[Congressional Record (Bound Edition), Volume 146 (2000), Part 12]
[House]
[Pages 17292-17297]
[From the U.S. Government Publishing Office, www.gpo.gov]



                             FEDERAL BUDGET

  The SPEAKER pro tempore (Mr. LaHood). Under the Speaker's announced 
policy of January 6, 1999, the gentleman from Texas (Mr. Stenholm) is 
recognized for 60 minutes as the designee of the minority leader.
  Mr. STENHOLM. Mr. Speaker, I want to thank those making this period 
of time available today to further the discussion of the bill that was 
vetoed and then sustained earlier today.
  I would gather that anyone listening to the debate today was rather 
confused about what was in the bills or what was not in the bills or 
what the effect would be. But to do this, to set the stage for this, I 
think it is important for us to go back and to review the budget 
debates earlier this year.
  And I want to speak on behalf again of the Blue Dog budget, the Blue 
Dog Coalition, that proposed a budget that got 171 votes, a majority of 
the Democrats, and 33 Republicans, joined with us when we were 
debating. And we thought this year's budget debates should be built 
around a framework that would put our government on a path of retiring 
and entirely eliminating our public debt by 2010. We thought it was 
important to save 100 percent of the Social Security and Medicare 
surpluses. And we thought it important to allow a net tax cut, net tax 
cut of $387 billion over 10 years targeted to small businesses and 
middle-income families and make investments in priority programs of 
$387 billion over the same 10-year period.
  That became known as the 50/25/25 plan, taking any non-Social 
Security surpluses and taking 50 percent of that to pay down the debt. 
Because I have found in my district at home, and I notice the polls 
bear this out, that the American people by and large, by 70 percent 
plus, want to see the Congress fix Social Security for the future, 
because every one knows that beginning in 2010 we are going to have 
some difficult times delivering on our promises of Social Security 
particularly at the exact same time that the baby boomers will be 
retiring. No one disputes that.
  We felt like that that was important, but the majority party felt 
like the most important thing that they could do this year was to 
deliver a 1.3, 1.6, pick the number, $1 trillion tax cut of which every 
one agrees that many of those components are very, very, very popular.
  But the Blue Dogs have said first off when we hear people talk about 
the $4.6 trillion surplus, we know, and I hope the majority of the 
American people will soon know, those are projected surpluses.
  My colleague will hear in a moment from the gentleman from 
Mississippi (Mr. Taylor), in which he will show there are no surpluses, 
and he will be right, 100 percent right.
  When we disregard the trust funds, not only the Social Security, but 
Medicare and military and civil service retirement and now railroad 
retirement, there are no surpluses, but yet we keep hearing this. And 
then we hear the rhetoric that says $4.6 trillion, it is your money, 
and we are going to return a part of it to you.
  This kind of prompted me to say that even young school children know 
to complete the phase I swear to tell the truth, the whole truth and 
nothing but the truth. As common as that phrase is, we sometimes forget 
that. In the courthouse, it is rather important. I would wish that it 
was also important here in the U.S. House, because just this afternoon, 
as we have heard many times, the truth is, yes, the marriage tax 
penalty is unfair and in many cases two married individuals currently 
are taxed at a higher rate than they would be had they remained single, 
and that is not fair.
  It is true that family farms and ranchers and other small businesses 
somtimes have a difficult time paying the current death tax, that is 
true.
  But then let us talk about the whole truth and nothing but the truth. 
Yes, the $4.6 trillion that we hear so much about, most of us 
understand and I hope the American people will soon understand, those 
are projected surpluses, not a single American family tonight will go 
out and spend projected income without a risk.
  If we get an extra bonus of $5,000 and we owe our bank $10,000, we do 
not go out and spend it on a vacation, unless we are willing to take a 
chance on digging our family into a deeper hole. Why should our country 
be different?
  That was the argument that many of us were making this afternoon as 
pertained to the so-called death tax. I personally feel very strongly 
that the bill the President vetoed should have been vetoed. In fact, I 
personally recommended that he do veto the bill, and here is why.
  When we look at the effect of a bill that is phased in, in 2010, 10 
short years from today, that creates a hole in our budget of $50 
billion that will expand over the next 10 years to $750 billion, 
without a plan of how we are going to be dealing with that or just 
passing on to future Congresses, really, we are passing it on to our 
grandchildren.
  It seemed to me that the first bill that ought to have come to the 
floor of the House should have been a Social Security reform bill. That 
should have been the first bill, followed quickly by the Medicare and 
Medicaid reform bill.
  Back home I have numerous hospitals that, unless we put together a 
balanced budget fix again this year, we will have to close their doors, 
and this is no exaggeration. Now, to those that talk about spending, if 
we do not wish to spend some additional money to keep rural hospitals 
and inner-city hospitals open, that is a fair position for anyone to 
take, and we will have that discussion. But that is the one we ought to 
have first, how do we provide for the minimal needs?
  As we heard the gentlewoman from Michigan talking about the 
pharmaceutical bill needs, all that is well established, but yet today 
we had a bill, the first one to be vetoed. And now I hope the message 
is sunk in to the leadership of the House, that the next bill also will 
be vetoed and will be sustained, because I suspect now that most people 
are beginning to see that

