proposals. But now I have to say to the Senate, with the utmost 
deference to my friend--I say to the Senators from Nebraska, Florida, 
Minnesota, Senator Bingaman--we have the word of the chairman, and his 
word is absolutely bondable in this body. If he says it, it is so. But 
that is the only way you would know it is so because we just received a 
copy of the bill this morning, and certainly have not been able to 
review all 589 pages.
  This is not the way to handle the second largest tax decrease in 
history. There was no conference on this matter. We met formally for 20 
minutes, and the negotiation was entirely between party leaders of the 
majority. It is an age-old practice of the Congress to, at the end of a 
conference, distribute the signature papers that the conferees sign or 
do not sign. I was the conferee for this side of the aisle; no 
signature paper came to me.
  There was no participation of any kind from this side of the aisle. I 
think that would be true in the House as well as in the Senate. That is 
something we have to watch in terms of our procedures. It was not the 
way the Senate conducted itself in such a matter when I first came here 
and became a member of the Finance Committee.
  During the debate last week on the Senate version of the 
reconciliation bill, I attempted to put the debate in a ``doctrinal 
perspective,'' as I put it. I traced the development from the 1960s of 
an intellectual movement which holds that the only way to restrain the 
growth of Government is to deliberately create a protracted fiscal 
crisis. This was disarmingly put by then President-elect Reagan. It was 
just 16 days before his inauguration in 1981. He said:

       There were always those who told us that taxes couldn't be 
     cut until spending was reduced. Well, you know, we can 
     lecture our children about extravagance until we run out of 
     voice and breath. Or we can cut their extravagance by simply 
     reducing their allowance.

  So in 1981 to 1983, the allowance of the Federal Government was 
reduced. While other intervening events--a sharp recession in 1981-82--
impacted on revenues, nonetheless, there was a precipitous drop in 
revenues from 19.0 percent of GDP in 1980 to 17.5 percent of GDP in 
1983. Simultaneously, the recession and defense buildup conspired to 
increase outlays from 20.2 percent of GDP in 1979 to 23.6 in 1983. The 
result, a huge gap--6 percent of GDP--between revenues and outlays, and 
deficits of $200 billion or more ``as far as the eye could see,'' to 
quote the former Director of OMB, David Stockman, and with this huge 
gap, the national debt quadrupled from under $1 trillion to $4 trillion 
between 1980 and 1992.
  In August of 1993, with a deficit of $290 billion, we chose to 
confront that, to raise taxes and reduce outlays by a little more than 
a half trillion dollars. More recently, the Office of Management and 
Budget estimated that ``the total deficit reduction has been more than 
twice this--$1.2 trillion.'' In 1997, a bipartisan measure was passed. 
We are now in a situation of reasonable surplus, reasonable 
expectation. But there is no reason to act on a surplus that does not 
yet exist.
  Here we are, with unemployment at 4.3 percent, near zero inflation, 
real economic growth at 4 percent, and an economy in the ninth year of 
an expansion. All the economists--the ones we care much about--are 
saying: Not now. Alan Greenspan suggested, speaking before the Senate 
and House Banking

[[Page 19779]]

Committees just last month, the most effective means that we can have 
to regenerate the economy and keep the long-term growth path moving 
higher is if we hold tax cuts until we need a stimulus. Contrariwise, 
to stimulate when you don't need it is to invite inflation--inflation, 
which is a tax on anyone when interest rates go up. Anybody who pays a 
car loan and has a credit card or a mortgage pays it.
  Dale Jorgenson described this persistent interest in cutting down the 
size of Government by reducing revenue ``fiscal disaster'' in his 1995 
testimony before the Finance Committee. Yet it persists as a 
conviction. There is very little testing of the proposition.
  I won't go on too long in this doctrinal discourse, but back in 1973, 
Herbert Kaufman of the Brookings Institution published a small book 
called ``Are Government Organizations Immortal?'' He reported that of 
175 organizations he could identify in the Federal Government in 1923, 
no less than 148 were still there a half century later, and of the 
others, most of their functions had just been moved to different 
organizations.
  Recently, the Cato Institute, a conservative group here in 
Washington, looked at the half dozen organizations which the 1995 House 
Contract With America targeted for extinction--$75 billion worth of 
programs, out. Sir, not one of them is out. Indeed, the appropriations 
for them have gone up by $2 billion.
  Mr. President, I ask unanimous consent that a table prepared by the 
Cato Institute and printed in the Washington Post be printed in the 
Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the Washington Post, Aug. 3, 1999]

                              Growing Back

       In 1995, the House GOP's ``Contract With America'' targeted 
     $75.3 billion worth of programs for extinction. Now the 
     government spends $77 billion on those programs. Here are 
     some of the targeted agencies and programs for which spending 
     has risen, in millions of dollars.

------------------------------------------------------------------------
                      Program                          1995       1999
------------------------------------------------------------------------
Department of Commerce............................     $3,401     $4,767
Department of Education...........................     31,205     34,360
School-to-work grants.............................         82        503
Goals 2000........................................        231        507
Manufacturing Extension Partnerships..............         40        128
Aid to East Europe and Baltic states..............        332        450
Economic Development Administration...............        350        438
Adult education...................................        299        400
Star Schools......................................         25         45
Summer youth employment and training..............        867        871
Bilingual and immigrant education.................        225        386
Trade adjustment assistance.......................        268        307
Intelligent transportation system.................        143        185
------------------------------------------------------------------------
Source: Cato Institute analysis of federal budget.

  Mr. MOYNIHAN. Somehow we have to come to terms with this whole 
assumption. Perhaps something like the Hoover Commission on the 
organization of the executive branch needs to be done. Some of us have 
the assumption that we really aren't that serious. As that brief 
ceremonial meeting of our conferees this week opened, our respected 
friend--and we have known each other for a quarter century--Bill Archer 
said in his opening remarks:

       We don't need full-time Government and part-time families; 
     we need part-time Government and full-time families.

  In no way to cast any suggestion that he is anything but absolutely 
sincere, I don't think the proposition would survive close inquiry. I 
asked him: Sir, do you think we could settle for ``a part-time Marine 
Corps, or a part-time Federal Bureau of Investigation?'' No, you don't 
mean that.
  I, for one, very much share the view that the Federal Government has 
taken on too many matters and needs to be cleared out a very great 
deal. Our Federal system makes that possible, and the world situation 
in which we now find ourselves makes it necessary but not through the 
illusion that it will happen simply by reducing revenues.
  I wish to make the point that we can't afford this tax cut. We may 
want one in 5 years time or in 3 years, but not at this time. That is 
why the fate of this measure has already been settled.
  According to the Joint Committee on Taxation, tax expenditures are 
projected to cost about $672 billion in 2003. While we have not yet had 
time to adequately scour the conference report for all of its 
provisions, a cursory review indicates that, the bill we are asked to 
vote on today would increase annual tax expenditures by about $19 
billion in 2003.
  Under the Congressional Budget and Impoundment Control Act of 1974, a 
tax expenditure is a revenue loss:

       . . . attributable to provisions of the Federal tax laws 
     which allow a special exclusion, exemption or deduction from 
     gross income or which provide a special tax credit, a 
     preferential rate of tax, or a deferral of tax liability.

  The problem is that we continue to use tax expenditures as a way of 
funding programs that we do not seem to have the will to finance with 
outlays--a problem made all the more severe by the caps on 
discretionary spending alluded to earlier.
  On a more global scale, 40 years ago Walter Heller, Chairman of the 
Council of Economic Advisers in the Kennedy-Johnson Administration 
spelled out the criteria for evaluating tax expenditures--criteria 
which most tax expenditures fail to meet. In testimony before the House 
Ways and Means Committee Heller stated that Federal fiscal policy 
relies on income taxes for three central roles: (1) Placing resources 
at the Government's disposal in a non-inflationary way; (2) Offsetting 
fluctuations in the private economy; and (3) Bringing the distribution 
of income more closely into line with public preferences.
  Heller then argued that the use of the tax code to promote other 
objectives should be subject to stern tests, which can be summarized as 
follows:
  Is the tax preference for a legitimate public purpose?
  Is the tax preference the most effective way to achieve that purpose?
  Is the preference targeted?
  In Heller's view most tax preferences fail the test. Yet, he noted we 
persist in expanding tax preference because:

       The back door to Government subsidies marked ``Tax Relief'' 
     is easier to push open than the front door marked 
     ``Expenditures. . . .''

  Besides, tax expenditures need not be reviewed annually through the 
appropriations process.
  This bill also adds to the complexity of the tax code. I have long 
been concerned that today's tax system is so complex that ordinary 
taxpayers have difficulty following the rules. For example, under the 
bill capital gains are indexed. The Senate Finance Committee held 
hearings on February 16, 1995 regarding the enormous new record keeping 
burdens that would be required to calculate the gain or loss on common 
transactions. The New York State Bar Association stated that:

       Congress should reject any proposal to adjust or ``index'' 
     the basis of capital assets for inflation. [A]n indexation 
     regime would create intolerable administrative burdens for 
     taxpayers and administrators as well as offer numerous tax 
     arbitrage and avoidance opportunities for aggressive tax 
     planners.

  The Joint Committee on Taxation wrote at that time that ``[i]ndexing 
would involve a significant amount of record keeping'' and that it 
``would substantially increase the number of calculations necessary to 
calculate taxable gain for many common transactions.''
  Even if this bill did not risk a return to protracted fiscal crisis, 
and even if its 589 pages did not add to the complexity of the code, it 
should be rejected because most of the benefits accrue to those already 
well-off.
  My colleagues on the other side of the aisle argue that the bill 
justifiably provides most of the tax relief to those who pay most of 
the taxes. But their analysis is incomplete since it is based solely on 
the distribution of income taxes. For example, taxpayers earning less 
than $50,000 pay 36 percent of payroll taxes; while those earning over 
$200,000 pay only 7 percent of payroll taxes.
  The conclusion is very different if the analysis is based on the 
distribution of all federal taxes--income, excise, and payroll. Those 
earning less than $50,000 pay almost a quarter of the taxes, which is 
the same percentage as those earning over $200,000. So, why is it that 
the Republican tax bill before us today only provides 14 percent of the 
tax cut to those earning less than $50,000 while providing 78 percent 
of the tax cut to those earning over $80,000? Even worse,

[[Page 19780]]

why does 45 percent of the tax cut go to the top 5 percent of income 
earners, those earning over $155,000? Should we not provide a more 
equitable tax cut?
  We might also consider heeding the advice of Herbert Stein, Chairman 
of the Council of Economic Advisers in a Republican Administration. In 
an op-ed in yesterday's Wall Street Journal Mr. Stein had this to say:

       . . .I [have] come to the conclusion that we should not 
     make a large tax cut at this time. But my purpose here is not 
     to sell that conclusion. What I am trying to do is to sell 
     the idea that we need a more systematic, explicit and 
     thorough public discussion of the tax vs. debt reduction 
     issue and to illustrate what some of the elements of such a 
     discussion would be.

  We have not had that debate.
  I see that my learned friend, the gallant Senator from Nebraska, is 
here, and I think he would like to speak.
  The PRESIDING OFFICER (Mr. Voinovich). The Senator from Nebraska.
  Mr. MOYNIHAN. Mr. President, I yield such time as he may require to 
Senator Kerrey.
  Mr. KERREY. I thank the Senator from New York very much.
  I am sorry I didn't wear the same necktie that he did. Other than 
that, we are deeply matched.
  Mr. President, first I want to compliment Chairman Roth. I believe 
all through the Finance Committee deliberations and last week on the 
Senate floor he held true to two ideas that I share.
  The first is that we can cut taxes. The second is we must do so 
fairly. Indeed, the net effect of cutting taxes by nearly $800 billion 
over ten years is to give the American people an $800 billion increase 
in their after-tax income. I believe we can do it safely. We have $3 
trillion in surpluses forecast over the next ten years. And I don't 
believe that cutting taxes will generate inflation if done correctly.
  In his original package, the Chairman held true to the idea that some 
standard of fairness need be applied in how the income tax cuts would 
be distributed. He attempted to do that. Doing that caused him a little 
grief on his side of the aisle. I appreciate very much what the 
chairman attempted to do with his original tax cut package.
  Accordingly, I voted for the package enthusiastically on the floor. I 
believe it was a good proposal. I may have written it a little 
differently if I were the one who was doing the writing. But I thought 
it was a balanced proposal and a good proposal, and I was fully 
supportive of it. I was one of four Democrats to do so.
  Thus, I come to the floor with some regret. I say to my friends on 
the other side of the aisle that you should know that people like me 
took a position that said we were prepared to vote for a tax cut of 
$800 billion. The Chairman's original package received 57 votes on this 
floor. I understand the other side has been working all night to get 
the votes to pass the package we have before us and I suspect the most 
votes this package will receive is 52. So I say to my friends on the 
other side of the aisle, if you are trying to get a piece of 
legislation passed to try to change the law and give Americans an 
income tax cut, you are going in the wrong direction. With the 
President threatening to veto the bill, it seems to me that a better 
approach would have been to try to get more votes, not fewer.
  I am here, regrettably, to say that I will not only change my vote 
from an enthusiastic ``aye,'' but I will now change and be voting 
enthusiastically ``no.'' Let me tell my colleagues why.
  First of all, I want to identify some things that are in this package 
that I think would be good. I appreciated very much the chairman 
fighting for them and getting them into the bill, and I am fully 
supportive of them.
  Eliminating the marriage penalty is terribly important. There are new 
provisions in here which will make it more likely that Americans will 
save and will have the resources they need for retirement. There are 
provisions in here which will make it more likely that Americans will 
have health insurance, and that will make it more likely that Americans 
will be able to afford the cost of higher education.
  I do not object at all to eliminating the inheritance tax. I 
cosponsored legislation to do that. I am not going to take a great deal 
of time explaining why, as a Democrat, I reached that conclusion. I am 
prepared, if anybody is interested, in debating it at a later time.
  I am not ideologically opposed to lowering the capital gains tax.
  There are many things in this proposal that I, in short, like or 
don't have strong objections to. It is this test of fairness which I 
believe was applied to the Senate version that I find lacking in the 
conference report.
  Let me take the one provision that is the most important provision in 
the Senate version.
  The provision that cut the lowest tax rate on income from 15 to 14 
percent that was in the Senate finance bill would have cut taxes for 
families in Nebraska with an income of $46,000, for a family of four, 
by $440. It would have cut taxes on a U.S. Senator with a spouse and 
two kids by $440 as well. That was the idea.
  I am not interested in engaging in class warfare. I have no quarrel 
with upper-income Americans or upper-income Nebraskans. Quite the 
contrary. In Nebraska, there were 775,000 federal income tax returns in 
1996. Of that, 6,500 had adjusted gross incomes of over $200,000. That 
is a relatively small number. But they paid almost a third of all the 
$3.6 billion in federal taxes paid by Nebraskans.
  So I am not here to say that upper-income people don't deserve a tax 
break. I think it is very important for us to take a look at America 
and try to discern which taxpayers are most in need of help. It is, it 
seems to me, a fair question for us to ask. And to try to apply a 
standard of fairness, it seems to me, is something we ought to be 
doing.
  Under last week's proposal, a single Member of Congress, I would have 
gotten a $260 tax rate cut, just as a single person with $26,000 of 
income. But under this proposal, by decreasing the taxes for everyone 
at higher rates as well, a Member of Congress, a single Member such as 
myself, I am going to get a tax cut of $1,185. I get over $900 more 
under this proposal. And if I got married, I would do even better.
  I can make an argument that because I am paying more taxes I ought to 
get more of a tax cut. But look at households. A family of four with 
$46,000 worth of income probably ought to have a larger tax cut than I 
do. At the very least, I should not receive more than they do. That is 
what I mean when I say that this bill, when it passed here last week, 
met the minimal standard of fairness.
  I say to my friends on the other side of the aisle that if you are 
trying to figure out how to get more votes and not fewer, you have now 
figured out how to get fewer. You had 57 votes on this side last week. 
The high water mark today, in my view, is likely to be 52. I understand 
that the conference report had to be reopened in the later hours of 
yesterday evening and some provisions had to be put in to woo some 
votes for a bare majority. I know there were some concerns that the 
Vice President might be sitting up there at the end of business today 
and there might be no more than 50 votes for this legislation. All of 
that should be a sign. You had 57 votes. Yesterday you did not have 50. 
Something is going in the wrong direction.
  I believe a majority of Democrats and Republicans in chamber, want to 
apply a standard of fairness. The distinguished junior Senator from 
Texas, offered an amendment on this floor last week that would increase 
the standard deduction for a married couple. Why did she want to 
eliminate the marriage penalty for people who are using the standard 
deduction? It got a lot of Democratic votes and a lot of Republicans 
votes. Indeed, I think it was the only amendment that actually broke 
the 60-vote requirement. That is a clue. That was a fairness issue and 
the junior Senator wanted that fairness applied to married people who 
take the standard deduction, people who do not itemize, people who are 
generally not in the upper reaches of income in this country.
  I'm not talking about crafting a social engineering package. What I 
am

[[Page 19781]]

talking about is applying a standard of fairness.
  As I said, I have great respect for the chairman of the Finance 
Committee. I believe he attempted to apply a standard of fairness, and, 
in my judgment, his package of last week passed that test. I voted for 
it enthusiastically. But the conference committee report does not pass 
that test. It does not pass the test of fairness.
  So I enthusiastically and confidently will vote ``no'' on it. I do so 
regrettably because I believe there was an opportunity this year not 
just to do this but to get a bipartisan solution on Medicare and to get 
a bipartisan solution on Social Security. The package before us today 
does not bode well for future bipartisan efforts to come up with those 
solutions.
  This bill had 57 votes last week. As I said, were it not for the sort 
of last-minute work to try to have some changes to get some additional 
votes, it might not have even 50 votes later today when we will have a 
vote on final passage.
  I say to my Republican friends, if you want to cut Americans' taxes, 
listen not just to what Democrats are saying but also listen to what 
Republicans are saying. They want a standard of fairness applied. It is 
a legitimate concern.
  I don't know how many Members of the Senate believe that $800 billion 
is too much. I believe the distinguished occupant of the Chair does. He 
fought very hard as mayor and Governor, and I think he is coming to 
this Congress saying we ought to be careful not to spend the surplus 
and lose all the progress that we have made. Fine. Make that argument.
  But for the majority of us who believe that $800 billion is not too 
much, if we want to persuade our reluctant colleagues to support 
cutting taxes for American families, then you have to apply a standard 
of fairness, a test of fairness. You may not like doing it. You may 
believe your ideology tells you that you should do something else. But 
if you want to change the law and get this done, you had darned sure 
better do it, because not only will you not get the strong majority you 
will need but you will never, in my judgment, get the President of 
United States to sign a piece of legislation that doesn't attempt to 
measure and apply some test of fairness.
  Again, I appreciate very much the work that the distinguished 
chairman did, Senator Roth of Delaware, as well as the ranking 
Democrat, Senator Moynihan. I appreciate very much the leadership of 
both of them. Senator Moynihan led the Democrats in the committee to 
come up with a $300 billion tax cut proposal. It had a very key 
component in there, which was to increase the standard deduction for 
individuals. That takes a number of people off the income tax rolls, 
reduces the top tax rate for many and simplifies tax filing for 
millions.
  I suggest to my Republican colleagues on the other side of the aisle 
that if you want to get a bill, that is the kind of proposal that you 
should have included in this package and it is unfortunate that you did 
not. It is unfortunate that the centerpiece of the tax proposal that we 
voted for last week--the reduction of the 15 percent tax rate to 14 
percent--was not left alone. If there is a second chance to consider a 
tax bill this year, I hope we will work harder to pass a bill that will 
get significant support from this side of the aisle and the way to do 
that is to ensure a bill meets a basic standard of fairness.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Minnesota.
  Mr. WELLSTONE. I thank the Chair.
  Mr. ROTH. I yield 10 minutes on behalf of the minority to the 
distinguished Senator from Minnesota.
  Mr. WELLSTONE. I thank the Senator from Delaware. Let me start out by 
saying I also appreciate the work of Senator Roth as the chair of the 
Finance Committee. However, I am in profound disagreement with this 
reconciliation bill, this tax cut bill, that comes before the Senate--
$792 billion in tax cuts, aggregate amount.
  According to Citizens for Tax Justice, the top 1 percent of taxpayers 
would receive 42 percent of the benefits, while the bottom 60 percent 
would receive only 7.5 percent of the benefits. Regarding 
distributional effect, my colleague from Nebraska talked about a 
standard of fairness: 60 percent of all taxpayers would get an average 
tax cut of $65; the wealthiest 10 percent would get an average tax cut 
of $1,322; the wealthiest 1 percent would get an average tax cut of 
$5,281.
  This tax cut bill that the Republicans bring to the floor of the 
Senate is ``Robin Hood in reverse'' economics. Even worse, I think it 
represents a politics of illusion.
  Not that long ago others, I think former President Bush, talked about 
voodoo economics. He was referring to a set of proposals in the early 
1980s that said we could have massive tax cuts, increase Pentagon 
spending, make the investments we needed to make as a nation, and 
continue to reduce the deficit. That is not what happened.
  It is pretty simple, I say to the people in Minnesota, and to the the 
people in the Nation. We are in agreement, I hope, that of the $3 
trillion of surplus, $2 trillion is Social Security. It is not touched. 
It is to make sure that system will be solvent. Of the other $1 
trillion, three-quarters of it is in assumed cuts--assuming we have the 
economic growth in discretionary domestic spending.
  With this proposal before the Senate that the Republicans bring to 
the floor of the Senate, not only do we have tax cuts and benefits to 
people in inverse relationship to need, a ``Robin Hood in reverse'' 
economics, but we have a politics and an economics of illusion. We are 
going to explode the debt. We are going to build the debt up again. In 
addition, we are not going to be making the investments that we in our 
speeches on the floor of the Senate say that we are for.
  I heard my colleague from Delaware talk about health care, talk about 
education, talk about children, talk about tax cuts. One more time, to 
use the old Yiddish proverb: ``You can't dance at two weddings at the 
same time.''
  We are not going to be able to have this amount of tax cuts, $792 
billion in tax cuts, and at the same time continue to pay down the debt 
and make the kind of investments we need to make. We are going to see, 
America, is cuts in Head Start, cuts in low-income energy assistance, 
cuts in community policing, cuts in environmental protection, cuts in 
veterans' health care, and cuts in Pell grant programs. We are not 
going to make any of the investments to which we say we are committed.
  I think this tax cut legislation before the Senate is in many ways 
more serious than bad economics. And it is bad economics. It is bad 
economics because it will build up the debt rather than pay down the 
debt. It is bad economics because it could very well lead to higher 
interest rates. It is bad economics because it is the last thing we 
ought to do in an expanding economy. In addition, it is bad economics 
because we are not going to be able to make the investments that my 
colleague from Delaware says we are committed to at the same time we 
are doing all these tax cuts.
  It is also an illusion. It will put this country in a straitjacket 
where we are not going to be able to do one positive thing to make sure 
we have equal opportunities for every child in this country. We are not 
going to increase Head Start benefits; we are going to cut them. We are 
not going to increase health care benefits for our citizens; we are 
going to cut them. We are not going to do anything about the acute 
shortage of affordable housing; we are going to cut housing programs. 
We are not going to get it right for veterans in health care; we are 
going to cut. We are not going to do anything about the shameful 
statistic of right now providing benefits for only 1 percent of the 
kids who would benefit from Early Head Start in our country; we are 
going to cut.
  There is not one Senator who can come to the floor of the Senate and 
debate me on the argument I have just made. That is exactly what we are 
going to do.
  This is also an ideological debate. If Members believe--and maybe 
this is what my colleagues now believe, let me

[[Page 19782]]

now give credit--when it comes to the most pressing issues of people's 
lives in the United States of America, or Minnesota, that there is 
nothing that the government can or should do, if you don't think we 
should be making any of these kinds of investments in Pell grants, or 
affordable child care, or Head Start, or community policing, or 
veterans' health care, or health care, or affordable housing, then you 
would be for this conference report. What this will do is put this 
country in a straitjacket where any kind of an investment that any 
Senator will talk about to expand opportunities for our citizens will 
be, by definition, fiscally irresponsible because we won't have any of 
the revenue.
  I conclude this way. The political argument behind these tax cuts is 
a pretty effective argument if you listen to it only up to a point. The 
argument is that we built up the surpluses--maybe, assuming the economy 
continues to perform. Let's give it back to the citizens; it is your 
money. People in Minnesota, it belongs to you.
  I maintain, as a Senator from Minnesota, it doesn't belong to me; it 
doesn't belong to adults. It belongs to our children, and it belongs to 
our grandchildren. Whatever surplus there is ought to be used to pay 
down the debt. We put it on their shoulders. Whatever surplus there is 
ought to be used to make sure their Social Security and Medicare is 
there, just as it will be there for us. It ought to be used to make 
sure there are opportunities for children so that our children and our 
grandchildren have the same opportunities that we have had.
  The Presiding Officer, the Senator from Ohio, is committed to early 
childhood development. The Presiding Officer, the Senator from Ohio, 
came to the Senate with a commitment to children. I know that. That is 
his passion, and he will make an enormous difference. I don't care 
whether he is Republican or not. I know what he cares about, and I know 
he is an effective Senator.
  With this measure of tax cuts, if this legislation passes, we will 
not only not be making any additional investments in the way we should 
in early childhood development, such as Early Head Start or Head Start, 
much less what we really should be doing for child care, much less 
nutrition programs, much less affordable housing programs, we will be 
cutting those programs.
  That is shameful. That is unconscionable. That is exactly what we 
will be doing. I say to the President of the United States of America, 
Mr. President, you should veto this legislation. Let's not get into 
Washington, DC, bargaining where we say $500 billion or $600 billion is 
a reasonable compromise. If that is what we do, we still will not be in 
a position to make any of these investments. We still will see cuts in 
discretionary spending to the tune of hundreds of billions of dollars. 
Let's pay down the debt. Let's make sure we make a commitment to 
Medicare and Social Security. More than anything else, I would rather 
see more of the emphasis on an investment in children. I believe when 
we pay down our debts, the most important debt we can pay off is the 
debt we would leave our children.
  What we owe our children is to make sure that every child in the 
United States of America--regardless of color of skin, regardless urban 
or rural, regardless high income or low income or middle income--has 
the same chance to reach his and her full potential. These tax cuts 
will make that impossible.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from Delaware.
  Mr. ROTH. Mr. President, just so the record is clear, we have 6 
hours, 3 hours to a side. The two managers have agreed we will go back 
and forth from one side to the other when people are present. But that 
is not the case now. So I yield 15 minutes on behalf of the minority to 
the distinguished Senator from North Dakota.
  The PRESIDING OFFICER. The Senator from North Dakota.
  Mr. CONRAD. Mr. President, this is an editorial that appeared in the 
New York Times on August 2. It says: ``Here we go again.'' That is 
exactly what this tax bill is all about. Here we go again.

       Back in 1980 Ronald Reagan assured one and all that he 
     could cut taxes sharply, increase defense spending 
     substantially and balance the Federal budget.

  That is the promise he made. It did not work out that way. The 
deficits exploded. George Bush at the time:

       . . . famously derided Mr. Reagan's supply side fantasies 
     as ``voodoo economics.''

  We all remember that. The veteran Washington Post reporter Lou 
Cannon, in his book ``President Reagan, the Role of a Lifetime'' 
described the reaction of James Baker, Mr. Reagan's own chief of staff, 
to the transformation of economic fantasy into national policy. He 
wrote:

       Though not particularly well-versed in economics, Baker 
     suspected there was something screwy about the idea that 
     massive tax cuts would increase government revenues. Later, 
     he would privately express regrets that the deficits had 
     `gotten away' from the administration and wished he had paid 
     more attention to the consequences of the tax cuts.

  Here we go again. Again, we have the fantasy being held out to the 
American people that somehow you can have a massive tax cut, you can 
have a big defense buildup, domestic needs will not be hurt, and 
somehow it is all going to add up. The problem with it is it is highly 
unlikely to happen. Let's just check the record. It shows very clearly 
what happened in the Reagan administration when they had this fantasy 
that they were going to cut taxes dramatically, have a big defense 
buildup. Somehow it was all going to add up. It did not add up and this 
plan does not add up.
  This is what happened back then. President Reagan inherited a deficit 
of just under $80 billion and he promptly shot it to $200 billion. That 
is what happens when we just put our head in the sand and get wedded to 
an ideology and do not care about the economic results, or the economic 
fallout. This plan is a disaster. I do not know how else to say it. It 
is risky; it is radical; it is reckless. We would make a profound 
mistake to pass it today.
  We then went into the Bush administration and the deficits went up, 
up, and away again. It went up to $290 billion in 1990.
  In 1993, President Clinton came into office and we passed a 5-year 
budget plan to cut spending and, yes, raise income taxes on the 
wealthiest 1 percent. That plan worked. Each and every year of that 5-
year plan the deficit came down until finally we have achieved a 
balanced budget. Why would we ever want to go back? Why would we ever 
want to repeat the incredible mistakes this country made in the 1980s 
that threatened the economic security of this country, that put this 
country's economy in a ditch, that led to recession, that led to job 
loss, that led to an extinguishment of economic growth? Why would we 
want to repeat that tragic mistake? Yet here we are. ``Here we go 
again.'' Goodness knows, don't we have more common sense than this?
  This is not just my view. This is the view of economist after 
economist who has looked at this proposal. Mr. Samuelson, the 
columnist, wrote:

       The wonder is that the Republicans are so wedded to a 
     program that is dubious as to both policy and politics.

  He went on to say:

       As Federal Reserve Chairman Alan Greenspan noted the other 
     day, tax cuts might someday be justified to revive the 
     economy from a recession or to improve the prospects of a 
     sweeping program of tax simplification. But there is no case 
     for big tax cuts based merely on paper projections of budget 
     surpluses.

  That is what this is. These are plans based on projections of what 
might happen over the next 10 years. What a risky way to run the 
economy. What a reckless way to run economic policy, to run out here 
and shovel $800 billion out the door before the money is collected. 
That puts this entire economy at risk. That puts this entire period of 
bringing down the deficit at risk. That puts this entire successful 
economic policy of improving economic growth, reducing unemployment, 
reducing inflation at risk. It is a mistake we should not make.
  This columnist points out:

       Suppose that spending exceeds projections by one percentage 
     point of national income

[[Page 19783]]

     and that tax revenues fall below projections by the same 
     amount. In today's dollars, these errors . . . not out of 
     line with past mistakes . . . would total $170 billion 
     annually. Most of the future surpluses would vanish.

  That is the reality. We are betting the farm on projections of what 
is going to happen over the next 10 years. Does anybody believe these 
projections are going to come true?
  I used to be responsible for projecting the income of the State of 
North Dakota. That was my job. I can tell you, projecting 5 years out 
is very risky. Frankly, it is hard to project 1 year out. Projecting 10 
years out is a total crapshoot and we are basing the economic security 
of this country on a 10-year projection? Are we really going to do 
that?
  I ask my colleagues, are we really going to do that? Is this what you 
are seriously proposing for the United States, after the economic 
success we have enjoyed by reducing the deficits, by reducing debt?
  Some of the very same people who said the 1993 plan would not work 
are here today, advocating this risky scheme. The 1993 plan, as I 
showed, worked. That 5-year deficit reduction plan, in fact, reduced 
the deficit each and every year. But when we passed it in 1993, the 
other side said it would crater the economy; it would ruin us.
  This is what Senator Gramm, who is on the Budget Committee and on the 
Finance Committee, said back in 1993:

       I want to predict tonight that if we adopt this bill the 
     American economy is going to get weaker and not stronger, the 
     deficit 4 years from now will be higher than it is today and 
     not lower. . ..When all is said and done, people will pay 
     more taxes, the economy will create fewer jobs, government 
     will spend more money, and the American people will be worse 
     off.

  That is Senator Gramm in 1993 when we passed the plan that did just 
the opposite. Let's look at the record. We passed that plan in 1993, 
and here is what happened: Unemployment went down to the lowest level 
in 41 years.
  Senator Gramm and the advocates of opposition to the 1993 plan, who 
are the very ones who are the advocates of this plan today, were wrong. 
They said it was going to increase unemployment. They were wrong. We 
have the lowest unemployment in 41 years. They said that that economic 
plan would increase inflation. They were wrong. That plan reduced 
inflation to the lowest level in 33 years.
  Mr. President, it does not stop there. Look at the economic growth. 
They said the 1993 plan would retard economic growth. They were wrong. 
Look at the record. We have the strongest economic growth during the 
last 6 years of any administration going back to the administration of 
Lyndon Johnson.
  Friends, people who are listening across the country, let's think a 
minute: Is the economy in good shape or is the economy in bad shape? I 
think every one of us knows we have the strongest economy in anyone's 
memory. That was built on a plan of reducing the deficits, relieving 
pressure on interest rates, making America more competitive, reducing 
home interest loans, reducing car loans, reducing student loans, 
because there was less deficit, less debt. Now we are on the brink of 
completely changing that policy and going back to the bad old days of 
deficits and debt and decline. Are we really going to turn back the 
clock to those days? I hope not. I hope we do not make as foolish a 
mistake as that.
  Because of the 5-year plan put in place in 1993, not only have we 
gotten the lowest unemployment, the lowest inflation in decades, the 
strongest economic growth in decades, we have also seen welfare 
caseloads decline dramatically. That is the record. That is the fact.
  The other side says: Oh, but wait a minute. Taxes are the highest 
they have been in 20 years.
  They are not telling the whole story. Here is what has happened. 
Remember when we had deficits, we had a gap between the revenue of the 
United States and the spending of the United States. The blue line is 
the spending; the red line is the revenue.
  Go back to 1993. There was the gap. That was the deficit, $290 
billion. We cut the spending line, and we raised the revenue line. That 
is how we balanced the budget. We cut spending; we raised the revenue 
line.
  When they say the taxes are the highest they have ever been, again, 
they are not telling the whole story. Revenues are strong because the 
economy is strong, but individual taxpayers are not paying more in 
taxes; most are paying less. That is not the Senator from North Dakota 
speaking, that is the respected accounting firm of Deloitte & Touche. 
They analyzed the tax burden, including payroll taxes and income taxes, 
of a family earning just under $20,000 a year. They looked at 1979, and 
they looked at 1999.
  In 1979, that family was paying 8.6 percent of their income in 
taxes--payroll taxes and income taxes. That burden has been reduced to 
5 percent. Why? Because when we raised taxes on the wealthiest 1 
percent in the 1993 plan, we also cut taxes on 28 million Americans by 
increasing the earned income tax credit. So we reduced taxes for 
individuals.
  The same is true for a family of four earning $35,000 in 1999. Again, 
the respected accounting firm of Deloitte & Touche went out and looked 
at their tax burden: 1979, 11.2 percent. That has been reduced to 10.5 
percent in 1999. It is also true of a family earning $85,000 a year. In 
1979, they had a total tax burden of 17 percent; in 1999, 16.3 percent.
  Does that mean there should not be any tax relief? No. We should have 
tax relief, but we ought to have a responsible package of tax relief, 
not one that threatens to put us back in the economic ditch of deficits 
and debt. Unfortunately, that is what the Republican plan does.
  On the question of the fairness of this proposal, if this is fair, I 
do not understand fairness. They are going to give to the top 1 percent 
in this country with an average income of $837,000 a $46,000 tax cut. 
They are going to give to the bottom 60 percent of the income earners 
in this country, the vast majority of people on average, a tax 
reduction of $138. That does not strike me as very fair.
  Let's check their math. We have heard over and over they are just 
giving 25 percent of the money that is available in surplus back in a 
tax cut. That is interesting math they are using. Let's check it.
  The total surplus is $2.9 trillion. That is the CBO estimate.
  I ask for 3 additional minutes.
  Mr. ROTH. I yield 3 minutes on behalf of the minority.
  The PRESIDING OFFICER. The Senator has 3 more minutes.
  Mr. CONRAD. Look at what CBO is projecting--and I emphasize 
projecting--as the surplus over the next 10 years, $2.9 trillion. But 
$1.9 trillion of that is Social Security. If you take that out, you 
have $1 trillion left. Republicans are proposing nearly $800 billion of 
tax cuts. When you do that, you add interest costs of $141 billion. 
That only leaves $63 billion left for debt reduction, for strengthening 
Medicare, for domestic needs. They are using not 25 percent of what is 
available; they are using 94 percent of what is available, because we 
have all agreed that none of the Social Security money is available.
  The only way they get this number of 25 percent being used for a tax 
cut is when they include Social Security in the base. Are they 
proposing we are going to use 25 percent of the Social Security money 
for a tax cut? No. So they are using phony statistics. They are 
applying this 25 percent to two-thirds of the money that is Social 
Security money. They are taking 94 percent of the money that is truly 
available for this risky tax cut.
  Here are the choices: Republicans say $800 billion of tax cuts; 
nothing to strengthen Medicare; nothing for domestic needs; they have 
$63 billion unallocated.
  Our proposal in the Senate was balanced. We said save every penny of 
Social Security for Social Security and then one-third for tax relief; 
one-third to strengthen Medicare--and, by the way, this money is not 
needed immediately so it can be used for the next 15 years to pay down 
debt--and one-third of the money for high-priority domestic needs, such 
as education, defense, and agriculture.

