[Congressional Record (Bound Edition), Volume 147 (2001), Part 2]
[House]
[Pages 2010-2011]
[From the U.S. Government Publishing Office, www.gpo.gov]



              BUDGET PRIORITIES AND FISCAL RESPONSIBILITY

  The SPEAKER pro tempore. Under a previous order of the House, the 
gentleman from Virginia (Mr. Moran) is recognized for 5 minutes.
  Mr. MORAN of Virginia. Mr. Speaker, the most important issue facing 
this Congress is the amount of the tax cut that has been proposed by 
the President and by the majority party, and a majority of Americans 
apparently think that this tax cut would be in their best interests. 
Today I would like to make five points why I disagree, and try to 
explain why I think a cut of this proposed magnitude is potentially 
disastrous.
  The five points that I would like to make are, one, CBO's 10-year 
surplus projections are highly unreliable; secondly, the tax cut is 
skewed to benefit those who need the assistance the least; third, I 
believe that this tax cut is fiscally irresponsible in that it is 
substantially understated; fourthly, the tax cut ignores the financial 
catastrophe that we know is going to occur when the baby boom 
generation retires in another few years; and, fifth, it does not 
address what I believe is our highest priority, which is to pay off our 
public debt before we do anything else with the surplus.
  On point number one, Mr. Speaker, the projections upon which we 
assume that we can afford the tax cut are highly dependent upon 
economic performance that is, at best, uncertain in the near term, and 
really has no credible basis over the long term. CBO has increased 
their estimates from 2.8 percent to a little above 3 percent annual 
growth, but if they are off by as much as eight-tenths of one percent, 
$4 trillion of the surplus goes away.
  GAO Comptroller David Walker testified before the Congress that ``no 
one should design tax or spending policy pegged to the precise numbers 
in any 10-year forecast.'' He also said it is important to remember 
that while projections for the next 10-year period look better, the 
long-term outlook looks much worse.
  Mr. Speaker, secondly, it is important to understand that the effect 
of the tax cut applies primarily to those who in fact pay the most 
taxes. But the top 1 percent, people whose incomes are over $320,000 a 
year, now pay about 21 percent of the taxes. One percent pays 21 
percent of the total Federal taxes; yet they would get 43 percent of 
the benefit. Eighty percent of the population would receive less than 
29 percent of the entire tax cut benefit.
  Thirdly, Mr. Speaker, while the tax plan proposes a $1.6 trillion 
cut, it does

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not include the additional interest costs that are incurred because it 
is not applied to paying down the debt. It also raises the number of 
people who will be subject to the alternative minimum tax from 2 
million today to 27 million households by 2010. Virtually everybody 
over $75,000 over a year in income is going to get hit with the 
alternative minimum tax. They are going to be screaming at the time, 
and we are going to have to fix it at a substantial cost that is not 
factored in here. I should also say the estimates do not protect 
military retirement nor civil service retirement.
  Fourthly, the baby boomer crisis. Once the baby boom generation that 
was born right after World War II starts to retire, we are going to be 
in the position of only three workers for every retiree. That creates a 
situation that is untenable. So after we get out past 2011, when all 
these estimates are pegged, we are going to find that for the next life 
span we are as much as $22 trillion short in Social Security and $12 
trillion short in Medicare.
  The best thing we could do right now is to currently fund that 
unfunded Social Security liability. If we put $3.1 trillion aside, as 
we would do if we were facing this in our own family or in a private 
corporation, we could fund that unfunded liability and not leave that 
burden to our children and grandchildren to do so.
  Lastly, Mr. Speaker, let me say that our highest priority should be 
to pay down the debt. That is the best way we can invest in our future, 
and that is the best gift we can give to our children and 
grandchildren. We do it in our own family; we ought to do it in the 
Nation's best interest as well.

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