[[Page 17293]]

the Blue Dogs might have had something right when they said let us not 
spend projected surpluses, let us use this opportunity in case these 
surpluses are real, let us pay down our debt.
  Let us not forget the $5.6 trillion that we still owe, $700 billion 
now which I was corrected earlier, because contrary to the rhetoric in 
this body, our debt is going up, not down. We are paying down publicly-
held debt, which is good, but we are increasing the debt to our trust 
funds, which eventually will have to be paid.
  Let us not forget so easily as is so often done, and again this 
afternoon, let us not forgot that we have an unfunded liability in the 
Social Security trust fund as of today of $7.9 trillion which is going 
to have to be paid off. And that is why the Blue Dogs in our budget 
with the 50/25/25 of saying put maximum interest on paying down the 
debt, and let us equally divide increased spending on priority areas, 
and those are defense, veterans, education, health care and 
agriculture, that is it. Then let us deal with tax cuts.
  And that is where, before I yield to my friend, the gentleman from 
Mississippi, (Mr. Taylor), I would make this point again, we would have 
thought this afternoon that the bill that was vetoed and then sustained 
was going to do great things for small businesses immediately.
  Well, if we listen carefully, we will understand that the reductions 
in the tax rate on estates under the death tax would not take effect 
until 2010. The bill that I supported, continue to support and believe 
that if we can somehow revive some bipartisan action in this action, I 
believe we can put together a tax component as it pertains to death 
taxes that would, in fact, repeal all death taxes on all estates up to 
$4 million immediately, effective January 1, 2001, to those family 
farms that I heard, and I have numerous of those in my own district.
  I want to make it very clear, unless your estate is more than $4 
million the Democratic substitute that I and others and I hope will 
revive itself now that this one has been vetoed, that we can in fact 
have a $4 trillion exemption so no business, no individual family will 
ever have to worry about the death tax now.
  Now, the argument will be why do we not eliminate it just for 
everybody. Show me how we are going to fix the Social Security program. 
Show me how we are going to deal with these surpluses that are not 
real, which my friend, the gentleman from Mississippi (Mr. Taylor) will 
be showing absolutely that we are talking in terms of fictitious 
numbers. Show me how we are going to deal with the Social Security, 
Medicare and Medicaid problems, then let us come and have an honest, 
open debate about how far we go on estate taxes.
  I think a $4 million exemption effective January 1 beats the heck out 
of an estate tax phased out in 2010. My colleague, the gentleman from 
North Dakota (Mr. Pomeroy) showed so eloquently earlier today the exact 
numbers of what we are talking about, and I think once that is 
understood and folks will get back off of the budget plans that are now 
showing are going nowhere, that we can come together, we can emphasize 
what the American people want, and that is pay down the debt, take care 
of Social Security, so it will be as good for our children and 
grandchildren as it is for those on it today. Take care of Medicare and 
Medicaid and pharmaceutical drug needs. Be prudent. Debate your 
spending, hold the spending down as much as you possibly can in a 
bipartisan way.
  And with those opening comments, I yield to the gentleman from 
Mississippi (Mr. Taylor).
  Mr. TAYLOR of Mississippi. Mr. Speaker, I want to thank my friend and 
colleague, the gentleman from Texas (Mr. Stenholm). You know, I 
represent a district that is very, very heavily promilitary, overly 
blessed in military bases. We have about 14,000 military retirees and a 
much higher percentage of overall citizens who have served in the Armed 
Forces than we think the typical congressional district has.
  I guess because of that, I take particular offense at the thought 
that for 2 years of the past 3 years, the Veterans Administration 
budget was frozen, not one penny increase. Despite the fact that we 
have now about 1,300 World War II veterans a day dying, they are 
getting to that point in their lives where they need help the most. For 
a typical American, 90 percent of all health care costs that any of us 
will incur will occur in the last 6 weeks of our lives. So the last 6 
weeks of their lives is very sadly coming due for many of our World War 
II veterans and the VA budget for the past 2 years was frozen because 
the majority party said there is not any money to give to them.
  This month, this month on September 29, the troops would normally 
have been paid, there are over a million people who serve in the Army, 
Navy, Air Force, Marines who are out there in dangerous places like 
Korea in Kosovo right now or in places like Colombia right now who are 
flying planes right now, under the sea right now, normally they would 
get paid on September 29, that is not going to happen this year. They 
are going to get paid on October 1.
  The reason for that is so that pay period of over a billion dollars 
will not be reflected on this fiscal year, it will be shifted to next 
fiscal year. For a Congressman like myself or a high-ranking government 
official who makes good money, that is no big deal, delaying our pay 
for a couple of days. As a matter of fact, though, our pay is not going 
to get paid. All the congressional staffers will get paid at the end of 
September. In fact, the only people in the entire United States 
Government whose pay is going to be delayed are the guys who earn it 
and deserve it the most.
  And so for a young enlistee on fixed income who is counting on that 
paycheck on Friday to buy Pampers and formula for his kids, he is not 
going to get paid until Monday, because it is one of the gimmicks once 
again from the folks who say we needed that money.
  The last year the Democrats ran the House was 1994. In 1994, there 
were 404 ships in the United States Navy. Today as I speak, there are 
315 ships in the United States Navy. That is a drop of 89 ships since 
the Republicans, who pledged for a strong national defense took over, 
because they will not give them the money to build the ships or 
maintain the fleet, again, they say, because we do not have the money.
  The fleet is now the smallest it has been since 1933 when it was 311 
ships. They say because we do not have the money, so you can imagine my 
surprise and a great many American's surprise when lo and behold they 
are suddenly saying we have this huge surplus, after telling the 
veterans wait your turn, after telling the active duty military wait 
your turn, after telling the United States Navy wait your turn, we have 
a big budget surplus, and to keep the guys in Washington, whoever they 
are, since they are in the majority, from spending it, we have to give 
it away in tax breaks and let us start with the wealthiest 2 percent of 
all Americans, the ones who do pay the estate taxes.
  There is one small problem with the allegedly budget surplus. It does 
not exist.