[[Page 19784]]

  That leads our friends on the other side to say: There go the 
Democrats again; they just want to spend money.
  Let's examine that notion. This blue line shows constant buying power 
of what we do with Federal spending now for domestic needs. That is 
what would happen if we had constant buying power. The Democratic plan 
is represented by this red line. It is a cut from current buying power. 
Here is the Republican plan down here. They have a massive cut, $770 
billion over the next 10 years from what current buying power would 
permit.
  They do not want anybody to talk about this, but the reality is, they 
are advocating deep cuts in education, in defense, in agriculture, and 
in all the rest--parks, law enforcement--because there is no way to 
avoid this mathematical reality. They came to this Chamber with a chart 
that said, yes, you could accommodate this tax cut if you froze all 
domestic spending for 10 years. It has never been done. What is amazing 
about it is that it is not what they are doing in the Appropriations 
Committees that meet every day. They are spending additional money.
  I ask for 1 additional minute.
  Mr. ROTH. On behalf of the minority, I yield 1 minute.
  The PRESIDING OFFICER. Without objection, it is so ordered. The 
Senator is yielded 1 minute.
  Mr. CONRAD. I thank the Chair.
  Mr. President, let's be honest with the American people. This plan 
does not add up. It threatens to take us back to a period of growing 
debts. It fails to meet high-priority domestic needs such as education 
and agriculture and defense. It does not do anything to secure Medicare 
for the future. It is not real. It is not balanced. It is not 
responsible. This plan is not conservative.
  It is radical; it is risky; it is reckless. It ought to be rejected.
  Mr. DORGAN. Mr. President, I ask unanimous consent that the Senator 
from North Dakota be granted 2 additional minutes from the minority 
time so he might be able to respond to a question.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. DORGAN. Mr. President, I think Senator Conrad makes the most 
compelling presentation in the Senate on these budget matters. The 
charts he has used today have been extraordinary in their description 
of the folly here with respect to this plan.
  I want to ask the Senator to go back to a couple charts with respect 
to those who made predictions some years ago because I thought that was 
very telling. The practice of augury in old Roman times was that the 
high priest would read the flights of birds and the entrails of cattle 
in order to evaluate the future.
  We have some folks who are practicing augury in the Senate. They are 
the prophets who have described to us how wonderful this plan is. I 
know the Senator used, a bit ago, the same kind of descriptions from 
these same prophets 7, 8 years ago.
  Could the Senator refer to that again, because I think that is most 
telling who brings this plan to the Senate, and what were their 
predictions previously?
  Mr. CONRAD. I remember so well. I remember being on the floor of the 
Senate the day we passed the 5-year plan that got us back on track. I 
remember Republican leaders saying if we passed the plan, it would 
crater the economy. I remember Republican leaders telling us if we 
passed the plan it would increase unemployment, it would increase 
inflation, that it would cost jobs, that it would wreck the economy. 
They were wrong, and they were wrong on every single count. They said: 
If you raise taxes on the wealthiest 1 percent, and you cut spending, 
it is going to create a nightmare. They were wrong. They were 
absolutely wrong.
  Maybe we are not reminding people enough. Maybe we are not learning 
the lessons of the past, but we have to because we should not go back 
to the days of deficits and debt that put this economy in the ditch.
  So I am very hopeful we will learn from the past and we will 
recognize that to come out here, based on a projection over the next 10 
years, to justify a massive tax-scheme giveaway that blows a hole in 
the budget, blows a hole in the deficit, leads us back to the path of 
debt and is a profound mistake.
  It makes us all feel good. I would love to have a tax cut. I have two 
kids in college, and it is expensive. But I care more about their long-
term future. I care about them inheriting a world that is less debt-
laden than what we have done to them so far. Because our generation--
and here it is--has taken the debt from 1980, and here we are today. 
This is what we have done with the national debt. We have run up the 
debt from less than $1 trillion to nearly $4 trillion.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. CONRAD. I ask unanimous consent for 1 final minute.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. CONRAD. That is what we have done in our generation. We have 
taken this national debt of less than $1 trillion and run it up to 
nearly $4 trillion. That is the publicly held debt. Gross debt is even 
higher. But this is publicly held debt.
  Is that the legacy we want to leave, that we ran up the debt on our 
watch? I do not think so. This is what could happen if we stay the 
course. This is what the Congressional Budget Office tells us could 
happen if we stay the course. We could actually eliminate publicly held 
debt over the next 15 years. But it will not happen with this plan 
because we apparently all have our hand out. We want to take care of 
ourselves first and forget about the future. I hope that is not the 
legacy we leave.
  I thank the Chair, and I thank my colleagues, and I yield the floor.
  Mr. ROTH. On behalf of the minority, I yield 20 minutes to the 
distinguished Senator from Florida.
  The PRESIDING OFFICER. The Senator from Florida.
  Mr. GRAHAM. I thank the Chair and thank my colleague, the chairman.
  Mr. President, last year we learned a very satisfying and important 
lesson. That is that there are rewards for fiscal discipline. After 
almost three decades of deficits and mounting national debt, we finally 
were able to eke out a small surplus. The very prospect of that small 
surplus has been a major contribution to one of the longest and most 
expansive periods of economic growth in our Nation's history. This 
fiscal discipline helped us to create favorable economic and fiscal 
conditions to address our long-term national challenges, especially our 
long-term commitments in Social Security and Medicare.
  This, frankly, is a time of national celebration. The question is, 
What kind of celebration? Will it be a prudent and patriotic 
celebration of our success where we will channel our justified 
enthusiasm for our accomplishment into positive national family and 
individual goals or will it be a wanton and reckless celebration? 
Because our success, our opportunity to celebrate, did not give us 
license to return to the free spending, free period of increased 
indebtedness of the recent past. No. We owe it to our children and our 
grandchildren to save this money, to save this money until we have 
dealt with our future obligations to them.
  Unfortunately, several major legislative actions in the 105th, now 
the 106th, Congress have made a mockery of our promise to maintain 
fiscal discipline. As an example, in February of this year, the Senate 
passed a military pay bill, with great enthusiasm and with great 
acclamations among those who would be particularly benefited and who 
hoped that it would strengthen our national security. The problem is, 
we did not provide a means of paying for it. So we were, in essence, 
saying we will pay for it out of our surplus.
  If last February's legislation was just an aberration, a momentary 
lack of judgment, an inadvertent haste to turn from impeachment to 
legislation, it might have been forgiven. Sadly, it cannot be so 
characterized. It, in fact, was part of a pattern of a continued lack 
of fiscal discipline. It was the second time, in fact, within 8 months 
that we had proven ourselves unwilling to

[[Page 19785]]

take the hard decisions and too willing to sacrifice the well-being of 
future generations on the altar of expediency.
  It was in October of 1998, in the waning hours of last fall's budget 
negotiations, that we passed a $532 billion omnibus appropriations 
bill. Included in that bill was $21.4 billion in so-called emergency 
spending. Since that $21.4 billion of emergency spending could be 
approved without the necessity of finding any way to pay for it, that 
funding came right out of the surplus. It took $3 billion out of the 
fiscal 1998 surplus. It took $13 billion out of the 1999 surplus. It 
will take $5 billion out of this year's surplus.
  The action would have been even mildly palatable had all of the 
supposed emergency funds been allocated to true emergencies. But, in 
fact, many of the items that were funded out of the $21.4 billion were 
items which had in the past been considered normal, regular obligations 
of the Federal Government, not the necessary, sudden, urgent, 
unforeseen, temporary needs that are supposed to be the hallmarks of 
real emergencies.
  In June, we made our third raid on the Social Security surplus, a 
supplemental appropriations bill that again cloaked many nonemergency 
spending items in emergency designation under the title of Kosovo. With 
all the negative public attention that had been focused on our previous 
raids, one would have thought that we might have at least been 
embarrassed back into fiscal responsibility. But, again, I am sorry 
that was not the case. So another $4 billion was taken out of the 
surplus through emergency spending for 1999 and $7 billion will be 
taken out in the year 2000.
  What have we done thus far? We started with a total surplus for 1999 
of $137 billion, of which $124 billion was Social Security. But after 
we had taken $13 billion for the emergency of 1998 and $4 billion for 
the emergency of 1999, we have reduced our surplus down to $120 
billion. So we have spent every penny of the off-budget surplus, and we 
have spent $4 billion of the Social Security surplus to fund these 
emergencies.
  Now, what is the chart for the year 2000? We started out with a total 
surplus of $173 billion, of which $147 billion was Social Security. We 
have the $5 billion from 1998, we have the $7 billion bloated Kosovo 
emergency expenditure, and just last night, we voted yet another 
emergency expenditure of $8 billion for agriculture. Today we have on 
the floor a tax bill that will cut the revenue for the year 2000 by $5 
billion. So what started off as a $173 billion surplus has already 
shrunk to $148 billion. Every dollar of that surplus is Social Security 
save $1 billion, which, as I will point out in subsequent remarks, is 
highly in danger.
  The action yesterday relative to agriculture represents the 
difficulty of the dilemma. Certainly American farmers are facing 
distressful circumstances. I happen to be an American farmer. I think I 
understand something of their plight. But the way to deal with this 
problem is not by temporary emergency fixes. The way to deal with this 
problem is to look at the underlying causes, which might be that we 
haven't been adequately dealing with fundamental issues such as crop 
insurance reform or that we have not been sufficiently aggressive in 
our trade policy in order to ensure there are open markets for American 
agricultural goods. Those are some of the ways in which we ought to be 
directing our attention, not through emergency spending to deplete our 
surplus.
  The budget resolution says that emergency spending must meet five 
criteria. It must be necessary, sudden, urgent, unforeseen, and it must 
not be permanent. I suggest that many of these expenditures we have 
made over the last 2 years fail to meet those standards of emergency.
  Our fiscal irresponsibility, however, is not limited just to 
emergency appropriations. We have defined the surplus as the difference 
between estimated revenue and estimated expenditures. Yet in arriving 
at those estimated expenditures, we have used unrealistic standards. We 
have created expenditure expectations that no one in this Congress 
believes are, in fact, going to be met; thus, the necessity to resort 
to these kinds of emergency measures. While we are doing that, we are 
also fundamentally deceiving the American people as to what our Federal 
Government's policies will be.
  Let me use one example.
  I ask unanimous consent at the end of my remarks to have printed in 
the Record an article from the New York Times of July 25, ``National 
Parks, Strained by Record Crowd, Face a Crisis.''
  The PRESIDING OFFICER. Without objection, it is so ordered.
  (See Exhibit 1.)
  Mr. GRAHAM. There is no better time than in early August to talk 
about the state of our national parks, because this is a time of the 
year when hundreds of thousands of our fellow citizens are taking 
advantage of one of America's great treasures--its national park 
system. But it is a treasure which we have been systematically looting 
through indifference. It is stated in this article that in an 
assessment made last year, the Park Service estimated it would cost 
$3.54 billion to repair maintenance problems at national parks, 
monuments, and wilderness areas, maintenance that has been put off for 
decades, in some cases, because of lack of money.
  Mr. President, while we may deceive ourselves into the statement that 
we have this significant surplus, it is a surplus which is being 
derived by a systematic underfunding of important national priorities, 
priorities which we know eventually are going to be met, but which we 
are now deceiving ourselves into the false illusion that there is an 
unrealistic surplus, a surplus which we can now use to fund these 
massive tax cuts.
  The time is now to provide some honest leadership for the American 
people, not hollow statements and false promises. I am afraid that that 
leadership and honesty are not to be found in the tax bill before us 
today.
  What I think we need to do is to put first things first. As 
Ecclesiastes says: There is a time for all things. There is a season to 
plant and there is a season to harvest.
  What is the season today, in this time of national celebration of the 
results of fiscal discipline? I suggest the season for today is to deal 
with the challenges of our children and our grandchildren, starting 
with two critical national programs.
  We should provide for the solvency of Social Security for our 
children and our grandchildren, and we should strengthen Medicare and 
bring it into the 21st century by providing it with the tools 
necessary, not just to deal with illness but to do what Americans 
want--to provide for their health and well-being. We should be funding 
those medical services that will prevent disease and illness, that will 
maintain our American people in their highest state of health. 
Unfortunately, when we have spent the resources that would be necessary 
to fund this tax cut before having dealt with Social Security and 
Medicare, there will be no money left to deal with Social Security and 
Medicare.
  The statement will be made that Social Security is off the table; we 
have already dealt with it; that by placing all of the Social Security 
surplus into a lockbox to protect it for Social Security, we have 
discharged that responsibility. Well, first, I say that we have a very 
leaky lockbox. Willie Sutton was once asked: Why do you rob banks? The 
answer was: That is where the money is. Well, the lockbox assumes the 
money has already gotten to the bank. But Jesse James figured out that 
if he could rob the train before the box got to the bank, he could get 
the money before it could be placed in the vault. That is essentially 
what this emergency spending loophole is allowing us to do. We are 
looting the lockbox before the money arrives.
  Even if we put the full amount of the Social Security surplus into 
the Social Security program, we would only have extended its solvency 
for our children to the year 2034.
  The Greenspan Commission of the early 1980s had recommended that we 
ought to fund Social Security on a three-generational program, which 
would mean through the year 2075. We

[[Page 19786]]

have not completed our task if the only thing we have done is to secure 
the solvency of Social Security to the year 2034.
  Mr. President, we have an opportunity to lead the Nation in the way 
in which I believe thoughtful Americans wish to go. They wish to be 
prudent at this time. They wish to celebrate the successes of fiscal 
discipline and to continue those successes. They want to take care of 
today's season of business first. They do not want us to embark upon a 
reckless course which would dissipate our ability to deal with our 
future needs and place us in the precarious position of depending upon 
unrealistic estimates of future revenues and a totally unrealistic 
expectation of future national needs.
  So the issue is not the details of this tax proposal, although I 
believe an examination of that detail would indicate this plan is 
woefully lacking in basic principles of fairness and equity to all 
Americans. But the fundamental deficiency of this tax bill is its lack 
of timeliness. We should not be considering any tax cut until we have 
taken care of priority business--protecting Social Security for three 
generations and strengthening Medicare. We should not be considering 
any tax measures until we are certain the projections of revenue and 
the estimates of future needs are based on realistic, not political, 
assessments.
  After we have carried out those first tasks, then if there are funds 
left available--and I suggest there probably will be --then we could 
consider what would be an appropriate form of returning that measure 
back to the American people through a tax cut. But, for today, the 
answer must be no to the measure that is before us. I hope that soon we 
will be answering yes to the responsibility we have to do America's 
first business first.
  Thank you, Mr. President.

                               Exhibit 1

                [From the New York Times, July 25, 1999]

        National Parks, Strained by Record Crowds, Face a Crisis

                         (By Michael Janofsky)

       YELLOWSTONE NATIONAL PARK, WY--In growing numbers that now 
     exceed 3.1 million a year, visitors travel here to America's 
     oldest national park to marvel at wildlife, towering 
     mountains, pristine rivers and geological curiosities like 
     geysers, hot springs and volcanic mudpots.
       Yet many things tourists may not see on a typical trip 
     through Yellowstone's 2.2 million acres spread across parts 
     of Idaho, Montana and Wyoming could have a greater impact on 
     the park's future than the growl of a grizzly or spew of Old 
     Faithful.
       For all its beauty, Yellowstone is broken. Hordes of summer 
     tourists and the increasing numbers now visiting in the 
     spring, fall ad winter are overwhelming the park's ability to 
     accommodate them properly.
       In recent years, the park's popularity has created such 
     enormous demands on water lines, roads and personnel that 
     park management has been forced to spend most of 
     Yellowstone's annual operating budget, about $30 million, on 
     immediate problems rather than investing in long-term 
     solutions that would eliminate the troublesome areas.
       Yellowstone is not the only national park suffering. With 
     the nation's 378 national park areas expected to attract 
     almost 300 million visitors this year, after a record 286 
     million in 1998, many parks are deferring urgently needed 
     capital improvements.
       For instance, damaged sewage pipes at Yellowstone have let 
     so much ground water from spring thaws into the system that 
     crews have had to siphon off millions of gallons of treated 
     water into meadows each of the last four years.
       And with budget restraints forcing personnel cutbacks in 
     every department, even the number of park rangers with law-
     enforcement authority has dropped, contributing to a steady 
     increase in crime throughout Yellowstone.
       ``It's so frustrating,'' Michael V. Finley, Yellowstone's 
     superintendent, said. ``As the park continues to deteriorate, 
     the service level continues to decline. You see how many 
     Americans enjoy this park. They deserve better.''
       Over the last decade the annual budget of the National Park 
     Service, an agency of the Interior Department, has nearly 
     doubled, to $1.9 billion for the fiscal year 1999 from $1.13 
     billion in 1990, an increase that narrowly outpaced 
     inflation.
       But in an assessment made last year, the park service 
     estimated that it would cost $3.54 billion to repair 
     maintenance problems at national parks, monuments and 
     wilderness areas that have been put off--for decades, in some 
     cases--because of a lack of money.
       The cost of needed repairs at Yellowstone was put at $46 
     million, the most of any park area in the system. But the 
     park service report shows that budget limits have forced 
     virtually all national parks to set aside big maintenance 
     projects, delays that many park officials say compromise 
     visitor enjoyment and occasionally threaten their health and 
     safety.
       Senator Craig Thomas, a Wyoming Republican who is chairman 
     of the Subcommittee on National Parks, and Bob Stanton, 
     director of the park service, negotiated a deal this week to 
     spend $12 million over the next three years for Yellowstone 
     repairs.
       Other parks may have to wait longer. The Grand Canyon 
     National Park depends on a water treatment system that has 
     not been upgraded in 30 years, a $20 million problem, park 
     officials say. Parts of the Chesapeake and Ohio Canal 
     National Historical Park along the Potomac River are 
     crumbling, another $10 million expense. The Everglades 
     National Park in South Florida needs a $15 million water 
     treatment plant.
       Even with a heightened awareness of need among Federal 
     lawmakers and Clinton Administration officials, money to 
     repair those problems may be hard to find at a time when 
     Congress is wrestling over the true size of a projected 
     budget surplus and how much of it will pay for tax cuts. If 
     billions were to become available for new spending, the park 
     service would still have to slug it out with every other 
     Federal agency, and few predict that parks would emerge a big 
     winner.
       It is a disturbing prospect to conservationists, parks 
     officials and those lawmakers who support increased spending 
     to help the parks address their backlog of maintenance 
     problems.
       ``It's kind of like a decayed tooth,'' said Dave Simon, the 
     Southwest regional director for the National Parks and 
     Conservation Association, a citizens' group that is working 
     with Yellowstone to solve some of the long-term needs. ``If 
     you don't take care of it, one day you'll wake up with a 
     mouthful of cavities.''
       The parks' supporters like Representative Ralph S. Regula, 
     an Ohio Republican who is chairman of Appropriations 
     Subcommittee on the Interior, concede that budgetary 
     increases as well as revenue from new programs that allow 
     parks to keep a greater share of entrance fees and concession 
     sales have been offset by inflation, rising costs and daily 
     operational demands that now accommodate 8.9 percent more 
     people than those who visited national parks a decade ago.
       With few dollars available for maintenance programs, the 
     parks suffered ``benign neglect,'' Mr. Regula said, adding: 
     ``It's not very sexy to fix a sewer system or maintain a 
     trail. You don't get headlines for that. It would be nice to 
     get them more money, but we're constrained.''
       Denis P. Galvin, the deputy director of the National Park 
     service, noted that only twice this century, in the 1930's 
     and in 1966, has the Federal Government authorized money for 
     systemwide capital improvements, and he said he was not 
     expecting another windfall soon.
       ``Generally,'' Mr. Galvin said, ``domestic programs come at 
     the back of the line when they're formulating the Federal 
     budget, and I just don't think parks are a priority.''
       Perhaps no park in America reflects the array of hidden 
     problems more than Yellowstone, which opened in 1872, years 
     before Idaho, Montana and Wyoming became states.
       Park officials here say that the longer problems go 
     unattended, the more expensive and threatening they become.
       The budget restraints have meant reducing the number of 
     rangers who carry guns and have the authority to make 
     arrests.
       Rick Obernesser, Yellowstone's chief ranger, said the 
     roster had dwindled to 112 from 144 over the last 10 years, 
     which often means leaving the park without any of these 
     rangers from 2 A.M. to 6 A.M.
       Next year, Mr. Obernesser said, the park will have only 93 
     of these rangers, about 1 for every 23,000 acres compared 
     with 1 for every 15,000 acres when his staff was at peak 
     strength.
       That has not only led to slower response times to 
     emergencies, like auto accidents and heart attacks, he said, 
     but also to an increase in crime. Since the peak staffing 
     year of 1989, he said, the park has experienced significant 
     increases in the killing of wildlife, thefts, weapons charges 
     against visitors and violations by snowmobile drivers.

                           *   *   *   *   *

  Mr. NICKLES addressed the Chair.
  The PRESIDING OFFICER. The Senator from Oklahoma is recognized.
  Mr. NICKLES. Mr. President, I ask the Senator from Delaware to yield 
me 20 minutes.
  Mr. ROTH. I am happy to yield 20 minutes to the distinguished Senator 
from Oklahoma.
  Mr. NICKLES. Mr. President, first, I wish to compliment my colleague, 
the chairman of the Finance Committee, Senator Roth, for his leadership 
in bringing the bill to the floor. In addition, I compliment Senator 
Lott and Senator Domenici because they helped make this happen.

[[Page 19787]]

  The Senate, earlier this year, passed a budget resolution that says 
let's use most of the surplus that is projected to pay down the 
national debt. As a matter of fact, let's use over two-thirds of it to 
pay down the national debt. I have heard complaints from colleagues on 
the Democrat side saying we don't do enough. Frankly, we pay down the 
national debt more than the Democrats have proposed and more than the 
President has proposed. Maybe that is not enough for them, but it is 
more than they have proposed.
  I compliment Senator Domenici and Senator Lott, as well as Senator 
Roth, for laying the groundwork to say let's take at least one-fourth 
of the surplus projected and let the people keep it. Some people say 
give it back to them. Well, I don't think they should ever have to send 
it to Washington, DC, in the first place; it is their money.
  That is the issue. Are we going to allow the taxpayers to keep one-
fourth of the surplus, or are we going to insist on that money going to 
Washington, DC, and Washington spending it? Obviously, there is no 
limit on the number of demands we have on spending other people's 
money. We can spend it all just like that. It is quite easy, in fact it 
is the easiest thing to do. Now, we finally have an opportunity, as a 
result of the significant surplus, to allow people to keep more of it.
  We do that in this bill. We have come up with a bill that I believe 
is fair, balanced, and I think is a good tax bill, a tax bill for 
taxpayers. I will go into some of the benefits. First, I want to 
repudiate some of the comments that were made against it. One Senator 
said it was too much. It is one-fourth of the surplus.
  I don't think that is too much. We have given tax cuts in the past 
when we didn't even have a surplus. I happen to have supported those. 
We passed a tax cut in 1997--a strong majority of Congress passed it. 
We didn't have a surplus then. I think it was the right thing to do. We 
gave a tax cut because, in some cases, rates were too high. We said if 
we have a tax cut, it will stimulate the economy and raise more money. 
Guess what. That is what happened.
  We cut the capital gains tax both in 1995 and in 1997. The President 
vetoed it in 1995. He signed it in 1997. When I say ``we,'' I am 
talking about Republicans because we didn't have any support in 1995 
from our Democrat colleagues--maybe with one or two exceptions. We 
passed it in 1997. We cut capital gains from 28 to 20 percent. It 
helped the economy and raised a lot of money. It beat the expectations 
by the CBO and the Treasury Department. Why? We reduced the tax on 
transactions by about 230 percent and ended up having more financial 
transactions. As a result, you have more income and more taxes. It 
helped the economy. Many of us said that would happen, that it would 
have a very positive impact.
  Let me touch on one other thing. A couple of colleagues said you 
can't have this tax cut because it benefits high-income people. Heaven 
forbid, somebody making $500,000 is going to get a greater benefit than 
somebody making $10,000. Let me just step back a little bit. Is this 
tax cut too high, too generous for high-income people? I don't think 
so.
  Let me talk about rates. I believe marginal rates impact on whether 
or not somebody is going to do extra work. I have been in the private 
sector. I used to have a janitorial service, and marginal rates kept me 
from doing more work. I had a situation where I was making enough money 
to combine income and Social Security taxes. I was working about 40 
percent of the time for the Government, and I said that is enough. I am 
not going to work more if the Government is going to take almost half 
of everything I make. It denied the advancement and expansion of my 
business--a small business.
  I might mention, that small business is where most additional new 
employees are starting. Somebody says, wait a minute, this tax cut is 
unfair, it benefits the high income bracket. Look at what we do for 
high income. We reduce every single income bracket by 1 percentage 
point. The low end is 15 percent and we reduced it to 14 percent. The 
high income is 39.6 percent, and we reduced it to 38.6 percent, and so 
on. There is a 28 percent bracket; we move that to 27.
  Somebody says, that benefits the high income. Wait a minute. We 
reduce it in every single bracket by 1 percentage point. It so happens 
that for the 15-percent bracket, to move down 1 point, that is a 7-
percent reduction. If you move a 39.6 percent down to 38.6, that is a 
2.6-percent reduction--less than half of a percentage reduction of the 
15-percent taxpayer, or the lower income taxpayer. So I don't think 
this is tilted in any way. If anything, if one really looks at this, it 
makes the system more progressive.
  So the argument that this benefits upper income doesn't fly, and it 
doesn't fly with history. Look at what the tax cut rates were when 
President Clinton was sworn into office. The maximum rate in 1992 was 
31 percent. After the Clinton tax increase--or maybe I should say the 
Democrat tax increase because it only passed by Democrats, with the 
Vice President breaking the tie vote twice in this Chamber--it 
increased the maximum rate from 31 to 39.6 percent. Actually, it went 
higher than that because they also took the cap off the Medicare tax 
and said you have to pay Medicare tax on all income, all salary, and 
all wages. So you have payroll taxes and Federal income taxes and 
Social Security taxes, and no limit, no base, no cap on Medicare taxes.
  Medicare tax is 1.45 percent of payroll, plus your employer's 
contribution; that is 2.9 percent. So a person in the maximum bracket 
pays actually 39.6, plus 2.9 percent Medicare. That is a total of 42.5 
percent. When Bill Clinton was sworn in, the maximum rate was 31 
percent. One year later, it was 42.5 percent on all income, all wages, 
on everybody in the country.
  That is a massive tax increase. That is a 37-percent increase.
  What are we doing in this bill? We are reducing that by one point. We 
reduce it from 39.6 to 38.6; 38.6 is a whole lot more than 31.
  So, the tax cut that we are proposing is just a small fraction of the 
tax increase President Clinton and the Democrats passed in 1993--a 
small fraction. Yet some of my colleagues are saying we can't do that. 
It might deny us the ability to spend more money. We have a whole 
laundry list of people parading to Washington, DC, saying: Give me some 
more money because we want to spend it. We want more of your money 
because we can spend it better than you can.
  Finally, I want to address the comments of one of our colleagues who 
says we favor a tax cut, but we don't believe now is the time to do it. 
Wait a minute. When are you going to do it, if not now?
  We have estimates of a $3 trillion surplus over the next 10 years. 
And we are not going to do it now? Will we only give you a tax cut if 
it is $4 trillion, or $5 trillion? At what point would our colleagues 
say it is time to let people keep more of their own money? We are 
taking too much from them. If my colleagues are not going to agree to a 
tax cut that is only one-fourth of the surplus, they will never agree 
to one.
  It absolutely amazes me how our Democrat colleagues all marched in 
step in 1993 and said: We are going to support this tax increase 
because Bill Clinton wants it.
  You might remember that Bill Clinton shortly after that said, Oops, 
surprise, I agree with the business community. We increased taxes too 
much. He actually admitted to that. A lot of Democrats were mad, but he 
admitted to it anyway and then he went ahead and vetoed our tax cut in 
1995.
  Then in 1997, he eventually agreed to a tax cut and everybody seemed 
to favor it. I guess whatever Bill Clinton says the Democrats march in 
line to.
  I don't know. But we cut taxes in 1997. We reduced capital gains from 
28 to 20 percent--very positive things. They might think that was a bad 
thing to do. No one offered an amendment saying let's bring capital 
gains back up to 28 percent saying that it was terrible. A lot of 
people debated against it in 1997. But it was the right thing to do.

[[Page 19788]]

  We cut taxes for families in 1997. We passed a $500 tax credit for 
each child in 1997. Bill Clinton campaigned for it in 1992. He didn't 
deliver in 1993. As a matter of fact, in 1993 he increased taxes. That 
tax cut didn't happen until 1997. Republicans passed it. The President 
vetoed it. We passed it in 1997 and he eventually signed it.
  A family of four with an income of less than $80,000 has $2,000 per 
year that they can keep. A family with four kids gets to keep $2,000 
more per year because Republicans in Congress said we are going to pass 
it. We promised to and we did.
  We established the Roth IRA.
  We did some good things in 1997. Guess what? We didn't have the 
projected surplus in 1997 that we have in 1999. Now we have trillions 
of dollars of anticipated surplus. Let's give one-fourth of it back to 
the American people. Let's let them keep it. They shouldn't have to 
send that much to Washington, DC. Their taxes are too high.
  I will go through a couple of examples that we correct in this bill 
to show why their taxes are too high and what we do about it. There are 
too many people who send too much to Washington DC. Let me address a 
couple of those examples.
  I mentioned a self-employed person. A self-employed person, an 
individual, makes $25,000. They are taxed at the marginal bracket of 15 
percent on everything they make up to $25,000. Above that they are 
taxed at 28 percent. If somebody has a painting service in rural 
Delaware, and paints houses and works for himself, that individual has 
a taxable income of $25,000, and probably is not considered wealthy by 
most people's standards. Any additional contract that person makes, any 
additional income that person makes, is taxed at 28 percent. He also 
has to pay Social Security and Medicare tax. That is 15.3 percent on 
top of the 28 percent. Add those two together, and it is 43.3 percent. 
He has to pay State income tax. In my State that is 6 or 7 percent. For 
any additional dollar that individual makes painting houses, fifteen 
cents of it goes to the government.
  That is too high. That is far too much.
  For a married couple right now that makes $43,000, it is the same 
thing. For any additional dollar they make, half of it goes to the 
government, if they are self-employed.
  That is too high. So we cut that.
  We provide marriage penalty relief and several other positive things. 
Let me go through some more of the changes.
  I mentioned that we cut all brackets by one percent. That benefits 
the lower more than the upper brackets. The lower brackets get a seven-
percent reduction and the upper brackets get a 2.8 percent reduction. 
That is not stacked towards the higher income people. It is a tax cut 
for all taxpayers, and it benefits, percentage-wise, the lowest income 
taxpayers first. The lowest income taxpayer gets the break first.
  Again, for somebody who says this is weighted towards the wealthy, it 
is absolutely totally and completely false.
  We widen the 15 percent bracket. We make it 14 percent. Then we widen 
it. We ship $3,000 more of income into the 14-percent bracket instead 
of the 28-percent bracket.
  That is a very positive change for an individual with an income up to 
$25,750. That means they get to save $390. That is fairly significant. 
I think that is very significant.
  For a couple you are talking about double that amount. So they get to 
save a significant amount as well.
  Marriage penalty relief: What did we do? Some people do not 
understand what we did. We said we would double the bracket by 
increasing the standard deduction--basically doubling the standard 
deduction for an individual. If you look at the income tax forms, and 
say you are filing as individuals, or joint. If you file as married, 
you don't get twice the individual deduction. So, frankly, it would be 
better off if a married couple filed as individuals. They are penalized 
for filing jointly.
  Does it make any sense for our Tax Code to penalize people for being 
married to the tune of $1,400 per family? That is wrong. This bill 
eliminates that for most couples.
  What do we do? We said, Let's double the standard deduction. It 
should be twice as much for those who are married as it is for 
individuals.
  We do that with this legislation because the biggest hit is on 
married couples, and the marriage penalty is that individually they are 
taxed at 15 percent. For joint income tax they are taxed at 28 
percent--almost twice as high. We move those rates to 14 and to 27 
percent. We are saying for all of the income that is taxed up to 14 
percent they should have twice that bracket amount for a couple. That 
is not the way the tax code is right now.
  Let me explain it.
  Individuals today are taxed at 15 percent up to $25,000. You say, OK. 
That is for an individual, and it would make sense for a couple then to 
be taxed at 15 percent up to $50,000. But that is not the present law. 
The present law says above $43,000 they are taxed at 28 percent. So 
they have $7,000 that they are taxed at a higher rate, twice the rate 
as what they should be. We eliminate that. We double the 15 percent 
bracket for married couples.
  So if it is $25,000 at 15 percent for an individual, it would be 
$50,000 for a couple.
  What does that mean in savings to a couple that makes $50,000? It 
means $980 a year that they will be able to keep. We are not going to 
penalize couples because they happen to be married and because they 
happen to file joint returns.
  I want to compliment the chairman, because he has worked very hard in 
supporting this.
  We have $100 billion in tax relief for married couples by eliminating 
the marriage penalty in this legislation--that is one eighth of this 
bill.
  When we debated this legislation on the floor of the Senate last 
week, no one said take out the marriage penalty.
  The marriage penalty tax elimination is one of the most important 
aspects of this bill and we are going to make it happen.
  The upper rate reductions that I mentioned move one percent down.
  That may not happen, because we have a trigger mechanism that says if 
we don't meet the deficit reduction targets the tax cut doesn't happen.
  That is not the case for marriage penalty relief.
  I encourage my colleagues. If you believe in getting rid of the 
marriage penalty, you had better vote for this bill. It is one of the 
most significant reforms that we have in this legislation.
  What else did we do? Why should somebody be in favor of this?
  We eliminate the death tax.
  We changed the current unified credit into an exemption.
  What does that mean? Right now everybody knows that we have a unified 
credit that says if you have a taxable estate above $650,000, you don't 
have to pay a death tax. If you pass away, your survivors and kids 
won't have to pay any death tax.
  We changed that unified credit into an exemption.
  What does that mean? Once you have to pay the tax, you start paying 
at 39 percent.
  By making an exemption, you start out at a lower rate. So any taxable 
estate will be taxed at an 18 percent rate.
  The beginning rate of a taxable estate will be 18 percent instead of 
39 percent. We will be helping out estates that are just over the 
threshold, estates that are $1 million or $1.5 million. That is a very 
positive change.
  Eventually, in 9 years, by the year 2009, we eliminate the death tax. 
At that point, estates should be taxed when the property is sold--not 
in the event of death but when the property is sold. If your kids 
inherit a business or ranch, they don't have to pay inheritance tax 
until they sell it; if they sell it, then they are taxed capital gains. 
And they have to pay tax on the base, going back to the original base. 
That is how it should be. If they sell, they should pay capital gains; 
if they don't sell, they shouldn't be hit.
  I learned the hard way. This inheritance tax makes people sell 
businesses

[[Page 19789]]

all the time. It makes people sell farms, ranches, homes--just name 
it--to cover estate taxes. That is wrong. If they should choose to sell 
it, then let them pay the tax on the gain. That is what we do here and 
that is a very significant provision in this bill.
  What else do we do in this bill? We reduce capital gains taxes. We 
have proven time and time again, going back to the time of John F. 
Kennedy, reduce taxes and we generate more money to Government, 
particularly with marginal rates and capital gains rates. We reduced 
the capital gains rate in 1997 from 28 to 20 percent, and it raised a 
lot of money for the Federal Government. In this bill, immediately 
going back to January 1 of this year, we reduce the capital gains rate 
from 20 percent to 18 percent.
  Beginning January 1 of next year we index capital gains. What does 
that mean? It means we will quit taxing inflation. If someone has a 
home and that home is escalating in price through inflation, they won't 
have to pay taxes on that inflated gain because the home really hasn't 
increased in value, it is just staying up. That is a very positive 
provision and I compliment the authors of the bill for their hard work.
  We increase IRA deductions from $2,000 to $5,000. We haven't 
increased it since we passed IRAs many years ago. That is another 
significant provision, so people are saving and are not so dependent on 
an employer or the Federal Government.
  We allow self-employed persons to deduct 100 percent of their health 
care costs. Right now they can deduct 45 percent. This measure affects 
nearly 16 million taxpayers. It is a very positive provision. We allow 
100-percent deductibility of health insurance for workers without 
generous employers. If you do not work for a generous employer, you can 
deduct your health care costs.
  We increase child care tax credits.
  We have AMT reforms so people don't get stuck paying an alternative 
minimum tax just because they are taking tax credits that Congress has 
already passed.
  We allow small businesses to be able to expense up to $30,000 a year. 
We increase that from $19,000. This is a provision that will benefit 
thousands and thousands of businesses, small businesses, all across the 
country.
  I say to my colleagues, this bill is a good tax bill, it is a fair 
tax relief bill. It allows small business, individuals, and married 
couples an opportunity to keep more of their own money instead of 
sending it to Washington, DC.
  I urge my colleagues on behalf of the taxpayers all across America to 
vote ``yes'' on this bill later this evening.
  Mr. President, I ask unanimous consent to have printed in the Record 
a couple of tables showing the distributional effects. Changes that we 
are making will show the greatest percentage of reductions are 
certainly pushed towards the lower income. For example, on married 
filing jointly, the rate reduction is 7 percent but the biggest 
reduction actually is for incomes of $40,000 to $60,000, receiving 
significant reductions, up to 17 and 22 percent, because of the 
marriage penalty relief that we have added.
  I ask unanimous consent to have these tables printed in the Record.
  There being no objection, the material ordered to be printed in the 
Record, as follows:

                                                                                              IMPACT OF RATE REDUCTION & BRACKET EXPANSION
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                          Current law                                                                                   GOP tax cut                                                    Change
               -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Taxable Income                                                                     Taxable @                                                                                    Taxable @                     Amount of     Change as %
                 Taxable @ 15%   Taxable @ 28%   Taxable @ 31%   Taxable @ 36%       39.6%         Total tax     Taxable @ 14%   Taxable @ 27%  Taxable @ 30%  Taxable @ 35%      38.6%        Total tax        change        of taxes
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         MARRIED FILING JOINTLY
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
       10,000          10,000               0               0               0               0           1,500          10,000               0              0              0              0          1,400          (100)             -7
       20,000          20,000               0               0               0               0           3,000          20,000               0              0              0              0          2,800          (200)             -7
       30,000          30,000               0               0               0               0           4,500          30,000               0              0              0              0          4,200          (300)             -7
       40,000          40,000               0               0               0               0           6,000          40,000               0              0              0              0          5,600          (400)             -7
       50,000          43,050           6,950               0               0               0           8,404          50,000               0              0              0              0          7,000        (1,404)            -17
       60,000          43,050          16,950               0               0               0          11,204          57,500           2,500              0              0              0          8,725        (2,479)            -22
       70,000          43,050          26,950               0               0               0          14,004          57,500          12,500              0              0              0         11,425        (2,579)            -18
       80,000          43,050          36,950               0               0               0          16,804          57,500          22,500              0              0              0         14,125        (2,679)            -16
       90,000          43,050          46,950               0               0               0          19,604          57,500          32,500              0              0              0         16,825        (2,779)            -14
      100,000          43,050          56,950               0               0               0          22,404          57,500          42,500              0              0              0         19,525        (2,879)            -13
      110,000          43,050          61,000           5,960               0               0          25,382          57,500          46,500          5,950              0              0         22,404        (2,979)            -12
      120,000          43,050          61,000          15,950               0               0          28,482          57,500          46,550         15,950              0              0         25,404        (3,079)            -11
      130,000          43,050          61,000          25,950               0               0          31,582          57,500          46,550         25,950              0              0         28,404        (3,179)            -10
      140,000          43,050          61,000          35,950               0               0          34,682          57,500          46,550         35,950              0              0         31,404        (3,279)             -9
      150,000          43,050          61,000          45,950               0               0          37,782          57,500          46,550         45,950              0              0         34,404        (3,379)             -9
      160,000          43,050          61,000          54,500           1,450               0          40,955          57,500          46,500         54,500          1,450              0         37,476        (3,479)             -8
      170,000          43,050          61,000          54,500          11,450               0          44,555          57,500          46,550         54,500         11,450              0         40,976        (3,579)             -8
      180,000          43,050          61,000          54,500          21,450               0          48,155          57,500          46,550         54,500         21,450              0         44,476        (3,679)             -8
      190,000          43,050          61,000          54,500          31,450               0          51,755          57,500          46,550         54,500         31,450              0         47,976        (3,779)             -7
      200,000          43,050          61,000          54,500          41,450               0          55,355          57,500          46,550         54,500         41,450              0         51,476        (3,879)             -7
      250,000          43,050          61,000          54,500          91,450               0          73,355          57,500          46,550         54,500         91,450              0         68,976        (4,379)             -6
      300,000          43,050          61,000          54,500         124,600          16,850          91,961          57,500          46,550         54,500        124,600         16,850         87,083        (4,879)             -5
      350,000          43,050          61,000          54,500         124,600          66,850         111,761          57,500          46,550         54,500        124,600         66,850        106,383        (5,379)             -5
      400,000          43,050          61,000          54,500         124,600         116,850         131,561          57,500          46,550         54,500        124,600        116,850        125,683        (5,878)             -4
      450,000          43,050          61,000          54,500         124,600         166,850         151,361          57,500          46,550         54,500        124,600        166,850        144,983        (6,379)             -4
      500,000          43,050          61,000          54,500         124,600         216,850         171,161          57,500          46,550         54,500        124,600        216,850        164,283        (6,879)             -4
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
       10,000          10,000               0               0               0               0           1,500          10,000               0              0              0              0          1,400          (100)             -7
       20,000          20,000               0               0               0               0           3,000          20,000               0              0              0              0          2,800          (200)             -7
       30,000          25,750           4,250               0               0               0           5,053          28,750           1,250              0              0              0          4,363          (690)            -14
       40,000          25,750          14,250               0               0               0           7,853          28,750          11,250              0              0              0          7,063          (790)            -10
       50,000          25,750          24,250               0               0               0          10,653          28,750          21,250              0              0              0          9,763          (890)             -8
       60,000          25,750          34,250               0               0               0          13,453          28,750          31,250              0              0              0         12,463          (990)             -7
       70,000          25,750          36,700           7,550               0               0          16,479          28,750          33,700          7,550              0              0         15,389        (1,090)             -7
       80,000          25,750          36,700          17,550               0               0          19,579          28,750          33,700         17,550              0              0         18,389        (1,190)             -6
       90,000          25,750          36,700          27,550               0               0          22,679          28,750          33,700         27,550              0              0         21,389        (1,290)             -6
      100,000          25,750          36,700          37,550               0               0          25,779          28,750          33,700         37,550              0              0         24,389        (1,390)             -5
      110,000          25,750          36,700          47,550               0               0          28,879          28,750          33,700         47,550              0              0         27,389        (1,490)             -5
      120,000          25,750          36,700          57,550               0               0          31,979          28,750          33,700         57,550              0              0         30,389        (1,590)             -5
      130,000          25,750          36,700          67,550               0               0          35,079          28,750          33,700         67,550              0              0         33,389        (1,690)             -5
      140,000          25,750          36,700          67,800           9,750               0          38,667          28,750          33,700         67,800          9,750              0         36,877        (1,790)             -5
      150,000          25,750          36,700          67,800          19,750               0          42,267          28,750          33,700         67,800         19,750              0         40,377        (1,890)             -4
      160,000          25,750          36,700          67,800          29,750               0          45,867          28,750          33,700         67,800         29,750              0         43,877        (1,990)             -4
      170,000          25,750          36,700          67,800          39,750               0          49,467          28,750          33,700         67,800         39,750              0         47,377        (2,090)             -4
      180,000          25,750          36,700          67,800          49,750               0          53,067          28,750          33,700         67,800         49,750              0         50,877        (2,190)             -4
      190,000          25,750          36,700          67,800          59,750               0          56,667          28,750          33,700         67,800         59,750              0         54,377        (2,290)             -4
      200,000          25,750          36,700          67,800          69,750               0          60,267          28,750          33,700         67,800         69,750              0         57,877        (2,390)             -4
      250,000          25,750          36,700          67,800         119,750               0          78,267          28,750          33,700         67,800        119,750              0         75,377        (2,890)             -4
      300,000          25,750          36,700          67,800         152,900          16,850          96,873          28,750          33,700         67,800        152,900         16,850         93,483        (3,390)             -3
      350,000          25,750          36,700          67,800         152,900          66,850         116,673          28,750          33,700         67,800        152,900         66,850        112,783        (3,890)             -3
      400,000          25,750          36,700          67,800         152,900         116,850         136,473          28,750          33,700         67,800        152,900        116,850        132,083        (4,390)             -3
      450,000          25,750          36,700          67,800         152,900         166,850         156,273          28,750          33,700         67,800        152,900        166,850        171,383        (4,890)             -3
      500,000          25,750          36,700          67,800         152,900         216,850         176,073          28,750          33,700         67,800        152,900        216,850        170,683        (5,390)             -3
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Policies as fully phased in applied to 1999 tax brackets.
Provided by Senator Don Nickles, 08/05/99


