[Congressional Record (Bound Edition), Volume 149 (2003), Part 6]
[House]
[Pages 7962-7966]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     CONDITION OF THE U.S. ECONOMY

  The SPEAKER pro tempore (Ms. Ginny Brown-Waite of Florida). Under the 
Speaker's announced policy of January 7, 2003, the gentleman from New 
Mexico (Mr. Pearce) is recognized for 60 minutes as the designee of the 
majority leader.
  Mr. PEARCE. Madam Speaker, we have been talking about the budget in 
this body for several weeks now. As I visit back in the district, I 
find it instructive to deal with the questions that the voters are 
bringing to me, and so I have brought a series of slides tonight where 
we can discuss the budget, take a calm look at it, look at some of the 
factors that surround it and help voters make an assessment of the 
truth on the budget and the condition of the U.S. economy.
  First of all, one of the most pressing questions is a concern of 
exactly what is the state of the economy today. I have got a chart here 
that shows the last 10 years of gross domestic product in the U.S., and 
we see a fairly consistent line of, generally, a 4.9 percent average. 
We had a slight recession in the period that I have marked here, 2001. 
It does not show up on the chart, but if we had an expanded chart, we 
would see that the recession flattened out and caused a depression in 
the receipts into the treasuries of the United States.
  So basically, we can say overall that the economy in the United 
States is solid, it is in good shape. But people want to know exactly 
why did we go through this period in the last couple of years.
  First of all, the stock market back with the dot-com expansions, we 
found stocks that were overvalued. They were based not on recognized 
profit or recognized product, but on the hopes and on some speculation. 
The stocks were overvalued, and it was necessary at some point for 
those stocks to collapse back down. They did that and put us into a 
mild recession that would not have lasted very long, except 9/11 came 
along.
  We had a pretty big shock to our economy on 9/11. Forgetting the 
human impact, just talking about the impact financially on the country, 
the estimates range anywhere from a hundred billion to several hundred 
billion, depending on how it is evaluated.
  So first we had the collapse of the dot-coms and the stock market, 
and then we had 9/11.
  Just about the time we were to come into a recovery, then the 
corporate scandals, the governance issues of Global Crossing and Enron 
and other corporations that had misused their accounting methods did 
not actually cause that much financial difficulty in the market, but 
actually did affect the confidence. So we found that our economy went 
into slight recession that was accentuated by later factors. Those 
factors are the reasons that we are running deficits today.
  If we look at the next chart, Members can see the revenue line. This 
is revenue and taxes, and we see the bulge there in 2000-2001. It is 
interesting to note, if we were able to extend this line directly up, 
we would find that in fact our tax revenues are actually very stable, 
but our capital gains in that period where it deviates upward, were 
creating an anomaly, a bubble in revenues, that could not be sustained; 
and when the market collapsed back down, then our revenues fell right 
back in line with the predetermined historic perspective that we had 
established.
  That is an interesting note because people want to assume that our 
economy is in bad shape, and our friends on the other side of the aisle 
talk in horrific, frightening terms to people, who are just paying 
their rent every month, about how desperate our economy is and the 
reasons for it. I think this chart begins to show that we have been 
quite predictable except for a little bit of a bubble that was on the 
positive side, frankly.
  People want to know why are we running deficits. The deficits are 
caused because we oriented our spending to an increased revenue that 
could not be sustained, and now that our revenue has collapsed back 
down, we have got a problem with our spending exceeding the revenues 
that we are bringing in. That is the short answer to why we have a 
deficit.
  People want to know, are we running historic high deficits. They are 
hearing the talk coming from Washington, and it causes fear among 
people who do not watch these figures closely. If the postwar average 
of 1.5 percent, the red line across here, is looked at, we can see that 
our deficits right now are nowhere near historic highs.
  We also see that our surpluses in the period that just preceded us, 
our surpluses actually reached a very high level, but they were 
artificial, created by the capital gains on that overinflated stock 
market.
  So again, as we take a patient, honest look, we see that deficits are 
existing, but they do not necessarily mean that our economy is in 
horrific shape or that there is reason for fear and concern. There is 
reason for fiscal discipline.
  A lot of people wonder that with deficits, then we create debt; that 
is, we do not have the money to pay for the bills today, we spend 
negatively, we borrow money and we create longer-lasting debt. A lot of 
Americans ask, are we facing a skyrocketing debt. That again is an 
interesting question that deserves an answer.
  Looking at the next chart, we again see the median line of 42.9 since 
World War II, and we find that our debt is actually quite low, 
somewhere around 36 percent. The projections there from 2002-2007 would 
show that if the projections are right that come from the economists, 
if we do in fact pass the tax relief, if we do in fact cause the 
economy to grow, that we can hold our debt at the level of 36 percent.
  After World War II, our debt was almost 100 percent. Japan today has 
a debt of almost 160 percent. Our debt is approximately $3.8 trillion. 
If we had the same percent of debt as Japan, then we would have $17 
trillion. As we look at some of these numbers that come from other 
developed economies, then we begin to put our numbers into perspective.
  Madam Speaker, I would say that, so far, the discussions that come 
from our colleagues on the other side of the aisle are intended mostly 
to cause alarm rather than to cause understanding. I would say that 
right now our debt service, that amount that we pay for the debt is at 
an historic low. It is approximately 3 percent of our budget.
  So if we have a period of deficits and we have a period of debt, why 
are Republicans calling for spending cuts? The next chart would show us 
that one of the critical elements, one of the critical measures that 
most economists agree on is that the level of growth in