                              {time}  1800

  As a matter of fact, it you take the time to read these numbers, you 
will realize about the only two things accurate in the words ``budget 
surplus'' are the letters ``BS.''
  Those of you who have home computers, I would encourage you to take a 
look at 3 p.m. eastern time on the fourth workday of every month on 
www.publicdebt.treas.gov. This is a publishing of the public debt. One 
of the things our colleagues will tell you is not only do we have this 
great big surplus, but we are paying down the debt. If that were true, 
it would be wonderful. Unfortunately, it is not.
  The total debt outstanding as of June 30, 1 year ago, was $5 
trillion, and a trillion is a thousand billion, 638 billion, and a 
billion is a thousand million, 780 million. One year later, on June 30 
of the Year 2000, it has grown by over $40 billion, to 
$5,685,938,000,000.
  It has grown. It has grown by $40 billion. So despite the talk that 
they can

[[Page 17294]]

afford to give away the $50 billion a year that the estate tax repeal 
would cost the Treasury of the United States, there is no surplus. The 
debt is not shrinking, it is growing.
  Who owns that debt? Let us remember that a third of all the national 
debt is owned by foreign lending institutions. So if the Japanese or 
German lending institutions that own our debt demand that it be paid 
off, think about the economic chaos in America.
  One of the things that I would hope the American people would take 
the time to look at is that there is a surplus in what is called the 
trust funds. The trust funds are taxes that are collected for a 
specific purpose and are supposed to be set aside just for that 
purpose.
  If you look on your pay stub, there is something called FICA. That is 
just Social Security taxes. It is collected from you, it is collected 
from your employer, and it is supposed to be set aside to pay your 
Social Security benefits when that time comes. There is a Medicare 
Trust Fund, taxes collected from you, set aside to help with your 
health care costs when that time comes.
  If you served in the military, there is a military retiree trust fund 
to pay your benefits when you retire. There is a trust fund for the 
Highway Department. Again, taxes when you buy your gasoline, those 
taxes are supposed to be set aside and used for nothing but paying the 
trust fund.
  Unfortunately, if you take the time to look at the report that I just 
told you about, you will see that ending in the month of June, the 
Nation in that fiscal year had already taken $11 billion out of the 
trust funds just to meet annual operating expenses. That number grew to 
$12.967 billion in the month of July.
  So my question to my colleagues who say that we can afford to lose 
$50 billion a year in revenue on the estate tax is whose trust fund are 
you going to steal it from? And they have yet to answer that question. 
If they are not going to borrow it, then they have got to steal it from 
a trust fund in order to pay that bill.
  Are they going to steal it from the Social Security trust fund? Are 
they going to steal it from Medicare part A, which pays the hospital 
costs of senior citizens? Are they going to steal it from Medicare part 
B, which pays the physicians' costs? Are they going to pay it from the 
Social Security disability fund, for people who through some tragic 
accident can no longer work and need a little help until they reach the 
age of 65? Or are they going to steal it from the military retiree 
trust fund, people who have given their whole lives to defending our 
country, who have set aside a portion of their paychecks so they can 
count on that check for the rest of their lives? Who are they going to 
steal it from?
  As I told you, the debt is growing, and the best analogy that I can 
use as far as those folks who say we have this big surplus, not only is 
the debt growing, but it has grown enormously in our lifetimes. Most 
Americans think that maybe this generation did our per capita share of 
the total debt. Wrong.
  In 1980, this Nation was less than $1 trillion in debt. Right now it 
is $5.7 trillion in debt. Almost all of the debt has occurred in our 
lifetimes. So I ask my colleagues who are adamant about huge spending 
increases or adamant about huge tax decreases, why would you as a 
Nation burden your children with that debt? Can you name one single 
responsible individual who says I am going to go buy a whole bunch of 
stuff, I am going to have a whole lot of fun, and I am going to stick 
my kids with that bill? And, by the way, I am going to deplete the 
military while I am at it, I am not going to build any ships to defend 