[[Page 19790]]

  Mr. ROTH. Mr. President, I yield 5 minutes to the distinguished 
Senator from Arizona.
  Mr. KYL. Mr. President, I begin by commending the chairman of the 
Finance Committee, Senator Roth, and our leadership, Senators Lott and 
Nickles, for their tremendous work on this bill. Members have heard 
Senator Nickles discuss the details of the bill, the many things that 
have been included in this bill. Through his leadership, a lot of the 
things that Members of the Republican Party and people I represent who 
have talked to me about tax policy wanted in this bill have gotten 
included in the bill. I think they did a tremendous job in ensuring 
that the tax relief for taxpayers became a part of this tax package.
  I won't go over the details of the bill as Senator Nickles has just 
done, but I want to note that this is, as he said, the largest middle-
class tax cut since Ronald Reagan was President. It is based on the 
same kind of progrowth, broad-based policies that will let all 
taxpayers keep more of their hard-earned money.
  Mr. NICKLES. Will the Senator yield?
  Mr. KYL. I am happy to yield to the Senator.
  Mr. NICKLES. I want to take a minute to congratulate and thank my 
friend and colleague from Arizona for his leadership in the entire tax 
reduction effort, but particularly in estate taxes. The Senator from 
Arizona has been principal sponsor of a bill to reduce and eliminate 
the estate taxes. We have incorporated most all of that provision in 
this bill.
  I want to compliment him because I am confident eventually--maybe 
this bill will be vetoed; I hope not; I hope the President 
reconsiders--we will pass a bill to eliminate the death tax. The 
Senator from Arizona deserves great accolades and credit for being a 
principal player in making that happen.
  Mr. KYL. I thank the distinguished assistant majority leader. I agree 
that by including the repeal of the estate tax, sometimes called the 
death tax, in this legislation, we have laid down a marker and pretty 
well ensured that sooner or later it is going to be repealed.
  Obviously, for the time being, we may have to pay it down a little 
bit and find it is repealed in maybe the ninth or tenth year. 
Hopefully, by virtue of the fact we have agreed that it has to go 
eventually, we will repeal it, and hopefully it will be sooner rather 
than later because some of my friends have kidded, saying: You know, it 
is fine you get this repealed 9 years from now, but that means I have 
to hang on for another 9 years. I am not sure that is possible. Besides 
that, I have to do the expensive estate planning in the meantime.
  We prefer to get that eliminated sooner rather than later. I think it 
is a testament to the leadership of Senator Nickles, majority leader 
Senator Lott, and Senator Roth, as well as our friends in the House who 
were in agreement that the death tax had to go. That important 
provision was included in this election.
  Rather than describe the specifics of this program, let me note, when 
I turned on the television this morning I heard a report on CNN. 
Reporters had gone to Orange County in California. They found the 
average citizen on the street there really didn't like this tax relief 
that much.
  They said: Why do we need to do it? After all, shouldn't we be saving 
the Social Security surplus for paying down the debt or for Social 
Security?
  I say as plainly and clearly as I can: That is exactly what we do. We 
are not spending the Social Security surplus. Every dime of the Social 
Security surplus is set. It is not the subject of this tax bill.
  There are two kinds of surplus. First, FICA taxes fund the Social 
Security payments to seniors. We collect more in FICA taxes than 
current beneficiaries require under Social Security. So there is a 
surplus. We don't use that for the tax cut.
  Now, there are all of the other tax payment provisions of the code. 
We have to pay income tax, the estate tax, the capital gains tax, these 
other taxes. They, too, are producing more revenue than we need. We are 
not spending as much as we are collecting. That is the surplus we are 
talking about for tax relief.
  As Senator Nickles said a moment ago, out of the entire surplus, only 
25 cents of it is going for tax relief. When some of our friends on the 
other side of the aisle or the President say we can't afford tax 
relief; we should be saving the Social Security surplus, they are 
fooling the American people. The truth is, the Social Security surplus 
is not being used for this tax relief--not a penny of it.
  As a matter of fact, those people who say we should pay down the 
national debt should understand that both under the President's plan 
and under our plan, any amount of the Social Security surplus that 
isn't necessary for Social Security is used to do what? Pay down the 
national debt. That is what the Social Security surplus is being used 
for.
  Let's not be confused. There are good reasons for a tax cut. The 
money for the tax cut is not coming out of the money for Social 
Security or for paying off our national debt. That is the fundamental 
point I wanted to reiterate.
  Different provisions of the bill stress the point that Senator 
Nickles made, which is that finally we have achieved in law--we will by 
the time we vote for this--that the death tax is going to be repealed. 
I think that sends a very important message as we continue to craft tax 
legislation. Should the President veto this bill, that will permit us 
to include that principle in whatever eventually is sent to the 
President and, hopefully, signed into law.
  The Taxpayer Refund and Relief Act, which is really the largest 
middle-class tax cut since Ronald Reagan was President, is based upon 
the kind of broad-based, pro-growth policies that will help all 
taxpayers and keep our nation's economic expansion on track.
  Mr. President, this measure really represents a departure from the 
kind of targeted tax cuts that we have seen in the past. Taxpayers will 
not have to jump through hoops, or behave exactly as Washington wants, 
to see relief. If you pay taxes, you get to keep more of what you earn. 
It is as simple as that. The marginal income-tax rate reductions in 
this bill refund to all taxpayers a share of the tax overpayment that 
has created our budget surpluses. Those in the lowest income-tax 
bracket will see a seven percent reduction in their taxes. Those in the 
highest tax bracket will see a reduction of about half that size. I 
would have preferred an across-the-board reduction that helped everyone 
more than this. But recognizing the constraints imposed on the Finance 
Committee by the budget resolution, I think this is a very good 
product.
  In addition to marginal rate reductions, the bill would eliminate two 
of the most egregious taxes imposed on the American people: the 
marriage-tax penalty and the death tax. There is simply no reason that 
two of life's milestones should trigger a tax, let alone the steep 
taxes that are imposed on people when they get married and when they 
die. Eliminating them is the right thing to do.
  To eliminate the marriage penalty for most taxpayers, the standard 
deduction for joint returns would be set at two times the single 
standard deduction, and the new 14 percent income-tax bracket would be 
adjusted to two times the single bracket, phased in over the life of 
the bill. This will solve the problem for most taxpayers, but we need 
to make clear that, although we have devoted fully 50 percent of the 
relief in this bill to broad-based and marriage-penalty relief, we will 
not have eliminated the marriage penalty entirely. We will still need 
to come back and address the problem for taxpayers who choose to 
itemize.
  The bill also phases out the death tax over the next several years, 
so that by 2009 it is completely eliminated. I would ask Senators to 
carefully review the details of what is proposed here, because I 
believe they will find that the bill offers a way for those on both 
sides of the aisle to bridge our differences with respect to how 
transfers at death are taxed.
  The beauty of the proposal is that it takes death out of the 
equation. Death

[[Page 19791]]

would no longer be a taxable event. It would neither confer a benefit--
the step-up in basis allowed under current law--nor a penalty--the 
punitive, confiscatory death tax.
  The provisions are based upon the bipartisan, Kyl-Kerrey Estate Tax 
Elimination Act, S. 1128, which would treat inherited assets like any 
other asset for tax purposes. A tax on the capital gain would be paid, 
the same as if the decedent had sold the property during his or her 
lifetime, but the tax would be paid only if and when the property is 
sold.
  If the beneficiaries of an estate hold onto an asset--for example, if 
they continue to run the family business or farm--there would be no tax 
at all. No death tax or capital-gains tax. It is only if they sell and 
realize income from the property that a tax would be due, and then it 
would be at the applicable capital-gains rate.
  This simple and straightforward concept attracted a bipartisan group 
of cosponsors, including Democratic Senators Kerrey, Breaux, Robb, 
Lincoln, and Wyden, and about a dozen Senators from the Republican 
side. If the President makes good on his threat to veto this tax-relief 
bill, our bipartisan initiative provides a blueprint for how we should 
deal with the death tax in future tax legislation.
  Mr. President, another important feature of this tax bill is its 
capital-gains tax-rate reduction. It will reduce capital-gains tax 
rates another two percent, so that the top rate is only about two-
thirds of where it was just a few years ago.
  Why is another capital-gains reduction important? Let me quote 
President John F. Kennedy, who answered that very question: ``The 
present tax treatment of capital gains and losses is both inequitable 
and a barrier to economic growth.'' He proposed excluding 70 percent of 
capital gains from tax, which, if you applied the same concept today, 
would result in a top rate of about 11.88 percent. That is lower than 
the top rate of 18 percent proposed in the bill we have before us.
  President Kennedy explained that ``[t]he tax on capital gains 
directly affects investment decisions, the mobility and flow of risk 
capital from static to more dynamic situations, the ease or difficulty 
experienced by new ventures in obtaining capital, and thereby the 
strength and potential for growth of the economy.''
  In other words, if we are concerned about whether new jobs are being 
created, whether new technology is developed, whether workers have the 
tools they need to do a more efficient job, we should support measures 
that reduce the cost of capital to facilitate the achievement of all of 
these things. Remember, for every employee, there was an employer who 
took risks, made investments, and created jobs. But that employer 
needed capital to start.
  President Kennedy recognized that. He recognized that our country is 
stronger and more prosperous when our people are united in support of a 
common goal--and that we are weaker and more vulnerable when punitive 
policies divide Americans, group against group, whether along racial 
lines or economic lines.
  While some politicians may employ divisive class warfare to their 
political advantage, President Kennedy had the courage to put good 
policy ahead of demagogic politics. I am with him, and I support the 
capital-gains reduction in this bill.
  There are several other provisions that I want to mention briefly, 
because they, too, will help keep the economic expansion going: the 
increase in the IRA contribution limit, the alternative minimum tax 
relief, and the increased expensing allowance. These are things that 
will encourage the capital formation needed to help keep the United 
States competitive in world markets, producing jobs and better pay for 
our citizens.
  The bill addresses the critical issue of health care as well, 
providing an above-the-line deduction for prescription-drug insurance, 
and a 100 percent deduction, phased in over time, for health-insurance 
costs for people not covered by employer plans.
  We encourage savings for education by increasing the amount that 
individuals can contribute to education savings accounts. Funds in 
these accounts could be used for elementary and secondary education 
expenses, in addition to higher education. The exclusion for employer-
provided educational assistance would be extended, and the 60-month 
limit for deducting interest on student loans would be repealed.
  Mr. President, a few final points before closing. Providing the tax 
relief in this bill will not require us to use any of the Social 
Security surplus in any year. In fact, all of the Social Security 
surplus will be reserved for Social Security. In all, about 75 percent 
of anticipated budget surpluses over the next decade would still be set 
aside for Social Security, Medicare, and other domestic priorities, 
including debt reduction.
  It is only the remaining 25 percent of the available surplus that 
would be refunded to American taxpayers. In other words, we are 
proposing to refund just 25 cents of every surplus dollar back to the 
people who sent it to Washington. It is a sensible and a modest 
initiative.
  Remember, the $792 billion in tax relief would be provided over a 10-
year period. If you include enough years in the calculation, of course, 
the amount sounds large, but we are really only talking about an 
average of $80 billion a year.
  To put that into perspective, the federal government will collect 
$1.8 trillion this year alone. It will collect $2.7 trillion by the end 
of the 10-year period, in 2009. The amount of tax relief we are 
considering is very modest--not risky, not irresponsible at all, as the 
President would have us believe.
  Even accounting for the proposed tax cut, the debt would be reduced 
substantially. The Budget Committee chairman gave us the numbers last 
week. Publicly held debt would decline from $3.8 trillion to $900 
billion by 2009. Interest costs are forecast to decline from more than 
$200 billion annually to about $71 billion a year. In fact we reduce 
debt and debt-service costs more than the President would in his 
budget, because President Clinton would spend nearly $1 trillion on new 
initiatives. According to the Congressional Budget Office, part of the 
President's new spending would even be funded out of the Social 
Security surplus.
  To the extent that there is any surplus in the non-Social Security 
part of the budget, it is because we will have already taken care of 
the core obligations of government--things like education, health care, 
the environment, and defense. It is true that we may not launch some 
new initiatives, or fund lower priority programs, but I believe it is 
appropriate to refund part of the tax overpayment to hard-working 
taxpayers before funding new endeavors.
  Mr. President, if a corner business did what the federal government 
is doing, it would be accused of gouging. We are charging the taxpayers 
too much, taking more than the government needs to fund its 
obligations. We ought to return this overpayment to the people who 
earned it, instead of thinking up new ways to spend it in Washington.
  Mr. President, again I commend the leaders who were able to put this 
package together. I intend to vote for it and encourage my colleagues 
to do so.
  I yield whatever time is remaining to the Senator from Delaware.
  Mr. ROTH. I yield 7 minutes to the distinguished Senator from 
Kentucky.
  Mr. BUNNING. Mr. President, I rise in strong support on conference 
report on the Taxpayers Refund and Relief Act of 1999 and urge my 
colleaguess to support it. I congratulate Senator Roth and his staff on 
getting such a great bill to the floor of the Senate. I urge the 
President of the United States to reconsider his threat to veto it.
  It is a good bill. It is responsible in its timing. It is responsible 
in its provisions. And it is definitely responsible to let the American 
taxpayers keep a little more of their own money.
  On the basis of fact, it is difficult to dispute the fairness or the 
timing for a tax cut in general.
  Federal tax rates are at an all-time, peace-time high, consuming more 
than 20.6 percent of the Nation's economic output. That is a higher tax 
rate than any year except 1944 at the height of World War II when 
Federal taxes consumed 20.9 percent of the gross domestic product.

[[Page 19792]]

  At the same time, we are anticipating record budget surpluses. The 
economists tell us that over the next 10 years, the Federal Government 
will take in nearly $3 trillion more than it needs. Even if we set 
aside $1.9 trillion of that surplus to safeguard Social Security and 
pay down the public debt, the Federal Government will still have $1 
trillion more than it needs over the next 10 years.
  It is hard to imagine a more opportune or reasonable time to cut 
taxes. Tax rates are at record highs--budget surpluses are at record 
highs. What more do you need?
  In a similar vein, it is difficult to dispute any of the major 
provisions in this bill on the basis of fairness. It does a lot of good 
things.
  It reduces each of the personal income tax rates, which currently 
range from 15 percent to 39.6 percent by 1 percentage point so that 
low- and moderate-income taxpayers receive a larger real cut than those 
in higher income brackets.
  It reduces the capital gains tax moderately and indexes capital gains 
to account for inflation. It encourages savings by increasing IRA 
contribution limits from $2,000 to $5,000.
  It would eliminate the odious death tax which destroys family 
businesses and farms. Point by point, it is difficult to portray any of 
these provisions as radical or unfair.
  It is also difficult to question the fairness of the bill's 
provisions which try to eliminate the marriage penalty that exists 
under current tax law and which forces 20 million married couples to 
pay about $1,400 a year more in taxes than unmarried couples.
  In an effort to eliminate this inequity, the Taxpayer Refund Act 
increases the standard deduction and raises the upper limit of the 14-
percent bracket for married couples.
  The individual provisions in the tax cut bill are reasonable and 
fair.
  Still, the President insists that a $792 billion tax cut is 
irresponsible and reckless. Even though our Republican plan sets aside 
$1.9 trillion to secure Social Security and pay down the public debt--
even though it reserves another $277 billion to pay for Medicare reform 
or other essential services--even though the tax cuts are phased in 
slowly over 10 years, the President claims it is reckless and 
irresponsible.
  It is easy to understand why. He wants to spend more.
  He says cutting taxes $792 billion is reckless but he didn't have any 
qualms about proposing 81 new spending programs that would cost $1.033 
trillion in his budget proposal this year.
  He clearly believes that the money belongs to the Federal 
Government--not the taxpayers. And he clearly plans to find ways to 
spend that surplus if given the chance. That is the big question that 
faces the Nation right now. Whose money is it and is it more 
responsible to give some of it back to the taxpayers than it is to 
spend it?
  I have heard a lot about Federal Reserve Board Chairman, Allen 
Greenspan's recent testimony before a Senate Committee on which I serve 
and, admittedly, he was not overly enthusiastic about cutting taxes 
right now.
  He would prefer that we use all the budget surplus to pay down the 
debt. But, he also made it clear that the worst thing we could do is to 
spend the surplus on new programs. He made it clear that cutting taxes 
would be preferable to expanding Federal spending. Our tax bill already 
pays down the debt more than the President's plan and if we don't cut 
taxes now, make no mistake about it, the President will find plenty of 
ways to spend the rest of that surplus.
  This bill simply says that when tax rates are at record highs and the 
Government has more money than it needs to protect Social Security and 
Medicare and to pay down the debt, the responsible thing to do is to 
give some of that money back to the people who pay the taxes.
  There is nothing reckless about the Republican tax cut. It protects 
Social Security and Medicare. It reduces the debt more than the 
President's plan.
  It reserves several hundred billion to pay for essential services or 
to pay the debt down even more. The timing is right. The provisions are 
fair. It simply allows the Nation's taxpayers to keep a little more of 
their own money.
  I urge my colleagues to vote for it.
  Mr. ROTH. I now yield 5 minutes to the Senator from Missouri.
  The PRESIDING OFFICER. The Senator from Missouri.
  Mr. ASHCROFT. Mr. President, I thank the Senator from Delaware and 
commend him for his outstanding work in respect to this piece of 
important legislation. The Republican plan is a good plan for several 
reasons, the first of which is that the Republican plan protects every 
single cent of the Social Security surplus. None of it is to be 
consumed in the tax cut or in tax relief. Every penny of money from the 
Social Security trust fund is to be protected--$1.9 trillion over 10 
years.
  When the President presented his budget earlier this year he said we 
should protect 62 percent of the Social Security trust fund. There is 
an important distinction. We would protect every cent. The President 
proposed spending $158 billion of the Social Security benefits over the 
next 5 years. We said zero. I am happy to say he went back to the 
drawing board. He still comes back with a plan that spends $1 trillion 
more in 10 years, including about $30 billion of the Social Security 
surplus, but it is closer to the Republican plan which protects Social 
Security. It is very important to understand the Republican plan does 
not invade Social Security in order to have a tax cut.
  Since Congress took Social Security off budget in 1969, the Democrats 
have never protected every dime of Social Security surpluses, and 
frankly neither have we until this year.
  In addition to protecting Social Security, the Republican plan pays 
down the national debt. What is important is that over the next 10 
years we will pay off almost half of the national debt. That is 
responsible. Most homeowners do not pay off half their mortgage in 10 
years. On a 30-year mortgage, it takes about 15 years to get halfway 
through the process.
  Mr. President, $1.9 trillion of the $3.6 trillion in publicly held 
national debt will be paid off. We will reduce the national debt from 
41 percent of the gross domestic product to only 14 percent of the 
gross domestic product.
  On the other side, in contrast, they want to spend more money and 
leave Americans with a higher national debt. President Clinton's plan 
provides $223 billion less in debt reduction than does ours.
  The Republican plan also saves more money for Medicare. Over the next 
10 years, the Republican plan sets aside $90 billion for fixing 
Medicare, in contrast to President Clinton's new Medicare entitlement 
that provides only $46 billion for additional funding over that period.
  After attending to all these priorities, after setting aside Social 
Security, after attending to and making sure we pay down half the debt, 
running it down from 41 percent of the gross domestic product to 14 
percent of the gross domestic product, the Republican plan cuts taxes 
for every taxpayer; it cuts taxes for married couples, for savings in 
IRAs, for college education, for health care, cutting the bottom rate 
and every other rate by 1 percent.
  In addition, the Republican plan reduces the marriage penalty for 
couples, thanks to the outstanding work of Senator Hutchison of Texas. 
I was pleased to have joined her, along with Senator Brownback of 
Kansas, in accelerating that kind of relief in our effort. The 
Republican plan will make the standard deduction for married couples 
double that for singles. We will also increase the rate bracket for 
married couples, making it possible for them to become married couples 
without paying a penalty. In contrast, the President's plan and the 
Democratic plan would spend more money on Government, leaving less 
money for our families.
  If your faith is in government and in bureaucracy and your faith is 
not in families and in our communities, then you want to sweep 
resources to Washington and spend it here. If you believe the greatness 
of America is in the families and the hearts of the American

[[Page 19793]]

people, then leaving some of their resources, which they have earned, 
with them is wise policy.
  President Clinton's plan calls for $1 trillion more in spending over 
the next 10 years. The American people did not balance the budget just 
so they could be the victims of more spending. Out of approximately $3 
trillion in total surpluses over the next 10 years, our plan devotes 
only $792 billion, less than a quarter of the entire total surplus, to 
tax cuts. The Republican plan protects Social Security, cuts the 
publicly held debt in half, and provides needed relief to every 
taxpayer while protecting the opportunity to reform and address the 
needs of Medicare.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. ROTH. Mr. President, I yield 5 minutes to Senator Hagel.
  Mr. HAGEL. I thank the Chair.
  Mr. President, first I add my thanks and appreciation to the chairman 
of the Senate Finance Committee, Senator Roth, for the leadership he 
has provided in getting a very fair, responsible, realistic, reasonable 
tax cut this far. It has been a rather remarkable achievement. It is 
the right thing for America.
  I rise to state my strong support for this bill. We have heard a lot 
of talk about standards of fairness, is this right, does it help 
everyone. That is a good question, an appropriate question.
  I ask these questions: What can be more fair than an across-the-board 
reduction in marginal tax rates? Everyone who pays Federal income tax 
benefits.
  Let's put some perspective on this. This tax cut bill is focused on 
those who pay taxes. It might be a revelation for some, but actually it 
is true and we acknowledge that right from the beginning. This is about 
tax relief for those who pay Federal income taxes.
  Another relevant question is: What is more fair than ensuring people 
do not pay more in taxes just because they are married? Was it fair 
that we penalized married couples? No. This tax bill addresses that 
issue, and we do something about it. In fact, we make it fair.
  Are only rich people married? I don't think so. I think a lot of 
middle-class people are married. I think a lot of people at the bottom 
of the economic structure who pay Federal income taxes are married. 
Surely, they will benefit from this tax bill.
  Another question: What is more fair than making sure farmers--we have 
been talking about farmers all week--and small businesspeople, the 
engine of economic growth in America, don't have to sell their farms or 
their businesses in order to pass them on to their children so they, in 
fact, can keep farming?
  That is fair. Are there people in the middle-class economic structure 
of America who so fit? I think so.
  Another question: What is more fair than making sure self-employed 
individuals have the same opportunities as big corporations when it 
comes to deducting the cost of health insurance? I think that is rather 
fair.
  What about this: What is more fundamentally fair than giving back to 
the American people their money when they are paying too much in taxes, 
say, over $3 trillion more in taxes projected over the next 10 years?
  This bill does that. It does it fairly; it does it reasonably; it 
does it realistically; and it does it responsibly.
  We have heard in this Chamber over the last few minutes some of my 
colleagues talk about Social Security. My goodness, all responsible 
legislators, all responsible Americans would not dare take Social 
Security surpluses and use those for tax cuts. We are not talking about 
that. If the American public gets a sense that there is just a hint of 
demagoguery in this, they might be right and they actually might be on 
to something because the fact is, this plan does not do that.
  All Social Security surpluses are laid aside. We do not cut Medicare. 
We do not cut into spending. We provide for the adequate national 
defense requirements and, in fact, increase national defense spending 
over the next 10 years, veterans' benefits, and education benefits. 
That is where every 75 cents of this $1 overpayment goes. The other 25 
cents goes back to the taxpayer.
  This is not theory or some abstract debate. You either favor tax cuts 
or you do not. We can all dance around this and we can confuse each 
other and say: It's not fair and it's not reasonable.
  In the end, this place is about decisionmaking, hard choices. It is 
about hard choices, and you either agree that we should cut taxes or 
you do not. That is what we are going to vote on today. There are two 
clear choices: Give the American people a tax cut or keep the money in 
Washington where it surely will be spent.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. HAGEL. Mr. President, I appreciate the opportunity to register my 
strong support and yield the floor.
  Mr. ROTH. I yield 5 minutes to the Senator from Pennsylvania.
  Mr. SANTORUM addressed the Chair.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SANTORUM. I thank the Chair and thank the chairman for yielding 
me time.
  I, too, rise, as the Senator from Nebraska just did, in strong 
support of returning to the American public what they have overpaid. 
And that, to me, is good business practice. If a business gets 
overpaid, we think they would be honest enough to see that they have 
been overpaid and give back the money to the person who paid more money 
than was needed for what they were buying. In fact, if business did not 
do that, you would think they were ripping you off.
  It is somewhat incredible to me to imagine how the American public, 
when they see they are overpaying their taxes--we have more money than 
is needed to pay for the needs of Government, which are immense; $1.9 
trillion, some pretty big need--the American public, at least through 
the polls, are saying: Well, keep it. We really don't need it. We don't 
really need a tax cut. At least that is what the polls would have you 
believe. I do not believe that.
  I do not believe it is good business for the Government to keep money 
that it does not need because what the Government will do is what a 
business would do. They will take it and use it to benefit themselves, 
not benefit the customer.
  I think that is what we are seeing happen already this year in 
Washington with the surplus projected for next year to be some $14 
billion. People are just banging down the door to spend that money. We 
spent half the surplus last night. The projected surplus is half gone. 
If we pass the Ag appropriations bill in the form it passed last night, 
it will be half gone. My guess is the House, and others, will want to 
pass even more than that.
  So what my big concern is--I think the Senator from Nebraska hit the 
nail on the head--if we leave the money here, it will be spent. It will 
not be spent to benefit the broad economy. It will not be spent to 
benefit the average taxpayer in America. It will be spent to benefit 
those who are loud enough or politically powerful enough to get that 
money set aside for them.
  That is not the way things should operate when, you, the taxpayer 
have paid more than you should, that we are going to take that money 
and give it to someone who screams the loudest to get that money here 
in Washington, or who has the political clout to get that extra money 
here in Washington. No.
  What we have done in this modest tax relief package--everyone says 
how big this tax relief package is. This is modest tax relief. This is 
incremental tax relief. This phases in over a 10-year period of time. 
This is tied to meeting our surplus targets. In other words, if our 
debt payments do not go down as projected, guess what. Most of this tax 
cut, or a big portion of it, does not even happen in the future years.
  So what is being talked about is this calamitous idea that we are 
going to give all this money--this horrible thing--back to the people 
who overpaid it. And at the same time, many are standing up saying: 
Look, we need this money to spend on all this. We need it here. Of 
course, the American public doesn't need it. You have more money than 
you need back home.

[[Page 19794]]

  As someone who is raising four children, and one due in a month and a 
half, I can tell you that raising a family is very expensive. I am not 
too sure anybody would, if you think about it, mind having a couple 
extra hundred dollars to be able to do some things to help them and 
their family.
  That is what we are talking about. It is not a huge tax cut. I wish 
it were. I wish we could reduce taxes more, give more surplus back. I 
wish we could cut Government spending, pare down the growth of this 
Government. But we are not even talking about that. We are talking 
about letting Government continue to increase its spending, letting the 
entitlement programs continue to flourish, and just giving a little bit 
of what is overpaid back.
  I am excited about this particular package. There are lots of goods 
things in this package--reductions in rates, the marriage penalty tax 
relief, and one particular provision I want to speak about for a minute 
or two is the American Community Renewal Act.
  The American Community Renewal Act was not in the bill that passed in 
the Senate. I entered into a colloquy with Senator Roth, and he agreed 
he would look at what was included in the House package. He did. And 
included in this bill out of conference is a bill that does not just 
provide tax relief, which is what we talked about, but a provision that 
helps those people in poor inner-city and rural communities who are not 
being lifted by the rising tide of this economy with incentives, such 
as the zero capital gains tax within these renewal communities.
  One hundred of them would be designated. Twenty percent of them at 
least would have to be in rural areas, with a zero capital gains rate 
to help businesses start in those communities; to provide help for home 
ownership; expensing of businesses would be increased; wage credits; 
real powerful incentives for employment opportunities to happen within 
these communities, housing opportunities to happen within these 
communities, to see a real transformation, using, again, the private 
sector, not public-sector programs, not the Department of Housing and 
Urban Development, but, in fact, private sector incentives for private 
sector development and home ownership, which is the real key to success 
in America.
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. SANTORUM. I thank the chairman for including that in the bill 
today.
  Mr. ROTH. Mr. President, I yield 6 minutes to the Senator from 
Minnesota.
  Mr. GRAMS. I thank the Chair.
  Mr. President, in a few hours we are going to cast a very important 
vote to return tax overpayments to working Americans. The passage of 
the conference report of the Taxpayer Reform Act will signal a clear 
victory for all Americans. I commend the Senate Republican leadership 
and especially Chairman Roth for their strong commitment to major tax 
relief in this Congress.
  We promised to return to American families the non-Social Security 
tax overcharges they paid to the Government, and today we are going to 
fulfill that solemn promise. We can now proudly declare that: promises 
made are promises kept.
  The proposed tax relief significantly reduces taxes for millions of 
American families and individuals and immediately eases working 
Americans' tax burden and allows them to keep a little more of their 
own money, again, for their own family's priorities.
  The American people have every reason to celebrate this victory 
because they are the winners in this debate on tax cuts.
  This tax relief is a victory for all Americans, particularly the 
middle-class, who will receive a $800 billion tax refund over the next 
10 years.
  It is a victory for millions of Minnesotans because each family in my 
state of Minnesota is expected to receive $8,000 in tax relief over 10 
years.
  It is a victory for the 22 million American couples who will no 
longer be penalized by the marriage penalty tax, because we completely 
eliminate this unfair tax.
  It is a victory for millions of farmers and small business owners 
because this tax relief enables them to pass their hard-earned legacies 
to their children without being subject to the cruel death tax.
  It is a victory for millions of self-employed and uninsured because 
health care is made more affordable to them with full tax benefits.
  It is a victory for millions of baby-boomers because the pension 
reform allows them to set aside more money for their retirement.
  It is a victory for millions of entrepreneurs and investors because 
the capital gains tax is reduced to stimulate the economy.
  It is also a victory for millions of parents, students, teachers, and 
workers because higher and better education will be available and 
affordable with a variety of tax benefits included in this package.
  By any standard, the working men and women of this country are the 
winners, not Washington.
  Moreover, in my judgment, this tax relief plan is a highly sensible, 
responsible and prudent one. It reflects American values and is based 
on sound tax and fiscal policy. It comes at the right time for working 
Americans.
  We must recall that Americans have long been overtaxed, and millions 
of middle-class families cannot even make ends meet due to the growing 
tax burden. They are desperately in need of the largest tax relief 
possible.
  The budget surplus comes directly from income tax increases. These 
overpaid taxes are taken from American workers and they have every 
right to get it all back.
  This tax relief takes only a small portion of the total budget 
surplus. In fact, only 23 cents of every dollar of the budget surplus 
goes for tax relief.
  After providing this 23 cent tax relief, we have reserved enough 
budget surplus to protect Social Security and to reform Medicare, 
including prescription drug coverage for needy seniors. We further 
reduce the national debt and reserve funding for essential federal 
programs.
  Contrary to Mr. Clinton's rhetoric that tax relief will cause 
recession, cutting taxes will keep our economy strong, will create 
jobs, increase savings and productivity, forestall a recession and 
produce more tax revenues. Somehow, he believes that if Americans spend 
the money, it is bad, but if it is left here for Washington to spend, 
it is good. History has proved again and again that tax cuts work. It 
will prove this tax relief is a sound one as well.
  I am also pleased that this tax relief does not come at the expense 
of seniors. We have locked in every penny of the $1.9 trillion Social 
Security surplus over the next 10 years, not for government programs, 
not for tax cuts, but exclusively to protect all Americans' retirement.
  We have been working hard to reform Medicare to ensure it will be 
there for seniors. Prescription drug coverage for the needy will be 
part of our commitment to seniors to protect their Medicare benefits. 
Had the White House and Democrats cooperated with us, we could have 
fixed Medicare by now. The President discounted his own commission on 
Medicare reform.
  In any event, we will continue our effort to preserve Medicare as 
Chairman Roth reveals his Medicare bill in the near future.
  We have reduced the national debt and will continue to dramatically 
reduce it. Debt held by the public will decrease to $0.9 trillion by 
2009. The interest payment to service the debt will drop from $229 
billion in 1999 to $71 billion in 2009. We will eliminate the entire 
debt held by the public by 2012.
  As I indicated before, we have not ignored spending needs to focus on 
tax cuts as has been charged. We not only have funded all the functions 
of the government, but also significantly increased funding for our 
budget priorities, such as defense, education, Medicare, agriculture 
and others.
  In fact, we set aside over $505 billion in non-Social Security 
surplus to meet these needs. This proves we can provide $792 billion in 
tax relief while not ignoring other important priorities.
  This major tax relief does not come at the expense of seniors, 
farmers,

[[Page 19795]]

women, children or any other deserving group.
  On the contrary, it benefits all Americans and keeps our economy 
strong. And most importantly, this tax relief will give every working 
American more freedom to decide what's best for themselves and their 
families.
  Mr. President, let me conclude my remarks by citing President Reagan 
who once said: ``Every major tax cut in this century has strengthened 
the economy, generated renewed productivity, and ended up yielding new 
revenues for the government by creating new investment, new jobs and 
more commerce among our people.''
  President Reagan was right. This tax relief will do the same.
  Now, Mr. President, we have done our job, and it is up to President 
Clinton to decide if he wants to give back the tax overpayments to 
American families or spend them to expand the government.
  In Buffalo, NY, earlier this year, the President said: If we give the 
money back to the American people, what if they don't spend it right? 
In other words, the President looked down his nose at working Americans 
and said they are too dumb to spend their money right. They are smart 
enough to earn it, not smart enough to spend it. I hope the President 
will trust the American people and make the right decision.
  Mr. ROTH. Mr. President, I yield 5 minutes to the Senator from 
Wyoming.
  The PRESIDING OFFICER (Mr. Thomas). The Senator from Wyoming.
  Mr. ENZI. I thank the Senator.
  Mr. President, I rise in strong support of the Financial Freedom Act 
of 1999. This bill represents the third prong in our plan to restore 
financial security to America's families. Along with saving Social 
Security and reducing the national debt, the Financial Freedom Act of 
1999 marks another significant chapter in our continuing effort to 
bring stability to our national budget and financial discipline to 
Congress.
  I congratulate the chairman of the Finance Committee, Senator Roth, 
for his unwavering determination to provide greater financial freedom 
to America's families. Let there be no doubt about what we are debating 
today. We are debating whether we should return part of the overpayment 
by the taxpayers to the taxpayers, true overpayment. As an accountant, 
I am particularly concerned with that. We need to return the 
overpayment to the people who made the overpayment.
  Or should we keep it in Washington to fund President Clinton's new 
bureaucracies and unproven Government programs? I am not talking about 
funding adequately the ones we have. I am talking about brand new ones 
that will require continuing additional funds. The choice is between 
tax relief and new spending, plain and simple.
  I, for one, believe it is time to reward the ingenuity and hard work 
of our taxpayers by allowing Americans to keep more of what they earn. 
The Financial Freedom Act provides tax relief over the next 10 years 
with cutoffs if the surplus doesn't materialize. By phasing those tax 
cuts in over 10 years, this demonstration assures the American people 
that the money dedicated to Social Security will only be used for 
Social Security. Moreover, by making the majority of the broad-based 
across-the-board tax reduction contingent on reducing the national 
debt, this bill makes a real commitment to reducing the Federal debt 
and forces Congress to live within its means.
  This legislation not only reduces the overall tax burden but reduces 
all the marginal income tax rates, beginning with the lowest rate and 
increasing the ceiling on the new 14-percent bracket. This plan will 
reduce much of the damage imposed by President Clinton's mammoth tax 
hike of 1993 and by the bracket creep that millions of Americans have 
experienced as a result of job and wage growth over the past 10 years. 
This broad-based reduction, which is the backbone of the act, would 
provide tax relief for all taxpayers. Let me repeat that: Anyone who 
now pays Federal income tax will see their bill go down as a result of 
the 1-percent marginal rate decrease in each and every marginal tax 
rate.
  Moreover, this tax cut is especially aimed at the middle class. By 
increasing the income limits of the new 14-percent bracket by $2,000 
for single filers, millions of Americans will see their tax bill 
reduced by $400 per year by this provision alone.
  In addition to reducing all the marginal rates for taxpayers, the 
Financial Freedom Act eliminates one of the most egregious effects of 
our current Tax Code--the marriage penalty. We have heard a lot of talk 
about supporting the fundamental institution of marriage. This bill 
allows us to put our money where our mouths are by doubling the 
standard deduction and doubling the income limits of the new 14-percent 
tax bracket, bringing our tax policy in line with the rhetoric. If you 
are serious about helping the financial needs of millions of married 
couples across the country, you will support this legislation.
  It also reforms our Tax Code and our tax policy by eliminating the 
infamous death tax. We encourage savings and thrift, and we provide 
much-needed relief for millions of ranchers, farmers, and small 
businessmen around the country, people who at the time of death will 
have to end their family business. As a small businessman who worked 
with my wife and three children selling shoes to our neighbors and 
friends in several Wyoming towns, I know firsthand how difficult the 
choices can be when you have to make that kind of a decision. The 
current tax on death punishes countless small businesses and farm and 
ranch families.
  I congratulate, again, the people who have put together this, the 
cooperation there has been between the House and the Senate, the 
outstanding work of providing a balanced picture of tax relief to the 
American people while assuring that we can save Social Security, help 
Medicare, and pay down the national debt.
  Mr. ROTH. Mr. President, I yield 5 minutes to the distinguished 
Senator from Texas.
  Mrs. HUTCHISON. Mr. President, I thank the distinguished chairman of 
the committee for giving us tax relief for the hard-working American 
family.
  We have heard a lot of debate in this Chamber in the last few hours, 
but it comes down to a very simple issue, and that is whether we are 
for giving the people who earn the money the right to decide how to 
spend it. It comes down to one basic issue. We are for tax cuts, and I 
think the question is, Is the President for tax cuts? He campaigned 
saying he was for tax cuts for middle-income people, but the President 
has not supported tax cuts yet.
  In fact, the major area of tax policy that the President gave us was 
the largest increase in the history of America. We are trying to cut 
back on those tax increases because we have a surplus and because we 
believe that the surplus should be shared with the people who gave it 
to us in the first place.
  A lot has been said about Social Security and whether we are going to 
maintain the stability of Social Security. The answer is emphatically, 
we are; $2 trillion will come in over the next 10 years in Social 
Security surplus. The Republican plan that is before us today totally 
keeps that $2 trillion for Social Security stability.
  The other $1 trillion in surplus over the next 10 years is in income 
tax surplus, withholding surplus, people's hard-earned money that they 
have sent to Washington in too great a quantity. It is that $1 trillion 
that we are talking about. We are talking about giving 25 cents per 
dollar of that trillion back to the people who earn it, and we think 
that is not only fair; it is required.
  I worked very hard with Senator Ashcroft and Senator Brownback to 
eliminate the marriage tax penalty. This bill does it. We double the 
standard deduction so that people will not have a penalty because they 
get married. And, most of all, the people who need it the most are 
going to have total elimination of the tax on marriage. That is the 
schoolteacher and the nurse who get married and all of a sudden are in 
a double bracket, from 15 percent to 28 percent. One earns $25,000, the 
other earns $33,000, and together they go into the 28-percent bracket 
today. This bill eliminates that from the Tax Code forever, period--
gone.