[[Page 7963]]

the private economy is going to be created by the level of spending as 
a percent of our gross domestic product, that is, how much the 
government spends as a percent of the overall economy in the United 
States should fall in a target of anywhere from 16 to 22 percent. As it 
exceeds above that, we find stagnation. We find that capital is not 
available for reinvestment by private firms because they are having to 
compete with the Federal Government, and we find that new jobs are not 
created.
  We in this body have opted to keep our spending within restraints, 
understanding that if we just continue to spend without the tax 
revenues, that we will actually cause a dampening effect in our 
economy. And so a lot of people ask that question, and it is justified 
to ask why we would be seeking budget cuts at a time like this, and it 
is because we need to maintain that target in the range of 20-22 
percent. We can see from this chart, we have had, historically, far 
less amounts and far greater amounts, but right now we do not have a 
situation in our economy that is due alarm.
  There are those who complain that this Congress is cutting budgets 
tremendously, that we do not feel the needs of those people in society, 
and I have a series of charts all of which are going to show about the 
same thing, that under Republican rule the actual amount spent on many 
budgets have increased dramatically from what it was previous to 
Republican control.

                              {time}  1730

  I will simply go through these charts and take a brief look at them 
to get an understanding of some of the historic perspectives in our 
spending to date.
  We have complaints that we have cut in the agriculture sector, but we 
see the spending in 1996 versus 2003. Who among us would say that we 
are actually penalizing the agriculture market? I think reasonable 
people would assure themselves that we do need fiscal discipline and we 
need to be careful how we spend our money, but to say that we have not 
adequately invested in this program is lacking in full truth.
  Similar arguments have been made about Medicaid and Medicare, that we 
have restricted spending, that we have given deep cuts. Again since 
1995, about the time that Republicans took over, we can see the 
tremendous increase in spending in Medicaid and likewise in Medicare. 
We again find that we have had abrupt increases in the level of 
investment in these programs. If we are not getting the output in the 
programs that we need, it is because the programs themselves have flaws 
in their design, that the processes in which they choose how much and 
to whom to pay are the problems rather than the level of spending by 
the Republican Congress.
  Much has been made of the situation of veterans. Again we would see 
that in 1995 we had $20 billion and today we have $30.6 billion. The 
slope of the line simply tells us that we have increased spending 
dramatically. This one abrupt drop here is simply due to an accounting 
anomaly where we had 13 payments in this period and 11 payments in the 
other period, and so those would even themselves out to show a fairly 
steady increase of almost 5.1 percent per year. President Clinton 
before he left office expanded the number of people who are able to tap 
into the veterans system. Prior to his regulatory change, veterans who 
were disabled in the line of duty were able to collect benefits, but 
those who were disabled in some other way were not allowed to collect 
benefits. That one change has created a tremendous demand for services 
that did not previously exist and so you can see that we are investing 
almost one-third more in the past 6 years, but the drains on it have 
kept the incremental amounts going to individuals, the amounts that 
people feel have been kept at a low level because of the increased 
demand by regulation change. If we have problems with veterans and if 
we have problems with other programs, the problems are problems of 
process. They are not problems of a failure to invest.
  Many people wonder why we are asking for tax cuts at this time when 
we have deficits. Tax cuts are the way that we grow our economy. Tax 
cuts become money that are placed back into the hands of investors. 