us, I am going to shortchange the guys in uniform, and by the way, we 
might even take a little money out of the militarily trust fund. That 
is their solution for America. I think their solution is wrong.
  I had an opportunity to give this talk to someone who really would 
benefit from this. He happens to be a banker in Mississippi. He happens 
to be the majority stockholder of the biggest bank in Mississippi. He 
had written me saying, you know, I worked on all of my life, I scrimped 
and saved, and I know the man and know it to be true, and I would like 
to leave as much of this as I can to my kids. I do not want to pay an 
estate tax.
  I explained to him that our Nation is squandering $1 billion a day on 
interest on the national debt, we did it yesterday, we did it the day 
before, we will do it tomorrow and do it every day for the rest of our 
lives until we pay off the national debt. He is a banker. He 
understands interest. At the end of our conversation, he said, ``Gene, 
you did the right thing.''
  I would hope that other Americans will take the time to look at these 
reports, because, unfortunately, the Washington Post will not tell you, 
the New York Times will not tell you. I have actually seen economists 
in nationwide publications saying there is so much money they are going 
to pay off the debt in 2 years. None of them have bothered to read the 
only reports that count, and that is the reports from the U.S. Public 
Debt, the reports from the U.S. Treasury, and they will show 
convincingly there is no surplus.
  So if we care about our country as much as we say we do, if we care 
enough to let our kids serve in the military, if we care enough to 
reward those veterans who served us so well in places like World War 
II, in Vietnam and Korea, if you think the sacrifices that they made 
are worth preserving, then why would we bankrupt our country now? And 
not for the least fortunate Americans, but for the sake of the most 
fortunate Americans? It makes no sense whatsoever.
  So I want to thank the gentleman from Texas (Mr. Stenholm) for this 
opportunity, and again I want to encourage every American to look up 
this site, www.publicdebt.treas.gov. If you have any doubt whatsoever 
as to the accuracy of these figures, you may get them for yourself. I 
encourage every American who has a computer to take the time and look, 
because it is frightening; and we as a Nation are truly in the position 
of a guy who cannot pay his debts, who for 200 years has not paid his 
debt, and is now going to the banker and saying, Can I just pay some 
interest? That is what we are doing as a Nation.
  There is no surplus. It is time to pay off the debt and quit sticking 
our kids with our bills.
  Mr. STENHOLM. Mr. Speaker, I thank my friend from Mississippi for his 
contribution and would remind my colleagues, Mr. Speaker, that this is 
the left side of the aisle speaking. These are the same voices that 
have been encouraging the current majority to take a look at these 
surpluses that everyone talks about and deal with them as they are.
  What the gentleman has just stated is a fact. It is not made up. The 
only response we sometimes hear from them is ``you Democrats were in 
charge for 40 years and you did it, so we are going to do it too.'' 
Well, that really does not make sense. I do not think the majority of 
the American people want us to continue making the same mistakes that 
others have made. That is why we in the Blue Dog Coalition have said 
all year, let us be fiscally responsible with our tax cuts and let us 
be fiscally responsible with any additional spending. Let us seek out a 
bipartisan agreement on all of the above.
  Again, that is why I want to, before I yield to my friend from East 
Texas (Mr. Turner), I want to again reiterate today's vote on the death 
tax. Most of us who opposed it and supported the President did so 
because we believe there is a better alternative.
  I would hope that now that the veto has been sustained and that the 
people will begin asking the question, what next, we will take a look 
at the Democratic alternative. Maybe it is not perfect, and I would be 
the first one to say it is not perfect. If it can be improved, let us 
work in a bipartisan way to improve it. To do what? To eliminate the 
unfair punitive penalties that occur on small businesses when the death 
of parents occurs.
  We agree to that. Our proposal was that we ought to exempt $4 million 
estates. Now, back home where I come from, those are not small 
businesses. But in the big picture they are small businesses. When you 
start picking a number, it is always difficult to do.