[[Page 19796]]

  The President has said he is going to veto that tax relief, and I 
don't understand it.
  Let me talk about what it does for women. Of course, the marriage 
penalty tax hurts women. But we also know that women live longer and 
they have smaller pensions. They have smaller pensions because women go 
in and out of the workplace, and they lose the ability to have that 
growth in geometric proportions in their pensions. That has been an 
inequity for women in our country. We eliminate that in this bill, or 
at least we try. We help by allowing women over 50 who come back into 
the workplace to be able to set aside 50 percent more in their pensions 
to start catching up. So where most people--all of us--have a $10,000 
limit on a 401(k), a woman over 50 who comes back into the workforce 
after raising her children will be able to have a $15,000 set-aside in 
her 401(k). We also give help on IRAs.
  It is very important to a woman who is going to live longer to have 
equal pension rights because she is more likely to have children, raise 
her children, maybe through the 1st grade or maybe through the 12th 
grade. We want to make sure we equalize that and recognize it. We have 
done that. Yet the President says he is going to veto this bill.
  We have tax credits in this bill for those who would take care of 
their elderly parents, or an elderly relative, because we know one of 
the hardest things families face is how to take care of an elderly 
relative who doesn't want to go into a nursing home. Families would 
like to keep them. Sometimes they don't even want to do that, but long-
term care is so expensive that they can't afford it. So we have credits 
for long-term care insurance, and we have credits for those who would 
care for their elderly parents.
  So this bill lowers capital gains, lowers the death tax; it gives a 
benefit to everyone. The working people of this country deserve it. I 
hope the Senate will pass it. I hope the President will sign it and 
make good on all of our pledges to give the working people of this 
country relief.
  Thank you, Mr. President.
  Mr. ROTH. Mr. President, I yield 5 minutes to the Senator from 
Kansas.
  Mr. BROWNBACK. Mr. President, I thank the chairman, the Senator from 
Delaware, for his excellent work on crafting this compromise package 
and putting it together. I think it is a substantial bill of support 
for the American public. We need to give this money back to the 
American public for overpaying their taxes.
  I rise in strong support of the conference report being considered 
today. This important bill provides broad-based tax relief to America's 
families and returns their tax overpayment to them in the form of a tax 
reduction. It is important that Congress return this money to the 
American people and allow them to do with it what they see fit.
  I am particularly pleased to join in this effort on the elimination 
of the marriage penalty. The Senator from Texas, Mrs. Hutchison, has 
led this effort, along with Senator Ashcroft. This bill does important 
work on eliminating the marriage penalty tax and reducing that 
pernicious impact on our society. The American people need to get this 
rebate. I think we can do more and better with it than the Government 
can.
  The conference report before us takes important steps, as I stated, 
toward eliminating the marriage penalty. It doubles the standard 
deduction, as well as widening the tax brackets, which does much to 
alleviate that terrible impact that the marriage penalty has on 
America's families. It impacts nearly 21 million American couples in 
this country.
  Doubling the standard deduction helps families. Our families 
certainly need help. I am, therefore, pleased that the conferees kept 
this provision, and I am hopeful that the President will sign the 
conference report and provide America's families with this important 
tax relief which they clearly deserve and clearly need.
  Congress has drafted a tax bill. Now it will be up to the President. 
This session, Congress utilized its opportunity to provide for 
comprehensive tax relief. It has done that. Now the President must make 
use of this unique opportunity to help eliminate the marriage penalty.
  It affects so many couples in our country--21 million--by forcing 
them to pay, on average, an additional $1,400 in taxes a year. The 
Government should not use the coercive power of the Tax Code to erode 
the foundation of our society.
  We should support the sacred institution and the sacred bonds of 
marriage. Marriage in America certainly is in enough trouble the way it 
is, and it doesn't need to be penalized by the Government. According to 
a recent report out of Rutgers University, marriage is already in a 
state of decline. From 1960 to 1996, the annual number of marriages per 
1,000 adult women declined by almost 43 percent.
  Now, when marriage as an institution breaks down, children do suffer. 
The past few decades have seen a huge increase in out-of-wedlock births 
and divorce, the combination of which has substantially had an overall 
impact on the well-being of our children in many ways. It has affected 
every family in this country. People struggle, and they try to help to 
support the family and the children as much as they can. But this 
institution of marriage has had great difficulty. In my own family, 
there has been difficulty as well. The Government should not tax 
marriage and further penalize it. There is a clear maxim of Government 
that if you want less of something, tax it; if you want more of 
something, subsidize it. Well, we don't want less of marriage. We 
should not tax it.
  Study after study has shown that children do best when they can grow 
up in a stable home environment, with two loving, caring parents who 
are committed to each other through marriage. Newlyweds face enough 
challenges without paying punitive damages in the form of a marriage 
tax. The last thing the Government should do is penalize the 
institution that is foundational in this civil society.
  This year we change that. The new budget estimates, from both the 
Office of Management and Budget and CBO, show higher-than-expected 
surplus revenue, even after accounting for Social Security. Of course, 
for some, this is no surprise. We have known all along that growth does 
work. It helps and it works. Of course, the surging surplus is as a 
result of nonpayroll tax receipts. It is really a tax overpayment to 
the Government in personal income and capital gains tax. We must give 
the American people the growth rebate they deserve and return the 
overpayment. I believe we can, and must, start--and start now--to rid 
the American people of the marriage tax penalty. I look forward to 
working with the Chairman, as well as other colleagues, to make sure we 
get this job done.
  In closing, this is a day we should celebrate. We are able to do 
something that sends a strong signal of support to families across this 
country, which is critically important to do. Yes, this has an impact 
overall, but I think it is a very positive impact to send that sort of 
signal to our struggling young families across this country. I think we 
clearly should do that.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, I have the pleasure to yield 15 minutes 
to the distinguished Senator Lautenberg, my neighbor and friend from 
New Jersey, followed by 5 minutes to the distinguished Senator from 
South Dakota.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. I ask whether or not the Senator from South Dakota 
would like to go first.
  Mr. JOHNSON. I say to the Senator that I am certainly prepared to go 
at this time. But I would accommodate my friend.
  Mr. LAUTENBERG. I suggest that he go first.
  Mr. MOYNIHAN. Mr. President, I reverse my request.
  The PRESIDING OFFICER. The Senator from South Dakota is recognized 
for 5 minutes.
  Mr. JOHNSON. I thank my friend from New Jersey.

[[Page 19797]]

  Our Nation deserves a thoughtful tax and budget plan from Congress 
that places an emphasis on paying down our existing accumulated 
national debt, while protecting Social Security and Medicare, and 
investing in key domestic priorities and providing targeted tax relief 
for middle-class and working families.
  On the marriage penalty, for instance, most families in America get a 
marriage tax bonus, not a penalty. But for those who are penalized, we 
can address that in the Democratic plan while approaching this in a 
balanced fashion. But, sadly, the radical tax cut bill being considered 
by congressional Republicans could be described as simply ``foolish,'' 
were it not so seriously dangerous to the future prosperity and 
security of every American family.
  There are obvious reasons why even leading Republican economists so 
vigorously are condemning this irresponsible bill, and why it has 
become the butt of so much ridicule.
  First, the bill assumes that a $964 billion surplus over that needed 
for Social Security will absolutely materialize over the coming decades 
while our budget estimators in the past haven't even been able to 
estimate the economic growth over a year much less over 10 years. 
Common sense tells us that we should be careful about committing to use 
money that we do not yet have and may never have.
  Second, this plan fails to use even a cent of the supposed $1 
trillion surplus above Social Security to help pay down the $3.7 
trillion public debt that our Nation currently owes. Paying down our 
debts would do more to keep the American economy growing than any other 
single thing the Government could do.
  Third, in order to find room for a $792 billion tax cut, we would 
have to not only pay down the accumulated debt but we would have to cut 
defense buying power by 17 percent and domestic programs, meaning law 
enforcement, VA, health, education, school construction, medical 
research, national parks, and so on by 23 percent over the coming 10 
years. If we decline to cut defense, under this plan we then would have 
to cut these domestic initiatives by an outrageous 38 percent. What is 
even worse is that this tax bill is cynically constructed so that the 
drain on the Treasury will explode and triple in cost during the second 
decade after passage.
  Fourth, economic experts all over the country tell us that this tax 
package would cause interest rates to go up. At the current time, the 
Federal Reserve is raising interest rates and warning us that putting 
one foot on the gas and one foot on the brake is not a sensible 
economic policy for our country.
  The small tax cut that most Americans would receive would be negated 
through higher costs for financing everything from a house, to a car, 
to college education, to business expansion, and farming and ranching 
operations. If this bill becomes law, our middle-class families will 
wind up with fewer and not more dollars in their pockets.
  Fifth, this bill does absolutely nothing to prolong the life of 
Medicare much less provide for drug coverage payment reform that 
hospitals and clinics and medical institutions all over our country are 
in dire need of securing.
  Specifically, this legislation outrageously provides an average 
$22,500 tax cut for the wealthiest 1 percent of Americans. But a 
typical American family--a family in my State of South Dakota with an 
income of $38,000--would get a couple of bucks a week while paying 
higher interest costs for everything they buy.
  Wouldn't it make more sense to use a large portion of any surplus 
that actually materializes to pay down the accumulated national debt 
and then provide for targeted tax relief for middle-class and working 
families, protect Social Security and Medicare, and make some key 
investments in education, in the environment, infrastructure, and the 
things that we need to continue the economic growth in America?
  I yield the remainder of time that I may have to my colleague from 
New Jersey, Senator Lautenberg.
  The PRESIDING OFFICER. The Senator from New Jersey.
  Mr. LAUTENBERG. Mr. President, I obviously oppose this Republican tax 
bill. I am going to explain why in a minute.
  But I would like to start off by using an expression that we heard 
kind of invented around here, and that is: There they go again. There 
they go again. Or: There you go again.
  The party that claims that its mission is fiscal responsibility has, 
once again, resorted to tax cuts to establish its role in fiscal 
management.
  I find it shocking. I must tell you that we suddenly wanted to 
distribute a tax cut, which everybody likes to do. Make no mistake 
about it. I heard the President this morning say: After we finish 
securing Social Security and securing some extra longevity for 
Medicare, then we ought to distribute some tax cuts to people.
  But if you ask anybody who has a mortgage--and most people I know 
have one--whether they would like to get rid of the mortgage before 
they do anything else, if they had a choice, they would take the 
mortgage relief. I will tell you that. They would say: Look, that is 
the one thing that bedevils us, and especially if the mortgage lives on 
beyond their existence on Earth, and it passes on to their children and 
their grandchildren. They would say: Look, let's get rid of that 
mortgage.
  That is what we are talking about. We are all mortgagees in common 
when it comes to the national debt. We owe it. My kids owe it. My 
grandchildren will owe it if we don't get rid of that debt.
  What is proposed by the Democrats is that we pay down the debt, that 
we have a target of 15 years to get rid of all the public debt. It 
would be unheard of in contemporary terms, and maybe in historical 
terms as well, because I don't think there is any country in the world 
that has any advancement that would find itself without significant 
debt outside the government. But that is what is being proposed.
  Here we are. We want to give a tax break. And it works like this: The 
top 1 percent of wage earners who average $800,000-plus a year would 
get a $45,000 tax cut--just under $46,000. The person who works hard 
and struggles to keep their family intact, who struggles to keep 
opportunity available for their children's education and training and 
earns $38,000 a year, is going to get about 40 cents a day in tax 
relief. This fellow who earns over $800,000 is going to get a $45,000 
tax break.
  I have heard my colleagues on the other side say, well, they pay most 
of it; why shouldn't they get most of it? Why? Because what difference 
does it make in the life of someone earning $800,000 and some a year 
whether they get a $45,000 tax cut? I am not saying they shouldn't get 
anything, but it sure doesn't compare with the impact that it has when 
you take $157 and you give it to someone earning $38,000. It doesn't do 
much for them at all.
  It permits this guy to buy a new boat, maybe even to make a 
downpayment on a second home. But to the other people who are 
struggling, often two-wage earners in the family, struggling to manage 
the future, it is impossible if you make $38,000 a year and you have a 
couple of kids.
  The Republican plan is now stripped down to its bare essentials. It 
says to raid Social Security if we must to give this tax cut, and don't 
pay any attention to Medicare, while people all over this country worry 
about their health care. Over 40 million of them have no health 
insurance at all. We are talking about Medicare and the sensitivity of 
appropriate health care for people who are in their advanced years.
  Our Republican friends are saying: Don't worry about Medicare. Maybe 
we will find a way to take care of it one day. Or Social Security: 
Well, if it expires--I guess that is what they are saying--we will have 
to deal with it.
  Just think. With all of this robust economy and the surpluses that we 
have, the Republican tax plan says this: That in a mere 6 years we will 
be dipping into the Social Security surplus--6 years. With all the 
promises about the $2 trillion that is going to go into Social Security 
because it is earned there, it will start to be decimated within 6 
years under the Republican tax plan.

[[Page 19798]]

  I hope the message that goes out of here is that we are two different 
philosophies on how we ought to treat our treasure trough because we 
have been smart but we also have been lucky. We are lucky that we live 
in a country that is as rich in resources and talent and opportunity as 
is America. But, at the same time, it took a lot of work to plan for 
this. It took President Clinton's leadership when he arrived in office. 
Deficits were $290 billion a year--much of that attributed to the 
leadership of President Reagan who made a decision, in all due respect, 
that tax cuts were the most important thing in the world and cut taxes 
all over the place while he borrowed from the public to finance it. 
What was the result? Inflation out of sight, and a lot of joblessness 
as well. We don't want to do that again. We should have learned. We are 
smart enough to have learned it the first time we saw it.
  What will happen now? Beginning 6 years hence in 2005, Social 
Security starts to decline at a time when a lot of baby boomers arrive 
at retirement age. It could force inflation upon us and cost more for 
borrowing. Whether for a house mortgage, an automobile, appliance, 
people would be paying more.
  One of the most astounding things I find, all Members hover around 
Alan Greenspan because he has been so clever in the way he has managed 
his share of the economic policy in this country. We listen to every 
word. I know him well. He used to be on the board of my company when I 
was chairman of the company. We would listen carefully to his advice 
because it was so profound, so deep, so insightful. The Republican 
message is, ignore what Alan Greenspan says about the timing not being 
right; forget that he has warned Members in the Budget Committee--and I 
am the senior Democrat on the Budget Committee--that tax cuts are not 
the best way to go. He said rather than having an outright spending 
binge, maybe tax cuts, the best thing to do is pay down the debt.
  The message rings loud and clear. I am shocked that the wise heads 
who exist on the other side of this aisle don't understand that the 
risk they are taking is our economy at large. When we look at the 
projections and we hear what the Republicans are using to finance this 
tax cut--almost $800 billion direct in higher costs as a result of the 
interest on the remaining debt--it just doesn't make economic sense. It 
is not fair to our citizens to see the guys at the top, the people at 
the top who make all the money, get these incredible bonuses in tax 
cuts while the person who struggles to keep food on the table and a 
roof over their head gets a measly 40 cents a day in their tax cut.
  What will happen? What will happen is, tax cuts will come along if 
things go as they are, unless the President has the courage to step up 
and say, no, the American people don't want this; that is not their 
preference. Everybody wants to pay less in tax, but they want a stable 
society, a stable economy. They don't want their kids saddled with 
obligations in the future.
  This tax cut will also mean we will cut deeply into programs. We will 
cut education by 40 percent. Will we cut veterans' programs? The 
veterans now are screaming in pain because they are not being taken 
care of as they should be or as we promised they would be when they 
were recruited.
  Cut the FBI by 40 percent? Thank goodness we have trained FBI people. 
It is hard enough to recruit. Now we are talking of cutting 40 percent 
while we still have a significant crime problem in our country, despite 
prosperity? I don't think so.
  Will they cut border guards? Are we going to try to hold back the 
tide of illegal immigration, with fewer people to do it? That is what 
the result will be.
  The truth of the matter is, they are talking about a surplus that is 
largely imaginary. It is forecasting; it is anticipated; it is hoped 
for. That, enacted into legislation, will make an enormous difference. 
Once the tax cut plan is in place, that is mandatory. However, the 
surpluses are hoped for, anticipated.
  We have to alert the public what is going on. It will be a tax cut 
that will be talked about as a Republican accomplishment. I make a 
prediction--and I wish we could look inside everybody's thinking--that 
the Republicans know very well that this tax cut cannot go through, but 
what they want to do is have a speaking platform. They want politics, 
not policy. They want everybody to believe they are the only ones who 
are thinking about the average working person. The fact is, they are 
thinking about themselves because they know the President is committed 
to veto this. They know the economy could not stand this kind of a cut.
  Imagine cutting those programs and saying to the American people: We 
have to take 40 percent from various programs, and we will not do a 
thing to extend the solvency of Social Security, not do a thing about 
Medicare; when it dries up, it dries up, friends, in 2015. If you are 
at an age when Medicare will be important to you, don't count on it. 
You had better save your money because you will have to take care of 
yourself on that score.
  In Medicare, the cuts would exceed $10 billion a year. Medicare cuts 
are squeezing many hospitals and other health care providers.
  In sum, the game is over. We will be voting at a later time today. We 
have the disadvantage of being in the minority. It is not my preferred 
position, but the facts are there. The President is our last hope 
because the Republicans have decided that no matter what, they are 
going to give a tax break. No matter what the advice is, no matter what 
the inequity is, no matter what programs are cut, no matter what we do 
to veterans' care, no matter what we do to Head Start, no matter what 
we do to education generally, it doesn't matter.
  They say a tax cut is the most important thing on our agenda. The 
numbers are there, and the votes are there. We will lose this one. I 
believe it is possible some of our Republican friends will see the 
light and say, this is no time to do a roughly $800 billion tax cut, 
but it is time to continue to pay down our debt, improve our financial 
condition, and help preserve Medicare and Social Security for future 
generations.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, I congratulate the Senator from New 
Jersey on a forceful argument.
  I now have the pleasure to yield 10 minutes to the Senator from North 
Dakota and 10 minutes to the Senator from Connecticut.
  Mr. DORGAN. Mr. President, I am happy to allow the Senator from 
Connecticut to go first.
  The PRESIDING OFFICER (Mr. Brownback). The Senator from Connecticut 
is recognized.
  Mr. LIEBERMAN. Mr. President, I thank my colleagues.
  I rise to oppose this conference report and the $800 billion tax cut 
it contains. I do not rise reflexively. In fact, my reflex, similar to 
most of my colleagues, is to support tax cuts, not to oppose them.
  I was proud just 2 years ago to be a lead cosponsor, for instance, of 
the cut in the capital gains tax and to support so many of the 
initiatives of the chairman of the Finance Committee in encouraging 
savings. However, I am going to oppose this tax cut as I would tax cuts 
at any time when they were not needed to help our economy, not 
justified by the availability of money to support the tax cut. These 
are similar arguments I made against the reconciliation bill, this tax 
cut, when it was before the Senate last week.
  It reappears as a conference report. It is essentially the same. The 
chairs have been shuffled on this Titanic, but the fact remains that 
this big luxury liner of a tax cut is headed for an iceberg. It may 
well take the American economy down with it. The iceberg here is the 
cold, hard reality that there is no surplus to pay for the cut that 
this enacts. In fact, this Congress, in an act of legislative 
schizophrenia, is on one side saying there is a surplus, beginning with 
next year, that justifies this tax cut; on the other side, through 
fictional emergency appropriations, through double counting, through 
overspending, is spending more than the surplus projected for next 
year. So that the reality is that ``there is no there

[[Page 19799]]

there.'' There is no surplus there to pay for this tax cut.
  My colleagues cite the Congressional Budget Office saying there will 
be, for instance, a $14 billion surplus next year and almost $1 
trillion over the 10 years. But, as has been said on the floor, CBO, 
after making those surplus projections, also issued a report which 
makes very clear that they are based on Congress exercising self-
control, the kind of self-control over spending we are showing each day 
of this session we are unable to exercise.
  If you take the $1 trillion surplus the Congressional Budget Office 
estimated and then simply assume that Congresses over the next 10 years 
spends only the amount of money to operate our Government that we are 
spending this year, in 1999, adjusted only for inflation--real 
dollars--then that projected surplus of $1 trillion suddenly becomes 
$46 billion. What does it require to hold the $1 trillion surplus? Cuts 
in spending that we all know are untenable. They are not going to 
happen. This Congress, and no Congress over the next decade, would 
enact them.
  I am privileged to serve on the Senate Armed Services Committee. I 
think in that capacity I have learned some about the needs of our 
national security and our military, our defense. To achieve the $1 
trillion surplus and live within the caps that currently exist would 
require cuts in defense spending over the next decade of approximately 
$200 billion. We cannot fulfill our constitutional responsibility to 
provide for the common defense of the United States of America over the 
next decade with $200 billion in cuts.
  I have too much confidence in my colleagues who serve today, as well 
as those who will serve over the next decade, to believe we would ever 
so jeopardize our security. It is just another way of saying the 
surplus projections are not real, and therefore enacting a tax cut 
which will not be backed up by available revenue will take America back 
down the road to a deficit before we hardly have had a chance to even 
appreciate the possibilities of a surplus.
  Let us remember also a $1 trillion surplus estimate is based not only 
on a capacity in Congress to cut spending that we have clearly shown 
already in this session we do not possess because it is based on a 
projection of continued 2.4-percent growth in our economy over the next 
decade, extending what is already the longest peacetime growth in an 
economy in our history. Just look at the news in the last week or two 
and consider the probability that we will continue to grow over this 
next 10 years, unimpeded by the world and events in the world. The 
value of the dollar has weakened in recent weeks, creating great alarm 
in other industrialized democracies, particularly in Europe and Japan, 
our close allies, for fear of what that will do to their economies, and 
also for fear of what that will do to the foreign dollars that are 
currently invested in our economy that may be withdrawn and the 
consequences that would have for our economy.
  Have you been following the stock market in recent days and watching 
the extraordinary gyrations in the American market which show 
underlying unease? Do we want to put into that situation a large tax 
cut, a tax cut of this immense size that will further threaten 
inflation and instability in our economy? Why? Why take the risk? 
Fiscal responsibility helped to bring our economy to the point it is 
today: An unprecedented combination of high growth, low unemployment, 
low inflation. Why risk it all for a tax cut that is not needed to 
stimulate the economy and not demanded by the people of the United 
States of America?
  I think we have to be conscious of how our fiscal actions affect the 
very global economy which helps to give us our strength. We are the 
only G-7 country running a budget surplus today. We are the only 
leading industrial economy that is positioned to deal with the global 
demographic challenge of retiring baby boomers, if we discipline 
ourselves. As Asia and South America struggle through economic 
difficulties, we must remember that any sign of economic instability 
here could trigger an economic crisis there that will come back to bite 
us. We must have a strong economy. We have one now. Why jeopardize it? 
Why encumber it with debt? Why not save this money, pay down the debt, 
store it up to weather any economic crisis that may come our way?
  There are times when I think of the famous Biblical story where 
Joseph advised Pharaoh in good times to put some away because good 
times would not last forever. I think we are in such a time now so we 
dare not let the cows and corn absorb themselves, as occurred in 
Joseph's dream.
  The result, I fear, is by passing a major tax cut, one paid by an 
imaginary surplus, we would incur sizable debts for years to come. 
Besides the effects on the financial markets and on our economy, we 
would leave little or no money available for building the solvency of 
Medicare and Social Security and thus raise the specter of a major tax 
increase down the line when we will least be able to afford it to 
compensate for our profligacy now.
  Finally, as has been said, I think anybody who has been following 
what Chairman Greenspan has been saying does not have to pick at the 
tea leaves. It has been very clear. If we cut taxes to this size now, 
the Federal Reserve will increase interest rates soon after. That will 
help to depress the economy and also hit average working Americans 
literally where they live, driving up the cost of their mortgages, 
their car payments, their credit card bills, and student loans to the 
point it would dwarf any tax benefit they might receive from this 
conference report.
  I present as evidence an analysis done for Business Week magazine by 
Regional Financial Associates of West Chester, PA, which says that 
wiping out the debt, the national debt, by 2014 would raise the 
economy's growth rate by more than one-quarter of 1 percent at the end 
of the 15 years, and that real annual household income would grow by 
$1,500. That is more than three times, this study shows, what a tax cut 
of this size would boost the GDP and household income. A tax cut such 
as the one passed in the House, according to this study, would raise 
household income by $400; whereas paying down the debt would raise 
household income by $1,500.
  So I will vote against the conference report and say when the 
President vetoes this bill he will not just be making another smart 
partisan political move in a political chess game; he will be saving 
the American economy from real damage.
  I thank the Chair and yield the floor.
  The PRESIDING OFFICER. The time of the Senator has expired.
  The Senator from North Dakota is recognized for up to 10 minutes.
  Mr. DORGAN. Mr. President, I wanted to come and visit on the proposal 
on the floor briefly. I was trying to think of a word to describe all 
of this, and I was thinking of a story I had heard about Daniel Boone, 
who was a great Kentucky backwoodsman.
  He was most at home in the backwoods and known for his long hunts, 
traipsing through the backwoods of Kentucky without a compass. He was 
asked once if he had ever been lost. Daniel Boone said: No, I can't say 
I was ever lost, but I was bewildered once for 3 days.
  I thought of that term ``bewildered.'' I cannot think of anything 
that better describes my reaction to conservatives bringing a plan to 
the floor of the Senate that is so unconservative and so risky for this 
country. It is enough to bewilder the entire country, to see people who 
say they are conservatives decide that it is not their intent to help 
pay down the national debt during good economic times, it is not their 
intent to try to conduct the business we need to conduct to deal with 
the big challenges of Social Security and Medicare and the demographic 
time bombs that exist in those programs, it is not their intent to do 
that. Their intent is to package up a nearly $800 billion tax cut 
before we have had the first dollar of surplus and say for the next 10 
years they are going to have this sort of riverboat gamble with this 
fiscal policy.
  Let's talk just for a bit about where we are and then where we have 
been.

[[Page 19800]]

  What is happening in this country? First of all, the country has an 
economy that is the envy of the world. Unemployment is down, inflation 
is down, home ownership is up, personal income is up, the welfare rolls 
are down, crime is down, economic growth is up, and the budget deficit 
is about gone.
  Go back about 8 years. What was happening in this country then? A 
$290 billion annual deficit that was continuing to rise and economists 
predicted they would see these deficits rise forever into the future. 
We had a Dow Jones Industrial Average that had barely reached 3,000. We 
had a sluggish, anemic economy; job growth, 1988 to 1992 was one of the 
worst 4-year periods in history; unemployment rates, 7.1 percent 
annually from 1981 to 1992; median family income fell by $1,800 in a 4-
year period; real wages were falling; welfare rolls were increasing.
  Have things improved in this country? You bet they have improved in 
this country. They have improved because we passed a new fiscal policy, 
passed a plan in the form of legislation in 1993. Some of our 
colleagues predicted it would throw this country into kind of a train 
wreck and ruin the economy. The economy was in big trouble back then. 
It is much improved now. We all understand that.
  In fact, today's newspaper is really interesting. A tiny little 
article on page 5 says:

       Treasury plans to buy back debt.

  My Lord, that ought to be on the front page with 3-inch headlines:

       Treasury plans to buy back debt.

  This country has $5.7 trillion in debt, and when we started with this 
plan we had a $290 billion deficit in that year alone, and it was 
expected to continue to grow. Now we have a balanced budget, and the 
Treasury is beginning to buy back debt.
  If we have surpluses that economists say they can see well into the 
future, what do we do? During tough economic times, it seems to me, a 
country always borrows money. How about during good economic times? 
Does a country pay it back? Does this country say, in giving that rare 
gift to the young people in this country: We will reduce the Federal 
debt; we ran it up during tough times, but in good times when we have a 
surplus, we will reduce the Federal debt? No, that is not what the 
majority party says. The majority party says: Here are our choices. Big 
tax cuts, most of it going to the upper-income folks; nothing for 
Medicare extension; nothing for education and other key investments; 
nothing for Social Security solvency; nothing for debt reduction. They 
say big tax cuts.
  How big are the tax cuts? Here are the pie charts. The top 1 percent 
of income earners in this country get a $46,000 tax cut, and the bottom 
20 percent get $24. Is that surprising? No. It is the same tired, 
chronic problem that always is brought to us in the Senate when the 
majority party writes a tax bill.
  This is a bar graph. You can barely see the bottom 60 percent. They 
only get $138; the top 1 percent, $46,000.
  How about this Social Security issue? This plan also raids the Social 
Security program after the first 5 years. That is a plain fact.
  What are our choices? The enduring truth of this country's existence 
for a number of decades has been two things: One, a cold war with the 
Soviet Union; and, two, a budget deficit that seemed always to grow 
worse. For four or five decades, that was the enduring truth that was 
overhanging all of our choices. Now the Soviet Union does not exist, 
the cold war is over, the budget deficits are gone, and everything has 
changed.
  Economists predict surpluses well into the future, and I said before 
these are economists who cannot remember their home phone numbers or 
addresses and they are telling us what is going to happen 3 years, 5 
years, 10 years into the future. God bless them, maybe they are right, 
maybe not. Forty of the forty-five leading economists the year prior to 
the last recession predicted it would be a year of economic growth. So 
economists do not always hit the mark. Economics, as you know, is 
psychology pumped with a little helium, an advanced degree, and then 
they give us projections. Our friends on the other side say just 
projections, that is enough, just projections alone will compel us to 
pass a bill that will take $800 billion and put it in the form of tax 
cuts, the substantial majority of which will go to the wealthiest 
Americans, and they will decide to take that gamble with the American 
economy.
  It is their right. They have the votes. We do not weigh them here, we 
count them. And when you count up the votes, they win. But it is a 
risky riverboat gamble for this country's economy. Those who have been 
giving us the most advice about this plan of theirs and how wonderful 
it is for our country are the very same people who were so 
fundamentally wrong 8 years ago.
  Now they say: We have a new plan. I say: What about your old one? It 
seems to me what we ought to do is make rational, thoughtful choices. 
Yes, there is room for a tax cut if we get the surpluses that the 
economists predict.
  The first choice, it seems to me, ought to be, during good economic 
times you pay down part of the Federal debt. That is the best gift we 
could give the children of this country, and that would also stimulate 
lower interest rates and more economic growth.
  The second choice for us to decide as a country is, we are going to 
confront a demographic time bomb in Medicare and Social Security, and 
we must confront it; let's use some of these surpluses to do that.
  Third, let's also make sure our investments that make this a better 
country and better place in which to live are provided for. Yes, 
education, health care. Does anybody really believe it is going to help 
this country to have massive cuts in a program such as WIC, the 
investment we make in low-income pregnant women and children? Does 
anybody think massive cuts in those kinds of programs or massive cuts 
in Pell grants for poor students to go to college are going to help 
this country? I don't think so. That is where this plan leads us.
  Our choices, in my judgment, are use this projected surplus when it 
exists to make a real dent in this country's debt and, second, let's 
have some targeted tax cuts, but after we have committed ourselves to 
extend the solvency of Social Security and extend the solvency of 
Medicare. Then let's make sure those programs that invest in human 
potential really do work; those programs in education and health care 
that make this a better country, let's make sure those programs are 
provided for as well.
  To develop a plan that implicitly assumes--and, yes, it does, no 
matter how much they decry that is not part of what they are doing--
that implicitly assumes you are going to have 20-, 30-, and up to 40-
percent cuts in programs that we know in this country work, that 
strengthen this country and improve this country and invest in the 
lives of people in this country in a very positive way, makes no sense 
at all.
  My colleagues have used charts to describe this tax proposal. There 
is, it seems to me, no chart that is better than this chart, which is 
where we were and where we are going. I hope we will decide to vote 
against this tax cut and have a more sensible fiscal policy as we go 
forward.
  I yield the floor.
  The PRESIDING OFFICER. The Senator's time has expired.
  Who yields time?
  Mr. GRAMM. Mr. President, I yield myself 20 minutes.
  The PRESIDING OFFICER. The Senator from Texas is recognized for 20 
minutes.
  Mr. GRAMM. Mr. President, I have been called many things, some not 
always so flattering or nice, but I have never been called 
unconservative because I thought we ought not to let Government spend 
working people's money rather than giving it back to them.
  There have been a lot of issues raised, and I want to go through and 
answer each and every one of them. Let me start with the rhetoric of 
our dear Democrat colleagues about, let's pay down this debt; don't 
give this money back to working people; we don't know what they are 
going to do with it; they

[[Page 19801]]

might waste it; they might use it in an unwise way. Let Government keep 
it and we will pay down the debt, our Democrat colleagues say. But the 
problem with that rhetoric is it does not comport with the facts. Our 
problem is what they are doing speaks so loudly on this issue that we 
cannot hear their words.
  I have here a chart. I know this chart is hard to read because my 
mama saw it on television and could not read it. But believe me, I can 
read it, and I am going to read it to you.
  Both sides tend to claim we are right about figures. But to make 
Government work, we have a nonpartisan organization called the 
Congressional Budget Office that is made up of experts, accountants, 
economists, that basically serve as a reality check on both Democrats 
and Republicans.
  They just completed what they call their Mid-Session Review, where in 
the middle of the year they looked at the President's budget, which our 
Democrat colleagues are supporting, and they looked at our budget 
resolution, which included our $792 billion; and they reported to the 
Congress and the American people about these two competing programs and 
what they would mean in terms of the Government budget.
  If you listened to our Democrat colleagues, they are trying to tell 
you it is a bad idea for us to give back roughly 25 cents out of every 
dollar of the projected surplus to working people. They say: Let us pay 
down debt.
  But when the Congressional Budget Office looked at the President's 
budget, they found that the President is proposing, over the next 10 
years, in his budget, to spend $1.033 trillion on increases for 81 
Government programs. They found that the President proposes spending 
$1.033 trillion on 81 programs as an alternative to our tax cut, and 
since our tax cut under the Republican budget is $792 billion, we 
actually pay off $219 billion more in debt than the President does. 
They talk about this money being used to pay down debt, but the 
President not only spends every penny of the non-Social Security 
surplus, he has to plunder the Social Security trust fund in 3 of the 
10 years just to pay for all of his new spending.
  So when you hear one of our Democrat colleagues say: Oh, it is a 
terrible idea to give working people back roughly 25 cents out of every 
dollar of the surplus because wouldn't it be better to use it to buy 
down debt? Please remember that the budget they support, written by 
President Clinton, spends every penny of the non-Social Security 
surplus, plus roughly $29 billion. So while they say: Let us buy down 
debt. Their program is to spend every penny of that money on increasing 
81 government programs.
  The reason this is so important that people understand is, this is 
not a debate between buying down debt and tax cuts. In fact, as the 
nonpartisan Congressional Budget Office has shown, after you look at 
all the spending the President wants to do, he would buy down debt 
$1.959 trillion. Our budget, with this tax cut, would buy down debt 
$2.178 trillion, or $219 billion more.
  The debate is not between buying down debt--in fact, we pay off more 
debt than the Democrats do. The debate is between spending the money on 
these 81 Government programs versus letting Americans keep more of what 
they earn.
  If we were going to have a totally honest debate, it would be our 
Democrat colleagues standing up and talking about these 81 Government 
programs and the $1 trillion they would spend, and asking working 
Americans tonight to listen to what they say; listen to our tax cut; 
and then sit down around their kitchen table and ask themselves a 
question: Can Government in Washington, with President Clinton's 
programs, spend this money to help our family more than we could if we 
got to keep the money to spend on our own family? Can they do a better 
job spending our money than we can?
  Obviously, that is a very different debate. Our colleagues do not 
want to have that debate. But their budget would spend every penny of 
the non-Social Security surplus.
  So when people are saying: Don't give this tax cut. Let us buy down 
debt, their budget spends every penny of this money, plus plundering 
some of the Social Security trust fund.
  So the debate is about whether we let the American people have the 
money and save it or spend it or invest it or whether they want to let 
Government spend it.
  Our colleague said: Let's put some money away in case the good times 
don't last. Who is better to put money away in case the good times 
don't last? Working people, with their own money, or Government? When 
is the last time anybody remembers the Government putting money away 
for a rainy day?
  I don't remember it. We are already $21 billion over the spending 
totals that the President and the Congress agreed to. We are not 
putting any money away here in Washington.
  Yesterday, we had the adoption of a farm bill that spent another $7.4 
billion, taking every penny of it right out of the surplus. So this 
money is being spent, is the first point, and that is the debate.
  The second point is, some of our colleagues have said: Well, boy, 
this is a huge tax cut, and we don't need this tax cut.
  And so I have two sets of figures I want to ask you to look at. The 
first is very interesting to me. These are the 7 years in American 
history where the tax burden on the American people has been at its 
highest level. One of my staffers, clever as he is, summed this up by 
saying, the ``Causes of Record Taxes: War and Clinton.'' Because if you 
look at the record tax burdens in American history, out of the six 
highest, four of them are Clinton years, and two of them are World War 
II--Harry Truman and Franklin Roosevelt--when defense was 38 percent of 
the economy and 37 percent of the economy. Now it is less than 3 
percent.
  The only other year where we have had a tax burden even approaching 
the one we have now was the year Ronald Reagan became President, and we 
were debating cutting taxes across the board by 25 percent.
  Our colleagues say: Well, it was just a terrible thing to do. We 
should have never cut taxes when Ronald Reagan was President.
  A couple making $50,000 a year, had we not had the Roth-Kemp tax cut, 
would have been paying $12,626 a year now in income taxes instead of 
paying $6,242. Our Democrat colleagues think that would be great. We 
thought it was a bad idea. So in the Reagan budget we cut taxes. The 
economy started to grow. We rebuilt defense. We won the cold war. We 
tore down the Berlin Wall. A lot of good things happened.
  But this is the most telling chart of all. You hear all this stuff 
about: Oh, this is a huge tax cut, and many of the writers and many of 
the columnists are beginning to pick this up. But nobody goes back and 
looks at the facts.
  Mr. DURBIN. Would the Senator yield for a question?
  Mr. GRAMM. I will be glad to yield when I get through if I have time.
  Now here are the facts. If you take revenues over the next 10 years 
that are projected, our tax cut is less than 3.5 percent. In other 
words, our tax cut cuts taxes, in terms of projected revenue, by under 
3.5 percent. That is this huge tax cut we are talking about.
  But this chart is really telling. The day Bill Clinton became 
President, before we raised taxes--or President Clinton raised taxes--
many of our colleagues have pointed out that not one Republican voted 
for that tax increase; and I am proud to say that is true--before he 
raised taxes in 1993, the Government was taking 17.8 cents out of every 
dollar earned by every American in Federal taxes.
  Today the Federal Government is taking 20.6 cents out of every dollar 
earned by every American in Federal taxes. That is the highest 
peacetime level of government taxes in American history, the second 
highest tax burden, second only to 1944 in American history. If we took 
the whole $1 trillion non-Social Security surplus--and I note that we 
are taking less than $800 billion--if we took all of it and cut taxes, 
we would still be taking, when the full tax cut is in effect 10 years 
from now, 18.8 cents out of every dollar earned by every American in 
Federal taxes.

