[Congressional Record (Bound Edition), Volume 145 (1999), Part 3]
[House]
[Pages 3625-3626]
[From the U.S. Government Publishing Office, www.gpo.gov]




              WHO GETS THE CREDIT FOR THE BUDGET SURPLUS?

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Colorado (Mr. Schaffer) is recognized for 5 minutes.
  Mr. SCHAFFER. Mr. Speaker, last year, the Treasury Department 
announced that the Federal budget was in surplus for the first time 
since 1969. Only 3 short years ago, the President had submitted a 
budget with $200 billion deficits as far as the eye could see, as many 
will recall.
  What happened?
  There are a lot of Americans who do not care much who gets the credit 
for the current fine state of our economy and then tend to take the 
President at his word when he takes the credit for the budget surplus 
we have at last achieved. But it is important to understand how we got 
here so that we may continue to a path of sound economic policy in the 
future.
  When the country was faced with large, chronic deficits in the 
beginning of the 1990s, Congress faced a choice. To cut the deficit, 
lawmakers essentially had two choices: cut spending or raise taxes. 
President Clinton and his liberal allies in the Congress naturally 
chose to raise taxes. Congress at the time was still under the control 
of the Democrats, and so President Clinton was able to pass the largest 
tax increase in our history.
  Republicans, on the other hand, wanted to reduce the deficit by 
cutting spending. Republicans believed government is too big, way too 
big, and they believe Washington wastes too much of our money. One 
would think this is an obvious point. After all, even the President 
himself declared in his 1996 State of the Union address that ``the era 
of Big Government is over.'' Oh, if that were only true.
  Mr. Speaker, we can see now that this declaration was nothing more 
than hollow words. Big Government is alive and well and bigger than 
ever. In fact, the Democrats have come back with still more ways to 
increase the size and power of government every year since, including 
this year.
  And while we can say that government is slightly smaller now than it 
would be had Republicans not taken control of the Congress in 1995, the 
truth is that government continues to grow. Any attempts to cut 
government, no matter how wasteful or counterproductive the program, 
the liberals immediately attack them as extreme and ``mean-spirited.''
  It has never occurred to them that it is perhaps mean-spirited on the 
part of the politicians to have so little respect for the working man's 
labor that Washington takes between one-fourth and one-third out of the 
middle-class family's paycheck just to pay Uncle Sam.
  So, Mr. Speaker, that still leaves us with the question, how did we 
go from

[[Page 3626]]

$200 billion deficits as far as the eye can see 2\1/2\ years ago to the 
budget surplus that we now enjoy?
  It is true that there have been some reductions in spending, but 
almost all of them have come out of the one place it should not have 
come: from the Pentagon. Defense spending is dangerously low, and our 
military forces are not what they should be. But liberals, in their 
boundless faith in human nature, ignore history and simply do not 
believe in the fundamental precept of ``peace through strength.''
  As for other spending, Republicans did manage to limit the number of 
new spending initiatives of President Clinton and the Democrats over 
the past few years. But the primary reason that the budget is in 
surplus today is that revenues are way, way up.
  Liberals will point to the President's 1993 tax increase as to the 
reason why revenues are up, hoping that we will not examine the budget 
tables to see if, in fact, it is true. Revenues are up primarily from 
the number of people who are taking advantage of low tax rates on 
capital gains, the part of the economy that is the lifeblood of our 
dynamic and growing economy.
  President Reagan cut the tax on capital gains, and the Republicans 
cut it again last year. Savers, investors, entrepreneurs and other job 
creators are taking advantage of such liberty. The economy is 
benefitting from that, jobs are being created, and revenues have 
soared. That is the primary reason the budget is now in surplus, when 
it was deep in the red just a few years ago.
  I would invite any of my Democratic colleagues who dispute these 
findings to come forward and show me otherwise. Perhaps the liberals 
have access to another set of government documents with different 
statistics. But if they use the same Treasury figures that I do, they 
will have to admit that the Reagan tax cuts and the Republican tax cuts 
are the most significant reason behind our current economic boom.
  With all due credit to Alan Greenspan, chairman of the Federal 
Reserve, for his outstanding stewardship of monetary policy, we should 
mostly thank President Reagan for turning around an economy that was in 
the ditch. We are still benefitting from his decision to make the 
United States a low-tax, low-regulation economy and thus able to 
compete in the world better than any other.
  The Republicans forced President Clinton to renounce his own budget 
with $200 billion deficits as far as the eye can see. We are grateful 
that he has at last accepted the need for government to balance the 
budget and put its financial house in order. We would like to encourage 
him to continue on this path, especially if he accepts the view that 
Washington can still afford to cut spending, cut taxes, and make good 
on his promise that the ``end of Big Government is over.''

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