[Congressional Record (Bound Edition), Volume 147 (2001), Part 3]
[Extensions of Remarks]
[Page 3828]
[From the U.S. Government Publishing Office, www.gpo.gov]



               ECONOMIC GROWTH AND TAX RELIEF ACT OF 2001

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                               speech of

                           HON. CHET EDWARDS

                                of texas

                    in the house of representatives

                        Thursday, March 8, 2001

  Mr. EDWARDS. Mr. Speaker, I rise in opposition to H.R. 3, because I 
believe the product is fiscally irresponsible and the process rushed to 
the point where we are voting on 10-year tax cuts before we even have a 
1-year budget in place. Congress is now making budget and tax decisions 
that will directly affect our families and our nation for the next 10 
years and beyond. It is crucial that we make informed, fiscally 
responsible decisions on the budget and taxes, because the choices we 
make today could lock in our national priorities for the future.
  I will support fiscally responsible tax cuts this year including 
reducing the estate tax and the marriage penalty as well as expanding 
child tax credits. I believe we must also fulfill the moral obligation 
we have to our children to reduce our $5.7 trillion national debt and a 
responsibility to protect Social Security and Medicare for our seniors. 
The question is not whether Congress will pass a tax cut this year--we 
will. The question is how large is the tax cut and will it be fiscally 
responsible and fair to all families, including middle and low-income 
working families?
  These are difficult questions that must be answered satisfactorily 
before tax cuts are approved. Perhaps if these questions were asked and 
answered back in the 1980s, our country could have avoided the huge 
budget deficits that contributed to the $5.7 trillion national debt.
  In 1981, President Reagan and Republicans and Democrats in Congress 
passed a huge tax cut into law. They predicted the then $55 billion a 
year deficits would become a surplus in 1984, 3 years later. What 
actually happened is that instead of having a surplus in 1984, the 
federal deficit exploded to $185 billion.
  As a consequence of that tax cut, the national debt tripled in the 
1980s--and now stands at $5.7 trillion. Last year Americans paid $223 
billion in taxes, just to pay the interest on the national debt. On 
average, that would approximately be $800 in taxes for every man, woman 
and child in America.
  Marvin Leath, my predecessor, said that the 1981 tax vote was his 
``worst vote'' in 12 years of Congress. In 1990, President George Bush 
chose to reverse his previous pledge to oppose new taxes. Why? By 1990, 
the federal deficit had skyrocketed to $220 billion each year, with no 
end in sight.
  President Bush, Republicans, and Democrats passed a tax increase in 
1990 and it cost President Bush dearly, but not as much as the budget 
deficit would cost average Americans. By 1993, projections were that 
deficits would further explode to over $300
  Those lower interest rates made it cheaper to buy a house or car or 
build a business. That, plus the new high tech economy that increased 
productivity of American workers, resulted in the longest sustained 
economic growth period in American history.
  And, after 29 straight years of deficits, in 1997, we had the first 
balanced budget since Neil Armstrong set foot on the moon in 1969. So, 
we spent the 1990s stopping the deficit binge of the 1980s, but where 
does that leave us now?
  The Congressional Budget Office and other government economists 
predict we will have a $5.6 trillion federal surplus over the next 10 
years. (FY 02-FY 11). The promise of surplus has led President George 
W. Bush to propose a 10-year, $2.4 trillion tax cut. But do we really 
have the money needed to provide this tax cut, pay down the debt and 
protect Social Security and Medicare? Before we take the step of 
spending a surplus we may not have, let me ask you two questions. One, 
is there anyone in this chamber that would bet his or her family's 
entire net worth on the belief that a federal government economist's 
10-year projections on the American economy will be 100 percent 
correct? Two, just how real is the $5.6 trillion surplus projected by 
2011?
  The projected surplus is $2.2 billion once you subtract the $3.4 
trillion held in the Social Security, Medicare, and other trust funds 
that Congress has pledged not to touch. The proposed tax plan costs 
$2.4 trillion once you add the additional interest costs, tax break 
extensions, and the retroactive tax cuts. Over 10 years the country 
will be looking at a $200 billion budget deficit and that's before 
other priorities are paid for. The tax cut plan assumes an overly 
optimistic 3 percent annual economic growth rate over the next 10 
years. If the growth rate is off by just 4/10 of 1 percent, then the 
surplus will be reduced by $1 trillion over 10 years. From 1974 to 1995 
the economy grew an average of only 1.5 percent annually--half the rate 
assumed in the tax cut plan.
  What if we proceed and cut taxes at this level and the economists are 
wrong? First, we'll see a return to budget deficits and interest rates 
will go up making it more expensive for families to make large 
purchases such as buying a home or starting a business. A larger 
national debt means more taxes to pay interest on the debt and less 
money to provide for priorities such as national defense and veterans, 
education, prescription drugs and protection Social Security and 
Medicare. Finally, the true cost of these tax cuts hits just as baby 
boomers are retiring and the Social Security and Medicare trust funds 
are running at a deficit.
  We have more options than the House leadership would have us believe. 
The first option is the one we are looking at now: passing a $2.4 
trillion, 10-year tax cut and hoping the rosy economic forecasts are 
correct and that spending cuts can be made.
  The second option is to pass a smaller tax cut now, make spending 
cuts and then see if the surplus is real. Once the surplus is 
guaranteed, then it will be time to pass more tax cuts.
  I will be guided by several principles on the tax cut question. I 
will do what I believe is right, not just politically popular at the 
moment. I will listen to the citizens of Central Texas before making a 
final decision. I will try to look at the numbers honestly--without the 
hype and false promises.
  I will support fiscally responsible tax cuts this year, but we also 
have a moral obligation to our children to reduce our $5.7 trillion 
national debt and a responsibility to protect Social Security and 
Medicare for our seniors.

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