They allow businesses to increase their production, to increase their 
employment. The estimates if we pass the tax plans that the President 
has submitted are that we would create 500,000 jobs per year. Those are 
not insignificant in times of higher unemployment. We must cut taxes in 
order to reinvest in our economy to create growth. We are finding at 
this point that because of taxes, many of our corporations are not 
competitive in the international market. We are losing jobs because of 
our tax plans which penalize companies located in this country.
  One of the things that our colleagues often talk about is the fact 
that we had corporations that have misused their accounting methods. 
Enron would be the example used most often. I would bring Global 
Crossing up as an extreme example. One of the things that happens when 
we cause companies to keep cash and not pay out dividends is that that 
cash builds up and there is stimulation to try to spend it, there is 
stimulation to try to create different sections of the company that 
would shelter and hide that cash from taxation.
  It would be much easier if we simply gave the money back to 
stockholders in the form of dividends. That particular tax cut, which 
has been accused of being only for the extremely wealthy, needs closer 
inspection. Almost half of the savings of the dividend taxes would go 
to seniors 65 and older. The average tax saving for seniors receiving 
dividends would be $936 per year. More than half of all American 
families today own stock. Eighty-four million Americans are invested in 
the stock market. Over half receive dividends. Over half of the ones 
who receive dividends have an income level of less than $50,000, but 
that story is not told in this body, Mr. Speaker.
  That story is not told because we are not always after the truth in 
this body, that we want to create fear and that we want to create 
illusions. But the truth is that many, many Americans would benefit 
from this dividend tax cut, the creation of jobs, the return of dollars 
to Americans. The fact that we are one of the last three countries in 
the world that causes double taxation of dividends cannot be 
overlooked.
  Mr. Speaker, I stand fully in support of the President's tax cuts 
that would give 46 million married couples an immediate check for 
$1,500 and continue it every year from now on. Mr. Speaker, I stand 
fully in favor of the President's tax plan which says just repeal the 
estate tax. Ben Franklin said that the only two things in life that are 
certain are death and taxes. He never envisioned the American Tax Code 
that would cause them to occur simultaneously. Mr. Speaker, we hear 
tremendous comments that this is just a tax cut for the wealthy. It is 
never explained that the top 25 percent of taxpayers, those people who 
have incomes $55,000 and over, pay 84 percent of the taxes, that if we 
are going to give a tax cut that is large enough to create economic 
growth and economic stimulus, that we must give it to the wealthy 
because we are describing as wealthy those households of $55,000 and 
over.
  Mr. Speaker, one of the best examples of the tax cut will occur with 
small businesses where they will be able to write off expense, up to 
$75,000 of new equipment. As a small business owner, I know that that 
single tax cut would create jobs. Mr. Speaker, I think I will close 
with a quote from the Governor of New Mexico. Governor Bill Richardson, 
a Democrat who served in this body, now Governor of New Mexico, says 
that reducing taxes puts us on the road to economic growth.
  Mr. Speaker, the other side knows the truth. They use it when it is 
important for them, but they refuse to discuss it on the floor of this 
House in this budget. Bill Richardson's plan this year passed in New 
Mexico's legislature reduced New Mexico's income tax rate by 40 percent 
from the current 8.2 percent to 4.9 percent by 2008. It cuts the State 
capital gains tax in half, to 10 percent. It offers tax credits to 
companies opening new facilities in the State. Richardson agrees that 
his plan sounds sort of like Bush's tax-cutting agenda, and he argues 
that Democrats nationwide should consider tax cutting