[[Page 19802]]

  Why is that important? It is important because what is being called a 
huge tax cut actually leaves taxes substantially above where they were 
the day Bill Clinton became President. So what is being called a huge, 
irresponsible, riverboat gamble--I was thinking Senator Breaux might 
want to defend riverboat gambling--what is being called a huge gamble, 
we are simply talking about giving back some of this huge tax increase. 
By the way, the President said later, at a fund-raiser, that he raised 
taxes too much in 1993. Our tax cut would still leave the tax burden 
substantially above where it was when Bill Clinton became President.
  Let me address the issue very briefly about rich people getting this 
tax cut. You need to understand when our Democrat colleagues speak that 
they have a code. The code is, every tax increase is on rich people; 
every tax cut is for rich people. So you don't ever want to cut taxes 
because it helps rich people. You always want to raise them because it 
hurts rich people. You are not for rich people.
  The problem is, when that argument was made on the President's tax 
increase in 1993, they taxed gasoline, and gasoline is bought by both 
the rich and the poor. They taxed Social Security benefits on incomes 
of $25,000 or more. That is hardly what we call rich.
  When we debated this issue when it first came to the Senate, one of 
our colleagues got up and said: The Roth tax bill gives 60 percent of 
the tax cut to the top 25 percent of income earners in America. Can you 
imagine that this tax cut gives 60 percent of the benefits to the top 
25 percent of income earners? But nobody bothered to point out that the 
top 25 percent of income earners pay 81.3 percent of the taxes. The 
truth is that the Roth tax cut, in terms of the rate cut, actually 
makes taxes more progressive, even though it reduces everybody's taxes. 
It reduces lower-income people's taxes more.
  Actually, I wanted it to be cut across the board. You have heard many 
people say: Some 30 percent of Americans under this tax cut get no tax 
cut. Can you imagine a tax cut where almost 30 percent of the people 
get no income tax cut? That sounds crazy until you realize that roughly 
30 percent of Americans pay no income taxes. Most taxpayers don't get 
food stamps. They don't get TANF. They don't get Medicaid because they 
are not poor. Those programs are not for them.
  Tax cuts are for taxpayers. If you don't pay taxes, you don't get a 
tax cut. It is not because we don't love you. It is not because there 
is something wrong with you. It is just that tax cuts are for 
taxpayers. So we are cutting income taxes. If you don't pay income 
taxes, you don't get a tax cut. Remember that when you hear all this 
business about rich people and poor people.
  Quite frankly, I think we do our country an injustice when we keep 
trying to pit people against each other based on their income. The 
plain truth is, if we could calculate this out, the Roth tax cut, the 
parts of it that we have enough data on in this short period of time to 
look at, it probably makes the tax code a little more progressive than 
it is. I don't think we ought to be doing that. I don't have any 
problem in saying, if you don't pay any taxes, you don't get a tax cut. 
If you pay a lot of taxes, you get a lot of tax cut.
  If we had a 10-percent across-the-board cut--unfortunately, we don't 
quite get that; I am proud of what we got--but if Senator Rockefeller 
makes 10 times as much money as I do, he would get 10 times as big a 
tax cut. Some people get upset about that, but I don't get upset about 
it.
  Alan Greenspan has become, his utterances at least, almost like a 
bible. Everybody quotes him to make their point. Generally the people 
quote him to make points that are 180 degrees out of sync. If you 
listen to the quotes by many of our Democrat colleagues, you would 
believe that Alan Greenspan has said: Never, ever, ever, under any 
circumstance, should we give anybody a tax cut. The reality is, what 
Alan Greenspan has said is very clear. His first preference would be to 
not spend any of the surplus and to not give any of it back in taxes. 
But Alan Greenspan says:

       If you find that as a consequence of those surpluses they 
     tend to be spent, then I would be more in the camp of cutting 
     taxes, because the least desirable outcome is using those 
     surpluses for expanded outlays.

  I submit that is exactly where we find ourselves when we look at the 
fact that we are spending the surplus as quickly as we can spend it, 
and the President has proposed spending $1 trillion of it over the next 
10 years.
  The final point I will make, before summing up, is that several of my 
colleagues have been joshing me--and boy, it is legitimate. When I was 
in economics, I never made predictions that would either prove true or 
false within 100 years. And then I didn't worry about it.
  It is true that when President Clinton submitted his economic 
program, as we debated it in those first 2 years, I said some awfully 
unkind things about it--not things you couldn't print in the paper, but 
they weren't generous. I suggested that if it was adopted, we would 
have a recession.
  Our colleagues have said: Well, look at the wonderful economy we 
have.
  In my final, major points, I will, as Paul Harvey, give you the rest 
of the story. To listen to our colleagues today, they would have you 
believe that all of the Clinton program was just a tax increase. But 
there were two other parts of it. If we are going to be fair to my 
quote, we need to be fair in saying there were two other parts of the 
Clinton program in those first 2 years. It certainly did raise taxes. I 
certainly was against it, and I still believe the economy would be 
better off if we had not done it. But the other two parts our Democrat 
colleagues want to forget. The first was a major spending program that 
spent $17 billion in the first year.
  The PRESIDING OFFICER (Mr. Smith of Oregon). The Senator's time has 
expired.
  Mr. GRAMM. I ask for 5 additional minutes.
  Mr. ROTH. I yield 5 additional minutes.
  Mr. GRAMM. The second part of the program that everybody doesn't talk 
about is a proposal to spend $17 billion to ``stimulate the economy.'' 
Our colleague from Oklahoma remembers it because we discovered, in one 
of the happiest discoveries in recent political history, that when you 
looked at that program, it was going to spend money on programs off a 
list submitted by communities, and on that list was an Alpine slide in 
Puerto Rico and an ice-skating warming hut in Connecticut. We had 
endless good times about that and, in the end, while we had a 
Republican minority and a Democrat majority, we actually filibustered 
and killed the $17 billion of spending.
  I don't have my copy of the Clinton health care plan here, and that 
is probably good because if I picked it up, I might get a hernia. The 
third part of the program was for the Government to take over one-
eighth of the economy by having one giant HMO--I think it was called a 
health care purchasing collective, or something--and all the doctors 
would work for the Government and the Government would run the health 
care system. So if we are going to be fair in quoting my statement, 
let's remember that the plan had three parts; we killed two of the 
three.
  The final thing--and I probably ought not do this, but we are getting 
ready to go on recess, so why not. ``Bill Clinton balanced the budget 
and made everything wonderful.'' We have all heard that. We heard it 
right before I got up to speak. But I have in my hand President 
Clinton's budget for fiscal year 1996. This was the budget that the new 
Republican Congress got in January of 1995. I do remember this. One of 
my staff provided me with these unkind remarks, when I said in 1993, 
regarding this Clinton health care bill, ``If we pass it, we will be 
hunting Democrats down with dogs all over America.'' Well, we didn't 
pass it, but we did elect the first Republican majority in both Houses 
of Congress since 1952.
  In any case, to finish my point, when this new Republican Congress 
got here, this was the budget the President had sent them. This budget, 
right on page

[[Page 19803]]

2, projected a deficit of roughly $200 billion through the year 2000. 
The new Republican majority took this budget and threw it into the 
trash can, and we adopted a new budget.
  On this chart, here is the Clinton deficit projected in 1996. This is 
what we achieved with the Republican majority. Now, did we really do 
all that? No. Did Clinton do all that? No. The plain truth is that we 
had basically a stalemate, and we stopped virtually all new spending. 
In fact, with all this talk about the gloom and doom, we were able to 
control spending a little bit. The economy took off and we balanced the 
Federal budget.
  So let me sum up by simply saying this. I want to congratulate our 
chairman, who has put together a tax bill that is as good a tax bill as 
you can write in the Senate and get 51 people to vote for. I want to 
congratulate him for his leadership. If you trust the American people 
and their ability to spend their own money better than the Government, 
vote for this tax cut. If you believe the Government can spend it 
better and will make America richer, freer, and happier by spending it, 
rather than letting them have it, then you ought to vote against it. 
That is the choice.
  I yield the floor.
  Mr. MOYNIHAN addressed the Chair.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. May I point out that 80 percent of non-retired American 
adults pay more in Social Security taxes than income taxes. That is a 
point we are not dealing with much.
  I have the honor and privilege to yield 5 minutes to my friend from 
Louisiana.
  Mr. BREAUX. Mr. President, I thank the Senator from New York and also 
the distinguished chairman of the full committee, the Senator from 
Delaware. They are both distinguished gentlemen.
  I just make a note that when we use the term ``distinguished 
gentleman,'' we use it sometimes lackadaisically in the Senate. In this 
case, I think it is important for us to note that there are probably no 
two finer gentlemen in this body today than the Senator from Delaware, 
the chairman of the committee, and the Senator from New York, the 
ranking member of our committee. They are gentlemen in the sense of how 
they have had to conduct the affairs of bringing this conference report 
and this tax bill to the American public. Although they have had 
differences in what they thought the ultimate product should look like, 
both of these two distinguished Senators have conducted themselves in 
the finest sense of being a gentleman, and they have worked together in 
a fashion that I think has kept our committee together. I congratulate 
them for that.
  Let me say a couple of words about where we are. Unfortunately, the 
debate we are hearing on the floor today is about something that is not 
going to happen. We are spending all of this time talking about 
something that is not going to become law; it is not going to occur 
because none of this will, in fact, become legislation. It will only be 
something about which we have talked. Many colleagues on this side of 
the aisle are talking about how bad the provisions are in the 
conference report, and many colleagues on that side of the aisle are 
talking about how wonderful the provisions in the bill are.
  The bottom line is we are talking about something that is not going 
to happen because it is very clear to everybody in America, and 
everybody in Washington knows, that when this bill gets down to the 
President in this form, it is going to be vetoed. The veto will not be 
overridden.
  All of this exercise today, while I am sure it is important to make 
our political points, is not talking about what is going to benefit the 
people of our country. As a result of where we are, there will be no 
reduction in the marriage penalty. It is not going to be fixed. It is 
not going to be addressed by this product. There will be no reduction 
of income rates from 15 percent to 14 percent. That is not going to 
become law. There is not going to be any increase in the standard 
deduction for hard-working Americans. The standard deduction is not 
going to go up. The marriage penalty is not going to go down. Estate 
taxes are not going to be repealed. Estate taxes are not going to be 
reduced. It will be the same after this bill is disposed of. Child care 
credits are not going to go up. Health care credits for people who 
don't have health care will not be assisted because all of the things 
we have in these various pieces of legislation that we tried to get 
into a package that could be signed will, in fact, not be signed into 
law.
  In many ways, this is an exercise in futility--in the sense that we 
know it will never become law. This debate, however, I think is still 
important. It is important to point out some of the things that are in 
the bill, which I find sort of interesting. I know my colleagues have 
looked at this list. It is a list of all of the things that are in the 
bill that are going to be sunsetted. We have more sunsets in this bill 
than they had in the movie ``South Pacific.'' The broad-based tax 
relief is going to be sunsetted. The marriage penalty will be 
sunsetted. The AMT relief, the capital gains reduction, and the 
individual retirement accounts, which Senator Roth has worked so hard 
on, will be sunsetted. Assistance for distressed communities will be 
sunsetted. There is a sunset on every page. It is enough to put us to 
sleep. The problem is that all of these things we have are not going to 
become law.
  But I think the debate we have is important because I always remain 
optimistic. I guess when I lose my optimism, I will lose my interest in 
serving in this esteemed body; and I haven't reached that point yet. I 
think it is important to have this debate. It is unfortunate that we 
only have 10 hours. It is unfortunate that we had 20 hours for 100 
Senators to debate a major reform in the Tax Code of this country. I 
think we have to recognize that the system in which we bring tax bills 
to the Senate floor for open debate needs to go back to that old system 
where we have open debate on something as important as tax policy. We 
used to do it and produce good bills. The distinguished ranking member 
and the chairman remembers those days. We need to go back to the 
process whereby we have open and complete debate on tax laws in this 
country.
  The final point I will make is that I hope sometime when we come 
back--after we have had the veto ceremony and the response to the veto 
ceremony, and everybody has gotten it off their chests, we can come 
back in September, as the chairman has said, and address the real issue 
of Medicare, try to look at what amount of money we really need in 
Medicare. We have a plug number in the Democratic bill of $320 billion. 
We don't need that much. I don't think we can spend $320 billion more 
in Medicare and make it any better than it is today. But we can reform 
it; we can figure out how much money we do need because we do need more 
money.
  We can figure out how to craft a program that brings Medicare into 
the 21st century. It was a great program in 1965. This is approaching 
the 21st century, and the model of 1965 does not fit what we need to do 
for the 21st century. We need to reform it and figure out how much 
money we need for a good, solid prescription drug program, particularly 
one with catastrophic protection, and try to combine that legislation 
with a realistic tax bill.
  I recommend that we also consider doing something on Social 
Security--certainly a lockbox, a temporary protection, but we need real 
reform for that program as well. We need to look at the private sector 
to help increase the return on Social Security investments from what we 
have right now as part of any real reform effort.
  I hope that sometime late in September we will have an opportunity to 
look at trying to combine the business recommendations from all of our 
Members on Social Security reform and on true Medicare reform, and 
figure out what we actually need to put into a tax bill that would give 
real relief to all of these things we are sunsetting right and left, 
and come up with something that helps people who need the greatest 
help.
  I voted for this bill in the Finance Committee to keep the process 
going

[[Page 19804]]

forward. I voted for it when it passed the Senate the first time to 
keep the process going forward. Unfortunately, at this stage the 
process has now gone backwards. What we have before the Senate is more 
reflective of the House-passed bill, which I think does not really 
direct the limited tax help to those who need it the most.
  It is interesting to note that, with all the trigger mechanisms, it 
looks like a shooting gallery as far as all the triggers that have to 
go into effect before the tax bill goes into effect. Add the sunset 
provisions with the trigger mechanisms, and I doubt that anybody in 
this body can tell you what the real tax benefits are going to be for 
the American people. Is it going to be $800 billion, or $545 billion, 
which is sort of pretty close to what a centrist group recommended of 
$500 billion. I suggest that we have, at best, a mishmash of differing 
recommendations and viewpoints about what the tax bill ought to look 
like.
  I am not sure, with all the sunsets and everything else we have in 
here, that anybody can really describe exactly what we are presenting 
to the American public other than a political issue. We are going to 
have a great political debate on this from both sides of the aisle. We 
are going to criticize everything coming from our opponents from both 
perspectives, but we are going to ultimately be talking about what we 
didn't do. We are going to be talking about failure, and we are going 
to talk about whose fault it is that we didn't accomplish anything. 
That is really unfortunate.
  I happen to think the American people would much prefer for us to 
have a debate on success: You did it. We did it. No. You did it. But at 
least we would be talking about success. We would be talking about 
something we did instead of debating failure and whose fault it was 
that we weren't able to come together.
  We have a divided government. The President is a Democrat. He is 
going to be there until the next election. And who knows what after 
that?
  I conclude by saying that I congratulate our two leaders. They did a 
terrific job. I greatly respect them for it. Hopefully, we can come 
back and do it later in a better fashion.
  Mr. MOYNIHAN. Mr. President, I hope we have listened carefully to 
what the Senator from Louisiana has said. He is generous and 
optimistic, and it might just turn out to be true.
  I yield the floor.
  Mr. ROTH. Mr. President, I yield 10 minutes to the distinguished 
Senator from Idaho.
  The PRESIDING OFFICER. The Senator from Idaho.
  Mr. CRAIG. Mr. President, I thank the chairman for yielding. Let me 
thank him for the tremendous work he has done in the last several 
months to produce a tax package that is here on the floor.
  Let me turn to my colleague from Louisiana first. I wish the 
President would follow that Senator's leadership, for if he had 
followed his leadership, we would have a Medicare package and be 
working on it right now. But the President chose to politicize Medicare 
and to walk away from his Democratic colleagues whom he placed onto the 
Commission to do the work that they did so well in a bipartisan way.
  And we are here today without a fix for Medicare because the 
President did not awaken to the responsibility he had in that regard 
and the opportunity that the Senator from Louisiana and the Senator 
from Nebraska had helped create in the Medicare Commission. I wish the 
President had awakened, but he chose not to.
  We are here today debating a tax relief bill for the American people, 
a relief bill that, in my opinion, is responsible, reasonable. In all 
fairness, given the total picture of our budget and our projected 
revenues, it is, in fact, modest tax relief.
  Some would be surprised by that statement on the modest size of this 
tax relief package if they were to listen to the rhetoric from the 
other side of the aisle. But that is the truth. It is responsible tax 
relief, within the responsible budget plan which we passed earlier this 
year.
  Under this plan, we use three-fourths of the total budget surplus to 
pay down the public debt by nearly one-half over 10 years and 
completely protect the Social Security system. For the first time in 
the history of our Government, our budget commits us to reserving all 
of future Social Security surpluses and all future Social Security 
revenues exclusively for Social Security beneficiaries. That is a first 
for all of us; it is an important and responsible first.
  If we continue to hold the line on new spending, that discipline plus 
some of the leftover surplus funds, also will allow us to accommodate 
prudent Medicare reforms, meet emergencies, and address additional 
priorities that we may face, also all within that three-fourths of the 
surplus that we are setting aside.
  This tax relief bill draws on the remaining one-fourth of the total 
surplus. This is hardly not reckless, like some have said. It is 
responsible, reasonable, and modest to take just one-fourth of the 
total surplus and return it to the American people.
  These facts seem to go unrecognized on the other side of the aisle. 
After we safeguard Social Security, meet the true and real 
responsibilities of Government, account for Medicare and other 
priorities, what we do in this bill is say to those whom we have 
overcharged, those who have overpaid their income taxes, we are going 
to refund to you a little of your own money.
  Too many in Government and the press seem to miss this fundamental 
question: Who earns the money in the first place? Whose money is it? I 
am always fascinated by the debate on taxes when the other side seems 
to think that nearly everything the working person owns is the 
Government's. And if we are providing tax relief, somehow in our 
generosity, we are turning to them and smiling, and saying: We are 
going to give you back just a little.
  Are we, to quote some on the other side, ``spending'' this money on a 
tax cut? Are we giving it back? No. We are saying it belongs to the 
worker who earned it, and that he or she should be able to keep a 
little more of the fruits of his or her own labors.
  What we are suggesting is that we don't take so much in the first 
place--that we have enough right now to fund Government in a 
responsible way, and we ought to recognize that it is the working 
person out there we are taking it from, and we ought to return the 
overcharge.
  This tax relief is phased in, meaning future Congresses will have 
plenty of time to react if the economic conditions of our country 
change. That is also part of the argument why this bill is responsible.
  The bill represents only a 3.5-percent tax cut. That is modest, 
especially for the most heavily taxed generation in American history.
  Some of the future tax relief won't even kick in unless the national 
debt is in fact being reduced. I think that is responsible. Yet we hear 
the mantra again of, pay down the debt, pay down the debt.
  If you would read the facts of this tax relief bill we have put 
together, and the budget it implements, we are paying down a very 
substantial part of the debt--more than one-half of it. In fact, we 
already have paid down $142 billion in the public debt in the last 2 
years.
  Under our budget, and on top of this tax relief, we will pay down 
over $200 billion in debt more than the President's budget called for, 
even though he is one of those out there talking about debt reduction 
at this moment.
  Let me make you a deal, Mr. President. You say you are going to veto 
the tax cut. Well, if you veto the tax cut, why don't you bring to us a 
lockbox proposal that puts all of the surplus in a lockbox to pay down 
the debt? A lockbox that makes a binding guarantee that not one cent of 
the surplus will go to new spending. You are not about to do that, Mr. 
President. But if you would, I would support you in it because debt 
reduction is important. It would help the economy of this country.
  But one has to wonder if the President just flat isn't speaking with 
all of the truth that he ought to be. Look at his budget this year--tax 
increases and new spending. In fact, his own budget

[[Page 19805]]

this year calls for spending the entire non-Social Security surplus, 
and then raiding the Social Security trust funds for some more new 
spending. I am sorry, Mr. President. What you say and what you do don't 
come together--they don't add up. What you say about new spending in 
your budget doesn't match what you say about debt reduction when you 
oppose this tax relief.
  I don't think I would have to eat my hat on that kind of a promise to 
the President--that I would be willing to support him if he would take 
all of the surplus and put it in a fund to pay down the debt, because 
that is just not about to happen.
  No, the real issue here is not tax relief versus paying down the 
debt.
  The real issue is tax relief versus spending. We all know that. We 
were spending money yesterday. Frankly, I was helping spend some of it. 
That spending used some of the surplus and is going to relieve the 
current crisis circumstance in producing agriculture today across this 
country. I supported that agriculture appropriations bill because our 
farm families are facing an emergency. But I also know if we leave all 
the taxpayers' money in Washington, DC, all the surplus, it will get 
spent, and not just on emergencies. If we send it back to the people 
who earned it and own it, then it won't get spent by government. At 
least then, we would have to go back to the people and ask them for the 
right to spend more, by changing the tax structure to increase future 
revenues.
  Who believes if Government takes in $3 trillion in surplus revenue 
over the next 10 years, that Government won't spend it? We know they 
will spend it.
  The National Taxpayers Union Foundation does a little thing called 
``Bill Tally.'' They tally up all of the new bills introduced by 
Members of Congress every year and what those new bills will represent 
in new and increased government spending. Mr. President, 84 of 100 
Senators--that means Democrat and Republican alike--last year 
introduced new legislation that would lead to an additional $28 billion 
in spending per year, on average. Not over the next 10 years but in one 
alone--Democrat and Republican alike. New ideas, new bills, new 
spending. It is the habit of Government. Of course, we know that. That 
represents about a $232 increase in spending from every American 
taxpayer that is already on the wish list of most of the Senate.
  I hope and believe we can resist the temptation to spend the three-
fourths of the surplus we reserve to pay down the debt, save Social 
Security, and reserve some for other future priorities. That is what we 
ought to be doing with it. That is what we promised in the 
Congressional budget we passed earlier this year. Yet, the temptation 
will be there to spend the remaining one-forth, and part of that three-
fourths, as well.
  The choice is very simple. The debate today is about bigger 
Government versus bigger household budgets--private citizen household 
budgets. I hope helping those American household budgets is what this 
Senate ultimately will support. I hope over the course of August we can 
convince this President that he really ought to be more on the side of 
the American taxpayer than on the side of ever-bigger Government.
  This tax relief bill is fair. Yes, it is fair. I know we have heard 
the debate about tax cuts only going to the rich. The Senator from 
Texas did a marvelous job a few moments ago talking about how the folks 
on the other side of the aisle think it only goes to the rich. I am 
amazed and, frankly, frustrated that every time we talk tax relief, 
immediately Democrats run to the microphones and say it is for the 
rich, the rich are going to get the benefit of a tax relief proposal.
  That just ``ain't'' so in this bill. The chairman of the Finance 
Committee in the Senate deserves a lot of credit for focusing this bill 
right on middle America, right at husbands and wives, working and 
trying to raise a family out there in the market place, wage-earners 
who are paying the bulk of these taxes.
  Every American who pays income taxes will receive some benefit from 
this bill. The middle class Americans who pay most of the income taxes 
will get, by far, most of the income tax reduction. That is the way it 
ought to be.
  What we are actually doing in this proposal is making the tax code a 
little more progressive. Middle-income taxpayers will receive 
proportionately more relief, for the taxes they pay, than upper-income 
taxpayers. But everyone who pays income taxes gets income tax relief.
  This bill is fair because it shows compassion for the most heavily 
taxed generation in American history.
  Several of my colleagues have come to the floor to talk about that 
tax burden. But I am amazed my Democrat friends and colleagues don't 
seem to recognize it. Surely they do. In fact, somehow, they actually 
are allowing their President to propose more taxes, which he did in his 
budget proposal this year.
  That heavy tax burden has hurt people. It has robbed a whole 
generation of the opportunity to plan their retirement. It has forced 
families into adding a second and third income, rather than spending 
time taking care of children or elderly parents. It has robbed 
Americans of a major part of their freedom.
  Today's baby boomer family is paying, on average, 50 percent more in 
taxes at all levels, as a portion of income, then their parents did 
when they were raising their families.
  Only one year in history, 1944, at the height of the largest war in 
the history of the world, requiring incredible financial sacrifice, saw 
the federal government take in taxes a larger share of the national 
income than we are now paying.
  This tax relief bill will help real people with real needs. There are 
two ways we can help people: We can create bigger government, with more 
bureaucrats, with more programs and red tape, regulating more behavior, 
and hope we produce some more government checks for some beneficiaries. 
Or we can let Americans keep a little more of their own money and meet 
their needs without Uncle Sam as the middle man. We can provide broad-
based tax relief. We can provide targeted tax relief and incentives for 
folks to use for specific, beneficial purposes.
  If we really care about people, we care about helping them in the 
most direct, most effective way possible.
  Here's some of how we do that in this tax relief bill:
  Marriage penalty relief: It just isn't fair to force two individuals 
to pay hundreds of dollars more in taxes simply because they get 
married.
  Death tax relief: It just isn't fair that working families sometimes 
have to sell part or all of the family farm or the family business just 
to pay taxes. I've seen family farms carved up because of the death 
tax. The other side would have us believe that this is a debate about 
the so-called ``estates'' of rich people. It's not.
  Help for families with children:
  It would allow more parents to afford child care, both because it 
increases and expands the child care tax credit.
  It allows more modest- and middle-income families to make full use of 
the child tax credit we enacted in the 1997 Tax Relief Act.
  It expands the tax exclusion for foster care payments.
  Help for individuals and families with education:
  It would make education more affordable and available to individuals 
and families.
  It includes tax-free, qualified tuition plans; extends the employer-
provided tuition assistance; makes our 1997 education tax credits more 
fully available to modest- and middle-income families, by taking it out 
of the Alternative Minimum Tax calculations; and includes the 
Coverdell-Torricelli education savings account.
  Help with health care, long-term care, and eldercare:
  It increases the affordability of prescription drug insurance; health 
insurance for those who aren't covered by a corporate plan; long-term 
insurance, both for those who must pay for their own and those with 
cafeteria plans.
  Farmers, small businesses, and workers will benefit from making the 
self-paid health insurance deduction 100 percent deductible.
  Help for farm families: America's farm families are in a period of 
economic crisis today.

[[Page 19806]]

  It provides for increased expensing, to $30,000; create FARRM 
Accounts--Farm and Ranch Risk Management Accounts; and protect income 
averaging from the Alternative Minimum Tax.
  Help for folks who need retirement security: It includes expanded 
IRAs, 401(k) plans, and other provisions too numerous to mention, that 
especially will benefit folks over age 50.
  Help for disadvantaged individuals seeking work: The Work Opportunity 
tax credit is reinstated.
  Help for charities and charitable giving: 70 percent of taxpayers 
receive no recognition of charitable giving--because they don't itemize 
their deductions. This bill would reward and encourage those middle-
class taxpayers who benefit their community, help the less fortunate, 
and promote the social good, with an above-the-line deduction for 
charitable donations.
  This bill is needed by the American people.
  When the facts are known, I am confident they will send one message 
back to Washington, DC: Please Mr. President, sign this bill into law. 
Let us keep one-fourth of the surplus for our families, our communities 
and our future financial security, instead of confiscating it for more 
big government.
  I conclude by saying this is a fair tax proposal. In all fairness, 
compared with the total size of the Federal budget and the Federal 
government tax burden, it is modest. I close by once again recognizing 
the chairman of the Finance Committee for the tremendous work he has 
done to build that balance and fairness into this bill.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, I have the great pleasure to yield 10 
minutes to my good friend and colleague on the Finance Committee, the 
Senator from Montana.
  Mr. BAUCUS. I very much thank my good friend from New York.
  In a couple of years when the Senator is no longer here, we will miss 
him very much. I know of no Senator more provocative, in the best sense 
of the term, in forcing Members to think. That is something which too 
often is in short commodity on the floor of the Senate. I very much 
thank my friend.
  This is a strange debate. I heard earlier my good friend from North 
Dakota, Senator Dorgan, say he is bewildered. I myself have referred to 
this debate as surreal. My friend from Louisiana, Senator Breaux, 
asked: What are we talking about? Why are we here?
  Those are apt comments in many ways.
  One, because we know this bill will be vetoed. We know this tax cut 
that has been proposed is not going to happen. Yet both those who favor 
the tax cut and those who favor a veto are trying to score political 
points with the American people. There are a lot of games being played 
around here. I don't think that is any news to the American people. 
They know what is going on. They are pretty smart.
  It is similar to President Lincoln saying you can fool some of the 
people some of the time but you can't fool all the people all the time.
  The American people are smarter than the Congress thinks they are.
  Let me go through some of the reasons. First, the assumptions behind 
this big tax cut are unrealistic and we all know they are unrealistic. 
I daresay that many on the other side of the aisle would agree 
privately with our public statements on this side of the aisle that the 
assumptions are unrealistic. There is no way in the world the Congress 
will jeopardize national defense by cutting national defense a couple 
hundred billion over the next decade. There is no way in the world the 
Congress is going to hurt veterans by dramatically cutting veterans' 
benefits. There is no way in the world the Congress is going to cut 
education and do all that is assumed behind this tax cut. Yet virtually 
the entire projected surplus we are spending in this bill is based upon 
exactly these things happening. That is one reason this is a surreal, 
unrealistic, illusionary, and strange debate. It is not based upon 
facts.
  As others have pointed out, much more persuasively than I, the 
numbers of this tax cut as proposed do not add up. There is no way in 
the world we will be able to cut taxes $800 billion, pay the additional 
interest on the debt, and provide for a modicum of services that people 
need. Some have suggested--and nobody has disputed this number--that 
this tax cut will require about a $600 billion cut in spending over the 
next 10 years. It is unrealistic. It is not right. It is wrong to 
attempt to fool the American people that these levels of cuts are good 
for the country.
  Beyond that, this bill is based upon such ephemeral, illusionary 
projections, it baffles me that anybody could stand on the floor and 
say it is necessarily going to happen--that we will have a $1 trillion 
budget surplus from tax revenues over the next 10 years. Past 
projections have been so far off the mark that it is foolish to assume 
this projection will be accurate.
  On average, our projections are about 13 percent off the mark over 5 
years. This is a 10-year projection. I point out that CBO, the agency 
on which we base our projections, stated in January of this year they 
were off $200 billion when they came up with their midcourse review in 
July of this year. The projections were $200 billion off over a period 
of just 6 months. Who knows how far off a 10 year projection could be? 
If we are honest with ourselves, we know most people are concerned that 
the economy is now overheated, rather than underheated, and therefore 
the projections will probably fall off and we will have much less of a 
budget surplus than we assume.
  I point this out because it defies common sense that we lock in law 
tax cuts far out in the future based on these very flimsy assumptions. 
Why are we doing that? Most people wouldn't do that. Most people, 
putting their family budgets together, wouldn't do that. Certainly no 
business would do that. No business would assume that its revenues 10 
years out were going to be absolutely a certain amount and therefore 
they are going to spend all this money today. You just cannot make that 
assumption. You have to be prudent.
  I talked to the CEO of a major company just last week. I asked him 
how their company makes projections.
  He said: We cannot. We try to make a 5-year projection, but we are 
always way off. The best we can do is we put together a 5-year plan and 
try to anticipate what the future is going to be like, but we are 
constantly modifying it because times are changing so quickly.
  I think that probably makes sense. That is what we should be doing. 
We should not lock in tax cuts so far out. Rather, if we think tax cuts 
make some sense, they should be modest, to leave room for corrections 
if we have made a mistake.
  Times do change very much. So, again, I say this bill is reckless. It 
is based on an illusion. It is just not prudent. I say to the American 
people, I hope you understand how imprudent all this is.
  I must also make another point, and this point saddens me. We are in 
this strange, surreal situation, in part because there is so much 
partisanship in this body as well as in the other body. When I first 
came to the Senate about 20 years ago, I must say there was much less 
partisanship then than there is now. It is just too partisan now.
  By that I mean the other side of the aisle is totally controlling and 
secretive in what they are doing. They have put together their tax bill 
on their own; behind closed doors. No Democratic Senators were allowed. 
The same with the conference report; behind closed doors, on their own, 
with no Democratic Senator allowed.
  Not too many years ago when the Democrats were in the majority, both 
sides were included in drafting bills, both Republicans and Democrats. 
I think that is what the American people want. They want us to work 
together. They really do not care whether we are Republicans or 
Democrats; they really care that all 100 of us sit down, do the best we 
can, and recognize this is a democracy with different States, and 
different people who have different points of view, but achieve some 
rough justice and rough common sense.
  I think there is a reason for the secrecy. There is a reason for the 
closed

[[Page 19807]]

doors; that is, they can do things they know are not right, things that 
could not stand the light of day. If the doors were open and if both 
sides of the aisle were included, we would not have such phony budget 
projections. By ``phony'' I mean in the last couple of weeks, the other 
side directed CBO to come up with some new numbers based upon their own 
new assumptions to fit the conclusions they wanted.
  What was the conclusion they wanted? The conclusion they wanted was 
to show we could cut taxes by $800 billion and still come up with $400 
billion or $500 billion in spending revenue.
  CBO said, ``No, you cannot do that,'' before. So the other side said, 
``Just change some assumptions around so you can reach that 
conclusion.'' That is what they did. They did it privately. In fact, 
they distributed that chart on their side. They didn't even distribute 
it on this side because they knew, if we looked at it, we could 
probably find out how erroneous it was, how fallacious it was. We 
finally did.
  I very much lament the secrecy and partisanship which is producing 
this product. I guess what bothers me most is, when I ran for the 
Senate and I think when most of us sought this office and were 
privileged enough to get elected, we came here because we wanted to 
address the major, big problems facing this country. We are not doing 
that. We are poised to move into the next century, the next millennium. 
Who are we as Americans? What do we want? What is our role in the 
world?
  The PRESIDING OFFICER. The time of the Senator has expired.
  Mr. BAUCUS. I ask for an additional 2 minutes.
  Mr. MOYNIHAN. Of course.
  Mr. BAUCUS. I thank my friend.
  Who are we? How much do we want to spend on defense? What is our role 
in the Far East? Who are we as a country? What about countries like 
Bosnia and Yugoslavia? How much should we spend there? What is our role 
there? What is the proper role of Government? Not the false debate that 
is set up here--turn the money back or don't turn the money back. That 
is a vacuous, vacant, insipid argument. It is so simple-minded. That 
argument avoids asking the real questions. Questions like what is the 
proper level of government, what taxes should be collected from where, 
how and when should we stimulate the private sector? Let's have a real 
honest debate on policy, not a phony debate on politics.
  This has been a phony debate on politics, this last week, on this tax 
bill. It has not been an honest debate on public policy, on what is 
right, on what the right levels of spending should be. It is not based 
upon the same set of numbers, the same facts. Everybody comes up with 
his own charts, his own different facts.
  You know the old saying: Liars figure and figures lie. We cannot even 
agree on the same baseline. We can't agree on the same facts. By 
definition, we are just talking past each other. I guess that is what 
bothers me most and that is why I think this whole debate is most 
unreal and why it is sad. It is, in a large sense, not only a waste of 
time because we are not addressing the points that should be addressed, 
but it is a disservice to the American people.
  I very much hope in the next month, in September and next year, the 
leadership on both sides of the aisle will work harder to put politics 
aside and the Senators themselves will work hard to put politics aside. 
I know that might sound like a political statement, but it is what I 
believe. In every ounce of my body, I believe it because that is why we 
are here and that is what we should be doing.
  I very much hope after the President vetoes this bill, either there 
is no bill so we can start all over again, or we can come together in 
some appropriate way so we can get down to the real issues that face 
this country.
  The PRESIDING OFFICER. The time of the Senator has expired.
  The Senator from New York.
  Mr. MOYNIHAN. Mr. President, we now have a sense of why the Senator 
from Montana is an appreciated treasure in this body.
  Now I yield 5 minutes to my friend from Massachusetts.
  The PRESIDING OFFICER. The Senator from Massachusetts.
  Mr. KERRY. Mr. President I thank the distinguished ranking member. I 
share the affection and feeling expressed by the Senator from Montana, 
about how much we will miss the remarkable insightfulness and 
stewardship of the Senator from New York.
  Let me also associate myself with his praise of the Senator from 
Montana. That was a very thoughtful and very honest statement about 
what has happened in the Senate. I haven't been here quite as long as 
the Senator from Montana. I have been here 15 years. But I have never 
seen this body as polarized, as personalized, and as partisan as it is 
at this moment. I think it is very dangerous. It is dangerous for the 
country; divisive and difficult for the institution itself. I find it 
very hard, frankly, to understand.
  I guess I can understand it in macro terms. I find it hard to 
understand in the context of why we all run for the Senate and what we 
are in politics to try to achieve. There is something more than just 
winning elections. There are some people around here who do not believe 
that, but I am convinced the American people believe that. Indeed, I 
think an adherence to that notion is what has made us different from 
other countries, and the best moments of the Senate have been when we 
have tried to adhere to that notion.
  This is not a bill. This is not a tax bill. This is a political 
statement, a raw, fundamental, basic political statement. The statement 
is essentially one that seeks to say: Democrats want to spend money. 
Republicans want to give you back your money. That is the political 
statement. But it is not real when you look underneath it because the 
Republicans will join in September and October in spending the money 
because none of them are going to go back and tell the citizens of 
their State they are going to cut veterans hospitals, they are going to 
cut the Coast Guard, they are going to cut the FBI, and a host of other 
programs. None of them are going to do that. They are positioning 
themselves to say to their electorate: Gee, Clinton made me do it, but 
I wanted to give you back your money, even though the money wasn't 
there to give back.
  It is one of the great posturings and one of the great frauds of 
recent time from the very people who brought you Gramm-Rudman that fell 
on its face, the very people who built the great deficits of the early 
1980s when they adopted the Stockman philosophy of how to create crisis 
in Government and undo Government itself, the very people who predicted 
in 1993 that if we passed the 1993 Deficit Reduction Act there would be 
economic chaos, unemployment lines, massive economic failure.
  The results are, here we are today with the best economy we have ever 
had in this country, with unemployment at record low rates, with the 
stock market at high rates, with the greatest sustained period of 
growth, and the very same people who brought you those three great 
failures are now trying to sell this snake oil to the American people.
  Let's look at it as a political statement. That is what it is. It is 
a political statement. It is a political statement in which they are 
prepared to take the House tax bill that was worse than the Senate bill 
and bring most of it back so that their political statement is: 60 
percent of American taxpayers get 14 percent of the tax break that 
won't happen. On the other hand, their political belief is that the top 
10 percent of income earners in America ought to get 47.6 percent of 
the benefits of their tax statement that won't happen. So they can run 
around and say: Gee, we tried to service those who service us the best 
in the process of campaign financing. But the reality is, it is just a 
political statement.
  The conference report remarkably delays the Senate's marriage penalty 
tax relief for earned-income tax recipients. I cannot tell you how many 
times we heard people on the other side of the aisle saying: Oh, my 
God, marriage is being destroyed in America; we have a disincentive for 
marriage, particularly among the poor in this country.
  We heard it all through the welfare debate. We heard it from the 
Republicans year after year. Many of us say

[[Page 19808]]

we ought to get rid of the marriage penalty. We voted to get rid of the 
marriage penalty, but they come back and delay for working people the 
capacity to get rid of the marriage penalty. In exchange for delaying 
getting rid of the marriage penalty, what do they think is more 
important?
  The PRESIDING OFFICER. The Senator's 5 minutes have expired.
  Mr. KERRY. Can I have a couple minutes?
  Mr. MOYNIHAN. Of course, 2 minutes because we are running down on 
time.
  Mr. KERRY. They eliminate the alternative minimum tax that guarantees 
that the wealthiest of Americans will pay some kind of tax. So they 
trade off: Don't give the marriage penalty to the working poor, but 
give the wealthiest of Americans an exemption from the alternative 
minimum tax that guarantees fairness.
  That is not all they do. They wipe away the tax relief for child 
care. They dropped the Senate provision. They provide additional 
capital gains tax relief for investors, but they provide no tax relief 
to the people who pay most of their taxes through the payroll tax in 
America, which is the vast majority of Americans.
  There are many other egregious transfers to the wealthy at the 
expense of the average American. So let's take this as the political 
statement it is. It is a political statement that makes clear the 
priorities of their party, and it makes clear that they are prepared to 
even risk the high-technology boom we have been through, because when 
you give a tax cut of this level without sufficient money to pay for it 
at a time when the economy is doing well, as Alan Greenspan and 
countless Nobel laureates and economists have said: You are going to 
reduce capital formation and increase interest rate costs and, in 
effect, may even reverse some of the plus side that has given us this 
option.
  It is a political statement that I think ultimately will come back to 
haunt them because Americans know better. There is no American in this 
country who does not appreciate the vast commitment we have had to 
children, to education, to higher education, to technology creation, 
transfers, to a host of things which make this country what it is: a 
better country and, in fact, an extraordinary country measured against 
all the other nations of the world in today's economy. I do not think 
we should put it at risk, and I hope colleagues will join in rejecting 
this political statement and in rejecting this irresponsible direction 
they seem prepared to adopt.
  I thank my friend for the time.
  Mr. MOYNIHAN. Mr. President, I thank the Senator from Massachusetts 
for a forceful and needed statement. It was not easy to hear. It is 
true.
  I am happy to yield 5 minutes to my friend from Virginia, known in 
the Finance Committee as ``commandant.''
  The PRESIDING OFFICER. The Senator from Virginia.
  Mr. ROBB. I thank the Chair. Mr. President, I thank the distinguished 
ranking member of the Finance Committee, the Senator from New York, and 
mentor to us all. His presence, at the end of this Congress, will be 
missed in ways I do not think any of us fully appreciate.
  First of all, I want to fully agree with the comments made by the 
Senator from Montana and the Senator from Massachusetts. I will try not 
to repeat those comments. My particular frustration in dealing with the 
bill before us today is that we are considering this huge tax cut, one 
which would normally be designed to stimulate the economy, and yet no 
economist I am aware of has suggested that such a stimulus is needed at 
this particular moment.
  In fact, what is truly needed is not being done. This bill does 
nothing to address the two most pressing structural systemic problems, 
Social Security and Medicare. Instead of trying to bring about some 
responsible changes to the Social Security system and the Medicare 
system, we are taking a projected surplus we hope will occur, but may 
or may not occur, and spend it in a way that provides a stimulus to 
those who least need a stimulus at this particular time. Indeed, it is 
very hard to find someone who represents the group who will be most 
benefited by this bill who is actually asking at this time that we 
provide them with a huge tax cut or an economic stimulus. We just do 
not need it.
  If we are going to enact a tax cut, it is my view that it should be 
in some targeted areas we know we are going to have to take care of 
anyhow. For example, we should have a permanent extension of the R&D 
tax credit, not cutting it back. Instead, we go through the same 
charade we go through each year, which makes it difficult for those who 
must make decisions about investing in research and development to make 
the kinds of decisions they need to make. The bill also fails to target 
tax credits for investment in information technology training, which is 
so clearly the cutting edge of our economy today. We are not making 
those investments in this bill.
  What we are doing is making a huge tax cut available to those who are 
disproportionately in the middle- and upper-income brackets in this 
country, and not providing the basic investment in infrastructure.
  My personal preference is to not have a tax bill at this point. If we 
cannot do better than the one we have, I would rather have nothing, 
notwithstanding some of the good things upon which both sides agree, 
and simply begin to pay down the debt. We are in such a hurry, however, 
to deliver the good news that we are going to give money back to you 
that ought to be yours in the first place, even if we are only going to 
give you $4 billion of it back in the year 2000. Even though it is only 
$4 billion, those who support this bill are attempting to take credit 
for full $792 billion, the lion's share of which will not be until the 
end of the next decade. This bill is going to lock in statutorily those 
changes which will make it very difficult for those who serve in 
succeeding Congresses and succeeding administrations to make the 
corrections they may well be called upon to make.
  I am certain we will hear a scream from those on the other side of 
the aisle if we even think about what could be scored in any way, 
shape, or form as a tax increase, even though it would only be 
correcting a tax cut that most people who have common sense and have 
some sense of fiscal responsibility view as a mistake today.
  I will not extend the debate. I will only observe that even though I 
disagreed with the original proposal, there were a small number from 
this side of the aisle who were willing to go along in the hope that 
some sort of compromise could be reached. And we took a bad bill and 
made it worse, and drove off the Democrats who were prepared to 
participate in a bipartisan solution.
  So it does go to what the Senator from Massachusetts just suggested. 
It is a political bill. It is regrettable because we have an 
opportunity, for the first time in a long time, to do something really 
fiscally responsible in terms of the kinds of obligations that we have 
in this body and the other body, in concert with the White House at the 
other end of Pennsylvania Avenue.
  I regret we are in a situation that we cannot act in a fiscally 
responsible manner and address the true pressing needs, such as Social 
Security and Medicare, instead of what we are doing.
  I know the time has expired.
  With that, I urge my colleagues to oppose this particular measure, 
and to work eventually with those on the other side of the aisle to 
come up with a constructive, fiscally responsible measure to meet our 
legitimate needs.
  With that, I thank the distinguished Senator from New York, as well 
as praise, although I am not in agreement with, the distinguished 
chairman of the committee, the Senator from Delaware.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, it would appear that the force of the 
argument on this side of the aisle has silenced our friends on the 
other side, in which case I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative assistant proceeded to call the roll.