[[Page 17295]]

  Where is the $4 million coming from? It is something that would cost 
$22 billion over the next 10 years, rather than $105 billion. And the 
$4 million figure as proposed and supported by many of us on our side 
of the aisle would be signed by the President. In fact, I would not be 
surprised if it could not be improved.
  I keep hearing some say why not go to a $4 million exemption, and 
then tax all estates over and above that at the capital gains tax rate?
  I am for that, Mr. Speaker. I think that makes eminent good sense. I 
would like to see CBO and OMB seriously look at that and see if that 
would not be a better proposal.
  But the bill that was vetoed just cut it off in 2010. The Democratic 
substitute that I worked so hard on said let us not cut it off at 2010; 
let us continue the same cost into the next 10 years, at least until we 
fix Social Security for our children and grandchildren. That is why I 
have become such a bull dog on all programs, including the one that we 
just passed overwhelmingly, the Railroad Retirement Act that passed 
overwhelmingly awhile ago.
  I have no doubt it is a good bill. I was contacted by many of my 
constituents saying support it. A lot of it I could support. But the 
cost, getting into Social Security, reducing the retirement age 
precisely at the time that we are increasing the retirement age on 
Social Security, under current law, from 65 to 67, that is currently 
going on, I had some questions. I really questioned us taking out of 
context various bills, even the good ones, even those which I may in 
the end say I voted wrong today.
  But until we can put into context how we are going to deal with these 
non-surpluses, as we now have heard from the gentleman from Mississippi 
(Mr. Taylor), I really think we have to question what is fiscally 
responsible and what is not, and remind again when you hear about trust 
funds, when you hear about surpluses, they are projected. None of this 
is real. Most families do not spend projected surpluses without getting 
in trouble if they do not occur.
  Mr. Speaker, I am happy to yield to the gentleman from Texas (Mr. 
Turner).
  Mr. TURNER. Mr. Speaker, I thank the gentleman for yielding. I want 
to thank the gentleman in particular for his hard work that he has 
exhibited throughout his years in Congress to try to bring fiscal 
responsibility to the Federal Government.
  Just last year for the first time we had a surplus in the annual 
Federal budget. We had not had one they tell me for 30 years. I think 
it is very important as all of this talk is being kicked around about 
the surplus, the anticipated surplus, that we not waiver in our 
commitment to try to continue to have annual Federal surpluses so we 
can pay down our Federal debt.
  It may very well be, as the gentleman from Mississippi (Mr. Taylor) 
said, there may not really be a surplus. People talk a lot about the 
anticipated surplus; but it is not here yet, and it may not be here.
  We all have been told by the Congressional Budget Office that the 
non-Social Security, non-Medicare Trust Fund surplus totals about $2.2 
trillion over the next 10 years. That is an estimate. It may or may not 
arrive. But we also are told that that estimate of the surplus is based 
on a lot of assumptions. It is based on the assumption that Federal 
spending will not increase, even though we know the population of this 
country keeps growing and placing increased demand on the Federal 
Government.
  We also know that if we reduce the assumption in the budget estimate 
of economic growth by only one half of 1 percent, that 25 percent of 
that surplus just disappears. A one-half of 1 percent adjustment in 
annual growth over 10 years means $500 billion of the estimated $2 
trillion surplus disappears.
  So I think it is important for us to talk tonight about the 
importance of staying on course for fiscal responsibility, and I was 
very proud that Vice President Gore and Mr. Lieberman proposed a budget 
surplus reserve fund, to make sure that if all those rosy estimates of 