[[Page 7964]]

a viable strategy. ``We need to stop talking about class warfare and 
the distribution of wealth,'' he said. ``Economic growth and reducing 
taxes puts us on the road to economic recovery.''
  Madam Speaker, we do not always get a full and honest discussion in 
this body. I wanted to share these comments on the budget today.
  Madam Speaker, I yield to the gentleman from Florida (Mr. Feeney).
  Mr. FEENEY. Mr. Speaker, I wanted to come down to congratulate the 
gentleman from New Mexico for his advocacy for fiscal responsibility 
and his advocacy for taxpayers throughout America. I have been struck 
by the same sort of surreal, almost bizarre, arguments against this 
budget that the House has put together at this point and they seem to 
be in two categories that the gentleman has identified: number one, 
that we are having Draconian cuts in the budget; and, secondly, that 
somehow this tax cut proposal, the stimulus package, is designed to 
help the wealthy in America.
  With respect to the first provision, I would suggest, Mr. Speaker, 
that the Chicken Littles are out in big-time form these days. The sky 
is falling, the sky is falling, Draconian cuts, et cetera, when the 
fact of the matter is I have been hearing this argument for about 30, 
40 years. I remember watching TV as a small boy when President Ford was 
a Republican leader in this House of Representatives, and he was 
accused of cutting the school lunch program. Thirty-five, 40 years 
later, Mr. Speaker, actually we have an obesity epidemic in America's 
school grounds, unfortunately all too often, and so the truth of the 
matter is that whatever Republicans have been cutting in terms of 
school lunch programs has not done a very effective job if we have been 
trying to cut off the food supply. I would suggest that scaring 
teachers, scaring parents, scaring children, scaring veterans, scaring 
farmers is the wrong thing to do as a moral political policy; but more 
importantly it is empirically ignoring all of the facts.
  As the gentleman suggested, agriculture spending in America as a 
consequence of Republican leadership has increased from 1996 to the 
year 2003 from $6 billion to over $24 billion. Veterans medical care 
from 1998 to 2003 has increased from $17 billion to $24 billion. 
Education spending at the Federal level from 1998 to the year 2003, 
under President Bush especially, has increased from $30 billion to $58 
billion. Medicare spending has increased in America from 1996 to the 
year 2003 from $175 billion to roughly $240 billion.
  Mr. Speaker, I am new to Washington; but this is the only place where 
you can increase your budget an average of 5, 6, 8 percent a year and 
people will call it a Draconian cut to punish seniors. As a matter of 
fact, total discretionary spending since 1996 when Republicans took the 
leadership here has increased from $501 billion in programs throughout 
the budget to over $740 billion. Those are hardly cuts. As everybody 
that can do math knows, this is an increase, the overall spending 
proposed by House leadership and the House of Representatives as a 
whole, of over 3.1 percent during tough economic times. It comes in the 
aftermath of really what is soaring spending.
  Indeed, the truth of the matter is spending other people's money is 
an intoxicating experience, but it has consequences. It has effects on 
the average family. In fact, the Federal Government bites out of every 
family's budget on average $16,000 per year. That is for every 
household budget in America. That has huge effects. That is $16,000 
worth of spending that families do not get to cut out for their own 
purposes. Much of this is in duplicative or superfluous spending, 
unnecessary. There is this appetite of the Federal Government and 
bureaucrats and politicians to be indiscriminately meddlesome in trying 
to organize our life's affairs; and unfortunately, that stifles all 
sorts of economic growth, family planning, business planning, and I 
could go on.
  I have got about five pages of incredibly wasteful spending I could 
go through; but in the interest of time, I know I have some 
distinguished colleagues who would like to address this matter, I will 
skip the details. I will say that for example, however, the Federal 
Government cannot account, last year alone, for $17.3 billion worth of 
spending according to our own records. $17 billion just lost somewhere 
in the system. The Federal Government made $20 billion in overpayments 
in the year 2001 alone. The truth of the matter is that we are woefully 
irresponsible and inefficient.
  On top of that, what the gentleman from New Mexico knows and that is 
never pointed out by the opponents of the President of the United 
States and his fiscally responsible budget is that our cuts, the only 
cuts that we have asked for in this budget, come out of waste, abuse 
and fraud. We have instructed all of the budget draft persons to 
emphasize and never touch any of the important services provided to our 
military veterans, to the education system, to the farm system, 
certainly not to homeland security and defense that each see 
significant increases.
  We have instructed them to cut 1 percent out of abusive, wasteful and 
fraudulent spending. I would submit, Mr. Speaker, that not one person 
in my district does not believe that we could not cut one cent out of 
every dollar spent at the Federal level. The truth of the matter is 
that only one in 4,000 Federal employees is ever laid off because of 
bad performance. People in my district just do not believe you cannot 
find more bad performance than that, and they just do not believe that 
we cannot find one cent out of every dollar in terribly wasteful and 
abusive spending.
  I think the gentleman did a wonderful job talking about the 
importance. If we want to get this economy moving again, we have got to 
support the President's tax proposal and stop all of this demagoguery. 
I applaud the gentleman. I do not know how he and other Republican 
leaders were able to convince a Democratic policymaker, the 
distinguished Governor of New Mexico who happens to be a Democrat, how 
you were able to educate him in terms of the reality of job creation, 
wealth creation, prosperity and investment; but the quote from him, we 
need to stop talking about class warfare and the distribution of 
wealth, we need to start talking about economic growth, and reducing 
taxes puts us on the road to economic growth.