[[Page 19809]]


  Mr. KENNEDY. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Bennett). Without objection, it is so 
ordered.
  Mr. MOYNIHAN. I am happy to yield 5 minutes to my friend from 
Massachusetts.
  Mr. KENNEDY. Mr. President, in just a few moments we are going to be 
casting an extremely important vote that will in many ways have a 
dramatic impact on the economy of this country.
  I had the opportunity to be here in 1981 when we had a Republican 
proposal on a tax program. At that time there were 12 of us who voted 
in opposition to that program. But it passed, and we saw our Federal 
debt grow from $400 billion to close to $4 trillion over the period of 
the next years because of the economic forces that were put in place by 
that tax program.
  It had a very dramatic impact, particularly in terms of the 
allocations of wealth and the distribution of wealth here in the United 
States. Those that had resources benefited enormously, but for the 
great majority of the Americans, they had to work longer and harder 
just to hold on.
  Then in 1993, the Democrats passed a very important tax measure. The 
implications of that tax program, which took some belt tightening, so 
to speak, had a very dramatic impact in terms of our economy. That 
policy, more than any other single action we have seen, has had a more 
positive impact on our economy than any other action that has been 
taken by the Government. The point is that a tax bill of this magnitude 
has enormous impact on our economy as well as in relation to the issues 
of distribution. We now have before us, in 1999, a third rather 
dramatic proposal.
  Mr. President, very few decisions we make in Congress will have more 
impact on the long-term economic well-being of our nation than how we 
allocate the projected surplus. By our vote today, we are setting 
priorities that will determine whether the American economy is on firm 
ground or dangerously shifting sand as we enter the 21st century. This 
vote will determine whether we have the financial capacity to meet our 
responsibilities to future generations, and whether we have fairly 
shared the economic benefits of our current prosperity. Sadly, the 
legislation before us today fails all of these tests. We should vote to 
reject it.
  A tax cut of the enormous magnitude proposed by our Republican 
colleagues would reverse the sound fiscal management which has created 
the inflation-free economic growth of recent years. That is the clear 
view of the two principal architects of our current prosperity--Robert 
Rubin and Alan Greenspan. Devoting the entire on-budget surplus to tax 
cuts will deprive us of the funds essential to preserving Medicare and 
Social Security for future generations of retirees. It will force harsh 
cuts in education, in medical research, and in other vital domestic 
priorities. This tax cut jeopardizes our financial future--and it also 
dismally flunks the test of fairness. When fully implemented, the 
Republican plan would give 80% of the tax cuts to the wealthiest 20% of 
the population. The richest 1%--those earning over $300,000 a year--
would receive tax breaks as high as $46,000 a year, while working men 
and women would receive an average of only $138 a year--less than 40 
cents a day.
  Republicans claim that the ten year surplus is three trillion dollars 
and that they are setting two-thirds of it aside for Social Security, 
and only spending one-third on tax cuts. That explanation is grossly 
misleading. The two trillion dollars they say they are giving to Social 
Security already belongs to Social Security. It consists of payroll tax 
dollars expressly raised for the purpose of paying future Social 
Security benefits. Clearly, these dollars are insufficient to achieve 
our goal of protecting Social Security for future generations. Yet, 
Republicans are not providing a single new dollar to strengthen Social 
Security. They are not extending the life of the Trust Fund for even 
one day. It is a mockery to characterize those payroll tax dollars as 
part of the surplus.
  That leaves the $964 billion on-budget surplus as the only funds 
which are available to address all of the nation's unmet needs over the 
next ten years. Republicans propose to use that entire amount to fund 
their tax cut scheme. Since CBO projections assume that all surplus 
dollars are devoted to debt reduction, the $964 billion figure includes 
over $140 billion in debt service savings. The amount which is 
available to be spent--either to address public needs or to cut taxes--
is only slightly above $800 billion. As a result, the $792 billion 
Republican tax cut will consume the entire surplus. It will inevitably 
usher in a new era of deficits--just as the baby boom generation is 
reaching retirement age.
  Most Americans understand the word ``surplus'' to mean dollars 
remaining after all financial obligations have been met. If that common 
sense definition is applied to the federal budget, the surplus would be 
far smaller than $964 billion.
  We have existing obligations which should be our first 
responsibility. We have an obligation to preserve Medicare for future 
generations of retirees, and to modernize Medicare benefits to include 
prescription drug assistance. The Republican budget does not provide 
one additional dollar to met these Medicare needs.
  The American people clearly believe that strengthening Social 
Security and Medicare should be our highest priority for using the 
surplus. By margins of more than two to one, they view preserving 
Social Security and Medicare as more important than cutting taxes.
  We should use the surplus to meet these existing responsibilities 
first, in order to fulfill the promise of a retirement with both 
financial security and health security. If we do nothing, Medicare will 
become insolvent by 2015. The surplus gives us a unique opportunity to 
preserve Medicare, without reducing medical care, or raising premiums 
for senior citizens, or raising the retirement age. The Republican tax 
cut would take the opportunity away. It would leave nothing for 
Medicare. In fact, this legislation will actually force additional cuts 
over the next five years. Under existing budget rules, which 
Republicans have refused to modify, the enactment of this tax bill will 
force a sequester of Medicare funds.
  Senate Democrats have a realistic alternative. We have proposed to 
use one-third of the surplus--$290 billion over the next ten years--to 
strength Medicare and to assist senior citizens with the cost of 
prescription drugs. The Administration's 15 year budget plan provides 
an additional $500 billion for Medicare between 2010 and 2014. 
Enactment of the Republican tax cut would make this $800 billion 
transfer to Medicare impossible. If we squander the entire surplus on 
tax breaks, there will be no money left to keep our commitment to the 
nation's elderly.
  Unless we use a portion of the surplus to strengthen Medicare, senior 
citizens will be confronted with nearly a trillion dollars in health 
care cuts and skyrocketing premiums. We know who the people are who 
will carry this enormous burden. The typical Medicare beneficiary is a 
widow, seventy-six years old, with an annual income of $10,000. She has 
one or more chronic illnesses. She is a mother and a grandmother. Yet 
the Republican budget would force deep cuts in her Medicare benefits in 
order to pay for this exorbitant tax out
  The Republican tax cut, if enacted, will also make it impossible for 
us to assist Medicare recipients with the high cost of prescription 
drugs. That is one of the choices each of us will make when we vote on 
this bill.
  The cost of prescription drugs eats up a disproportionately large 
share of the typical elderly household's income. Too many seniors today 
must choose between food on the table and the medicine they need to 
stay healthy or to treat their illnesses. Too many seniors take half 
the pills their doctor prescribes, or don't even fill needed 
prescriptions--because they cannot afford the high cost to prescription 
drugs. Too many seniors are ending up hospitalized--at immense costs to 
Medicare--because they are not receiving

[[Page 19810]]

the drugs they need. Pharmaceutical products are increasingly the 
source of medical miracles--but senior citizens are being denied access 
to the full benefit of these new drug therapies. Remedying these 
inequities should be our priority. Instead, with these enormous GOP tax 
breaks, we are ignoring the basic needs of the elderly.
  The Republicans claim that their tax bill provides a prescription 
drug benefit for the elderly--but it is a meaningless provision which 
few if any seniors will ever be able to use. The provision is 
contingent on a whole series of other legislative actions that may not 
occur. Thus, it may never take effect. Even if it takes effect, it 
provides an above the line tax deduction for private insurance premiums 
which can only be used by the small percentage of more affluent senior 
citizens who itemize deductions. The vast majority of elderly taxpayers 
will never be able to use this provision.
  The projected surplus also assumes drastic cuts in a wide range of 
existing programs over the next decade--cuts in domestic programs such 
as education, medical research and environmental cleanup; and even cuts 
in national defense. We have an obligation to adequately fund these 
programs. If existing programs grow at the rate of inflation over the 
next decade--and no new programs are created and no existing programs 
are expanded--the surplus would be reduced by $584 billion. That is the 
amount it will cost to merely continue funding current discretionary 
programs at their inflation-adjusted level.
  In other words, the Republican tax breaks for the wealthy would 
necessitate more than a twenty percent across the board cut in 
discretionary spending--in both domestic programs and national 
defense--by the end of the next decade. If defense is funded at the 
Administration's proposed level--and it is highly unlikely that the 
Republican Congress will do less--domestic spending would have to be 
cut 38% by 2009. No one can reasonably argue that cuts that deep should 
be made, or will be made.
  We know what cuts of this magnitude would mean in human terms by the 
end of the decade. We know who will be hurt.
  375,000 fewer children will receive a Head Start.
  6.5 million fewer children will participate in Title I education 
programs for disadvantaged students.
  14,000 fewer biomedical research grants will be available from the 
National Institutes of Health.
  1,431,000 fewer veterans will receive VA medical care.
  These are losses that the American people will not be willing to 
accept.
  The Democratic alternative would restore $290 billion for such 
domestic priorities, substantially reducing the size of the proposed 
cuts. A significant reduction would still be required over the decade. 
One thing is clear--even with a bare bones budget, we cannot afford a 
tax cut of the magnitude the Republicans are proposing.
  Our Republican colleagues claim that these enormous tax cuts will 
have no impact on Social Security, because they are not using payroll 
tax revenues. On the contrary, the fact that the Republican budget 
commits every last dollar of the on-budget surplus to tax cuts does 
imperil Social Security.
  Revenue estimates projected ten years into the future are notoriously 
unreliable. As the Director of the Congressional Budget Office candidly 
acknowledged: ``Ten year budget projections are highly uncertain.'' 
Despite this warning, the Republicans tax cut leaves no margin for 
error. If we commit the entire surplus to tax cuts and the full surplus 
does not materialize, or if we have unbudgeted emergency expenses, 
Social Security revenues will be required to cover the shortfall.
  The vote which we cast today--the choices which we make--will say a 
great deal about our values. We should use the surplus as an 
opportunity to help those in need--senior citizens living on small 
fixed incomes, children who need educational opportunities, millions of 
men and women whose lives may well depend on medical research and 
access to quality health care. We should not use the surplus to further 
enrich those who are already the most affluent. The issue is a question 
of fundamental values and fundamental fairness.
  Unfortunately, Republicans returned from the Senate-House Conference 
with a substantially more regressive bill than the one the Senate 
passed last week. The current bill contains a costly reduction in 
capital gains tax rates which was not in the Senate bill. The current 
bill completely eliminates the estate tax, providing enormous new tax 
breaks to the richest few. It also provides more than twice as much in 
tax cuts for multinational corporations as the Senate bill did. Yet, 
the permanent extension of the research and development tax credit--the 
provision which would do the most to help many of those businesses 
whose innovations have created jobs and fueled our prosperity--was not 
included in this legislation. Instead, only a brief extension of the 
credit was provided. How extraordinarily shortsighted. In order to plan 
this research efficiently, the companies need to know what the rules 
will be in future years. The permanent extension of the research and 
development tax credit is the type of tax cut we should be passing. 
Unfortunately it is not before us.
  Democrats believes in tax cuts which are affordable and fairly 
distributed. The Democratic alternative, which I support, would provide 
$290 billion in tax relief over the next decade. That is an amount the 
nation can afford without endangering the economic progress we have 
made and without ignoring our responsibilities to Medicare, to Social 
Security, to education, and to other vital programs. We oppose the $792 
billion Republican tax bill because it would poison our prosperity and 
lead to a crippling rise in interest rates. We oppose the Republican 
bill because it would consume the entire surplus, and distribute the 
overwhelming majority of it to those who already have the most.
  That is not the way the American people want to spend their surplus. 
I urge my colleagues to reject the bill. The American people deserve 
better than this.
  Mr. MOYNIHAN. May I say to my friend from Massachusetts that the 
Office of Management and Budget has computed exactly what those 
sequesters would be, and they are horrendous.
  Mr. KENNEDY. I thank the Senator.
  Mr. MOYNIHAN. I yield the floor.
  Mr. ROTH. I yield 5 minutes to the Senator from Oregon.
  The PRESIDING OFFICER. The Senator from Oregon.
  Mr. SMITH of Oregon. I thank the Chair, and I thank the chairman and 
his committee for the work they have done on this bill.
  I rise to encourage my colleagues to vote yes when this vote is 
taken. I have had the privilege of sitting in that Chair, Mr. 
President, for a good part of this debate and have seen, with very 
clear eyes, two different philosophies on the floor of the Senate. One 
is a philosophy that says that Government spends money better than 
people can. That philosophy would grow Government. The other philosophy 
says we trust people; we don't trust Government as much. That 
philosophy, which trusts people, says let's grow families. Let's trust 
them to spend it for their needs because they can do it better than we 
can imagine it here inside the beltway.
  As I look at this plan that has been produced by our Finance 
Committee, and through this conference process, my conditions for 
voting for this have been met. I see both sides allocating the same 
amount to Social Security. I see both sides allocating the same amount 
to Medicare, save that we do not expand Medicare, but we dedicate a 
great deal of money to Medicare.
  I see both sides making the same commitment to debt reduction. In 
fact, this Republican proposal conditions the tax cuts upon the actual 
realization of the surpluses. So people that say we are spending the 
surplus or spending it without it actually being realized, we will not 
do that. We will not spend it in the sense of tax cuts if, in fact, 
these surpluses are not realized.
  So the question really becomes, Who is going to spend the surplus? 
Our

[[Page 19811]]

friends on the other side would do it to grow this Government. We, on 
this side, would spend it to grow families because we trust people more 
than we trust Government to spend it wisely.
  I tell you, as I look at the things that are provided in this tax 
package, I like what I see. When I look at reducing estate taxes, I say 
yes because, as a philosophical matter, I do not believe that it is the 
Government's business to tell you and me how we allocate our estates 
when we die. It is about redistribution of economics, which is what 
they are proposing, which is the law. I don't think that is the 
Government's role. I think we should trust people to distribute their 
money as they see fit.
  I look at the marriage penalty reduction. I don't think there should 
be a bias in our Tax Code against people marrying. I think it is 
terribly unfair when you have two working spouses, one has a high 
income, and the other may have a lower income; one is a corporate 
executive, the other is a schoolteacher; but the schoolteacher, the one 
with the lower income, gets taxed at the higher rate. What is fair 
about that? That is wrong. That is a bias against marriage that we 
should eradicate. If President Clinton wants to veto that, I will let 
him justify it.
  I look at the reduction of capital gains taxes, and I wonder, 
frankly, why we are taxing this capital twice. We should not be taxing 
it. We should be reinvesting it.
  That brings me to an important point. I am extremely frustrated every 
time I hear President Clinton or any other politician take credit for 
creating jobs. You and I, as politicians, as public servants, do not 
create jobs, unless we own the stock or unless we buy a bond, unless we 
invest in the free enterprise system that allows labor to go to work. 
When you hear President Clinton or any other politician claim they have 
created jobs, the predicate of that claim is that we are a centrally 
planned economy. And we are not. We are a free market republic.
  I think if my party has any contribution to make to this country, it 
is to make sure we do not become a socialistic, democratic welfare 
state, because if we become that, we will suffer the kinds of economic 
consequences that, frankly, our friends in Europe and Asia are 
suffering, which is little or no growth, high inflation, high interest 
rates, enormous unemployment rolls. That is the kind of system I don't 
want to be part of creating.
  The PRESIDING OFFICER. The Senator's time has expired.
  Mr. SMITH of Oregon. If I may have 1 final minute.
  Mr. ROTH. I yield 1 more minute.
  Mr. SMITH of Oregon. I think that is what is at stake. What kind of 
an America do we want? Whom do we trust? Are we the party of government 
or are we the party of the people?
  It is a question of whom you trust. It is a question of how you spend 
the money. When it comes to the essential programs, our programs are 
the same. When it comes to spending, we spend it differently. One does 
it for government; the other does it for families.
  I urge my colleagues to vote yes on this important piece of 
legislation.
  Mr. ROTH. Mr. President, I yield 5 minutes to the Senator from 
Wyoming.
  The PRESIDING OFFICER. The Senator from Wyoming.
  Mr. THOMAS. I thank the Chair.
  Mr. President, I have been on and off the floor all day. We have been 
at this for about 6 hours. I suspect most everything has been said, but 
we all, of course, haven't said it.
  I rise in support of what we are attempting--for the idea that we can 
do the things that are essential for the Federal Government to do and 
at the same time return substantial amounts of money to the people who 
own money, the taxpayers.
  I have been amazed at all the discussion that has gone on. We are 
talking about a fairly simple thing--tax relief. Yet I hear from the 
other side of the aisle how damaging that is to the economy. That is 
hard to imagine, isn't it, that returning money to people who have paid 
it in is going to damage the economy.
  We have tax relief based on our best estimate, provided by those who 
do professional estimating, that we will have a $3 trillion surplus 
over the next 10 years. Will it happen? Who knows. No one can guarantee 
it. But that is the way you have to plan any enterprise, by the best 
estimates you can make. We find ourselves now, of course, paying the 
highest taxes as a percentage of gross national product of any time 
since World War II. Surprising, isn't it, in this large of an economy. 
It certainly means one thing; that is, that the Government continues to 
grow.
  I think it is interesting to see the polls. When they ask, what is 
your highest priority? Do you like Social Security? Do you like 
Medicare? Do you like tax reduction? Tax reduction generally is the 
third one. That is not the point. We are setting aside Social Security 
before we do tax reduction. We are sustaining enough money to take care 
of Medicare. So that is not the choice.
  The better poll would be: What do you do after you have taken care of 
Social Security? What do you do when you have taken care of Medicare? 
Should you return the money? I think so.
  I saw somebody use an example of the simplest way to look at it, 
suggesting that you have three dollar bills in your hands, each 
representing $1 trillion. You say: I am going to set aside two of these 
dollars to do something with Social Security because that is where the 
surplus comes from. I am going to spend part of the third one for 
Medicare and the other costs that will be there. And about two-thirds 
of the last one we are going to give back to the people who sent it in 
because it is an overpayment of taxes. It is a fairly simple thing.
  We have, of course, in this case, as we do in many, a pretty strong 
difference of philosophy. We have on that side of the aisle people who 
prefer more government, more spending, more taxes. That is the 
philosophy. I understand that. I don't happen to agree with it.
  Our party, on the other hand, is one that says we ought to slim down 
the Federal Government; we ought to move more and more government 
towards the States and the counties, leave more and more money in the 
hands of the people. That is the philosophy, a difference of 
philosophy. That is so often the basis of our disagreement on many 
things. I understand that. It is perfectly legitimate. But if you want 
more government, that is fine. If you want the Government to spend more 
money, that is fine. That is a philosophy, one that has, through the 
years, been on that side of the aisle. It is not really a surprise.
  People say, of course, how is it going to affect me? Well, it affects 
us in very real ways:
  Estate taxes: I have a lot of people who farm and ranch in Wyoming 
who are very concerned about that. Capital gains taxes: More and more 
people are investing their money. The capital gains tax needs to be 
changed. Insurance deductions for health insurance, that people pay 
their own premiums, to be deducted, that is a reasonable thing to do. 
The marriage penalty, we have talked about that--a very reasonable 
thing to do.
  So we often get lost in the details when we say, as taxpayers, what 
does this do for us? I think it does a great deal for us. I think we 
should move forward. I am sorry we don't have agreement with the 
gentleman at the other end of Pennsylvania Avenue, but that ought not 
to keep us from doing what we think is right, and that is the thing we 
ought to do.
  I urge that my associates do the right thing.
  Mr. ROTH. Mr. President, I yield 10 minutes to the distinguished 
Senator from Arizona.
  Mr. McCAIN. Mr. President, the American people want us to save Social 
Security. They want us to fix Medicare. They want us to give them more 
control over their children's education. They want us to cut back the 
size of the bloated Federal bureaucracy and pay down the debt. Those 
are the clearly stated priorities of the people we represent, those 
whose interests we are pledged to protect.
  The Congress has tried to do something about the impending insolvency

[[Page 19812]]

of the Social Security system, but we have been blocked by the 
President's disingenuous statements about the kind of lockbox 
legislation he could support. The President rejected the 
recommendations of the bipartisan commission that was created to 
provide a basis for preventing the bankruptcy of Medicare. The 
President has put politics ahead of the needs of the people, but, 
unfortunately, so have we.
  The American people want, need, and deserve tax relief. They want us 
to reform and simplify our overly burdensome 44,000-page Tax Code that 
unfairly benefits special interests and overtaxes American families.
  Yet, here we are debating the merits, or not, of an $800 billion tax 
relief bill that we know for a fact the President will veto.
  Mr. President, let's be honest and acknowledge what's going on here. 
This bill is going nowhere. When it comes back to the Congress after 
the President's vetoes it, we should be prepared to set aside pure 
politics, and instead focus on producing results that benefit the 
American people.
  Mr. President, there are some very good provisions in this bill that 
help American taxpayers keep more of their hard-earned money. But most 
of these very important tax provisions for average Americans are put 
off for the future, while many of the perks for big business and 
special interests take effect immediately. This bill delays meaningful 
tax relief for the average taxpayer until 2001 or later, yet it 
complicates the tax system with a raft of new and renewed exemptions, 
exceptions, and carve-outs for special interests that go into effect 
immediately.
  Just under $6 billion of the entire $792 billion in tax relief in 
this bill is effective next year. Just 77 of the 180 provisions in this 
bill provide any tax relief at all in the year 2000. More than 80 
percent of the tax cuts are delayed until 2005 or later. And after 
phasing in the most important provisions over a 10-year period, the 
whole tax cut package sunsets after 2009, when we would presumably 
revert to the burdensome and overly complex tax system with which we 
are struggling today.
  I firmly believe we should repeal, once and for all, the disgraceful 
tax penalty that punishes couples who want to get married. This bill 
does provide relief from the onerous marriage penalty, but these 
important provisions do not even begin to take effect until 2001 and 
then they are phased in over a period of four or five years.
  Income tax rate reductions don't start to phase in until 2001, and 
then only the lowest bracket sees a half-percent rate cut, while other 
rate cuts are delayed until 2005. In fact, according to an informal 
estimate I was given, an American family making $65,000 per year would 
get just $47 in tax cuts based on the income tax rate reductions in 
this bill in 2002.
  We should also slash the death tax that prevents a father or a mother 
from leaving the hard-earned fruits of their labor to their children. 
There is absolutely no relief from the onerous death taxes in 2000. 
Estate tax reductions would be phased-in over a 9-year period until 
completely eliminated in 2009, but then this entire tax cut package 
would terminate and the death tax would be fully reinstated.
  At the same time, poultry farmers get an immediate tax break, 
totaling $30 million over 10 years, to convert chicken manure into 
electricity. Small seaplane operators don't have to collect tickets 
taxes, starting immediately, giving them a break of $11 million. 
Manufacturers of fishing tackle boxes get an immediate excise tax 
break, so that they can more competitively price their tackle boxes to 
compete with the tool box industry. And the people who make and sell 
arrows for hunting fish and game get an immediate cut in their taxes.
  Why are we giving a big break to chicken farmers when American 
families get not a dime in tax relief? Why don't people flying on 
seaplanes have to pay ticket taxes like people flying on other commuter 
planes? What compelling reason is there to give fishing tackle box 
manufacturers a tax break, while family-owned businesses get no relief 
from the confiscatory death taxes for quite some time?
  Many of the other provisions in this bill that provide tax relief for 
education, health care, and other issues important to American families 
are implemented gradually or simply delayed for several years. 
Likewise, some of the provisions that benefit small businesses and tax-
exempt organizations do not take effect for a number of years. Yet most 
of the provisions that give even more tax breaks to the oil and gas 
industry, financial services companies, high tech industry, insurance 
companies, and defense industry take effect early. The priorities in 
this bill are seriously skewed in the wrong direction.
  In addition, this bill does nothing to fundamentally reform our 
unfair and overly complex tax code. For years, and this bill is no 
exception, we have compounded the tax code's complexity and put tax 
loopholes for special interests ahead of tax relief for working 
families. The result is a tax code that is a bewildering 44,000 page 
catalogue of favors for a privileged few and a chamber of horrors for 
the rest of America--except perhaps the accountants and lawyers.
  The special interest set-asides and carve-outs in this bill merely 
exacerbate the complexity of the tax code. This bill adds new 
loopholes, new schemes, new ideas to keep lawyers and accountants busy.
  It is not right to pay back special interests ahead of American 
families. It is not fair to give more tax incentives and exemptions and 
cuts to big business, when individual taxpayers get no relief.
  If this bill had any chance of becoming law, perhaps it would have 
been prioritized somewhat differently.
  Mr. President, this tax bill is based on the premise that we will 
have nearly $3 trillion in the federal budget surplus over the next 10 
years. Let's look at the priorities for those surplus funds.
  Our first priority must be to lock up the Social Security Trust Funds 
to prevent Presidential or Congressional raids on workers' retirement 
funds to pay for so-called ``emergency'' spending or new big government 
programs. Most Americans don't share the view that dubious pork-barrel 
projects, such as millions of dollars in assistance to reindeer 
ranchers and maple sugar producers, should be treated as emergencies to 
be paid for with Social Security, but that is exactly what Congress did 
earlier this year.
  That leaves nearly $1 trillion in non-Social Security revenue 
surpluses. I believe a healthy portion of the projected non-Social 
Security surplus should be returned to the American people in the form 
of tax cuts. I also believe we have a responsibility to balance the 
need for tax relief with other pressing national priorities.
  After locking up the Social Security surpluses, I would dedicate 62 
percent of the remaining $1 trillion in non-Social Security surplus 
revenues, or about $620 billion, to shore up the Social Security Trust 
Funds, extending the solvency of the Social Security system until at 
least the middle of the next century. The President promised to save 
Social Security, but he failed to include this proposal anywhere in his 
budget submission. In fact, he has since proposed or supported spending 
billions of dollars from the surplus on other government programs, 
depleting the funds needed to ensure retirement benefits are paid as 
promised.
  I would also reserve 10 percent of the non-Social Security surplus to 
protect the Medicare system, and use 5 percent to begin paying down our 
$5.6 trillion national debt.
  With the remaining $230 billion in surplus revenues, plus about $300 
billion raised by closing inequitable corporate tax loopholes and 
ending unnecessary spending subsidies, I believe we could provide 
meaningful tax relief that benefits Americans and fuels the economy.
  The bill before the Senate includes provisions that are similar to 
some of the proposals I would include in such a plan, which are 
targeted toward lower- and middle-income Americans, family farmers, 
small businessmen and women, and families.
  I believe we should expand the 15% tax bracket to allow 17 million 
Americans to pay taxes at the lowest rate,

[[Page 19813]]

and this bill reflects a similar focus. The bill also increases the 
income threshold for tax-deferred contributions to IRAs, although 
delayed, and very gradually increases the amount that employees can 
contribute each year to employer-sponsored retirement plans. We should 
make these increases effective immediately to encourage more Americans 
to save now for their retirement. And this bill takes several steps to 
provide meaningful tax relief for American families by at least 
starting to eliminate the onerous marriage penalty and provide relief 
from confiscatory estate taxes.
  What the bill before the Senate does not do is provide much-needed 
incentives for saving. Restoring to every American the tax exemption 
for the first $200 in interest and dividend income would go a long way 
toward reversing the abysmal savings rate in this country.
  Most important, the bill does not eliminate immediately the Social 
Security earnings test. This tax unfairly penalizes senior citizens who 
choose to, or in many cases, have to work by taking away $1 of their 
Social Security benefits for every $3 they earn. There is no 
justifiable reason to force seniors with decades of knowledge and 
expertise out of the workforce by imposing such a punitive tax. And in 
our modern society, when many seniors have to work to survive, we 
should not keep this Depression-era relic in law.
  This is the kind of package that I believe could form the basis of a 
tax cut bill that properly balances national priorities and provides 
fair tax relief to average Americans and their families without further 
complicating our tax code. It would be a better step in the right 
direction toward economically sound and equitable tax relief and 
provide incentives to undertake real reform of our tax system.
  Mr. President, I will vote for the Taxpayer Refund and Relief Act 
because I believe it reflects a commitment to provide relief from a 
system that taxes your salary, your investments, your property, your 
expenses, your marriage, and your death. We must send a message to the 
American people and to the President that we must repeal the onerous 
marriage penalty and estate taxes that burden America's families.
  This bill is not acceptable to me. Special interests get the biggest 
breaks, and they get them right away. All the American families get are 
the leftovers. My problem with this bill is not with the size of the 
tax cuts, but who benefits.
  However, its passage and subsequent veto represent our only hope for 
meaningful tax relief for those working families who need it most. If 
this bill were to die today, so would the possibility of achieving 
meaningful tax relief this year. By passing this bill and forcing the 
President to address tax issues, I believe we hold open the possibility 
of entering into negotiations between the Administration and the 
Congress to provide meaningful tax relief for the benefit of all 
Americans.
  The sad reality is that this bill will not give a single American 
family even one extra dollar in their pockets, because it will be 
vetoed as soon as it arrives at the White House. But after this bill is 
vetoed by the President, our responsibility to the people we represent 
must be to work to address their priorities. We must save Social 
Security, fix the Medicare system, and return to the people more 
control over their lives and the lives of their children and families.
  At the same time, we can start to work on crafting a meaningful tax 
relief bill that truly benefits the American people--a tax bill that 
even President Clinton could not refuse to sign into law. That is what 
the American people want and need.
  Mr. MOYNIHAN. Mr. President, I am happy to yield 5 minutes to my 
learned friend from Michigan.
  The PRESIDING OFFICER. The Senator from Michigan.
  Mr. LEVIN. Mr. President, I thank the Chair, and my good friend from 
New York.
  This bill before us is unfair and it is unwise. It is unwise because 
the projected surplus that the bill uses for the tax cut is based on 
our abiding by spending limits that have already been breached and 
which would require huge cuts that we cannot make and should not make 
in veterans' programs, education programs, criminal law enforcement, 
and other important programs for the people of this Nation.
  If the surplus to this extent materializes, in fact we should then 
reduce the national debt that has been built up, particularly over the 
last 20 years. That would be the greatest gift of all that we could 
make for the American people, the reduction of that debt, because that 
would be a reduction in the interest rates which people pay on their 
mortgages and cars and credit cards, and that would truly be a 
contribution to the well-being of our constituents.
  The American people also sense that the tax program before us is 
unfair and not just unwise; they know--this has not apparently been 
contested--that 40 percent goes to the upper 1 percent of our people. 
The highest income 1 percent get over 40 percent of the tax benefits in 
this bill. More than 80 percent of the tax benefits in this bill go to 
the upper 20 percent of our people.
  It is, in fact, true that we are dealing with the people's money. It 
has frequently been said here that what we are talking about is whether 
or not to give back to at least some of the people their own money. It 
is true. This money--this surplus--belongs to the American people. But 
the economy belongs to the American people as well. The Social Security 
system belongs to the American people as well. The Medicare system 
belongs to the American people as well. The Head Start program belongs 
to the American people. Veteran hospitals belong to the American 
people.
  It is important that we consider what to do with a projected 
surplus--that we deal with this surplus as what it is, the people's 
money, but look at all of what we do here as hopefully carrying out the 
people's business.
  This bill takes us down the wrong road--the road back toward the 
deficit ditch that we are finally beginning to climb out of. It has 
taken us fewer years than expected. But, nonetheless, it has taken us 
about 6 years to get out of the ditch which we got ourselves into, 
particularly during the decade of the 1980s.
  Now that we are finally out of that ditch, we should stay out of that 
ditch. We should use any real surplus--not projected surplus but any 
real surplus--to protect Social Security and Medicare, and have a 
prescription program, and to do what is vitally necessary to invest in 
our people, particularly through their education, but then to pay down 
that national debt and to give back to the people what they truly want, 
which is a sound economy on a long-term basis and low interest rates on 
a long-term basis. That is what would be guaranteed if, in fact, we 
apply any real surplus beyond Social Security and Medicare prescription 
needs, beyond the investment in education, if we take that surplus, if 
it is real, and pay down the national debt.
  Instead, this bill takes us down a different road, a road which will 
deliver a huge tax cut mainly for those among us who need it the least 
and who are, for the most part, not even asking us for it. This bill 
represents an imprudent and unfair step, and we should not take it.
  I yield the floor.
  I thank the Chair.
  Mr. MOYNIHAN. Mr. President, may I say to my friend from Michigan 
that, as he well knows, we are in the second year of a budget surplus, 
the first such sequence since the 1950s. Let's not spoil it.
  Mr. President, I yield the floor.
  Mr. ROTH. Mr. President, I yield 10 minutes to the Senator from New 
Mexico.
  The PRESIDING OFFICER. The Senator from New Mexico.
  Mr. DOMENICI. I thank my friend, the chairman.
  Mr. President, fellow Senators, I want to talk for 10 minutes about 
why this is a good deal for the American people and why it is high time 
we set in motion a series of tax cuts which will give them back the 
money they are paying into the Government that we don't need.