the surplus turn out not to be true, that we will not put this country 
back into deficits.

                              {time}  1815

  A fellow in overalls probably made the point better than I will 
tonight at a town meeting I had in my district. After all my efforts to 
explain all this complicated talk about Federal budget surplus 
estimates and the national debt, he raised his hand and he says, 
Congressman, how can you folks in Washington talk about a surplus when 
you have a national debt of over $5 trillion? Well, that stumped me for 
a minute, because I guess that is true. Only in Washington can people 
claim to have a surplus when we have a $5 trillion debt at the same 
time.
  Back when we got the revised estimate of the anticipated surplus that 
is supposed to arrive over the next 10 years of $2.2 trillion from our 
Congressional Budget Office, that very day the national debt stood at 
$5.6 trillion. Yes, only in Washington can people say we have a surplus 
when we owe $5.6 trillion.
  So before we let the politicians squander our future anticipated 
surplus with new spending programs or irresponsible tax cuts that 
primarily are aimed at the wealthiest Americans, let us set up a simple 
and reliable budget framework that we can all play by.
  The Blue Dog Democrats, the conservative Democrats in this Congress, 
have always advocated a very simple plan for the use of any anticipated 
surplus that may arrive over the next 10 years. We say, let us dedicate 
50 percent of us to paying down the national debt. Let us use 25 
percent of it for commonsense tax cuts that are aimed at people who 
really need a tax break. Let us use 25 percent of any anticipated 
surplus to be sure that we save social security and Medicare for the 
next generation.
  That is a sensible plan, a sound plan, and any time I have had the 
opportunity to talk about it to the people of my district, they say it 
is a good plan that we ought to follow. Our national debt works a lot 
like our credit cards. When the United States runs up a big debt that 
we do not pay off, then we have to pay interest. The debt keeps 
growing, and so do the interest payments.
  The interest today is eating away at our budget. We spent last year 
almost as much on interest on our national debt as we spent on the 
entire defense budget, which is the largest category of spending in the 
Federal budget.
  If we use half of our surplus to pay down the national debt, we can 
pay it off entirely in 10 years. There is still room after that to 
afford other national priorities like commonsense tax cuts, social 
security reinforcement, and to save the Medicare program for the 
future.
  But it seems that here in Washington, in order to issue a good press 
release about how big a tax cut we are for, the majority in this 
Congress has insisted on applying the bulk of any anticipated surplus 
to tax cuts. In fact, if we total up all the tax cuts that have passed 
through one House or the other in this Congress, they total almost $1 
trillion.
  President Bush has proposed $1.3 to $1.6 trillion in tax cuts over 
the next 10 years. It is hard for me to see how they could devote 80 to 
90 percent of any anticipated surplus that may not even show up to tax 
cuts, and then tell the American people that they are going to pay off 
the national debt. The truth of the matter is that we cannot do it.
  Under those almost $1 trillion in tax cuts, we find that they were 
targeted at the wealthiest Americans. In fact, an analysis that I 
looked at just the other day said that 50 percent of the tax cuts in 
that Republican plan, that $1 trillion, almost, in tax cuts, would go 
to the wealthy families of our country who make over $130,000, the top 
5 percent of American families, while on the other hand, middle-income 
families making under $40,000 would get less than 10 percent of those 
tax cuts.
  Stated another way, it means that a middle-income family earning 
$50,700 a year would get a tax break under the Republican plan of $323 
a year, less than $1 a day, while the wealthy family earning $329,000 a 
year would save