                              {time}  1745

  I want to endorse the comments of the governor of New Mexico, and I 
am thrilled with the very notion that we can go back home to Florida 
and convince some of my friends and colleagues on the Democratic side 
that we can cut taxes and spur economic growth, spur job creation.
  Here is the bottom-line truth. If we want employment, we cannot 
punish all the employers in our State or in our country. If we want job 
growth, we cannot punish the people who are creating jobs. If we want 
wealth, we cannot punish those that are busy creating wealth for all of 
us, and if we want savings, we cannot punish those that save and 
invest.
  I will leave you with this. I am a big proponent of the President's 
dividend tax cut. The fact of the matter is that dividends in America 
today are taxed in a very punitive matter. The highest rate at the 
corporate level is some 36.5 percent, but even after the corporation 
pays tax, it has only got about 65 cents or so left, and it pays that 
out in dividends to individual shareholders. Those shareholders may be 
subject to taxation rates of up to 39 percent. The effective rate of 
taxation therefore is that the Federal Government takes 70 percent of 
every dollar earned by corporate investments. No wonder we are having 
trouble creating new jobs, new economic prosperity, and new wealth.
  On top of that, of course, there is a hodgepodge of other Federal 
taxes that are owed, State property taxes, State income taxes, State 
sales taxes that are collected by these corporations. It is a very 
punitive system that has effectively stifled much of the potential 
growth.
  But I will leave the Members with this last thought. The notion that 
job creation should be continually punished in America, forever, I 
think hurts every family, but I will tell the Members that especially 
in Florida there

[[Page 7965]]