[[Page 19814]]

  First of all, everybody talks about the fact that tax reduction comes 
in over a decade, and it comes in 1 year at a time. Almost everybody 
who is critical of that says at the same time they want to save Social 
Security.
  The truth of the matter is there is $3.3 trillion in accumulated 
surpluses over the next decade. In order to make sure you are 
protecting Social Security, each and every year of that 10 years, a 
substantial portion of that money belongs to the Social Security trust 
fund. So you can't have tax cuts that use up the Social Security trust 
fund. Anybody who says we are is ignoring the facts.
  The reason we have to have a phased in tax cut is because we are 
saving every single penny that belongs to Social Security for Social 
Security. Then we come along and say, let's have a tax cut, and let's 
phase it in each and every year.
  People can come to the floor and be critical of how slow it is and 
how long it takes to get the marriage tax penalty totally eliminated. 
But the truth of the matter is when you pass this tax bill tonight, and 
if the President were to sign it, you have put into law a change in the 
Tax Code which will get rid of the marriage tax penalty and many of the 
other onerous provisions in this law. Still, after you have done that, 
even though some of our best money crunchers in America have it wrong, 
there is $505 billion--not zero, as some people have said, $505 
billion--off a freeze which you can spend where you want over the next 
decade, be it for defense, be it for discretionary programs such as 
education, or you can use $90 billion to $100 billion of it, or as much 
as you want, to make sure you fix Medicare, if that is your goal.
  So for starters, there are so many people out there with wrong 
numbers and attacks on this proposal, who have the wrong facts, that I 
merely want to answer that part. We take care of Social Security 
regardless of what the President of the United States says. There is 
money in this budget for Medicare reform, if you choose to do it. There 
is money in this budget plan to pay for defense and to pay for 
education, and other high priority items, and to take care of the needs 
of this country.
  What we set out to do was to say we shouldn't keep more than we need, 
and we shouldn't set billions of dollars around in places up here in 
the National Government assuming that one way or another it will be 
there when it is time to give a tax cut.
  I submit that if you believe that you really do believe in the tooth 
fairy because, as a matter of fact, if you set that much money around 
up here and it is not used, it will be spent.
  We ask the question: Do you want to use this surplus to grow the 
pocketbooks of Americans, or do you want to increase their savings 
accounts, or would you like to spend it? That is the issue before us 
today. It is a blessing that we have this surplus.
  First, we should set aside enough for Social Security. We have done 
that. The bill then provides for our taxpayers to get some relief. It 
preserves and expands the child care credit. It protects various 
education credits, foster care tax credit, the alternative minimum 
tax--a fancy name. But what it means is that the way the Tax Code is 
written today, we give average Americans, middle-income Americans, 
credits and the like in the Tax Code. Then we take it away under the 
alternative minimum tax--like we give you a benefit and we take it 
away. We call it an alternative minimum tax, as if you are so rich you 
shouldn't get these credits.
  Do you know that if we do not pass this tax bill, 7 out of 10 
American taxpayers will lose some of their credits to the AMT by the 
year 2008, just about the time that we wiped out the AMT?
  Please, Mr. President, sign this bill. The bill provides tax relief 
for health care, long-term care, and has small business incentives. It 
is a bill that is good for farmers, for working men and women, and 
families. Overall, it is a very good bill.
  I also say, Mr. President, please sign this bill. The final tax plan 
is an excellent tax plan that moves toward slower, flatter, and simpler 
tax and moves toward taxing income that is consumed, not income that is 
saved, earned, and invested.
  On the business side, it moves closer to allowing business to deduct 
the cost of investments in the year they are made, thereby making them 
more competitive.
  This bill overall moves toward tax equity so everyone will get a 
break for health care regardless of where they work--a big company, 
small company, or a ma-and-pa one-stop shop. People who need health 
coverage say: Mr. President, please sign this bill.
  The bill focuses on generational equity. There are child care credits 
and long-term credits for the elderly. The President asks, be sure to 
take care of our senior citizens. We have taken care of them. Senior 
citizens, we are taking care of your children and your grandchildren 
who are interested in being helped because they pay more taxes than 
they should. On behalf of the seniors in the country, and their 
daughters, sons, and grandchildren, Mr. President, sign this bill.
  The bill takes the best part of the House and Senate bill and 
attempts to make it law. Broad-based tax reduction is fair. It cuts the 
tax rate in the lowest bracket first. Lowering of the 15-percent 
bracket happens before any other brackets are lowered. This sequencing 
recognizes that 98 million Americans are the people most urgently in 
need of a tax cut. Lowering the 15 percent to 14 percent is a 7-percent 
cut. Widening the lower bracket does two important things: It returns 
millions of Americans to the lowest brackets, fighting back ``bracket 
creep.'' In my own State of New Mexico, 151,000 New Mexicans will be 
returned to the lowest bracket; another 83,000 will see taxes cut.
  Talking about the marriage penalty for a minute, which everybody has 
spoken to--I won't be as eloquent as some--it is absolutely 
preposterous that the United States of America would punish by way of 
taxation a man and a woman who are married and both working, as opposed 
to a man and woman who are single. The marriage penalty is the wrong 
thing for America today. It was the wrong thing when we passed it. We 
ought to get rid of it.
  In behalf of millions of married couples who are begging Congress to 
be fair with them and get rid of this penalty on their marriage, please 
sign this tax bill.
  Because of the progressive rate structure in our tax code, Americans 
in the 28, 31, 36, and 39.6 tax brackets will all see their taxes cut.
  The marriage penalty relief in this bill is overdue and well done. 
There is roughly $117 billion in marriage penalty relief. Fully fifty 
percent of the bills resources go to a broad-based and marriage-penalty 
tax relief.
  The bill also phases in a doubling of the standard deduction to 
finally eliminate the marriage penalty. In addition to lowering federal 
income taxes by eliminating the marriage penalty for 567,170 New Mexico 
families, it will also save New Mexicans $72.4 million in New Mexico 
income taxes as well! Getting married would no longer be a taxable 
event.
  The bill increases the child care credit. It increases the credit for 
families with AGI incomes under $30,000. By 2006, the credit will be 40 
percent. This means that 29,042 New Mexican families will get more help 
with their child care expenses and this is a real helping hand because 
child care can cost as much as $3,133 to $5,200 a year per child. These 
29,042 families with child care expenses say, ``Mr. President, please 
sign this bill.''
  This bill improves tax treatment for education 7 ways. The 331,815 
public school students in New Mexico would be benefitted if this bill 
were to become law, so I say, ``Mr. President, please sign this bill.''
  This bill provides a deduction for prescription drug insurance, 
provides an extra exemption for the caretaker of elderly and infirm 
parents and grandparents, and provides a deduction for long term care 
insurance.
  43 percent of all Americans will need long term care at some point in 
their lives and 25 percent of all families are caring for an elderly 
relative today. It

[[Page 19815]]

is an emotional and financial commitment. The long term care deduction 
can help make it less of a financial burden. For the 19 million 
Americans expected to need long term care, I say, ``Mr. President, 
please, please sign this bill.''
  This bill cuts taxes by $43.9 billion by providing tax relief to 
families facing health care costs.
  The bill expands the deduction for health insurance so that everyone 
is treated the same regardless of whether they work for a big 
corporation with a fancy health insurance benefit plan, or whether they 
work for a small business that does not provided health insurance. This 
provision could help 43 million uninsured plus the 10.2 million who 
have access to health insurance but decline to participate because of 
the cost and it should help the 1.4 million children of self-employed 
who lack health insurance.
  In New Mexico this provision could have a big impact and make a big 
difference. We have 340,000 uninsured New Mexicans who belong to 
families where some in the family works.
  On behalf of all these people with no health insurance or with 
unaffordable health insurance, I ask, ``Mr. President, please sign this 
bill.''
  I have talked about why this bill is good for the American family. 
But there are two provisions that are good for the economy.
  Lowering the capital gains rate is the best economic policy and I am 
pleased that this bill lowers the top rate to 18 percent. I am also 
pleased that the bill increases expensing from $19,000 to $30,000.
  This bill also phases in a reduction of rates and then repeals the 
estate tax. The estate tax is perceived as one of the most confiscatory 
taxes of all time and it is one that disrupts small business and farms. 
I am pleased that the bill gets rid of the death tax. Dying should not 
be a taxable event.
  For all of the constituents who have written me about the unfairness 
of the death tax I say, ``Mr. President, please sign this bill.''
  The bill increases the amount that can be contributed for all IRAs. 
It is phased in so that eventually $5,000 a year could be contributed. 
The bill also increases eligibility for those who can participate in 
Roth IRAs and includes ``catch-up'' contribution limits for people aged 
50 and over.
  For the 15 million people who would be helped by these retirement 
security provisions, I say, ``Mr. President, please sign this bill.''
  The bill also does some things that really need doing. First it 
extends the R&E credit for five years. It also includes some 
desperately needed tax relief for the oil and gas industry.
  I am very pleased with this bill. It is fair, it is the right thing 
to do and it should be done before the money get spent on more 
government.
  I close today by saying I have been working on budgets for a long 
time. I have heard criticisms of budgets that we produced, and we have 
criticized budgets that the opposite side produced.
  The criticism of this tax cut, phased in over 10 years, is beyond 
anything I could ever have imagined. With surpluses of this size, for 
the White House and those who oppose it to be inventing numbers and 
accusations that are totally unfounded is something I never expected. 
As a matter of fact, there is even concern about the moderate economic 
assumptions in this budget. We grew at 6 percent the year before last, 
4\1/2\ percent last year, over 2 percent this year, and we plan the 
next decade to grow at 2 to 2.3 percent, a very modest growth. We even 
plan two recessions in there, and we still get these surpluses.
  Frankly, I think they are fair projections. At least they are fair 
enough to make sure we don't risk them being spent. All we are saying 
is, over the next decade set this much aside, just don't collect it. We 
are not going to cut taxes. We are just not going to collect it. It 
will stay with the American people. It is going to be phased in.
  Fellow Americans, it will take a while for some of them, but maybe we 
should ask the question for the other side and the White House who are 
critical that it takes too long for them to come in, When will their 
taxes come in? When will their tax reductions come? Perhaps never.
  Mr. MOYNIHAN. On behalf of the distinguished Republican chairman and 
manager of the bill, I yield 10 minutes to the Senator from Florida.
  Mr. MACK. I thank my distinguished colleague for yielding me that 
time.
  Mr. President, the vote on our tax relief bill is nothing less than a 
vote of confidence, reaffirmation of our belief in the wisdom of the 
American people and of our faith in the capitalist system. It all boils 
down to one basic, fundamental question: who has first claim on the 
income of Americans--does it belong to the government or to the 
individual families who create the income through the sweat of their 
brows and the genius of their (brains?)
  The President and the vast majority of our friends on the other side 
of the aisle act like the money belongs to the government. They reject 
our tax relief bill as ``too big,'' as if taxpayers earn income at the 
sufferance of the government. Under this view, Uncle Sam does not live 
under a budget he sets the budget for every American family, which must 
be content with the table scraps after the enormous appetite for 
spending in Washington has been satiated.
  Two and one-quarter centuries ago, the rejection of this arrogant, 
government-comes-first theory of taxation was the impetus for the 
founding of our Nation. Our political forefathers would not stand for 
the notion that Americans were mere pawns of a distant court, which 
could raid their purses and pocketbooks at any whim. America was 
founded not on concepts that divide peoples, such as race, or 
geography, but on the American Idea that brings us all together: the 
inalienable right to liberty.
  From our Nation's very conception, this idea has served as a beacon 
for people of all creeds and colors seeking refuge from he heavy hand 
of meddlesome government. In America, the government serves the people, 
and must necessarily trust the people to do what is right by and for 
themselves. The government should not try to do it all. We provide a 
safety net for the least fortunate, those who cannot help themselves, 
but everyone else is trusted with the responsibility of providing for 
their own financial security.
  And by all accounts, this combination of liberty for our citizens and 
restraint on the part of the public sector has, in fact, succeeded. By 
the end of the 19th Century, America was in the forefront of the 
Industrial Revolution. By the mid-20th Century, despite the MIRE of a 
worldwide depression, the United States was able to mobilize its 
industries and its men to rout one own of the twin evils of tyranny in 
the Second World War. And by the close of this Century, we succeeded in 
defeating the other Soviet Communism, by the force of our will, the 
commitment of a strong Commander-in-Chief, Ronald Reagan, and the power 
of our competing idea of liberty. Our Nation is President Reagan's 
shining city on a hill, the economic envy of the world and the 
destination of all who yearn for freedom.
  But this President and his supporters in the Congress just don't get 
it. The tax burden on our citizens is at an all time, peacetime high--
20.6 percent of the economy. Meanwhile, the federal government will be 
overcharging the taxpayers by more than $3 trillion over the next 10 
years. A Nation that trusted its people, that protected their liberty, 
would not flinch from the right thing to do: cut taxes so that our 
families can enjoy the fruits of their labors, instead of greedy 
Washington programs. This tax bill does just that, leaving $792 billion 
in the hands of the people to whom it belongs.
  This tax cut is a measured, balanced response to the surpluses that 
will be flowing into the capital. It leaves 75% of the surpluses to be 
used to retire debt, and finance important priorities like Medicare and 
national defense. Every penny in the Social Security trust fund is left 
in a lockbox to be used to shore up the retirement security of our 
citizens. And the tax cuts are phased in over time, so the bulk of the 
cuts are in the last 3 years of the coming decade, when surpluses would

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otherwise skyrocket and tempt a government spending spree.
  But voices are raised in opposition to the tax cut. It is said that 
the government cannot afford a tax cut of this size. But that is 
exactly backwards: our taxpayers cannot afford to continue to shoulder 
a record-high tax burden. Back in 1993, without the vote of a single 
Republican member of Congress, President Clinton pushed through a tax 
increase totaling $241 billion over 5 years. The rationale for this tax 
increase was the need to reduce our budget deficit. Well, the budget 
deficit is gone and we now have surpluses as far as the eye can see. 
The on-budget, non-Social Security surpluses will exceed $1 trillion 
over the next decade. We propose to let the American people keep $792 
billion of these overpayments. Is that too much?
  Not when you consider that the 5-year tax cut of $156 billion pales 
in comparison to the Clinton tax hike, imposed on what was then a much 
smaller economy. According to my Joint Economic Committee staff, the 
1993 Clinton tax increases will take some $900 billion from the 
American people over the next decade. Our tax cut of $792 billion does 
not even offset the lingering ill effects of that tax hike. Are we 
being too generous? Or have the taxpayers been too generous for too 
long?
  It is hard to find fault with the specifics of our tax cut package. 
Is it right that we should double-tax business investments, so our 
innovators lack the resources for research and development? Is it wrong 
to extend the R&D tax credit, to liberate our scientists and engineers? 
Is it right that people should pay higher taxes just because they are 
married? Do we want people to build their own nest eggs for retirement 
security, or do we want to force everyone to rely exclusively on the 
Social Security system?
  This tax relief package helps everyone. We make health and long-term 
care insurance fully deductible, and allow a dependent deduction for 
elderly family members. Education is more affordable through enhanced 
savings vehicles--IRAs and pre-paid tuition plans. Tax rates are 
lowered across-the-board. We eliminate the marriage penalty for 
taxpayers in the lowest tax bracket and repeal the Alternative Minimum 
Tax for individuals.
  Most significant is what this tax relief does for our future. As we 
enter the 21st Century, America needs a tax policy that will 
facilitate, not smother, innovation and new technology. Our tax relief 
bill improves the environment for pioneers in new products and 
services. The R&D tax credit is extended for 5 years--the longest 
extension ever, so business can count on it. The R&D credit will 
continue to fuel innovation in new technologies, leading to health and 
safety breakthroughs, and enriching our quality of life.
  Capital gains tax rates are also cut to their lowest levels in 58 
years. Lower taxes on capital gains will help our entrepreneurs find 
the seed capital they need to launch new businesses, create new jobs 
and provide new products and services. And capital gains are indexed, 
eliminating the tax on phantom gains due to inflation--ending the 
government raid on the savings of long-term investors, particularly 
retirees.
  We also eliminate the most unfair tax of all, the estate and gift 
tax. No longer will business owners be discouraged from reinvesting 
their hard-earned profits because the specter of the federal death tax 
is hovering, waiting to swoop down and scoop up 55 percent of the 
increased value of the business. By eliminating the death tax, cutting 
the capital gains tax, and expanding IRAs, some of the largest barriers 
to capital formation are pulled down, and the result should be a rising 
tide of investment that carries our economy through the coming Century 
of Knowledge.
  I want to commend Chairman Roth, and all of the conferees, for 
producing a balanced, thorough, and fair tax cut that benefits all 
taxpayers. High taxes are an infringement on the liberty of our 
families, who should not be struggling to make ends meet while their 
Federal servants hoard the wealth our families have created. When the 
question comes down to whether we trust the Federal Government or the 
family to use money wisely, I choose the family every time. I urge my 
colleagues to do the same, to side with the people, not the 
bureaucracy, and vote for the conference report.
  I yield the floor.
  Mr. STEVENS. Mr. President, I am pleased that the Conference Report 
of the Taxpayer Refund Act of 1999 contains tow amendments I authored 
to extend the same tax benefits that farmers have to fishermen. The 
original version of the Taxpayers Refund Act of 1999 included 
provisions to create farm and ranch risk management (FARRM) accounts to 
help farmers and ranchers through down times and to coordinate income 
averaging with the alternative minimum tax. The FARRM accounts would be 
used to let farmers and ranchers set aside up to 20 percent of their 
income on a tax deferred basis. The money could be held for up to five 
years, then it would have to be withdrawn and taxed at that time. 
Interest would be taxed in the year that it is earned.
  Encouraging farmers and ranchers to set some money aside for 
downturns in their markets makes sense. However, I felt this provision 
should have been expanded to include fishermen and I offered an 
amendment that would do just that.
  I also authored an amendment to expand income averaging to include 
fishermen and to coordinate averaged income with the AMT I am proud to 
say that both measures had broad bi-partisan support, and I want to 
thank those who cosponsored my amendments.
  Allowing fishermen to elect income averaging and coordinating that 
election with the AMT is important to the overall issue of tax fairness 
under the tax code. Under my amendment, a fishermen electing to average 
his or her income would owe AMT only to the extent he or she would have 
owed alternative minimum tax had averaging not been elected.
  In previous years Congress has responded to fishing disasters with 
Federal assistance under the Magnuson-Stevens Act. We do the same for 
farmers when crop disasters occur. Allowing fishermen, like farmers, to 
establish risk management accounts, is a responsible way to let them 
help themselves and preserve the proud self-reliance that marks their 
industry.
  Fishermen are the farmers of the sea. Fishermen and farmers share 
seasonal cyclical harvest levels and fishermen should not be left 
behind in the tax code because of this. While these amendments are 
modest steps toward equal treatment for our fishermen, they are an 
important part of ensuring the long-term sustainability of our fishing 
industry.
  In addition to the provisions in this bill for America's fishermen, 
I, along with my colleague, Senator Murkowski, included a measure to 
allow Eskimo whaling captains to deduct up to $7,500 dollars of their 
expenses incurred during whaling hunts. This provision allows whaling 
captains to continue the tradition of sharing whale meat with Alaska 
villages.
  It is the custom that the captain of a whale hunt make all provisions 
for the meals, wages and equipment costs associated with the hunt. In 
return, the captain is repaid in whale meat and muktuk, a consumable 
part of a whale. The captain is then required, by tradition, to donate 
a substantial portion of the whale to his village. This provision will 
allow the captains to deduct for the costs involved since they do not 
recoup the actual costs from their share of the whale meat. This 
provision is important to the heritage and traditions of the Alaskan 
Eskimos, and I am pleased that it was included in this bill.
  This tax refund plan is just that--a tax refund for every tax paying 
American. Every American would see a reduction in their Federal income 
taxes in the form of a refund. When you are overcharged for an item in 
a store, you march back in and demand the difference between the actual 
price and the amount you were charged. The American taxpayers cannot 
march up

[[Page 19817]]

the front steps of the Treasury demanding a refund of their 
overpayments to Uncle Sam. We in Congress must do that for them.
  Some would not like to see this measure pass because they feel it 
does not reduce our national debt. However, this bill contains 
provisions to ensure that the goal of debt reduction is met. The debt 
triggers included in this package would halt any future refund measures 
under this bill until our debt reduction goals are achieved. This is a 
good balance because it allows us to send money back to the American 
people while reducing our debt load. Under this bill, one cannot happen 
without the other.
  I urge my colleagues to support this meausre and I thank the 
leadership of chairman Roth and the members of the Finance Committee in 
organizing and authoring this sweeping tax refund bill.
  Mr. GORTON. Mr. President, I rise to express disappointment in the 
way this tax legislation takes a piecemeal approach toward electricity 
issues. It deals with only one of the three major provisions that need 
revision if this industry is going to meet the requirements of all 
citizens and ratepayers in an era of emerging competition.
  The electricity industry is in transition. Wholesale competition 
between utilities and suppliers is becoming a vibrant and competitive 
market, although there is still work to be done to make this market 
work more effectively. Consumers have benefited from lower prices and 
increased supply although the benefits have been invisible to many 
retail consumers. And nearly half of the states have moved to develop 
their retail electricity markets to give more consumers the chance to 
shop for their power provider.
  But the federal tax provisions that affect this industry were written 
for a monopoly era. This has the real effect of keeping many utilities 
from participating in competitive markets due to the penalties they 
would incur solely because of outdated tax provisions. If these 
utilities are somehow forced to respond to competition without the 
needed changes, rates would rise only because of laws written for a 
time before competition was imagined.
  This bill addresses only one of these tax problems, the taxation of 
nuclear plant decommissioning funds. This benefits the investor-owned 
utilities interested in buying or selling nuclear plants. Two other 
areas need to be addressed to prevent other consumers from being 
penalized: the private use restrictions on municipal and public power 
systems, and the restrictions on electric cooperatives when costs or 
revenues are incurred during the transition to more extensive 
competition.
  In my state we have a healthy mix of suppliers of electricity: 
investor-owned utilities, cooperatives, municipalities and public 
utility districts. These three major sectors of the industry should 
have their tax problems addressed at the same time.
  I hope Chairman Roth and Chairman Murkowski will keep their 
commitment to hold a hearing in the tax-writing committee in September, 
with an eye toward resolving these tax issues as expeditiously as 
possible.
  Mr. DASCHLE. Mr. President, as we approach final passage of the 
reconciliation conference report, I would like to put what we are about 
to do in proper perspective. Although some have characterized this 
process as politics as usual or political posturing, I do not see it 
that way. What the House has done, and the Senate is about to do, is 
serious business, not a political game.
  We are about to vote on legislation that affects this nation's 
economic and fiscal health and well-being. It will affect the live of 
millions of Americans for decades to come. The stakes could not be 
higher.
  And when you boil away all the rhetoric heard during this debate, 
what you really have is a tale of two paradigms. The Republican plan is 
an old and familiar one. Republicans would take us back to 1981 and the 
failed economic policies of that era. These policies can best be 
characterized as wishful thinking that led to a fiscal disaster.
  The Democratic position is that we should follow the model Democrats 
put in place in 1993 and continue to pursue to this day. Our plan 
turned record deficits into record surpluses and halted the 
skyrocketing growth of federal debt. At the same time, we have 
experienced the longest peacetime economic expansion in our history. 
The Democratic plan is one of fiscal responsibility and economic 
prosperity.
  In addition to giving us the strongest economy in a generation, the 
politically difficult vote cast by Democrats nearly 9 years ago 
provided something else. It provided this Congress with an historic 
opportunity--sustained economic health and the possibility of actual 
budget surpluses.
  The question facing this Congress at this time is, which road will we 
take--the fiscally responsible path or the fiscally dangerous one? Will 
we opt to build on our success or put our nation's fiscal health at 
risk yet again?
  As I have listened to many of my colleagues on the other side of the 
aisle, I am struck by how familiar many of their arguments sound. I am 
hearing some of the same dangerous rhetoric and false rosy scenarios 
that I heard last decade.
  And as I look at their bill, I see many of the same special interests 
disproportionately benefitting from their actions. Make no mistake 
about it. When it comes to irresponsible tax cuts tilted to the 
wealthy, the Senate bill was bad, and the conference bill is much 
worse. Let me cite a few examples.
  Under the terms of the bill before us, the bottom 60 percent of 
taxpayers would receive an average tax cut of just $138. That's about 
25 cents a day, not even enough for a cup of coffee. At the same time, 
Republicans feel it is appropriate to provide the top 1 percent of 
taxpayers, people with incomes over $300,000, an average tax cut of 
over $46,000. A cup of coffee for most, $46,000 for a few.
  To further highlight the skewed nature of this cut, people earning 
over $300,000 would receive more than 40 percent of the $792 billion in 
tax relief provided by this bill. Meanwhile, people making between 
$38,000 and $62,000, the heart of this country's middle class, would 
receive 10 percent of the tax cuts in this bill. Once again, much for a 
few, and little for many. It's hard to see how anyone could 
characterize this as fair.
  While providing these huge tax cuts for a few, the Republicans opt to 
set aside nothing for prescription drugs for Medicare beneficiaries.
  In order to generate the surpluses necessary to pay for their 
monstrous tax breaks, Republicans require drastic cuts in education, 
veterans' health, defense and agriculture. If our military were funded 
at the level requested by the President, the Republican budget would 
force across-the-board domestic discretionary cuts of 38 percent below 
their level today. If defense were fully funded and Republicans 
followed the plan laid out by Chairman Domenici, these cuts would grow 
to 50 percent.
  A final consequence of Republican recklessness is that they would 
force $90 billion in cuts to Medicare, student loans, veterans' 
benefits and many other programs on top of cuts I just described. The 
budget rules are clear on this. If tax cuts are not budget-neutral, the 
law requires across-the-board cuts in many mandatory programs. The 
Republican plan would require $32 billion in Medicare cuts over the 
next 5 years. And starting in 2002, the Republican plan would eliminate 
the Commodity Credit Corporation, crop insurance, child support 
enforcement, and veterans' education benefits.
  As I said earlier, we have this historic opportunity, and this is how 
the majority responds. They fail on at least three counts. First, 
Republicans would set out on an irresponsible fiscal policy. As history 
has painfully proven, their tax cuts would inevitably lead to bigger 
deficits and more debt.
  Second, they are pursuing an irresponsible national policy. Their tax 
cuts would explode just as baby boomers retire, eating up scarce 
resources that will be needed if the government is to keep its 
commitments on Medicare and Social Security.
  Third, as Republicans have known from the outset, engaging in this 
reckless and risky course will only produce one outcome--a Presidential 
veto. The President has been clear: he will veto this bill. And I am 
confident that the

[[Page 19818]]

vote on final passage will show equally clearly that this veto will be 
sustained.
  Instead of wasting Congress's and the American people's time with 
this vainglorious pursuit, we should be working together on a fiscally 
responsible plan that protects the entire Social Security surplus, 
strengthens and modernizes Medicare by extending its solvency and 
providing a prescription drug benefit, pays down the debt, provides 
targeted tax relief for working Americans, and invests some of the non-
Social Security surplus in critical priorities such as defense, 
education, veterans' health, and agriculture.
  The size of the projected surpluses are sufficient to permit all of 
this. Yet, the Republicans insist on pursuing a course that neglects 
all but the tax cuts and is certain to produce a veto.
  We have seen this course before. On juvenile justice, on the 
Patients' Bill of Rights, on gun control, on their overall budget plan, 
and on this bill. Time and again the Republican Congress has opted to 
follow a path outlined by ideological extremists. A path that focuses 
attention on special interests instead of the nation's interests. A 
path that wastes precious time and fails the American people when it 
comes to truly addressing their concerns.
  When we return from the August recess, this Congress will have about 
30 working days until our target adjournment date in October. I hope 
that when we come back in September, we can focus our limited time on 
the people's business. I ask that my colleagues reject this bill today, 
and begin that process immediately.
  Mr. CHAFEE. Mr. President, the Taxpayer Refund and Relief Act 
contains many provisions which I support, as well as some which I would 
not vote for if considered on their own merits.
  Let me just highlight some of the more commendable provisions in the 
bill which I hope will be included in any final tax legislation the 
President may sign:
  I am pleased the bill includes reforms to the Alternative Minimum Tax 
(AMT). This tax was never intended to apply to families, nor to be 
triggered by the number of exemptions they might claim.
  In the health care area, this bill includes some important changes. 
First, it provides a health insurance deduction to individuals whose 
employers provide no subsidy, regardless of whether or not the 
individual itemizes. In addition to this deduction, the bill includes a 
similar deduction for the purchase of long-term care insurance that 
will help aging Americans pay for the care they need.
  This bill includes a number of provisions which would strengthen 
retirement security, both by encouraging more private savings and by 
reforming and simplifying our pension laws. These reforms would 
eliminate many of the administrative burdens which discourage 
businesses from offering their employees pensions, and would also 
provide for higher contribution limits.
  The bill includes a repeal of the 4.3 cent per gallon diesel fuel 
excise tax which railroads (including Amtrak) and inland barge 
operators have been required to pay toward deficit reduction. This 
change would enable these modes of transportation to compete more 
effectively by reducing their costs.
  By making the Dependent Care Tax Credit available to more families, 
this bill would help to make child care affordable for more families. 
In addition, the bill includes a provision to extend the adoption tax 
credit and to strengthen the credit for the adoption of special needs 
children.
  The bill proposes to extend the Work Opportunity Tax Credit, a 
program I have long championed, which encourages employers to hire and 
train disadvantaged and unskilled workers.
  The marriage penalty relief provisions in the bill are aimed at 
moderate income families and those eligible for the Earned Income Tax 
Credit.
  The bill also includes provisions which will improve the 
deductibility of student loan interest, and which will help families 
save for college.
  The bill includes an expansion in the conservation easement rules to 
encourage more Americans to donate land for the preservation of open 
spaces.
  The bill also contains a deduction to encourage the restoration of 
historic residential properties. I would have preferred that the 
credit, as included in the Senate bill, had prevailed rather than the 
deduction, but this is a good start.
  Importantly, some of the income tax rate reductions contained in the 
bill are made contingent upon progress toward debt retirement. Failing 
such progress, up to $200 billion of tax cuts would not take place.
  While I will vote for this measure to keep the process moving toward 
an expected presidential veto and final budget negotiations with the 
White House, I would much prefer a smaller bill, such as the $500 
billion bipartisan compromise plan which I--along with Senators Breaux, 
Jeffords and Kerrey--pressed during Finance Committee and floor 
deliberations on the tax bill.
  Because of the uncertainty of projecting budget surpluses over a ten-
year period, and given all of the other priorities we face, I am simply 
not comfortable with an $800 billion tax cut. In my judgment, cutting 
taxes is only one of several important priorities toward which our 
budget surplus should be directed. Others include reducing the national 
debt; modernizing Medicare and adding a prescription drug benefit; 
strengthening Social Security for the long-term; and, ensuring adequate 
funding on an annual basis for important discretionary programs.
  Clearly, there are provisions I had trouble with.
  The bill includes a provision to encourage the establishment of 
Individual Education Savings Accounts to subsidize the cost of private 
school tuition for children in grades K-12.
  This bill would redirect revenues from the Leaking Underground 
Storage Tank Fund to the Superfund program. As Chairman of the 
Environment and Public Works Committee, I strongly opposed inclusion of 
this provision.
  Reducing the capital gains tax rate from 20 to 18 percent for 
individuals, as this bill proposes, seems unnecessary because this rate 
reduction was scheduled to happen in the near future.
  In sum, Mr. President, I am hopeful that negotiations between 
Congress and the Administration will begin in earnest after the 
President vetoes this bill in September. In my judgment, in addition to 
providing needed tax relief, those negotiations should also produce 
other critical benefits, including provisions to reduce our national 
debt, strengthen Medicare, and to fund discretionary programs.
  Mr. DODD. Mr. President, I rise this afternoon to regrettably oppose 
the conference report to the Year 2000 Budget Reconciliation 
legislation.
  With this conference report, the majority has succeeded in making a 
bad bill worse. Rather than using this conference to come together and 
attempt to develop a reasonable package, all of the objectionable 
features of the Senate-passed bill have been exaggerated, rather than 
moderated.
  First, the conference report further skews the benefits of its tax 
cuts towards those who need them least, and away from working families. 
We now have before us a conference report that includes a 1 percent 
across-the-board tax cut for all income tax brackets. We are led to 
believe that this provision is the center-piece of a package that 
constitutes broad-based tax relief. However, upon closer inspection, 
this clearly is not the case. Under this proposal, the bottom 60 
percent of taxpayers receive only 7.5 percent of the total tax cut 
benefits, while the top 10 percent of income earners receive nearly 70 
percent of the bill's tax cut benefits. Mr. President, I would not 
consider this broad-based tax relief.
  Perhaps the clearest example of how this conference report heaps its 
tax cut largesse on those who least need it is that it spends nearly 60 
billion dollars for the complete repeal of the estate tax. Again, the 
inclusion of full repeal of the estate tax within this conference 
report is a clear indication that its proponents do not wish to direct 
their tax cuts toward hard-working families who need and deserve a 
break. I believe in estate tax relief for farmers and small

[[Page 19819]]

businesses of modest means where it is necessary and appropriate. 
However, the beneficiaries of this provision are overwhelmingly not of 
modest means. They are the very, very affluent leaving estates worth 
millions of dollars. Mr. President, I fail to see how this specific tax 
cut helps the average family struggling to find affordable child care 
or to meet rising college tuition costs.
  Secondly, this conference report fails to meet critical domestic and 
military priorities upon which our nation's long-range prosperity and 
security depend. In order to accommodate the costs of a $792 tax cut, 
extensive cuts of nearly $511 billion will be necessary in domestic 
spending. If defense is funded at the President's request, cuts to 
domestic spending would reach almost 38 percent. As a result, over 
430,000 children would lose Head Start services, 1.4 million veterans 
would be denied much needed medical services from VA hospitals, and 
almost 1.5 million low-income people would lose HUD rental subsidies, 
forcing many into homelessness.
  Perhaps the clearest example of the conference report's failure in 
this regard is what the conferees have done to child care. Senator 
Jeffords and I offered an amendment to provide an additional $10 
billion over the next 10 years to the existing Child Care and 
Development Block Grant--almost doubling the children that would be 
served. It passed the Senate by voice vote. So it was surprising, not 
to mention disappointing, that this provision was summarily eliminated 
in conference. I intend to continue to work to see that Congress honors 
the commitment it made in the Budget Resolution to significantly expand 
funding for quality child care this year and in the years to come.
  Third, the conference report, like the Senate-passed bill, continues 
to pose an increased risk to our current economic prosperity. Federal 
Reserve Chairman Alan Greenspan testified before the House and Senate 
Banking Committees just days ago, urging caution about implementing a 
$792 billion tax cut at a time when the economy is performing so well. 
Chairman Greenspan stated that it would be better to hold off on an 
immediate tax cut because it is apparent that the current surpluses are 
doing a great deal of good to the economy. Moreover, he warned that 
Congress must also be prepared to cut spending significantly should the 
surpluses, upon which the tax cuts are based, not materialize. It is 
ironic to me that so many of our colleagues, who otherwise have had 
high and vocal praise for Chairman Greenspan's economic leadership, can 
so readily ignore his clear and repeated warnings about the 
consequences of their unrealistic and irresponsible tax plan.
  I have also noted with particular interest the comments of the 
esteemed Majority Leader in this week's newspapers where he has stated 
that an acceptable alternative to the Republican tax plan would be to 
``put the money in place so that the debt can be retired.'' This 
sentiment has also been echoed by the House Majority Leader. These are 
stunning admissions of the flawed nature of the conference agreement 
before the Senate today.
  Their ``all-or-nothing'' statements reasonably raise the question of 
how committed the majority is to this tax cut plan. Perhaps they are 
more committed to having a political issue than to giving working 
families a reasonable tax cut while also meeting our responsibilities 
to preserve and strengthen Medicare, Social Security, defense, and 
education. I fear that the Senate has been engaged in a fruitless 
political exercise.
  Mr. President, I worry that the majority has again squandered a 
unique opportunity to first maintain our current economic prosperity 
and then to address the legitimate needs of working families in this 
country. This legislation neglects to make much-needed investments in 
Social Security and Medicare, debt reduction, and critical defense and 
domestic priorities. The President has promised repeatedly to veto this 
legislation. We should have no doubt about his resolve to do so. Then I 
hope that congressional leaders will get serious about working in a 
bipartisan fashion to craft a reconciliation bill that is sensible and 
responsible. We have worked too hard in this decade to rectify the 
wretched budgetary excess of the last decade. Now is the time for 
prudence and caution.
  Mr. REED. Mr. President, here we are again, debating a conference 
report on a ten year, $800 billion tax cut.
  This tax cut works on the assumption of a budget surplus that has not 
been realized yet--a surplus that is generated in no small part by 
already unattainable budget caps which will lead to a significant, 23% 
to 38% reduction in essential programs, including Pell Grants, special 
education, community policing, and drug enforcement.
  In my home state of Rhode Island, my constituents stand to lose $15.9 
million in Title I education funding and $11 million in Special 
Education funding. In addition, more than 17,000 Rhode Island students 
would be denied Pell Grants, and more than 2,000 children would be cut 
from Head Start programs. At a time when one in five children lives in 
poverty, can we really bear cuts of this magnitude?
  At a time when we are asking the government to respond quicker and 
perform better, particularly with respect to domestic and international 
crises, we are considering legislation that trades away the essential 
services that the American people count on in exchange for speculative 
tax cuts whose benefit will be fleeting.
  This legislation is also a threat to the future of Medicare. Indeed, 
at the point that Medicare teeters at the brink of insolvency in the 
next ten to twenty years, the cost of this tax cut could balloon to $2 
trillion.
  We know that we must take steps as soon as possible to shore up 
Medicare and Social Security. A responsible use of the surplus would be 
to make a reasonable allowance for essential programs, address the 
long-term solvency of Social Security and Medicare, and pay down the 
federal debt. Then, we should consider a targeted reductions for 
America's working families.
  Of course, everyone realizes that we cannot continue to live under 
the spending caps. In May, a group of eight House Republicans wrote the 
President, stating, ``A rational compromise is needed to adjust the 
caps and maintain them for future years at achievable levels.'' If the 
most ardent architects of the caps are now having second thoughts, 
there is little reason to expect they can be observed in the future.
  But, we are already breaking the caps with ``emergency'' 
appropriations--appropriations that do not count against the caps.
  What is an ``emergency'' appropriation exactly? Apparently, it is 
anything the Majority wants it to be. Just the other day, the House 
passed legislation designating part of the funding for the 2000 Census 
an ``emergency''. As conservative columnist George Will noted, we have 
known about next year's Census since 1790. How could it be an 
``emergency''? Mr. President, since the end of fiscal year 1998, 
Congress has approved approximately $35 billion in ``emergency'' 
spending. One wonders how many other ``emergencies'' like the decennial 
census are looming.
  Beyond the massive cuts to essential domestic initiatives, this tax 
bill depends on the performance of the economy. But, Mr. President, 
after the longest peacetime economic expansion in history, can we 
continue to count on a robust economy for another year, for another 
five years, for another ten years? The bill before us depends on this 
sort of gamble.
  Ironically, this tax cut could be just the thing that stalls our 
economic growth. Recently, fifty economists, including 6 Nobel 
Laureates, wrote that this tax bill will stimulate the economy at 
precisely the wrong time.
  Even Federal Reserve Chairman Alan Greenspan, usually a strong 
supporter of tax cuts, has taken a cautionary view toward these tax 
reductions. The New York Times reported of his testimony on the Hill 
last week.

       The subject [of tax cuts] came up several times, and Mr. 
     Greenspan's message was stern: Don't do it. ``I'm saying hold 
     off for a while,'' Mr. Greenspan said . . . ``And I'm saying 
     that because the timing is not right.''
       Mr. Greenspan urged Congress to pay down the debt and delay 
     any tax cut until the

[[Page 19820]]

     economy begins to turn down. ``The business cycle is not 
     dead,'' he warned, telling lawmakers that whenever an 
     economic slowdown hits, ``a significant tax cut'' may be 
     needed to ward off recession.