[[Page 17296]]

$6,408 in their tax obligation. That is simply not fair.
  Yes, all Americans need tax relief, but those who have benefited the 
most from the prosperity that we have enjoyed should not receive the 
largest percentage of income savings. We need to get our financial 
house in order and our debt paid off before we give Bill Gates and Ross 
Perot a multi-billion dollar tax break.
  Let me make it clear, I am a strong supporter of tax cuts for working 
families. The Democrats in this Congress have voted for tax cuts for 
American families. They have voted for a less expensive version of the 
estate tax repeal that would repeal the estate tax for 95 percent of 
the American people who currently would be obligated to pay one, and 
keep in mind, only 2 percent of American families even pay the estate 
tax today.
  The Democrats also advocated getting rid of the marriage penalty, and 
voted on the floor of this House to do so, but the Republicans wanted 
to be sure they had a sweeter deal and they proposed a tax cut that not 
only eliminated the marriage penalty, but gave tax relief to those who 
actually get a marriage bonus.
  As I say, if we look at all the tax cuts that the Republican majority 
has passed on either the floor of this House or the Senate totalling 
almost $1 trillion, what we find is that the wealthiest Americans 
benefit the most, leaving the crumbs to average working families.
  It is the hard work of every American taxpayer that is fueling our 
surplus. As I have heard said often in the presidential campaign, 
American families need tax relief, and they do. Both candidates agree. 
But the truth of it, to say that the surplus is not the government's 
money, it is the people's money, misses the point, because the people 
of the country also, unfortunately, owe almost $6 trillion in debt.
  So let us be sure that when we talk about tax cuts, that we are 
talking about responsible tax cuts aimed at middle-income Americans who 
need the tax relief, and let us also be sure that we do not make those 
tax cuts so big that we fail to deal with the national debt, which is 
approaching $6 trillion.
  The truth is, the best tax cut that the American people can get is to 
pay down the national debt. Let me say that again. The best tax cut 
that the American people can get is to pay down the national debt.
  Members may say, why is that so? Economists uniformly agree that if 
we pay down the national debt, it gets the government out of the 
business of borrowing money in the credit market. If we reduce the 
demand for credit, the effect across-the-board is to lower interest 
rates: less demand from borrowed money, lowered interest rates.
  So what we can do is pay down the national debt, and by doing so, 
give the American people something even better than tax relief.
  The Council of Economic Advisors reports that paying down the debt 
over the next 10 years will save American families $250 billion in home 
mortgage payments alone, $250 billion. A 2 percent reduction in 
interest rates would save a family paying a $100,000 mortgage $2,000 a 
year.
  Keep in mind, even the gigantic, irresponsible Republican tax cut 
plan saves an average working family, a middle-income family, less than 
$1 a day, less than $323 a year. If we can lower interest rates and 
that family is trying to pay off a home, and most families enjoy the 
opportunity to own their own home at some point in their lives, if we 
can reduce that interest rate 2 percent, we will not save them $323, we 
will save them $2,000 a year.
  That is the kind of sound budget plan that this Congress need to 
pursue. We have a responsibility in these prosperous times to take 
advantage of a historic opportunity to pay down the debt, a debt that 
was accumulated over 30 years of deficit spending. We have a 
responsibility not to count on the estimated $2 trillion surplus that 
is supposed to arrive here over the next 10 years by deciding today 
what we are going to do with it.
  It is kind of interesting, because we actually here in Congress have 
had tax cuts on the floor that would consume the opportunity for any 
Congress in the next 10 years to vote on a tax cut. It seems to me that 
those who claim to be fiscally prudent, who claim to be fiscal 
conservatives, would understand that we do not spend a surplus that is 
not here yet, and that we do not spend it all at one time.
  There are other priorities that we have to be attentive to. Medicare 
needs to be preserved for the next generation. Social security needs to 
be preserved for the next generation. We need a prescription drug 
benefit under Medicare for our senior citizens. We need to spend more 
on national defense. We need to be sure that we protect our veterans.
  Those are issues that have not been accounted for when people talk 
about a $2 trillion estimated surplus. So let us stick to a plan of 
fiscal responsibility. Let us be sure we protect our economy for the 
future. Let us be sure that our children do not have to pay off that 
$5.6 trillion debt that, by the way, continues to grow.
  I thank the gentleman for the opportunity to share these thoughts.
  Mr. STENHOLM. Mr. Speaker, I thank the gentleman from Texas (Mr. 
Turner), and I thank the gentleman for pointing out that the best tax 
cut that this Congress can give the American people is that which keeps 
interest rates down, something that gets overlooked in the rhetoric 
around here so often.
  The gentleman gave the numbers, I was using a little smaller number, 
a $50,000 home mortgage, a reduction of 1 percent in the interest is 
$500 per year. That is real money that working families would darned 
sure appreciate.
  By now, I would hope that folks have begun to realize some of the 
fallacies of those who suggest a $1,300,000,000,000 tax cut is what 
this economy needs.
  Review for just a moment as I think out loud, what has the Federal 
Reserve done I believe six times in the last year? Increased interest 
rates. Why have they done that? Concern of the Federal Reserve that the 
economy may be overheating and inflation may be taking off; one of the 
cruelest taxes that occurs, particularly to those who live on fixed 
incomes.
  Why do we have a tax cut? To stimulate the economy. If we should have 
a large immediate tax cut that stimulates the economy, why would we not 
suppose the Federal Reserve may take it away in interest rate 
increases? It is something that has bothered me a great deal, and it is 
one of those things that has influenced the Blue Dog budget and the 
proposal.
  Let me again as I close remind everyone that this Blue Dog framework 
that the gentleman from Texas (Mr. Turner) and the gentleman from 
Mississippi (Mr. Taylor) and I have been talking about, and I am rather 
disappointed that we have not been joined by some of our friends on the 
other side of the aisle who have agreed with us, 33 voted with us 
earlier this year, in agreeing that this framework that would pay down 
the debt would be fiscally responsible on spending and tax cuts, and 
would be a pretty good plan.
  It is not too late. We still have 18 working days left now in the 
106th Congress if we adjourn at our scheduled time. In order for us to 
get through with our work, we are going to have to find an agreement 
that can be supported by a majority of the House, a majority of the 
Senate, and the President concurring.
  It is not a bad blueprint for us to be thinking about now. It is 50/
25/25. We all agree we are not going to touch social security and 
Medicare trust funds. That is half of the $4.6 trillion. Everyone 
agrees to that. Why not set aside half of the remaining to pay down 
debt, and then let us, in a bipartisan way, decide how much we are 
going to spend on health care; on pharmaceutical drugs; on the defense 
needs of this country; on water, as it pertains to my district.