are other portions of the President's tax cut program that make 
dramatic differences.
  We have got some 92 million Americans that earn dividend income. We 
have got millions of families that will receive a huge benefit from the 
increase in the child credit. We have got small businesses that, as we 
expand the deduction for buying new equipment, will be huge 
beneficiaries. As we phase in the 10-year tax cuts on marginal rates, 
all sorts of families will save thousands of dollars.
  The final thing I will leave the Members with is that the Democratic 
so-called tax cut proposal allows the average family to go out and buy 
a used television set on a one-time-only basis. The President's 
proposal puts an average of between $1,000 and $2,000 in every working 
family's pocket forever, every year. It will create jobs, it is will 
free families, and it is the right thing to do.
  I thank the gentleman from New Mexico (Mr. Pearce).
  Mr. PEARCE. Mr. Speaker, I yield to the gentleman from Colorado (Mr. 
Beauprez).
  Mr. BEAUPREZ. Mr. Speaker, I thank the gentleman from New Mexico for 
yielding.
  I have been intrigued by this dialogue about the budget and 
especially the economic growth package, so-called, and there are a lot 
of ideas going around on this Hill. I want to focus for just a minute 
on something very near and dear to my heart, job creation.
  I have been in the private sector all my life and only a brief while 
in this distinguished body as a Member of Congress. So my mind and 
perhaps a good share of my heart is still back home with the folks that 
actually are creating jobs and doing the work around this country.
  In fact, just this afternoon I had an electric contractor, 
electrician, in my office and he was lamenting with me the state of 
things back home, that he is actually for the first time in many years 
faced with laying people off, with eliminating jobs. And that is a 
tragedy because these people that work for him, he is a small business 
owner again, they become more than just employees, they become friends; 
and he knows that laying them off, especially in times like this, is a 
bad situation and it becomes a very personal situation.
  So I think a concept that has tragically been lost in a great deal of 
this dialogue is the one of job creation and something that we really 
ought to be committed to. And I submit that all of us from either side 
of the aisle, all of us that run for public office say, we are for job 
creation, we are going to do that when we get to Congress. If we are 
ever going to do that, if we are wherever going to really mean it, what 
better time to mean it than right now when we see unemployment up, when 
we see people like my friend from back home in my home district saying 
he is going to have to lay people off, that we be serious about it?
  Let me share a couple of statistics with the Members. Relative to 
this much-debated dividend tax elimination, the compelling part of that 
argument, the big part of it for me at least, is the number of jobs 
that it will create. Why would it create jobs? In our society, we 
typically get what we incentivize, and when we incent capital 
formation, capital which is critical to the creation of opportunity, 
the creation of an expanding economy, the creation of jobs, that is 
what we will get. When we incent it, we will get it. So when we incent 
the investment in capital, the equity side of business, it only stands 
to reason that we are going to get an expanding economy and jobs as a 
result.
  Point of reference: It is estimated in this economic growth package 
that has passed this body that, on average, for the next 5 years, 
almost 1 million new jobs a year will be created. Some have suggested 
that this dividend tax elimination is not a good idea, that it just 
benefits the rich, and I will return to that, that it really will not 
benefit the average guy. The average guy is exactly who we are talking 
about here who needs a job.
  If we eliminate that, we lose almost 60 percent of the job creation 
of the economic growth package that we are talking about here. We 
reduce from that almost 1 million new jobs a year, on average, for 5 
years to less than 400,000. That is tragic. That hits people right 
where they live, in their pocketbook, at home, and that will cost us 
jobs which we need. Again, it defies logic why we do that.
  Another critical piece of this economic growth package, if I might, 
is the increase in the investment credit tax deduction for small 
businesses from 25,000 to 75,000. Why is that such a big deal? My 
electrical contractor again, I asked him, If you had the option, would 
you use that? Yes, he would. What would you do? Well, he would buy some 
new equipment. He would buy a badly needed new van. He would buy some 
shop equipment; they fabricate a little bit.
  I submit to the gentleman the simple facts of life. If somebody is 
going to buy something, a washing machine, a drill press, a new 
computer, that means somebody has to design it. Somebody has to 
fabricate it. Somebody has to assemble it. Somebody has to ship it. 
Somebody has to make a box to ship it in. Somebody has to put it on a 
shelf. Somebody retails it. Somebody delivers it. Somebody installs it. 
Somebody services it. That creates jobs. That is how America works, and 
that is what we ought to be about in this body.
  And we have got an opportunity not to just stimulate, and I do not 
like that word, not to just stimulate this economy because typically we 
poke it here and it comes out there, and then we will poke back later. 
We ought to do some sound, long-term economic planning. That is what we 
have an opportunity to do here, to incent job creation.
  I submit to the gentleman from New Mexico (Mr. Pearce) this is a 
great package. I applaud him for taking leadership on the floor of this 
House tonight, and I pledge to him my support to seeing this economic 
package pass this body and, hopefully, become the law of the land. I 
thank him for yielding.
  Mr. PEARCE. Mr. Speaker, I recognize the gentleman from Colorado (Mr. 
Tancredo).
  Mr. TANCREDO. Mr. Speaker, I thank the gentleman from New Mexico. We 
have been standing here for some time listening to some of our friends 
on the other side of the aisle talk about what they saw as the doom and 
gloom of the tax package of a budget really that allows people to 
actually begin to operate, begin to do things that will bring this 
economy back.
  It is amazing. If we had listened for any length of time to our 
friends on the other side of the aisle, we would have heard time and 
time and time again that the following rhetoric; we would have heard 
something like this: Oh, my God, they are going to take money from the 
people who are veterans and children and old people and everybody we 
can think of to cast in a sympathetic light, and they are going to give 
it to the rich.
  Give it to the rich, this is a fascinating way of talking about 
letting people keep some of their money, but it is exactly what 
distinguishes the two sides in this debate. It really is a great way of 
explaining how one side of this debate looks at the whole issue of 
taxation and the whole issue of private development, the development of 
one's own resources and talents. To think that the Government of the 
United States or any government owns the money to begin with and that 
they, if they are nice, we are going to let them keep some. But if they 
are not very nice, and even if they are wealthy, if they made a few 
bucks in the process, all of a sudden they are the bad guy and we are 
going to either keep money from them, but if we are going to pass a tax 
break, we are ``going to give them money.''
  It is not giving anybody money to say that they can keep some of the 
money they earn, but it is only that if we think of it as being all the 
government's money to begin with, and that is exactly what the other 
side does, that is how they think about government: It is all 
government money. We will let them keep some if they are good. That is 
what really separates these two sides in this debate, and I

