[Congressional Record (Bound Edition), Volume 145 (1999), Part 16]
[Extensions of Remarks]
[Page 23641]
[From the U.S. Government Publishing Office, www.gpo.gov]



                        THE REPUBLICAN TAX BILL

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                            HON. MAX SANDLIN

                                of texas

                    in the house of representatives

                      Thursday, September 30, 1999

  Mr. SANDLIN. Mr. Speaker, the Republican tax bill is the definition 
of fiscal recklessness. It seeks to enact a tax cut that is based only 
on projected surpluses under ten and fifteen year estimates. Budget 
projections for the next ten years have improved by nearly $2 trillion 
in the last twelve months--they could go the other way just as quickly. 
If budget projections turn out to be wrong, the budget will return to 
deficits financed by borrowing from the Social Security surplus. Even 
the Congressional Budget Office--the source of budget projections upon 
which the Republicans' tax cuts are based--says these projections could 
vary as much as $100 billion a year. That's an extremely wide margin of 
error, wide enough to cause deep concerns among fiscal conservatives 
like me.
  Furthermore, even though Republicans are spending money they can't 
guarantee will exist, their tax plan still leaves no resources to meet 
important needs in education, agriculture, or defense, as well as 
funding for our veterans and other priorities. It is based on the 
assumption that discretionary spending will be cut by $595 billion 
below 1999 levels adjusted for inflation over the next ten years. This 
will require a cut in all discretionary programs of ten percent below 
current levels. Any increased spending in any area will require even 
deeper cuts in all other spending. The exploding costs of the tax bill 
will place an even greater squeeze on discretionary spending in later 
years.
  If these massive tax cuts are passed, education will suffer greatly. 
The Republican tax bill includes a change to the tax-exempt bond 
arbitrage rules that largely fails to meet the stated objective of 
modernizing schools, especially in rural areas. Under H.R. 2488, school 
districts would have four years to spend school construction bond 
proceeds rather than the two years currently permitted. According to 
Republicans, this would enable school districts to invest bond proceeds 
for a longer period and recognize greater arbitrage profits. The 
Republicans contend that their plan is universal, covering cities, 
suburbs, and farms.
  The truth is, many suburban and city school districts will receive NO 
BENEFITS from the Republican proposal. Schools with urgent needs, 
forced to teach children in trailers and dilapidated buildings, would 
not benefit from H.R. 2488. Their backlog of unmet needs means that 
they do not have the luxury of waiting four years before completing 
school construction. The Republican proposal also largely excludes some 
of our most needy schools--those in rural areas. The provisions in the 
Republican tax bill may benefit a few large, wealthy school districts 
with the financial capacity to issue large bonds four years in advance 
of need, but it WILL NOT help rural districts.
  The bottom line is simple: this bill will only serve to hurt the 
American people by jeopardizing the stability of our economy and the 
prosperity of future generations for the instant gratification of tax 
cuts that are not only irresponsible, but dangerous. In reality the 
best tax cut we can give to all Americans is keeping interest rates low 
by paying down our debt. Reducing our national debt will provide a tax 
cut for millions of Americans because it will restrain interest rates, 
thereby saving them money on variable mortgages, new mortgages, auto 
loans, credit card payments, etc. Each percentage point increase in 
interest rates would mean an extra $200-$250 billion in mortgage costs 
to Americans. Paying down the national debt will protect future 
generations from an increasing tax burden to pay interest on the debt 
run up by current generations. More than 25% of individual income taxes 
go to paying interest on our national debt. Every dollar of lower debt 
saves MORE than one dollar in taxes for future generations.
  Secure a prosperous future by paying down the debt and saying no to 
fiscally reckless tax cuts.

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