                              {time}  1830

  The Speaker pro tempore has had some pretty severe disasters out in 
his part of the country. I have witnessed that and the tremendous 
devastation that has occurred to forests and ranchers and all. I 
suspect there are going to

[[Page 17297]]

be some legitimate needs there where we probably are going to find some 
agreement. So let us stop this complete total partisan bickering and 
realize it is going to take some bipartisan action.
  Here, I want to make another comment about Social Security. Because 
if I had one prevailing reason for encouraging the President to veto 
the death tax bill that was presented to him, it was because of Social 
Security.
  I continue to say, as my colleagues have heard me say several times 
on the floor, I have two reasons for my vote today, and their names are 
Chase and Kohl, who are my wife Cindy's and my 5- and 3-year old 
grandsons. When they were born, the first one 5 years ago, I resolved 
that I did not want them to look back 65 years from that date and say, 
if only my granddad would have done what in his heart he knew he should 
have been doing when he was in the Congress, we would not be in the 
mess we are in today.
  That is kind of the guiding light, I guess, for me insisting that a 
backend loaded tax cut on the death tax that repeals it in 2010 at the 
cost of $50 billion at the exact same time baby boomers are retiring. 
That Congress, now I will not be here at that time, my body will not 
take this job that much longer, but there will be a Congress that will 
be there, and it is grossly fiscally irresponsible to pass on to future 
Congresses and to our grandchildren those unanswered questions of where 
they are going to get that revenue.
  I think we ought to first make the decisions here on Social Security 
and Medicare. Obviously we are not going to do that in the 106th 
Congress. It is going to take the 107th Congress to do that and a new 
administration. I look forward to working with them, hopefully, in a 
bipartisan way.
  Just as this year I want to commend the gentleman from Michigan (Mr. 
Smith) who stood alone arguing some fiscal responsibility on the 
Railroad Retirement and Survivors Improvement Act that passed 
overwhelmingly. I voted with the gentleman from Michigan (Mr. Smith). I 
appreciate the point he was making even though it did fall on deaf 
ears, because any time we can find some bipartisan consensus on 
spending additional money or cutting taxes, it is very popular, very 
difficult to stand in the way.
  But the gentleman from Arizona (Mr. Kolbe), my colleague from the 
other side of the aisle, and I have worked on a Social Security reform 
bill that we know that is going to cost some money over the next 10 
years to implement it. That is why I have said that, before we start 
spending surpluses that are not there, let us fix Social Security. Let 
us have that open, honest debate. Well, it will take us next year to do 
that unfortunately.
  Here a little bit of other history. Many times today I have heard 
that it was only after the majority changed in the House of 
Representatives that the budget got balanced. Well, I think that is 
taking a few liberties. I am perfectly willing and openly acknowledge 
the contribution of many of my friends on the other side of the aisle. 
But I think it is important for us from time to time when we start 
talking about budget to review some history on votes of the budget.
  Let us go back to 1991. Remember that one. That was the Bush budget, 
President Bush. Well, it passed, but only 37 Republicans voted for it. 
I happen to have voted for it because I thought it was the right thing 
to do. But President Bush paid dearly with it because he got unelected 
in 1992, and one of the big issues was the budget of 1991.
  Now let us go on to 1993. Remember that one. The Clinton budget. 
Well, I voted for parts of that and voted against parts of that, but I 
got the blame for all of that. In hindsight, the blame was not all that 
bad. But zero Republicans voted for that budget. It took all Democrats 
to vote for it.
  Then let us fast forward to 1997, the Balanced Budget Agreement in 
1997 that many give credit for the current fiscal situation. Well, here 
again 187 Republicans voted for it. It took a few of us Democrats, we 
Democrats to vote for it, too.
  My point here is saying that we have always had, in most cases, 
bipartisan cooperation, sometimes bigger than others. But we seem to 
have wanted to get away from that. I hope, Mr. Speaker, that our 
colleagues that have been observing this today and perhaps others who 
may be a little bit puzzled maybe will have a few answers today of why 
some of us believe that the veto of the bill on the floor today was the 
right vote. We sustained it, just as some of us feel that the 
President's veto of the so-called marriage tax penalty is the right 
vote. I am one of those. I will say openly and honestly right now I 
will sustain that veto also.
  Why do I say that? First off, I agree that we should not have a 
penalty on the marriage. Any two men and women married should not be 
penalized for being married. But it does not take $292 billion to 
repeal the marriage tax penalty. Most economists and accountants will 
say, no matter how hard we try, we cannot eliminate the penalty, but we 
can do the best job we possibly can with $82 billion. That is in the 
Blue Dog budget. That is what we will support, but not $292 billion.
  I am saying this to alert, to just say to the leadership, if they 
insist, and I think they will, on continuing to have as the real 
centerpiece of their economic platform for November of a $1.3 trillion 
dollar tax cut, but they also believe that we have to increase defense 
spending and they also believe we have got to fix health care and they 
also believe we have got to take care of agriculture's problems and 
they also believe that we have got to fix Social Security. They cannot 
do all of those things unless they take a more fiscally responsible 
position. Mr. Speaker, that is why we take this hour today.
  I will say again so that there shall be no misunderstanding by anyone 
observing or interpreting the vote today. The alternative that the 
President would have signed and will still sign, as he has stated, 
would have exempted all small businesses, all small businesses, farmers 
and ranchers included, up to $4 million from even having to consider 
paying the death tax. What is wrong with that? Effective January 1, 
2001, not 2010.
  If we really and truly want to deal with it in a fiscally responsible 
way, let us know that the partisan politics is over on this vote, let 
us roll up our sleeves, then let us see if we cannot put together some, 
as I said earlier, if the Democratic version is not perfect, let us 
roll up our sleeves and, for a change on the Committee on Ways and 
Means, work, Democrat and Republican, to make a better one. But let us 
make sure it fits within the budget restraints.
  To get my vote on any compromise, it cannot be a backend loaded tax 
cut for death taxes, for marriage tax penalty, for any other tax. It is 
fiscally irresponsible, in my humble opinion, for this Congress to pass 
tax cuts that explode in 2010 and afterwards. If we want to do it, do 
it now. Have that open debate. But do not, do not backend load without 
first coming to this floor with the Social Security reform bill.
  My colleagues will find that there will be bipartisan support, 
bipartisan support for a lot of the ideas kicking around as long as we 
are willing to openly and honestly pay for them. The bill that was 
vetoed today was not openly and honestly paid for. The truth, the whole 
truth and nothing but the truth.
  I thank my colleagues for joining with me today, and we look forward 
to the continuing of this discussion next week and hopefully getting an 
agreement that will get 218 votes, 51 votes and a Presidential 
signature, ideally 435 and 100, but that will never happen, Mr. 
Speaker. But I suspect that we might find one that you and I will agree 
on.

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