  In all respects, this legislation lacks proportionality. Fortunately, 
this bill, even if it passes the Senate and is sent on to the 
President, will be vetoed. It is regrettable that we have wasted so 
much time on this bill, when, instead, we could have focused on truly 
important issues like preserving Social Security and Medicare. Now that 
the political play has been made, I hope that we can return to 
substantive work on issues that really matter to the American people.
  Mr. HATCH. Mr. President, today we are considering a bill to return a 
portion of the surplus that is projected to be $2.9 trillion over the 
next ten years. This bill represents a balanced package that takes into 
account the problems as well as sharing in the good times. The bill 
will provide fiscally responsible tax relief over the next ten years 
while reducing the public debt and still save the $1.9 trillion Social 
Security surplus.
  Many of my colleagues have argued that $792 billion in tax cuts is 
too much--that we should save this money for Medicare and other 
spending. I strongly disagree. It is important that we not forget those 
who are responsible for the surplus--hard-working, over-paying 
taxpayers. After all, what is a surplus--it is excess revenues over the 
amount needed to fund government operations.
  The $2.9 trillion surplus is large enough to balance our priorities. 
This Conference Report shows that we can provide meaningful tax cuts, 
provide for Medicare reform, and reserve the Social Security surplus.
  I also marvel at how much we have recently heard from my colleagues 
on the other side of the aisle about debt reduction. I never knew the 
depth of their convictions on this, particularly since they fought the 
balanced budget amendment so hard. The balanced budget amendment would 
have once and for all imposed spending restraints on Congress. The 
majority of my colleagues on the other side of the aisle argued 
vigorously against such constitutional restraints, implying that they 
wanted unlimited access to the government checkbook.
  In my view, if we have a surplus, and we do not have a tax cut, the 
temptation of Congress to spend that surplus will be too great. I made 
this point many times during debate on the constitutional amendment to 
balance the budget, and I will make it again. If we have a surplus, 
this money will burn a hole in Congress' pocket.
  This conference report provides tax cuts for everyone by cutting tax 
rates 1% across-the-board. This may not sound like much, but it 
represents real tax cuts for each and every taxpayer. In addition, 
couples filing married returns will see their marriage penalty 
eliminated. It is sending the wrong signal to American taxpayers when a 
couple in Utah faces a higher tax bill when they marry than they do as 
singles. The bill also helps our families struggling to finance a 
quality education for themselves and their children.
  The bill also addresses the need for enhanced retirement security. It 
makes IRAs more widely available and improves retirement systems to 
increase access, simplify the rules, increase portability and provide 
small business incentives.
  We have all heard about the challenge that providing adequate health 
care that is facing American families. This bill provides meaningful 
help for those who are struggling with the costs of insurance.
  This bill also contains provisions that would help keep economic 
growth strong. There is a package of international tax relief that 
provides simplification and helps American companies which have 
operations overseas remain competitive and continue to grow. The 
expiring tax credits are extended.
  I am disappointed that the research and experimentation tax credit 
was not made permanent. I still believe that our American research 
engine would be helped significantly by relieving the uncertainty that 
a sunsetted credit imposes. Nevertheless, the 5-year extension in this 
bill is a step in the right direction. I hope that we can revisit this 
issue in the future and provide for a permanent tax credit for research 
and experimentation.
  This conference report contains some important improvements over the 
Senate bill. I am particularly heartened to see the full repeal of the 
estate tax and capital gains tax relief as part of this bill.
  The ``death tax'' is unfair and inefficient. For every dollar that we 
collect, roughly 65 cents is spent complying and collecting this tax. 
This is the wrong way to use up our resources.
  This bill also accelerates the capital gains tax rate cuts we passed 
in 1997. In addition, it will shorten the required holding period of 
assets from 5 years to 1. This will provide significant simplification 
for those taxpayers struggling to determine which capital gains rate 
applies and how long they have held their assets. This is true 
simplification and real relief. And, let's make no mistake: these tax 
changes will benefit more Americans than just the wealthy. These estate 
tax and capital gains tax provisions will benefit every American who 
owns a home, business, or family farm. It will benefit the increasing 
number of Americans who are investors in mutual funds and other 
securities.
  It is easy for us to get lost in the debate over numbers and how we 
should spend the surplus. However, we must keep in mind who sent us the 
revenue that created the surplus. We are talking about families 
struggling to make ends meet, provide an educations for their children, 
or save for their retirement. They are the family funning the corner 
grocery store or landscaping business. They are bus drivers, day care 
providers, carpenters, and students.
  This conference report is a balanced tax cut package that provides 
relief for middle class taxpayers. It gives American families a well-
deserved tax break, simplifies the tax code, and provides pro-growth 
incentives to help keep the economy strong and growing. This $792 
billion bill is the biggest tax cut since the Ronald Reagan presidency. 
Yet, it still represents a rebate of only one-quarter of the surplus 
dollars that the federal government has collected. I hope that the 
President can agree that we owe the American taxpayers that much and 
sign this legislation.
  Mr. MURKOWSKI. Mr. President, I rise to speak in strong favor of the 
Conference agreement that will provide every single American a well 
deserved refund of the taxes they are now overpaying as the government 
runs a surplus.
  I especially want to commend Chairman Roth for the extraordinary work 
he did in what must be record time to produce this Conference report. 
My colleagues should recollect that barely 6 days ago today that the 
tax bill was adopted on the floor of Senate.
  And now we are here with a completed conference report. The work of 
the Chairman, Finance Committee staff and the Joint Tax Committee staff 
is to be applauded. They all labored long hours and the result is a 
bill that I am proud to support.
  The Congressional Budget Office (CBO) projects that the total budget 
surplus over the next 10 years will be $2.9 trillion. Nearly a trillion 
dollars ($996 billion) of that surplus ($996 billion) comes from 
overpayments of income and estate taxes.
  What this tax bill does is return barely 25 percent of the surplus 
tax payments and return that money to the American taxpayer. All of the 
$1.9 trillion Social Security surplus will be used solely for 
preserving Social Security. And, as a result of this bill, we have more 
than $200 billion available for saving Medicare and paying down part of 
the debt.
  Mr. President, yesterday, President Clinton reiterated that he will 
veto this bill because he believes the tax refund is too large.
  The fact is that what the President wants to do is not provide a tax 
refund to the American public, but instead he wants to use the surplus 
to finance $1 trillion in new federal spending. And despite his claim 
that he wants to cut taxes by $300 billion, CBO scored the

[[Page 19821]]

President's budget as actually raising taxes by $100 billion over the 
next 10 years.
  In other words, at a time when we are running real surpluses in the 
hundreds of billions, the President comes along and wants to impose 
even higher taxes on the American people so he can finance more big 
government.
  The bill before us should not be vetoed because it provides a tax 
refund to every single American who pays taxes. The lion's share of the 
tax cut--nearly $400 billion--results from cutting the 15 percent rate 
to 14 percent and the near elimination of the marriage penalty.
  Is that what President Clinton objects to--reducing the tax rate paid 
by the lowest income taxpayers? Or does the President object to 
elimination of the marriage penalty? That must be the case Mr. 
President, because if the President had his way and we cut taxes by 
$300 billion, we could not eliminate the marriage penalty; we could not 
cut the rate paid by the lowest income earners.
  The bill also provides rate relief for all bracket taxpayers over the 
next 10 years. A modest 1 percent reduction in all tax rates is surely 
something we can afford with a trillion dollar surplus. I find it hard 
to believe that the President would object to such a modest change.
  The conference report also contains the Senate provisions that up the 
limit on contributions to Individual Retirement Accounts (IRAs) to 
$5,000. Moreover, it retains the provision in our bill that allows 
increased contributions by people over 50.
  In recent months, we have seen that the American savings rate is 
actually a negative number. These incentives could well serve to 
increase our savings rate. Is that what President Clinton objects to--
enhancing retirement savings incentives?
  Or does the President object to the health care provisions in this 
bill. Health care changes that bring a much needed level of equity to 
the tax code?
  Allowing the self employed to deduct 100 percent of the cost of 
health insurance finally brings small business to parity with large 
corporations.
  And for the first time in our history, employees who pay for more 
than half of their own health insurance will be able to take an above-
the-line deduction for those costs.
  I thought the President was so concerned about the uninsured? Why 
would he veto a tax bill that finally provides health equity to 
employees and small business owners?
  The conference report will also serve to continue the flow of money 
into equity markets by cutting the capital gains rate to 18 percent for 
all transactions that took place after January 1, 1999. I believe the 
capital gains rates should be even lower, but with the resources at 
hand this is an appropriate change.
  One of the most important changes in the conference report is the 
phase out and ultimately, in 2009 the elimination of the estate tax. 
This onerous tax punishes the hard work of many Americans and the death 
of this tax is long overdue. Confiscatory estate tax rates of 55 
percent should, if this bill becomes law, finally be a relic of 
history.
  This conference report will be sent to the President when we return 
in September. He has one month to reconsider his reckless veto threat. 
The American people deserve a tax refund. This conference report 
provides very modest and long overdue relief. I urge my colleagues to 
support this bill and I ask the President to reconsider his veto 
threat.
  Mr. LEAHY. Mr. President, Congress went on a tax cut binge in the 
1980s and left the bill for our children. Now that we have surpluses, 
we have a chance and an obligation to pay off that debt. The last thing 
Congress should be doing right now is to put our strong economy at risk 
by passing a tax scheme as risky as the Republican plan.
  Some of my fellow colleagues in Congress have gone off again on a 
binge of irresponsible tax cutting that puts our strong economy in 
jeopardy. Projections of budget surpluses in the future have gone 
straight to their heads--as if projected budget surpluses were like 
hard cider. It is time for my colleagues in the House and Senate to 
splash some cold budget reality on their faces and return to their 
economic senses.
  A sound economy rests on a solid foundation of balanced revenue and 
spending policies. For the past seven years, the President and Congress 
have build this solid foundation by reducing the deficit and 
restraining spending. Just as we Vermonters restrained spending and put 
Vermont's state budget in the black, Yankee thrift was alive and well 
in Washington, as it is in Vermont.
  President Clinton inherited a deficit of $290 billion in 1992 and his 
administration and Congress have steadily cut it down. For the first 
time since 1969, we now have a balanced budget.
  I am proud to have voted for the 1993 deficit reduction package, 
which was a tough vote around here, and has brought the deficit down. I 
am also proud to have voted for the 1997 balanced budget and tax cut 
package--tax cuts that were fully paid for by offsetting spending cuts. 
These balanced policies have kept interest rates down and employment 
up. In fact, over the past seven years, this deficit reduction has 
produced $189 billion in interest savings on the national debt, or 
roughly $2,700 in savings for every American family.
  Republicans and Democrats can rightfully claim their shares of the 
credit for getting the nation's fiscal house in order. The important 
thing is to keep our budget in balance well into the 21st century and 
keep our economy growing.
  That dose of Yankee fiscal discipline has paid off for Vermonters. 
Since 1993: Vermont's unemployment rate has been cut in half, from 5.8% 
to 2.9%; 20,000 new jobs have been created; Vermonter's average income 
has increased 25 percent; crime in Vermont has dropped by 15 percent; 
and the stock market has soared by 300 percent.
  Instead of keeping on this path of prosperity, the huge tax cut bill 
that Congress just passed veers from our successful fiscal discipline. 
It cuts taxes by $792 billion and pays for these sweeping cuts out of 
projected budget surpluses over the next 10 years. These surpluses are 
not real. They are just projections. What happens if we suffer a 
recession in three years or a depression seven years from now? These 
tax cuts are paid for by Monopoly money.
  But fooling with our strong economy is not a game. Passing risky tax 
cuts based on wishful thinking will have real consequences for 
Vermonters. It is estimated that paying for these huge tax cuts would: 
force more than 13,000 Vermont veterans to lose health care benefits; 
prevent any Medicare reform and new prescription drug coverage for 
senior Vermonters; drop 3,699 Vermonters from the WIC program; close 
off 2,116 Vermont students from Pell grants to help make college more 
affordable; and serve 11,127 fewer school lunches to Vermont children.
  Instead of this fiscal folly, I believe Congress should follow three 
basic principles to continue our strong economy and provide targeted 
tax relief. First, we must continue to keep our fiscal house in order 
and pay down the national debt. The national public debt stands at $3.6 
trillion--that is a lot of zeros. Like someone who had finally paid off 
his or her credit card balance but still has a home mortgage, the 
federal government has finally balanced its annual budget, but we still 
have a national debt to pay down. Indeed, the Federal government pays 
almost $1 billion in interest every working day on this national debt.
  It makes a lot more sense to pay off the national debt as our first 
priority, because nothing would do more to keep the economy strong. 
Paying down our national debt will keep interest rates low. Consumers 
gain ground with lower mortgage costs, car payments, credit card 
charges with low interest rates. And small business owners can invest, 
expand and create jobs with low interest rates.
  Alan Greenspan, head of the Federal Reserve, recently testified 
before Congress that: ``I would prefer that we keep the surplus in 
place and reduce the public debt.'' I agree with Mr. Greenspan and I 
believe most Vermonters do too.

[[Page 19822]]

  Second, we should put aside some of the surplus in a rainy day fund 
for Medicare and Social Security reforms. Just as we set aside extra 
revenue in a rainy day fund in Vermont, Congress should do the same on 
a national level. We all know that Congress must reform Social Security 
and Medicare for the future costs of the baby boom generation. This 
rainy day fund should also permit Medicare to cover prescription drug 
coverage for our seniors.
  One of the toughest and most important challenges that we face--right 
now--is to make sure that Social Security and Medicare will continue to 
be there for those who retire decades from now. The number of Social 
Security beneficiaries will rise by 37 percent from now until 2015, and 
Medicare runs into problems even earlier than that. Protecting Social 
Security and Medicare will not be easy, but these projected surpluses 
make it easier to keep both programs strong for future generations.
  Third, tax cuts should be fair and targeted to help all Vermonters, 
not just the wealthy. According to a Treasury Department analysis, the 
Senate-passed tax plan provides 67 percent of its tax breaks to the 
wealthiest 20 percent of Americans--those making more than $81,000 a 
year--while the poorest 60 percent of families would reap only 12 
percent of the Senate-passed tax cuts. That is not fair.
  This conference report is even more tilted in favor of the wealthy. 
According to an analysis by the Citizens for Tax Justice, the top 10 
percent of taxpayers would receive 69 percent of the benefits under 
this bill while the bottom 60 percent would receive only 7.5 percent of 
the benefits from the conference agreement. That means the average tax 
cut would be $138 for the bottom 60 percent of taxpayers while the top 
one percent of taxpayers would receive a tax break of $46,389. Again, 
that is not fair.
  Tax cuts that are targeted-- such as eliminating the marriage tax 
penalty, permitting the self-employed a full tax deduction for their 
health insurance and estate tax relief for family farmers and small 
business owners--also don't break the bank. I supported a more 
responsible alternative package of $290 billion in targeted tax cuts 
that would still leave room in the budget for Congress to make key 
investments in veterans, education and crime-fighting programs. I 
believe this targeted approach is far more prudent than the Republican 
tax cut plan.
  The enormous budget surplus that the Senate leadership claims is 
available to pay for nearly $800 billion in tax cuts is achieved only 
by unrealistic economic assumptions and deep cuts in programs that will 
never be attained. That is why I cosponsored an amendment filed by 
Senator Rockefeller that assumes there will only be a $100 billion 
surplus over the next ten years. This projected surplus is consistent 
with estimates by the Concord Coalition, Center for Budget and Policy 
Priorities, former CBO director Robert Reischauer and the Citizens for 
Tax Justice. The Rockefeller-Reed-Leahy amendment is a prudent and 
fiscally responsible approach that balances tax relief with reducing 
our debt and maintaining obligations to existing programs such as NIH 
research, veterans health, Head Start and the environment.
  I call upon President Clinton to follow through on his pledge to veto 
this irresponsible tax scheme. He should send Congress back to the 
drawing board to do it right. And the next time, Congress should apply 
a stout measure of Yankee thrift.


                         explanation of absence

  Mr. CRAPO. Mr. President, due to the wedding of my oldest 
daughter, Michelle Crapo, I will be unable to participate in the debate 
and vote on the Conference Report for H.R. 2488, the Taxpayer Refund 
and Relief Act of 1999. Had I been present, I would have cast my vote 
in favor of the measure.
  The Taxpayer Refund and Relief Act of 1999 is good news for America 
and will give individual income taxpayers the long-overdue tax relief 
they deserve. I am most pleased by the one percent across-the-board 
income tax cut for all individual tax rates and the marriage penalty 
relief provisions contained in the report. These provisions alone will 
go a long way towards reducing the tax burdens of the average Idaho 
family.
  I am also encouraged to see that the Conference Report eliminates the 
estate tax, provides alternative minimum tax relief, increases the 
annual contribution limits for individual retirement accounts and 
education savings accounts, and reduces individual capital gains tax 
rates.
  The Conference Report for the Taxpayer Refund and Relief Act of 1999 
is good for income taxpayers, the economy, and the nation. I urge my 
colleagues to support the report.


                              section 1317

  Mr. BREAUX. Mr. President, will the distinguished chairman of the 
Finance Committee yield for a question?
  Mr. ROTH. Mr. President, I will be glad to answer the distinguished 
Senator's question.
  Mr. BREAUX. Mr. President, the conference report for The Taxpayer 
Refund and Relief Act of 1999 states that section 1317 of the Senate 
amendment regarding prohibited allocation of stock in an S corporation 
ESOP was not included in the conference agreement. Is that report 
language correct?
  Mr. ROTH. Mr. President, that report language is not correct. The 
conference agreement adopted section 1317 of the Senate amendment 
without modification.
  Mr. BREAUX. Mr. President, I thank the distinguished Chairman for 
this clarification.


    Tax Treatment of Commissions Paid to Enroll Cellular Telephone 
                               Customers

  Mr. MURKOWSKI. Mr. President, the Senator from Louisiana, Mr. Breaux, 
the assistant majority leader, Senator Nickles, and I would like to 
engage Chairman Roth in a brief colloquy on an issue that several 
members of the Finance Committee have become involved in over the past 
several months.
  I refer to the fact that in some cases the IRS has taken what I 
believe is an unreasonable and unrealistic position regarding the tax 
accounting of sales commissions paid by providers of commercial mobile 
telephone service for enrolling customers. In the cases I refer to, IRS 
has contended that these costs should be capitalized and amortized over 
the average customer life, rather than deducted.
  Mr. BREAUX. I have been very concerned about this issue, as well. It 
seems to me that commissions paid by cellular telephone companies are 
like any other marketing expenses incurred by telephone companies--or 
any other companies--and are deductible under current tax law.
  Mr. NICKLES. I want to lend by voice to the positions expressed by 
both Senator Murkowski and Senator Breaux. It does not make sense to me 
that sales commission/costs can be anything but deductible.
  Mr. MURKOWSKI. This issue is not addressed in the pending tax bill 
because the Treasury Department has indicated to the Finance Committee 
that it is in the process of reviewing the IRS's position. We have been 
assured by Treasury officials that they plan to resolve the issue this 
year.
  The Treasury apparently agrees that the IRS may have gone too far.
  Mr. BREAUX. The IRS position would be difficult or impossible to 
administer. The position will lead to years of litigation, as companies 
and the IRS battle out whether commissions should be capitalized or 
deducted. That will drain resources from both sides for no productive 
reason.
  Mr. MURKOWSKI. We would like to ask Chairman Roth for his views on 
how this issue can be resolved expeditiously and efficiently.
  Mr. ROTH. I agree that this is an issue of concern to Finance 
Committee members. The cellular telephone industry is a high-growth, 
job-creating, industry. It is clear to any observer that the industry 
is frenetically competitive. Companies incur substantial marketing 
expenses, including sales commission, to attempt to sign up new 
customers and to entice customers to move from other carriers.
  I have little doubt that the IRS's position requiring companies to 
capitalize the sales commissions may lead

[[Page 19823]]

to years of litigation. The Treasury Department has made the decision 
to review the IRS's position. The agency included the issue in its 1999 
Priority Guidance Plan and has advised the Committee that they plan to 
deal with the issue this year.
  I strongly support the quick resolution of this issue by the Treasury 
Department. Sales commissions are a basic cost of doing business for 
cellular telephone companies, and I believe that the Treasury should be 
able to reach a sensible resolution of this issue.
  Mr. MURKOWSKI. I very much appreciate the chairman's thoughts and 
look forward to working with him and the Treasury to see this issue 
dealt with.
  Mr. BREAUX. I also appreciate the chairman's views on this. We are 
confident that the Treasury can resolve this issue satisfactorily, and 
we will be following events at the Treasury closely.
  Mr. NICKLES: I thank the chairman for sharing his views on this 
important issue. I hope it can be expeditiously resolved.
  Mrs. BOXER. Mr. President, this bill is a reckless tax plan. As a way 
to summarize my opposition, the following are my top ten reasons I 
oppose this bill.
  One, it is unfair to the middle class and the working poor. The 
average tax cut for a person who makes $30,000 per year is $311, 
compared to a tax cut of almost $46,000 for someone who makes more than 
$800,000 per year.
  Two, it threatens low interest rates. Alan Greenspan testified before 
the Senate Banking Committee last week--and I quote--``It's precisely 
that imprecision and the uncertainty that is involved which has led me 
to conclude that we probably would be better off holding off on a tax 
cut immediately, largely because of the fact that it is apparent that 
the surpluses are doing a great deal of positive good to the economy in 
terms of long-term interest rates.'' If interest rates go up just one 
percentage point on a $100,000 mortgage, the increased monthly cost is 
$70--in essence a tax increase on every homeowner.
  Three, there is not a dime in it for Medicare. As the Baby Boom 
generation begins retiring in 10 years, the Medicare situation will get 
larger, not smaller. This plan, by ignoring the issue, just compounds 
the problem we all know is coming.
  Four, there is nothing in it for debt reduction. Because the 
Democratic plan saves Medicare, it has the added benefit of reducing 
the debt. We have a historic opportunity to ensure that our children 
will not be saddled with huge interest costs, which currently total 
over $600 million a day.
  Five, it contains special-interest goodies, such as repealing an 
excise tax for a few companies that make tackle boxes and providing a 
$4 billion tax break on foreign oil and gas income.
  Six, it will require huge and unsustainable cuts in discretionary 
spending. Because the Republicans are assuming a freeze on 
discretionary spending at fiscal year 1999 levels--something they will 
violate in the next few months--the reality is that this plan would 
force cuts of an enormous size in education, law enforcement, 
environmental protection, and the military. This is completely 
unrealistic given inflation and the needs we have as a country.
  Seven, it relies on long-term surplus projections, which is very 
risky. Any businessman will tell you that even projecting out five 
years is unreliable at best. This bill tries to predict the economy 
over the next 10 years.
  Eight, it ties our hands in the event of a recession. The country is 
in a tremendous economic rebound, and we do not need a broad-based 
economic stimulus. But if we go into a recessionary period, that is 
when a tax cut would be needed--to help us get out of the recession. 
This plan precludes that option.
  Nine, it risks going back to the dark days of dramatic deficits. We 
have finally balanced the annual budget after 30 long years of red ink, 
and this plan turns right around and goes back to those times.
  Ten, it is totally partisan. The Republican leadership rejected 
compromising with Democrats--and no Democrats were even in the room 
when this plan was put together. That is no way to write important 
legislation that affects every American.
  I urge the President to fulfill his promise to veto this dangerous 
legislation, which jeopardizes the most remarkable economic recovery in 
history.
  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, I now yield 5 minutes to the Senator 
from New Jersey, who will be our last speaker.
  Mr. TORRICELLI. Mr. President, I ask at the end of 4\1/2\ minutes I 
be notified the time has expired.
  The PRESIDING OFFICER. The Senator will be notified.
  Mr. TORRICELLI. Mr. President, in life you can extend your hand, but 
to make any real progress someone has to grasp it. For these several 
weeks, many of us have worked to try to find some reasonable middle 
ground in the cause of reducing taxes on the American people. It was a 
worthwhile effort. I believe, indeed, taxes on middle-income Americans 
are too high and it is the American people who worked hard and paid 
their taxes who have produced this extraordinary American surplus. They 
deserve a dividend for the American economic performance.
  But a tax reduction is not all the American people deserve. They also 
deserve to know their children are getting educated in quality schools 
with good teachers. I am for tax reduction, but I want a tax reduction 
that allows teachers to reduce class size and the rebuilding of 
crumbling American schools. I am firmly committed that tax reductions 
for the middle class are required and should be enacted by this 
Congress. But I also believe the American people must have a health 
care system that provides for prescription drugs through Medicare for 
elderly Americans.
  My point is simply we are at a time when the Nation can both afford 
and requires multiple objectives. In the bipartisan tax reduction plan 
of $500 billion, Senator Breaux, Senator Kerrey, and I, working with 
our Republican colleagues, fashioned a plan where we believed we could 
reduce taxes on savings to encourage the American people to invest in 
the new economy by reducing or eliminating capital gains taxes on 
modest investments and by eliminating taxes on interest on modest 
savings accounts so all Americans save for their own future for 
security for their own families.
  In our plan we expanded by 4 million families the number of people 
from the 28-percent tax bracket to the 15-percent tax bracket because 
this Government has no right to tax at 28 percent the modest incomes of 
families who earn $50,000, $60,000, and $70,000, raising one and two 
children. Indeed, at this point in our history it is something we can 
afford--to allow people to keep that money for their own needs.
  Perhaps it was always going to be so, but that bipartisan tax plan 
was not enacted. But I am not a man who is discouraged easily. When the 
bipartisan plan was introduced, we described it as the October plan 
because there are tax plans that are presented because they have 
political value and communicate a political message, and there are tax 
plans enacted because they can be attained and they change the law. 
This was never going to be a brief process and perhaps it was never 
going to consist of a single phase. Tonight, the first phase is 
concluded. A message is being sent to the President and to the American 
people by both political parties. The Democratic Party is committing 
itself to middle-class tax relief after protecting Social Security and 
allowing for national objectives of Medicare and education.
  The PRESIDING OFFICER. The Senator has consumed 4\1/2\ minutes.
  Mr. TORRICELLI. Thank you, Mr. President.
  I believe that is still a worthwhile objective and I join with my 
party in doing so. It is, however, my hope that we can accelerate this 
process. This bill can be passed tonight, the President can exercise 
his judgment, and we can return.
  Therefore, I ask unanimous consent if the conference agreement 
passes, the

[[Page 19824]]

bill be enrolled within 5 days and sent the following day to the 
President.
  The PRESIDING OFFICER. Is there objection?
  Mr. ROTH. I object.
  The PRESIDING OFFICER. Objection is heard.
  Mr. TORRICELLI. Mr. President, I regret that will mean the process 
will have to continue longer than otherwise required. I hope we can 
return in the fall and pass a reasonable tax cut that accommodates 
other national objectives on a bipartisan basis.
  I yield the floor.
  Mr. MOYNIHAN. Mr. President, I ask there be printed in the Record a 
statement ``Sequester Impact of Tax Bill,'' prepared today by the 
Office of Management and Budget. I will read two sentences:

       Beginning in 2002, Medicare would be cut by 4 percent each 
     year. * * *
       In 2002, the $28 billion cut in mandatory savings resulting 
     from a sequester would still be $6 billion less than the cost 
     of the tax bill.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                      Sequester Impact of Tax Bill

       If the Conference Agreement on the Republican Tax bill were 
     to be enacted in its present form, it would result in a 
     sequester of mandatory programs in each year beginning in 
     2000. Mandatory spending would be cut by $2.4 billion in 
     2000. Beginning in 2002, Medicare would be cut by 4% each 
     year. Mandatory programs subject to a full sequester would be 
     eliminated, including CCC, child support enforcement, social 
     services block grants, immigration support, crop insurance, 
     mineral leasing payments and veterans education and 
     readjustment benefits.
       The costs of the tax bill in 2002 and subsequent years 
     exceed the savings that could be achieved by a sequester of 
     mandatory programs. In 2002, the $28 billion cut in mandatory 
     savings resulting from a sequester would still be $6 billion 
     less than the costs of the tax bill.


                                medicare

       Medicare spending would be cut by $2 billion in FY 2000 and 
     by $9.2 billion or 4% in FY 2002. Medicare payments to all 
     providers (e.g., hospitals, physicians, home health agencies, 
     skilled nursing facilities) would be reduced proportionally 
     by the sequester.
       Any reduction in current Medicare spending will increase 
     the pressure to ``undo'' the BBA and increase Medicare 
     spending. It also will make it difficult to garner support 
     for the reforms included in the President's Medicare reform 
     plan, which includes important new initiatives (e.g., the 
     prescription drug benefit) as well as justifiable reductions 
     in spending.


                     veterans readjustment benefits

       The Readjustment Benefits account provides education 
     benefits and training to more than 450,000 veterans, 
     reservists, and dependents through the Montgomery GI Bill and 
     the Vocational Rehabilitation and Counseling Programs.
       The elimination of Readjustment Benefits in FY 2002 would 
     mean that these veterans, reservists, and dependents would 
     lose entitlement to the education and training programs many 
     were promised (and paid into) when they enlisted. Programs 
     like the GI Bill are the most potent recruitment and 
     retention tools the military services have. Further, service 
     members transitioning to civilian life would no longer be 
     afforded re-training through college programs, work-study, or 
     on-the-job training.
       If eliminated, the Vocational Rehabilitation and Counseling 
     program, which helps 50,000 disabled veterans overcome 
     employment handicaps sustained on active duty, would no 
     longer assist veterans in finding jobs and becoming 
     productive members of society again.


                  ccc farm programs and crop insurance

       The Senate has just passed a bill that provides over $7 
     billion in FY 2000 emergency assistance to the Nation's 
     farmers and ranchers, to help them through these times of 
     nationwide low commodity prices and regional droughts that 
     are withering crops and livestock. Simultaneously, this bill 
     would cut assistance to farmers funded through the Commodity 
     Credit Corporation, through a small FY 2000 sequester, at a 
     time when many farmers are hurting.
       The effect on farm programs in the outyears starting in FY 
     2002 would be catastrophic, and cause thousands of farmers 
     and ranchers to go out of business. Farm income and price 
     support programs would be devastated, and if today's 
     commodity prices were to continue into the outyears, the 
     ``family farm'' would become a historic relic. In addition, 
     with U.S. agriculture heavily dependent on exports, such an 
     outyear sequester would end USDA's export credit programs 
     that guarantee billions of dollars of farm exports a year.
       Starting in FY 2002, the Agriculture Department's crop 
     insurance program would shut down, and without insurance most 
     farmers and ranchers could not secure the financing from 
     banks needed to operate their farms and ranches.


                             student loans

       Guaranteed and Direct Student Loan Program borrowers would 
     have their origination fees increased by one-half of a 
     percentage point beginning in 2000.
       The average student loan borrower would pay an additional 
     $28 in origination fees. A graduate student taking out the 
     maximum $18,500 loan would pay an additional $93 in fees. A 
     college junior or senior taking out the maximum $10,500 loan 
     would pay an additional $53 in fees.
       Over 5.5 million beneficiaries would be affected.


                       child support enforcement

       New Federal funding for Child Support Enforcement would be 
     eliminated beginning in 2002 and many States would no longer 
     be able to continue this critical program. In FY 1998 this 
     program collected $14.3 billion on behalf of children and 
     families, and helped many low-income families move from 
     welfare to work.


                  social services block grants (ssbg)

       Beginning in FY 2002, SSBO would be eliminated. SSBG 
     provides funding to States to support a wide range of 
     programs including child protection and child welfare, child 
     care, as well as services focused on the needs of the elderly 
     and handicapped. The inherent flexibility of this grant 
     permits States to best target funds to meet the specific 
     needs in their communities.


                          immigration support

       Mandatory funding for immigration programs pays for the 
     costs administering laws related to admission, exclusion, 
     deportation and naturalization of aliens. These costs are 
     funded principally from fees paid by aliens. Sequestering 
     this entire amount in FY 2002 and subsequent years would 
     bring the immigration services program to a halt, leaving 
     millions of legal aliens stranded in the immigration process 
     and stopping all new immigration actions. This untenable 
     situation would have the further effect of stopping all new 
     fee revenue collections, thereby increasing overall mandatory 
     spending.


                      mineral leasing act payments

       The impact of a 100-percent outyear sequester starting in 
     FY 2002 on Mineral Act Leasing payments would be devastating 
     to many States. Under current law, these payments are made by 
     the Interior Department to States as a percentage of Federal 
     receipts received from the leasing and development of mineral 
     resources (oil, gas, coal,) on Federal lands in those States. 
     Most of the payments are made to the western States and to 
     Alaska. The States, in turn, generally use these payments to 
     help finance local elementary and secondary schools. Some of 
     the lowest-income States would have outyear funding to 
     schools substantially reduced as a result of such a large 
     sequester.

                                           PAYGO SEQUESTER CALCULATION
                                          [Dollar amounts in millions]
----------------------------------------------------------------------------------------------------------------
                                                              2000       2001       2002       2003       2004
----------------------------------------------------------------------------------------------------------------
PAYGO Net Deficit Increase...............................      2,388        245     34,531     51,935     61,700
Excess above total PAYGO sequester baseline..............          0          0      6,332     23,410     32,193
                                                          ------------------------------------------------------
      Sequester amount (constrained to baseline).........      2,388        245     28,199     28,525     29,507
                                                          ======================================================
Programmatic Sequester Amounts:
    Special rules:
        ASI..............................................         24         38         39         40         41
        GSL and Foster Care..............................        180        191        203        215        228
    Medicare.............................................      1,981         15      9,247      9,993     10,567
    All other (across-the-board sequester):
        CCC..............................................         76          0      5,047      4,309      4,327
        Child Support Enforcement........................         12          0      3,148      3,381      3,649
        Social Services Block Grants.....................         22          0      1,441      1,435      1,435
        Immigration Support..............................         14          0      1,319      1,319      1,319
        Crop Insurance...................................         14          0      1,642      1,708      1,786
        Mineral leasing Act payments.....................          6          0        630        644        656

[[Page 19825]]

 
        Veterans Educ & Readj. Benefits..................          8          0      1,041      1,039      1,057
        All other........................................         50          0      4,443      4,443      4,443
                                                          ------------------------------------------------------
          Total, across-the-board seq. amounts...........        203          1     18,711     18,278     18,671
                                                          ======================================================
          Sequester total................................      2,388        245     28,199     28,525     29,507
----------------------------------------------------------------------------------------------------------------

  The PRESIDING OFFICER. The Senator from New York.
  Mr. MOYNIHAN. Mr. President, I yield back such time as remains.
  Mr. President, would you believe there is one more Republican 
speaker?
  The PRESIDING OFFICER. The Chair would believe that statement.


     the taxpayer refund & relief act of 1999--thanks to the staff

  Mr. LOTT. Mr. President, tonight we are passing a fantastic piece of 
legislation. The Taxpayer Refund and Relief Act of 1999 will return 
$792 billion of tax overpayments to American taxpayers over the next 10 
years. It will cut income tax rates for all Americans. It contains 
dramatic cuts in the marriage penalty. It cuts capital gains tax rates 
and indexes capital gains for inflation. It eliminates death taxes. It 
expands retirement opportunities, educational opportunities, and health 
care choices. This, Mr. President, is a superb bill, and I am proud to 
have been a part of the process that developed it.
  I want to thank the following staff for their dedication, 
intelligence, long hours, and commitment to Republican principles. The 
most important of these are Chairman Bill Roth's staff. Chairman Roth 
provided the leadership, and these people did all the hard work to back 
them up. From Senator Roth's Committee on Finance, I want to thank 
Frank Polk, Joan Woodward, Mark Prater, Brig Pari, Tom Roesser, Bill 
Sweetnam, Jeff Kupfer, Ed McClellan, Tara Bradshaw, Ginny Flynn, Connie 
Foster, and Myrtle Agent. They are the tax counsels and policy experts 
who help us understand the intricacies of tax policy and legislation. 
We rely upon them every day for advice, and we have leaned on them for 
support during the past month. They are professional, patient, 
intelligent, and dedicated. I also want to thank John Duncan and Bill 
Nixon from Senator Roth's staff for their leadership.
  One person in particular deserves special mention. Mark Prater, 
Chairman Bill Roth's chief tax counsel, was the principal Senate staff 
architect of this bill. Mark is an enormously valuable resource to the 
entire U.S. Senate. Mark's knowledge of tax policy and the tax code are 
unsurpassed. His dedication to good tax policy is unmatched. While we 
all worked hard to craft this legislation, Mark has given his days, 
nights, and weekends to this bill for several months. And his patience, 
professionalism, and easygoing demeanor make it a pleasure to work with 
him. I know that I speak for all of my colleagues, and for their staff, 
when I say thank you to Mark Prater for his work on this bill.
  I want to thank all of the Joint Tax Committee staff for their 
excellent, professional staff work. Under the leadership of Lindy 
Paull, and two of her deputies, Rick Grafmeyer and Mary Schmitt, the 
Joint Tax staff did an incredible job turning around legislative 
language and scoring faster than we thought possible. They said we 
couldn't conference two $792 billion bills in less than a week. Thanks 
to the leadership of Bill Roth and Bill Archer, and to the lightning 
speed of the Joint Tax staff, we proved them wrong.
  The staff for the Republican members of the Finance Committee also 
deserve special recognition: Kathleen Black from Senator Chafee's 
staff, Kolan Davis from Senator Grassley's staff, Judy Hill from 
Senator Hatch's staff, Alexander Polinsky from Senator Murkowski's 
staff, Hazen Marshall from Senator Nickles' staff, Ginger Gregory and 
Keith Hennessey from my staff, Dick Ribbentrop, Steve McMillin, and 
Mike Solon from Senator Gramm's staff, Jeff Fox and Ken Connolly from 
Senator Jeffords' staff, Vic Wolski and Shelly Hymes from Senator 
Mack's staff, and Rachel Jones and Libby Wood from Senator Thompson's 
staff.
  Much of this debate centered on questions that are normally 
considered in a budget resolution, rather than a reconciliation bill. 
So I also want to thank Senator Domenici's excellent Budget Committee 
staff, who, as always, did top-notch work. In particular, I want to 
highlight the efforts of Bill Hoagland, Cheri Reidy, Beth Felder, Jim 
Capretta, Amy Smith, Sandra Wiseman, and Andrew Siracuse. And we can't 
forget the Budget Committee ``masters of spin,'' Bob Stevenson and Amy 
Call.
  I offer my profound thanks to all of these dedicated Senate staff. 
Without their hard work, we would not be enjoying today's success.
  I believe then Senator Specter will be the final speaker.
  Mr. ROTH. I yield 3 minutes to the distinguished Senator from 
Pennsylvania.
  The PRESIDING OFFICER. The Senator from Pennsylvania.
  Mr. SPECTER. Mr. President, in my view, the underlying issues on the 
conference report on the tax cut bill present a close question. There 
is much to be said for the basic proposition of returning a portion of 
the surplus to the taxpayers so that they, instead of Congress, can 
decide where to spend the money.
  The competing view is that the projected surplus over a 10-year 
period is highly speculative and that great care must be exercised to 
be sure Social Security and Medicare are solvent. The projected surplus 
also requires adherence to caps or limitations on spending which both 
the Congress and the President now admit to be unrealistic. The 
projected surplus also does not take into consideration emergencies, 
such as the multibillion-dollar Agriculture appropriations bill which 
passed the Senate last night.
  In addition, there is substantial merit to using any surplus to pay 
down the national debt, thus reducing the $293 billion in annual 
interest charges on the $5.6 trillion debt. On balance, on a close 
question, I believe the Nation's interest will be best served by 
rejecting the $792 billion tax cut, leaving open the possibility at a 
later time of a more modest $500 billion tax cut as proposed by a group 
of centrists.
  In reality, the vote on the conference report may well be meaningless 
in light of the President's repeated statements that he will veto the 
bill. This bill is probably just another step in the complex 
negotiations involving pending appropriations bills, including mine as 
my capacity as chairman of the Subcommittee on Labor, Health and Human 
Services, and Education.
  I voted against the tax bill when it was before the Senate last week, 
and I am opposed to the tax bill tonight. At the urging of the majority 
leader, Senator Lott, I have agreed to consider a live pair with my 
colleague, Senator Mike Crapo, who is in Idaho for his daughter's 
wedding. As of early this morning when I talked to Senator Crapo, there 
were no commercial flights which would return him to Washington in time 
to vote. If he returned by charter aircraft, he would miss his 
daughter's wedding ceremony and disrupt the family's wedding 
celebration.
  I have decided to agree to that live pair, which means that during 
the rollcall, if it is necessary, if it turns out Senator Crapo's vote 
is indispensable, I will say that if Senator Crapo were here, he would 
vote aye for the bill and I would vote nay against the bill. His absent 
aye vote would be paired then with my nay vote which would not be cast.

[[Page 19826]]

  I am concerned, candidly, that this live pair being inside the 
beltway would be widely misunderstood, but I believe it is preferable 
to compelling Senator Crapo's return to Washington or to have the will 
of the Senate exclude the vote of Senator Crapo who could not be here 
unless he returned by charter jet and missed his daughter's wedding.
  As I say, I voted against this bill last week, and I am opposed to it 
today. I intend to vote no unless the live pair with Senator Crapo is 
indispensable for the reasons I have just outlined.
  I thank the Chairman and yield the floor.
  The PRESIDING OFFICER (Mr. Sessions). The Senator from Delaware.
  Mr. ROTH. Mr. President, I yield myself such time as remains. I think 
it is 2 minutes.
  As I said this morning, the fundamental question before Congress 
these past few weeks, as we have debated the Taxpayer Refund Act of 
1999, is quite simple: Is it right for Washington to take from the 
taxpayer more money than is necessary to run Government?
  The issue of tax relief isn't anymore complicated than that, and the 
outcome of the conference between the Senate and the House makes it 
clear that Government is not automatically entitled to the surplus that 
is, in large part, due to the hard work, thrift, and risk taking of the 
American people. Individuals and families are due a refund. That is 
exactly what we do with this legislation. We give the people a refund, 
and we do it in a way that is fair, broad based, and empowering.
  Mr. President, I am ready to yield back the remainder of time.
  Mr. MOYNIHAN. Mr. President, I believe we have yielded back the 
remainder of our time.
  Mr. ROTH. I yield back the remainder of my time, and I ask for the 
yeas and nays.
  The PRESIDING OFFICER. Is there a sufficient second?
  There appears to be a sufficient second.
  The yeas and nays were ordered.
  The PRESIDING OFFICER. The question is on agreeing to the conference 
report. The yeas and nays have been ordered. The clerk will call the 
roll.
  The assistant legislative clerk called the roll.
  Mr. NICKLES. I announce that the Senator from Idaho (Mr. Crapo) is 
necessarily absent.
  The PRESIDING OFFICER. Are there any other Senators in the Chamber 
desiring to vote?
  The result was announced--yeas 50, nays 49, as follows:

                      [Rollcall Vote No. 261 Leg.]

                                YEAS--50

     Abraham
     Allard
     Ashcroft
     Bennett
     Bond
     Brownback
     Bunning
     Burns
     Campbell
     Chafee
     Cochran
     Coverdell
     Craig
     DeWine
     Domenici
     Enzi
     Fitzgerald
     Frist
     Gorton
     Gramm
     Grams
     Grassley
     Gregg
     Hagel
     Hatch
     Helms
     Hutchinson
     Hutchison
     Inhofe
     Jeffords
     Kyl
     Lott
     Lugar
     Mack
     McCain
     McConnell
     Murkowski
     Nickles
     Roberts
     Roth
     Santorum
     Sessions
     Shelby
     Smith (NH)
     Smith (OR)
     Stevens
     Thomas
     Thompson
     Thurmond
     Warner

                                NAYS--49

     Akaka
     Baucus
     Bayh
     Biden
     Bingaman
     Boxer
     Breaux
     Bryan
     Byrd
     Cleland
     Collins
     Conrad
     Daschle
     Dodd
     Dorgan
     Durbin
     Edwards
     Feingold
     Feinstein
     Graham
     Harkin
     Hollings
     Inouye
     Johnson
     Kennedy
     Kerrey
     Kerry
     Kohl
     Landrieu
     Lautenberg
     Leahy
     Levin
     Lieberman
     Lincoln
     Mikulski
     Moynihan
     Murray
     Reed
     Reid
     Robb
     Rockefeller
     Sarbanes
     Schumer
     Snowe
     Specter
     Torricelli
     Voinovich
     Wellstone
     Wyden

                             NOT VOTING--1

       
     Crapo
       
  The conference report was agreed to.
  Mr. MOYNIHAN. I move to reconsider the vote.
  Mr. NICKLES. I move to lay that motion on the table.
  The motion to lay on the table was agreed to.

                          ____________________