[[Page 7966]]

hope that the people that listen to this debate understand and really 
are able to see that.
  Mr. Speaker, there was a time when the leadership in the Democratic 
Party, not just a single governor like Governor Richardson today, but 
the leadership of that party could actually look beyond the whole 
concept of class warfare and did not try to incorporate that into the 
philosophy of the Democratic Party.
  And there was a time that the leader of the Democratic Party actually 
came to the Congress of the United States, came to the people of the 
United States and said, You know what we need? You know what we have to 
have? We have to have a tax cut. Even though we have got deficits, huge 
deficits, the way to get us out of those deficits and back into a 
surplus is to let the economy begin to move again, and we have to do 
that by giving people tax cuts.
  The Members know who that was, of course. It was John F. Kennedy, and 
he put through a huge tax cut in the face, by the way, of large 
deficits that were running at the time; and he did not talk about 
letting rich people keep some of their money. What he said is, we have 
to allow people to keep some of the money that they are laboring for 
because that is truly what makes an economy hum. And he was right.
  There is another thing that we should pay special attention to, Mr. 
Speaker and my colleagues, especially my colleague from New Mexico, who 
I know understands this issue far better than most of us, and that is 
the importance of energy production and the importance of getting an 
energy bill through this Congress, the importance of getting the 
President's energy package through. This will do more to ``stimulate'' 
this economy than almost anything else we can doing aside from letting 
people keep more of their own tax dollars.
  We have to allow for the development of the economy and the 
stimulation of the economy to occur as the result of the production of 
energy resources in this country. No one, no one, believes that we 
should continue to rely upon foreign sources for our energy needs. That 
is why it is incumbent upon every single one of us in this body to do 
everything we can to put an energy bill in front of the President, let 
him sign it, an energy bill that will begin to explore the resources 
that are available in the United States, the coal, the gas, the oil 
resources available to us here while simultaneously researching what is 
available to us in alternative resources and the use of alternative 
energy supplies.
  That is what is desperately needed, and I hope we will begin to focus 
here, even for the remainder of the time we have available to us, on 
this issue of energy, because it is an extremely important part of this 
whole discussion of how we get an economy going again.
  Mr. PEARCE. Mr. Speaker, in summary, I just would say that, in 
perspective, people in this city are saying that the tax cut is just 
too large, that the original figure of $726 billion over a 10-year 
period, that compares to $120 trillion. Mr. Speaker, we are asking for 
seven-tenths of 1 cent back in taxes. Economists on both sides of the 
aisle declare that this tax cut, this tax relief package by the 
President of the United States to be the boldest tax plan ever 
presented, that if the dividend tax is repealed, it can surge our 
economy upward for a 50-year period with an immediate 10 to 15 percent 
increase in stock prices.

                              {time}  1800

  Mr. Speaker, again, I am going to close with the comments on March 31 
of this year from Democrat Governor Bill Richardson from New Mexico 
when he passed a tax cut in New Mexico: ``We need to stop talking about 
class warfare and the distribution of wealth,'' he said. ``We need to 
start talking about economic growth, and reducing taxes puts us on the 
road to economic growth.''
  Mr. Speaker, I cannot say it better.

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